NOVEMBER SURPRISE

FOR IMMEDIATE RELEASE
November 3, 2014
Contact: Allison Moore 502-618-1372

Alison Lundergan Grimes’ Family Caught Overcharging Kentucky Tornado Victims

LOUISVILLE – Team Mitch today released the following statement and background information after Alison Lundergan Grimes accepted services from her family’s businesses for a fraction of the price they charge Kentucky disaster victims.

“It's unconscionable that Alison Grimes would take services from her family businesses for a fraction of the price they charged Kentuckians after their entire livelihoods were destroyed in a tornado,” said Team Mitch spokeswoman Allison Moore.

BACKGROUND

McConnell rips Grimes over tornado

The Hill

Alexander Bolton

November 3, 2014

http://thehill.com/homenews/senate/222646-mcconnell-rips-grimes-over-tornado

Sen. Mitch McConnell’s (R-Ky.) campaign is criticizing Democratic opponent Alison Lundergan Grimes, saying her campaign has benefitted from services provided by businesses run by her family even as other family businesses charge local communities high rates.

The Republican is keying in on charges that Emergency Disaster Services, founded by Grimes’s father Jerry Lundergan, billed to Morgan County after a tornado killed 20 people and injured 300 in Kentucky.

The county is disputing the charges in court. They initially included $612,000 for the lease of four portable restrooms and $36,000 for four Kawasaki all-terrain vehicles.

McConnell’s campaign compared them to the relatively generous rates other family business asked of the Grimes campaign for political events.

“It's unconscionable that Alison Grimes would take services from her family business for a fraction of the price they charged the Kentuckians after their entire livelihoods were destroyed in a tornados,” said Allison Moore, a spokeswoman for McConnell’s campaign.

A Grimes campaign official argued the comparing the disaster-related charges and the political event charges is an apples-to-oranges comparison.

“Our campaign has not used or rented equipment from Emergency Disaster Services. Any questions regarding EDS are best directed to EDS,” said the official.

Brent Caldwell, EDS’s lawyer, said the company billed at rates meeting the extraordinary standards of an emergency response.

“Emergency Disaster Services rates are different than the standard contracting rental company, as equipment, operators and services are provided within a stringent time frame as time is of the essence in an emergency and recovery situations,” he said in a statement.

“Our services are on call, twenty-four hours a day, seven days a week,” he wrote. “Often during disastrous occurrences local equipment cannot be secured due to a myriad of reasons; so to compare the two are apples and oranges.”

McConnell’s campaign has criticized Grimes throughout their high-profile battle for the charges billed by family businesses.

Grimes came under criticism in August for traveling through the state on a campaign bus rented from one of her father’s companies at a quarter to a half of the going market rate.

McConnell is leading in most polls of the race, which Democrats had seen as one of their best opportunities in this cycle to take back a GOP seat.

The race has attracted national attention, with high-profile Democratic donors seeking a chance to knock off McConnell.

Internal correspondence from Underwriters Safety & Claims summarizing an April 2012 meeting with Tim Conley, who was then the judge executive for Morgan County, revealed they thought the $612,000 charge for portable restrooms units was “exorbitant.”

Lee Money, the liability manager at Underwriters Safety & Claims, a regional insurance agency responsible for catastrophic claims for Morgan County, questioned the $434,300 charge for three generators for less than a month of use as “not “reasonable” and noted the four ATVs, which cost $36,000, were not used at all.

He raised his concerns in an e-mail dated May 8, 2012 after Dobson pressed the insurer for payment the same day.

Underwriters Safety & Claims raised objections directly in e-mail correspondence with EDS and indicated that Conley shared its concerns. Conley made the decision to hire the company and his management record has since come under scrutiny. He pleaded guilty in August of 2014 to accepting kickbacks unrelated to his dealings with EDS.

Abby Dobson, Grimes’s sister, who helps run EDS and pressed local officials for payment, declined to answer questions over the phone about her business.

“I’m not answering any information regarding my company. We are a privately owned business, I don’t have to disclose any information,” she said, emphasizing that her sister “has absolutely no relation to” it.

“She’s not employed here, she has no ownership, she receives no payment,” she said.

Conley and Underwriters Safety & Claims, pushed back by arguing the charges were for a six-month period while the equipment in many instances was used only a few weeks.

After they balked, EDS reduced the charges substantially.

In a round of invoices sent June 5, 2012, EDS charged Morgan County $178,500 for three portable restroom units, $6,000 for two Kawasaki ATVs, $15,000 for six light towers, $123,750 for three 200-kva generators and $189,100 for 8-by-32-foot office trailers. Pickup and delivery charges were extra.

Money indicated in a May 22, 2012, e-mail that the county expected assistance from the Federal Emergency Management Agency to cover at least some of the disaster costs, raising the question of whether federal taxpayers would ultimately pay for a port of the tab.

Caldwell confirmed in his statement Sunday night that monies owed to EDS have been received through the FEMA reimbursement program.

He said the privately held company is only one of five specialized companies in the nation that provides “customized recovery and relief support” during natural disasters.

FEMA has so far spent $14.7 million on the tornado recovery effort, according to its website.

Mary Hudak, a regional spokeswoman for FEMA, said she would have to look into the matter further before commenting on whether any charges raised a red flag.

Caldwell said EDS is trying to collect the “outstanding debt” owed by Morgan County through litigation.

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