LEXINGTON, Ky. (AP) — A Lexington-based foundation that has received more than $1 million from a regional development district since 2009 has declined to release documents to show how the money was spent.
The money that went to the Bluegrass Industrial Foundation was mostly rent paid by the Bluegrass Area Development District. The foundation owns the office building where the development district is located, and its president is Jas Sekhon.
The Lexington Herald-Leader reports (http://bit.ly/1drsxaX) Sekhon ran the Bluegrass development district from 1971 to 2005.
The foundation's board members referred questions from the newspaper to Sekhon, who declined to release spending documents requested under the state Open Records Act. Sekhon responded in writing that that the foundation's board believes the foundation is not a public agency and receives no public funds for its operation.
The state auditor's office is investigating Bluegrass ADD after the forced resignation of its executive director, Lenny Stoltz II, in July amid questions about spending. The development district handles about $30 million a year, helping coordinate regional planning and federal spending among local governments in a 17-county area of central Kentucky.
In a telephone interview, Sekhon said the foundation works behind the scenes to lure more businesses to Kentucky and to forge better ties between the state and his native country of India. Most of the foundation's travel is made by Sekhon and a few board members to build up business networks and attend conferences, Sekhon said.
"We have a network with national organizations ... you can go to companies and somehow get the access, you learn from them," he said.
He declined to answer questions about current work by the foundation, citing confidentiality agreements with businesses.
First Amendment attorney Jon Fleischaker rejected Sekhon's argument that the foundation's financial records should not be made public, noting that at least 75 percent of the foundation's income comes from a public agency.
"I think there is a very strong argument that it is itself a public agency," Fleischaker said.
Tax records for the nonprofit organization say the foundation's Lexington building generated profits of between $60,000 and $70,000 a year from 2009 to 2011, but the foundation reported an overall deficit each year after accounting for other expenses, including about $115,000 for travel over three years.
The foundation's expenses for those years also include $60,000 in compensation for Sekhon and the foundation's seven-member board, $25,000 for conferences and almost $50,000 for "prospect development."
Sekhon formed the foundation in 1982, according to state business filings.
As executive director of the Bluegrass ADD at the time, he said, he liked the deal because it saved the agency money on rent. "It was a very favorable deal and good for the region," he said.
When asked if there could be a conflict of interest for him to head an organization that is the landlord for the organization he previously led, Sekhon said: "I don't know what you're talking about."
Last year, Bluegrass ADD's executive board unanimously passed a motion for the district to buy the office building so it could stop paying rent, but that purchase never happened.
"My concern was that if the ADD had all this money in reserve, why were we continuing to pay rent?" Garrard County Judge-Executive John Wilson, a Bluegrass ADD board member, said in a recent interview.
Wilson said he'd like to know more about the foundation and its ties to the development district.
"The more information everyone has, the better," he said. "I think there's a lot of questions about what all exactly is involved in the relationship between the two organizations."
Information from: Lexington Herald-Leader, http://www.kentucky.com