Secrecy shrouds campaign to form new suburban city in Louisville Metro

LOUISVILLE, Ky. (WDRB) -- The battle over a new city proposed for eastern Jefferson County has been waged on yard signs, in online forums and through word of mouth.

But one front where the campaign isn't occurring is on disclosure forms bringing transparency to groups fighting for and against the city of Eastwood.

In many cases, local and state laws require those advocating for high-profile issues in Louisville and Frankfort to identify themselves and explain how much they're spending to influence decision makers.

That's not happening in the Eastwood debate — a result of legislation approved by the Kentucky General Assembly in 2022 permitting new municipalities of 6,000 people in the county's unincorporated areas.

Creating Eastwood or any new city only requires signatures on a petition equaling 60% of the votes cast in the last presidential election. Once that number is achieved, the Louisville Metro Council can review the request but cannot overturn it.

Without any legislation or other vote at stake, no lobbying or campaign finance rules apply — and, without changes, could apply to other campaigns for new cities that are expected in outlying parts of Louisville.

The approach state lawmakers created for Jefferson County is "highly unusual," said John Pelissero, director of government ethics at the Markkula Center for Applied Ethics at Santa Clara University.

Pelissero told WDRB Investigates that there are few examples nationwide of creating a new government solely through a petition drive. The best approach, he said, would be an election with campaign finance rules.

"The public interest benefits when there's transparency," he said. "That's an important way of achieving the common good. When you have policy changes or structural changes in local government such as this, it creates more fairness and a greater level of understanding about where the real support and proponents of this structural change are getting their resources."

The Eastwood campaign aims to bring in more than 19 square miles in a fast-growing area mostly east of the Gene Snyder Freeway and Shelbyville Road. Supporters say they want the kind of local power over zoning matters and other services that independent cities like Jeffersontown and Middletown now have.

A group called East End Neighbors has been the most vocal opponents, calling the plan an "east end tax." Its website does not reveal who controls the organization, which is described as a nonprofit.

There is no listing for "East End Neighbors" on the Kentucky Secretary of State's business entity website or the IRS' online portal of tax-exempt organizations.

Representatives of the group have not responded to our requests dating back to November asking for an interview, including most recently in late February that also sought a comprehensive list of officers, founders and donors.

Juva Barber, executive vice president of the Building Industry Association of Greater Louisville, told WDRB previously that some of its members are part of East End Neighbors, along with certain property owners. She has not named them.

By contrast, the Eastwood Incorporation Committee LLC is listed in state business records and has hosted public meetings about its support for a new city. However, it chose not to register as a nonprofit that would generate detailed funding information, chairman Bob Federico said.

In theory, the identities of those involved in the Eastwood effort shouldn't matter, said Stephen Voss, associate professor of political science at the University of Kentucky. Voss, a specialist in Kentucky politics and elections, said citizens should be able to sift through the validity of the arguments.

But, "in practice, election reformers have thought it best to have transparency, have disclosure requirements to know who's paying for a campaign," Voss said.

"What we found is that when people fund a campaign — and they have to worry about the reputational bounceback of how their side behaves — they're a little more cautious," he said. "When instead a campaign is being funded by dark money or otherwise secret contributors, that allows the way they argue, the way they campaign, to sometimes be a little bit less ethical."

State Rep. John Hodgson (R-Fisherville) has been a proponent of new cities in his eastern Jefferson County district. Like others, he said he's concerned that no one knows the identity of the East End Neighbors group.

Asked if anything should be done to increase the transparency in the campaigns for new cities, Hodgson said: "You bring up an excellent question."

"A petition is not the same thing as casting a ballot, but it kind of is," he said. "You give me something to think about there."

Douglass Hills Mayor Bonnie Jung, vice president of the Jefferson County League of Cities, said there should be regulations or other ways to track who's lobbying during these campaigns.

Jung noted the difference between the lack of information about East End Neighbors compared with what she called the "very upfront" approach from Eastwood supporters.

"Somebody's got to put a stop to the things that go on that nobody can explain," she said.

Former Metro Council President Markus Winkler, D-17, said he's read speculation online that development interests are largely behind the anti-Eastwood campaign. "But I don't know if that's true or not," he said.

"I do think it's important the public would know that so that when they're consuming information they can understand what is the source of the information and what is the potential motivation," Winkler said.

Meanwhile, the Eastwood plan has faced difficulty getting enough support from residents, chairman Federico said this week, in part because some large subdivisions are resisting another layer of government.

Federico said his group supports House Bill 538 in the Kentucky legislature that would have lowered the threshold for new cities from 6,000 to 3,000 people. State records don't show any local interests lobbying the bill as of March 6; its sponsor, Rep. Chris Lewis (R-Louisville), did not return a phone message seeking comment.

In an interview, Federico described the status of the Eastwood campaign as "not good."

"We haven't quite gotten the response from the community that we expected," Federico said.

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• Push to form new city in Louisville Metro pits local control against 'east end tax'

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