INVESTIGATION INTO HIRING and Conduct of FORMER TARC

INVESTIGATION INTO Investigation HIRING AND CONDUCT initiated by the Louisville Metro OF FORMER TARC Council. EXECUTIVE DIRECTOR This investigative report provides a detailed analysis of the hiring of Ferdinand Risco and his conduct while employed at TARC. Report prepared by: David J. Beyer Pence & Whetzel, PLLC May 9, 2021 1 TABLE OF CONTENTS I. OVERVIEW AND INITIATION OF INVESTIGATION ..........................................3 II. SEPARATE TARC INVESTIGATION AND REPORT ............................................4 III. EXECUTIVE SUMMARY ............................................................................................4 IV. LEGAL ANALYSIS AND TARC STANDING ...........................................................9 V. ADMINISTRATIVE NOTE ........................................................................................16 VI. INITIAL HIRING OF RISCO – NO DUE DILIGENCE .........................................17 Louisville Witnesses .................................................................................................17 Atlanta Witnesses......................................................................................................24 VII. DUE DILIGENCE – PROMOTION TO EXECUTIVE DIRECTOR ....................37 VIII. WRONGFUL CONDUCT ...........................................................................................44 a. Sexual Harassment ....................................................................................................44 b. Hostile Work Environment – Isolation and Marginalization ..................................112 IX. BOARD OVERSIGHT ...............................................................................................139 X. OVERALL IMPACT ON COMMUNITY AND TARC CONSUMERS ..............140 XI. FORENSIC ANALYSIS .............................................................................................142 XII. IMPORTANCE OF BACKGROUND INVESTIGATIONS AND ONGOING REVIEW ......................................................................................................................143 XIII. FINANCIAL IMPACT AND IMPROPRIETIES....................................................148 XIV. TARC REPORT..........................................................................................................162 XV. OBSERVATIONS AND RECOMMENDATIONS .................................................173 XVI. CONCLUSION ...........................................................................................................209 XVII. EXHIBITS ...................................................................................................................210 2 I. OVERVIEW AND INITIATION OF INVESTIGATION On February 20, 2020, the Louisville Metro Council through the Government Oversight and Audit Committee (GOAC) adopted emergency Resolution 021, Series 2020, initiating an investigation into allegations of sexual harassment and other misconduct by former TARC Executive Director, Ferdinand Risco. This resolution was approved by Mayor Greg Fischer and Metro Council President David James on March 3, 2020.1 The resolution provided that the scope of the investigation would include: • Working with the GOAC, Counsel for GOAC/Louisville Metro Council, and its designated investigator. • Exploring the hiring policies and practices of TARC (including but not limited to the Board of Directors for TARC), and Louisville Metro Government, by identifying current hiring policies and practices and analyzing them in conjunction with the allegations in this case. • Identifying any errors or omissions in the process and decision leading to the appointment of Director Ferdinand Risco Jr. as the Executive Director of TARC. • Identifying all relevant documents, policies, cultures, customs, processes, and practices which were in place at Louisville Metro Government or TARC and bore on the outcome of the processes and decisions leading to the appointment of Director Ferdinand Risco Jr. as the Executive Director of TARC. • Identifying and Investigating any allegations of sexual harassment or other misconduct (including but not limited to financial mismanagement) occurring at TARC during Director Ferdinand Risco Jr.'s tenure as the Executive Director of TARC, or still occurring. For purposes of explanation, and not limitation, it is presently contemplated that investigative actions shall include Identifying and interviewing all persons while protecting and preserving victim’s rights, privacy, and anonymity (unless otherwise required by statute or law) and/or bodies who either: o made allegations against former Director Ferdinand Risco Jr. as the Executive Director of TARC, o made allegations of ongoing misconduct at TARC, 1 See Exhibit 1. 3 o were presented with allegations of sexual harassment or misconduct occurring at TARC during former Director Ferdinand Risco Jr.'s tenure as the Executive Director of TARC, o are believed to possess information relevant to any of the foregoing allegations, or information which may reasonably lead to information relevant to any of the foregoing allegations, or o were materially involved in the process and decision leading to the appointment of Director Ferdinand Risco Jr. as the Executive Director of TARC. By emergency Resolution 022, Series 2020, dated March 3, 2020, Louisville Metro Council, resolved to retain the professional services of David Beyer to assist the GOAC with the investigation adopted in Resolution 21, Series 2020.2 II. SEPARATE TARC INVESTIGATION AND REPORT On or about January 24, 2020, TARC Board Chairperson Mary Morrow, was notified of improprieties involving the TARC Executive Director Ferdinand Risco. Soon thereafter, the law firm of Dinsmore & Shohl, LLP, was retained by the Mayor’s office to conduct an investigation into the alleged improprieties. Sometime later, representation was shifted to TARC rather than the Mayor’s office. On September 8, 2020, the Transit Authority of River City (TARC), issued a report captioned “Internal Investigation into Ferdinand Risco,” hereinafter “TARC Report.” III. EXECUTIVE SUMMARY A. OVERVIEW: In late 2016, TARC undertook a nationwide search to identify a candidate for the position of Assistant Executive Director to replace Alyce French Johnson who had announced her retirement. An advertisement was placed in the American Public Transportation Association Journal which was an industry trade journal. In addition, then Executive Director Barry Barker (hereinafter Barker) made inquiries with vendors and other Executive Directors from transportation agencies asking if they knew of anyone who would be a suitable candidate for the position of Executive Assistant Director. 2 See Exhibit 2 4 Ultimately, the search produced 19 candidates. From this list of 19, three candidates were interviewed by a panel consisting of Barker, Deputy Mayor Ellen Hessen, and Board Chair Cedric Powell and Witness 25. As part of the interview process, it was Barker’s desire to select someone who could be his successor.3 At the conclusion of the interviews, it was determined that Ferdinand Risco, hereinafter Risco, was the best candidate. An offer was made to Risco which he accepted. He began working for TARC in February 2017. Thereafter, Risco embarked on a pattern of behavior that can best be described as that of a sexual predator. This behavior resulted in untold emotional trauma to his many victims—both employees at TARC and an outside contractor. It also resulted in a significant financial toll to TARC—funds that could have been better used to support the operations of TARC and, thereby, benefit the many low-income, elderly and disabled TARC consumers dependent on TARC for transportation. Risco also expended financial resources many times that of his predecessor. He traveled extensively and lavishly on TARC funds—again, funds that could have been better utilized to assist TARC’s consumers or provide raises to the many dedicated TARC employees. Risco also entered into questionable contracts with friends and acquaintances. He entered into contracts for work that could have been handled by on-board TARC employees. He ultimately was allowed to resign on February 11, 2020, after one of his victims notified the Board Chair about his behavior. Unfortunately, at no time during the initial hiring process was a formal background investigation conducted by anyone involved in the hiring process. Had a thorough background investigation been conducted, it is quite likely that sufficient negative information would have been developed to prevent this calamity from ever occurring.4 As part of this investigation an electronic search of federal court cases was conducted. This search revealed a case had been filed in 2014 against Risco’s former employer, MARTA, in which Risco was identified as inappropriately terminating a long-time employee who had received “exceptional” and “outstanding” performance appraisals prior to Risco becoming her 3 Barker stated that Alyce French Johnson had been the heir apparent prior to her announcing her retirement. 4 Ironically, a background investigation was conducted by TARC when Barry Barker was hired in 1994. At that time the background report was provided to Margaret Handmaker (who was later appointed as part of the Interim Executive Team at TARC after Risco left). Barker proved to be an excellent leader of TARC during his 24 years at TARC. See Exhibit 3. 5 supervisor.5 The facts of this case are like Risco’s behavior at TARC of targeting long-term employees whom he didn’t like or who would not capitulate

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