Note to politicians and wanna-be underhanded public officials: If you’re planning a junket using public funds and other people’s money-don’t charge it to your credit cards.
In a scandal that has Kentucky residents up in arms, the credit card spending practices of executives at two organizations that work with local governments across the state of Kentucky has come under intense scrutiny.
The trouble started when the Lexington, KY-based Herald-Ledger reported that the top three executives at the Kentucky League of Cities had racked up $300,000 in credit card expenses over the past three years. That was topped by a report five days later that five executives at the Kentucky Association of Counties (KACo) spent more than $600,000 over two years on meals, travel, and other expenses. Both organizations provide lobbying, financial and insurance services to member cities in Kentucky. The operations of both organizations are paid for by taxpayer money collected by the member cities.
The story really got interesting when details emerged about what “other expenses” actually referred to. The specifics of some of those charges read like a Visitor’s Guide to the seedy nightlife venues of the Louisville, KY area. One of the exec’s accounts showed three charges totaling $277 for the Thorobred Lounge, a strip club in Louisville, KY along with charges for $168 at another Louisville strip club, The Godfather.
Other charges included a $175 charge to an alleged Louisville escort service, repeated charges at the Louisville Hooters and a long list of expensive meals and bar charges for one exec alone totaling nearly $20,000 in 2008. The KACo officials spent more than $2,650 at one hotel during a three-day conference, charges which included a hospitality suite that opened at 9:30 p.m. on the same night that the escort service charge was made on one executive’s card.
The officials denied making the charges saying that they were “baffled” at how they got there and claiming that someone else must have used their credit cards. After the news story broke, KACo filed a dispute for the charges asking the card issuing bank to refund them. The Kentucky-based Central Bank & Trust Co, which issued the credit cards, politely refused noting that the charges were more than a year old and thus well beyond the 60-day deadline for filing a dispute.
The story has created all sorts of hardship for the hapless officials. Shortly after the stories appeared in the Herald-Ledger, one League official stopped using the BMW SUV that was paid for by the Kentucky League of Cities and League-paid travel for executive spouses was stopped. Even worse, they lost use of their credit cards as the board of the Kentucky League of Cities took steps to suspend credit card use by the League’s top officials.
The unusual charges has prompted an audit by the Kentucky State Auditor’s office, which has announced that it will be taking a closer look at the finances of both the Kentucky League of Cities and the Kentucky Association of counties, quoting “alarming media reports regarding spending by the organizations.”
The moral of the story? Credit cards have many great uses, but flagrant abuse of public funds isn’t one of them. Next time, leave the credit cards at home.
