Rep. Robin Smith resigns amid wire fraud charge for Phoenix Solutions “kickbacks”

Feds say Casada had key role in forming illicit vendor and pressured House leaders for work

By: - March 7, 2022 11:35 am
Rep. Robin Smith, R-Hixson, talks with reporters on the opening day of the 112th General Assembly. (Photo: John Partipilo)

Rep. Robin Smith, R-Hixson, talks with reporters on the opening day of the 112th General Assembly. She resigned Monday after being indicted on federal wire fraud charges. (Photo: John Partipilo)

(This story has been updated with new details.)

Rep. Robin Smith, one of three House members raided by the FBI 14 months ago, resigned Monday morning after federal authorities charged her with wire fraud, claiming she took “kickbacks” from an illicit campaign vendor. 

Smith is set to change her plea Tuesday as part of an agreement in federal court.

Federal authorities filed the charge Friday against Smith, a Hixson Republican who ran a political consulting business while serving in the House. Smith said last year she was not a target of the FBI investigation, but the filing proves otherwise.

Neither Rep. Glen Casada nor his former chief of staff Cade Cothren are named in the indictment but are presumably  referred to.

Phoenix Solutions, a phony vendor set up by Cothren  with the knowledge of Smith and Casada received more than $202,000 in payments from House Republicans before coming under scrutiny, as well as payments for independent expenditures from two Senate campaigns, the Tennessee Lookout previously reported. Casada, who also ran a political fundraising company after leaving the speakership, is not named in the filing but is identified as the former House Speaker from January to August 2019.

Phoenix Solutions, though, netted $158,165 from campaign accounts and $51,947 from mailer programs, the filing alleges. Smith and Individual 2 both earned at least $4,143, according to the filing.

The House Republican Caucus paid $48,000 to Phoenix Solutions for mailers through the Tennessee Republican Party.

The House Speaker’s Office confirmed Monday afternoon that Smith resigned. House Speaker Cameron Sexton commended the FBI for its efforts in the investigation, calling it a “sad day” for those who know Smith.

“It is clear from the charging documents that certain individuals used their official capacity to target General Assembly members and the Republican Caucus by using a fake company to siphon off money illegally and deceptively,” Sexton said in a statement. “I will continue to cooperate fully with federal authorities as the investigation continues, which has been the case since I became speaker in 2019.”

FBI agents converged on the Cordell Hull Building Jan. 8,2021 and searched the offices of Smith, Casada, state Rep. Todd Warner, in addition to going through their homes. They also raided the home of Cothren.

Smith avoided questions last year about Phoenix Solutions, a New Mexico-based company that used the same Chattanooga postal code, 383, for election material for Warner and a political action committee called Faith Family Freedom Fund to make attack ads against now-former Rep. Rick Tillis, who was critical of Casada and Cothren. 

The filing says Individual 2 formed Phoenix Solutions in November 2019 with Smith’s and Individual 2’s knowledge and support “for the purpose of offering mail and consulting services for legislative members facing primary challengers and was later expanded to offer constituent mail services to members of the Tennessee General Assembly.”

Smith and Individual 2 told legislators the company was run by “Matthew Phoenix” and claimed he was “an experienced political consultant who had worked for” a real consulting firm in Washington, D.C. Smith and Individual 1 knew Matthew Phoenix “was a fictitious person” and was really Individual 2, the filing says.

“In truth and fact, (Cothren) ran Phoenix Solutions and Smith and (Cothren) profited from it,” the filing states.

Robin Smith 1

Prosecutors claim Smith and Casada concealed Cothren’s position because they didn’t think the vendor would be approved otherwise. They also  “kickbacks” from Cothren for using their positions as a member of the Legislature to perform official acts, “including pressuring the Tennessee House Speaker’s Office to approve Phoenix Solutions as a Mailer Program vendor and disburse state funds to Phoenix Solutions.”

In January 2020, Smith notified Individual 2  the House Speaker’s office wanted to work directly with Phoenix Solutions and that the state couldn’t pay the company without a W-9 form. Individual 2–gain, presumably Cothren–then sent a W-9 signed by “Matthew Phoenix,” according to the filing

Just a month earlier, Smith told Individual 2 he might have to “assume the role of Matthew again.” He replied, “Matthew reporting for duty!” and included a picture of a salute from the Star Wars character Han Solo.

Individual 2  told Smith he set up Phoenix Solutions in New Mexico because that state allows anonymous registration of limited liability corporations, the filing says. He created a U.S. Postal Service post office box there and forwarded mail to his home address in Nashville.

Smith and Casada continued to cover up Cothren’s  participation in the company, which went underground shortly after the feds’ raid. 

Tillis’ campaign manager filed a complaint earlier with the Registry Election Finance, claiming illegal coordination between the Faith Family Freedom Fund and Warner campaign.

Rep. Glen Casada, R-Franklin, photographed during a recent special legislative session. (Photo: John Partipilo)
Rep. Glen Casada, R-Franklin, photographed during a 2021 special legislative session. (Photo: John Partipilo)

Casada last week denied any connection to the Faith Family Freedom Fund after an ex-girlfriend of Cothren told the Registry of Election Finance she formed the PAC at Cothren’s request so he could run it, allowing him to conduct business without attracting negative attention following a scandal in the Casada administration.

Casada previously told Tennessee Lookout he had no connection with Phoenix Solutions. He also said he was “at a loss” for why the FBI raided his home and office.

In January 2020, Smith and Cothren concocted an email chain to make it seem the vendor was complaining about not getting paid. Smith sent the Speaker Cameron Sexton’s acting chief of staff an email asking why Phoenix Solutions hadn’t received payments for work and then lied about who ran the company, according to the filing.

“It’s guys from {Consulting Firm 1} who did mail two years ago that left and started their own gig … tired of doing the DC/Trump stuff. Thanks.” She forwarded the email chain to Cothren and added the message “Shhhhhhhhh.”

In June 2020, Cothren and his girlfriend, who used the name “Candice,” started an email exchange to make it look as if they were Phoenix Solutions employees and needed to be paid, according to the filing.

Smith repeated false statements about the company and a move by Phoenix to New Mexico in an effort to be paid. She also falsely claimed she didn’t make any money from Phoenix Solutions, the filing says.

 

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Sam Stockard
Sam Stockard

Sam Stockard is a veteran Tennessee reporter and editor, having written for the Daily News Journal in Murfreesboro, where he served as lead editor when the paper won an award for being the state's best Sunday newspaper two years in a row. He has led the Capitol Hill bureau for The Daily Memphian. His awards include Best Single Editorial from the Tennessee Press Association.

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