Tennessee Rep. Bud Hulsey confirms he was served with federal subpoena

By: - March 23, 2022 2:43 pm
Tennessee State Capitol (Photo: John Partipilo)

Tennessee State Capitol (Photo: John Partipilo)

Only one state House member other than Speaker Cameron Sexton admitted Wednesday to being subpoenaed this week to testify before a federal grand jury.

Rep. Bud Hulsey confirmed to the Tennessee Lookout he was served Tuesday as part of a federal probe into corruption on Capitol Hill.

Hulsey speculated the grand jury wants to interview him because he did business with former House Speaker Glen Casada for a constituent survey in 2020. 

The FBI raided the offices and homes of Casada, now-former Rep. Robin Smith and Rep. Todd Warner in January 2021, an investigation that led to a wire fraud guilty plea by Smith two weeks ago shortly after she resigned her House post.

Smith pleaded guilty to working with Casada to pressure House Republicans to use a new campaign vendor, Phoenix Solutions, which was run by Cade Cothren and made more than $200,000 off members and the House Republican Caucus. Casada is identified as a former House Speaker from January 2010 to August 2019, and Cothren is thinly-veiled as his resigned chief of staff.

State Rep. Bud Hulsey, R-Kingsport (Photo: Tennessee General Assembly)
State Rep. Bud Hulsey, R-Kingsport (Photo: Tennessee General Assembly)

A spokeswoman for Gov. Bill Lee said no one in the governor’s office was subpoenaed.

The Lookout talked Wednesday to some 25 House Republicans who were in leadership positions, did business with Phoenix Solutions or were offered perks for a vote on the governor’s voucher program.

Two other House Republicans, Rep. Paul Sherrell of Sparta and Rep. Jason Zachary refused to confirm or deny whether they were subpoenaed. Sherrell, who did business with Phoenix Solutions, declined to comment.

Zachary would only say, “I know what you know” and declined to comment when asked if he was subpoenaed.

Zachary, R-Knoxville, did acknowledge talking to federal agents on several occasions because of a political survey he had Casada do as a campaign consultant. When Casada stepped down from the Speaker’s post in mid-2019 amid a sexist and racist texting scandal and complaints about his management style, he also lost his job with a veterinary pharmaceutical sales company. He then started doing campaign consulting for House members.

Speculation was that 10 to 12 House Republicans were subpoenaed by the grand jury, but several who had Phoenix Solutions do campaign work or taxpayer-funded mailers denied being called to testify.

Speaker Sexton in a Tuesday statement said, “We have been fully cooperating with the federal authorities since I became speaker in 2019. It is not unexpected that I and other members would be called to appear before a grand jury to provide factual statements as part of this ongoing investigation.”

Casada’s office door at the Cordell Hull Building was locked, but Warner said Wednesday he had not been subpoenaed. 

Rep. Kent Calfee, whose office was searched even though he is not a target in the investigation, said he was not subpoenaed. He has already been interviewed by the FBI.

The House Republican leadership team, including Majority Leader William Lamberth, Caucus Chairman Jeremy Faison, Caucus Whip Johnny Garrett and Deputy Speaker Ron Gant, who serves as Assistant Majority Leader, all said Wednesday they were not subpoenaed, based on information gathered by reporters.

Lamberth was in charge of writing checks for House Republican Caucus business, including a $45,000-plus expenditure with Phoenix Solutions, which was paid through the Tennessee Republican Party.

Garrett said Wednesday he initially spoke with a “Candice” when he first communicated with Phoenix Solutions about doing campaign work for the caucus. He quickly figured out the woman was not a political operative and asked to speak to “Matthew Phoenix,” who purportedly ran the business. According to Smith’s guilty plea document, Cothren posed as “Matthew Phoenix” and ran the company, giving kickbacks to Casada and Smith for directing business to him.

Speculation was that 10-12 House Republicans were subpoenaed by the grand jury. Rep. Jason Zachary, R-Knoxville, acknowledged talking to federal agents on several occasions but wouldn’t confirm or deny whether he was subpoenaed.

“Candice” is identified as a girlfriend of Cothren’s who helped him create a fake email chain about the company needing to be paid, according to Smith’s guilty plea. She is reportedly said to be Ava Korby, the daughter of Calfee’s former administrative assistant, Nadine Korby, who was suspended for more than a year and then fired shortly after Smith resigned.

“I did not think I was being hoo-dooed …,” Garrett said Wednesday. “But I realized she really doesn’t have a good grasp of some of the questions I was asking about campaign activity.”

He requested another phone meeting with “Phoenix,” and Smith “shepherded” the process.

“We probably spoke for an hour, and I was talking to a political operative who could answer my questions. But I had no idea at the time I was not speaking to ‘Matthew Phoenix,’” Garrett said. He believes that call took place around March 2020.

Democratic Rep. John Mark Windle said Wednesday he was not subpoenaed. He is believed to have been offered the position of general in the National Guard in return for his vote on the governor’s education savings account bill, which passed after Casada held the board open for nearly 45 minutes and worked the chamber for a tie-breaker in April 2019. Casada has denied making the offer, saying he didn’t have the authority. 

Gov. Bill Lee has said repeatedly he doesn’t know anything about such an offer to Windle, though Calfee says he discussed the matter with Lee in a meeting in the governor’s office.

Ultimately, Zachary agreed to vote for the bill, enabling it to pass, with the understanding Knox County Schools would be removed as a voucher district. Under the program, which was found unconstitutional in two lower courts and awaits a ruling from the Supreme Court, low-income students in Metro Nashville Public Schools and Shelby County School could receive state funds, about $7,300, to enroll in private schools.

State Rep. Bob Ramsey, R-Maryville, said Wednesday he was offered a new jail pod in return for his vote on the ESA bill. He declined without hearing from his sheriff.

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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.