We need your help, LEO readers, on solving the puzzle of why the state and local power structure is so hell-bent on building a downtown arena at the LG&E site instead of the old Water Company site. Any way you want to measure it, beginning with a $114 million savings in construction costs, the old Water Company site makes more sense.

So, what’s going on? Why are the Governor, the Mayor, the University of Louisville, the Arena Authority, and the downtown Louisville business community so fixated on the LG&E site?

It’s a puzzle, to be sure. We have a lot of random pieces but we are not sure they fit. We are tempted to call this puzzle “Follow The Money” or “Connect The Dots.” But that depends on whether the pieces do, in fact, fit, or whether they are just random pieces with little or no relation to each other.

Players must always keep in mind that President George W. Bush’s stated energy policy is centered around significantly decreasing America’s dependence on foreign oil by developing alternative forms of energy.

The President advocates the building of more refineries and power plants. Especially power plants. Kentucky is so rich in coal and natural gas that when Arena Authority Chairman Jim Host was Secretary of the Commerce Cabinet, he often referred to the commonwealth as “the Saudi Arabia of the U.S.”

Bush also has said the nation should seek foreign help and cooperation. The leading power provider in England, America’s closest ally, is E.ON, the company that also owns the former LG&E, Kentucky Utilities and Western Kentucky Power companies under the name E.ON U.S.

In announcing the name change, Victor A. Staffieri, chairman, president and CEO of E.ON U.S., said, “During the past three years, E.ON confirmed its commitment to Kentucky by supporting LG&E Energy’s civic and charitable donations of more than $10 million and by earmarking more than $2.3 billion for cleaner, more abundant energy” (emphasis added).

E.ON U.S. is represented by Frost Brown Todd, the powerful Louisville-based law firm. Last October, Frost Brown Todd announced a “strategic US-German alliance” with the Wahlert Rechtsanwaite law firm of Stuttgart. E.ON also is based in Stuttgart.

Said Ed Glasscock, co-managing partner of Frost Brown Todd, “The Wahlert firm is an outstanding group of attorneys, and its strategic location in Stuttgart, Germany, opens up tremendous opportunities for our clients here in the U.S. and in Europe.”

A keystone of E.ON’s marketing and promotions strategy is what it calls “cultural sponsoring.” The idea, to quote the E.ON Web site, is to make “a significant contribution to the attractiveness of the areas where we have a presence.”

In Europe, E.ON’s cultural sponsoring is mainly in the areas of art and classical music. For example, the company either sponsors or co-sponsors the Museum Kunst Palast and the Robert Schumann College in Dusseldorf; the Falkway Museum in Essen; the Franz Marc exhibition in Munich; and the International Bach Academy in Stuttgart.

If E.ON were to apply the same philosophy to Kentucky, it would sponsor the Louisville Orchestra, which recently almost had to declare bankruptcy and go out of business. But the arts and classical music aren’t nearly as important in Kentucky’s culture as they are in Europe.

What is important in Kentucky’s culture is … basketball!

With that background, here are your puzzle pieces. Ready, set, go!
 
• E.ON advertises itself as “the world’s leading privately-owned energy service provider.” It’s dominant in the United Kingdom, Central Europe and the Nordic area. It plans to expand into Russia.
• Since 2003, E.ON has been working to establish a “uniform company image.” For example, Powergen was named E.ON UK, Ruhrgas became E.ON Ruhrgas, and the consortium of LG&E, Kentucky Utilities, and Western Kentucky Power became E.ON U.S.
• E.ON U.S. consists entirely of the three companies in Kentucky. However, according to the E.ON Web site, the company’s presence in Kentucky “is the foundation upon which further expansion is possible in the U.S., the world’s largest power and gas market.”
• Host resigned as Secretary of the Commerce Cabinet effective Oct. 14, 2005, ostensibly for health reasons, but he immediately began working on his jobs as chairman of two important groups — the Louisville Arena Authority and the Kentucky task force for the 2010 World Equestrian Championships at the Kentucky Horse Park.
• From the time he left state government, Host has frequently worked out of Glasscock’s office at Frost Brown Todd, the powerful law firm formerly known as Brown Todd Heyburn.
• Glasscock is a close personal friend of Ed Manassah, former publisher of The Courier-Journal, and also a member of the board at Bellarmine University, which hired Manassah to establish a new communications program.
• Manassah is given credit for the idea of building a new multi-purpose civic arena on the E.ON U.S. (formerly LG&E) property bordered by the Ohio River, Main Street, the Second Street Bridge and Third Street.
• Frost Brown Todd is a member of a global multinational association of independent lawyers known as MULTILAW, headquartered in Stuttgart, Germany.
• The head of MULTILAW, Jobst von Wahlert, is a German oil-and-gas energy lawyer who recently spoke in Louisville at a Frost Brown Todd seminar on international law.
• Mayor Jerry Abramson worked for Frost Brown Todd or its predecessor between terms in office.
• Abramson and U.S. Sen. Mitch McConnell both were members of the Louisville Arena Task Force. Host was vice chairman of the Task Force and its dominant member.
• Long the leading advocate for the old Water Company as the site for a new arena — he even orchestrated a 9-8 vote to have it restored as an alternative to the E.ON U.S. (LG&E) site at the last meeting of the Task Force — Abramson now is just as strong an advocate for the LG&E site.
• McConnell, the second most powerful Republican in the Senate by virtue of his role as Majority Whip, is chairman of the State, Foreign Relations, and Related Agencies subcommittee of the powerful Senate Appropriations Committee.
• McConnell is a University of Louisville graduate and namesake of a lecture series and learning center at U of L. The list of donors to the McConnell Center is secret, which The Courier-Journal has deplored in numerous editorials and columns.
• The state, through Host, ostensibly approached E.ON U.S. about whether it would be willing to sell its riverfront property for an arena.
“They knocked on our door and asked if we would be interested,” E.ON U.S. executive Chris Herman said on the Francene show on WHAS radio. “We were not marketing our property.”
• E.ON U.S. agreed to sell the property to the state for its appraised value of $14.5 million, provided the state also would pay the $62 million necessary for the company to move its power plant from the site and relocate it 30 yards away on the opposite side of Main Street.
• It is not known if E.ON U.S. is interested in buying the naming rights if an arena is built on what would be its former property. Host has not released that information, and so far it is unavailable to the public through an open records request because Host claims the Arena Authority is a non-profit organization and, therefore, not subject to state open meetings and open records law.
• The Courier-Journal has not printed any editorials protesting Host’s secrecy in running the Arena Authority.
• As a Task Force member, McConnell voted for the E.ON U.S. site and is on record as still favoring it over the old Water Company site, even though a study privately commissioned by David Jones and John Schnatter documents several reasons why the old Water Company site is a better deal for taxpayers.
 
If you have fit all the pieces together, by all means let us know. Then maybe we can call the puzzle “Real Power Politics.” If you can’t make them fit, however, join the club. Because maybe there is no puzzle. Maybe there are only unconnected random facts.
What do you think?

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