Stockard on the Stump: FBI expediting Tennessee House corruption investigation

March 25, 2022 7:05 am
Speaker of the House Cameron Sexton is one of several lawmakers and legislative staff members to be supoenaed as part of an investigation but he says there's nothing unusual in the action. (Photo: John Partipilo)

Speaker of the House Cameron Sexton is one of several lawmakers and legislative staff members to be supoenaed as part of an investigation but he says there’s nothing unusual in the action. (Photo: John Partipilo)

It wouldn’t be shocking to see indictments come up before the Legislature adjourns in late April.

Sexton and state Rep. Esther Helton, R-East Ridge, both confirmed Thursday they are to go before the grand jury early next week. Helton told the Tennessee Lookout she believes she was ordered to show up because she used a phony New Mexico-based company called Phoenix Solutions for constituent mailers.

Although 10-12 people are believed to have been subpoenaed as part of the federal investigation into the use of the bogus company, reporters have been able to find only three who would admit it this week, including Sexton, Helton and Rep. Bud Hulsey, R-Kingsport. Rep. Paul Sherrell, R-Sparta, and Rep. Jason Zachary, R-Knoxville, would not comment, though Zachary repeatedly said, “I know what you know,” which isn’t nearly as much as the feds know.

Zachary did acknowledge being questioned by federal agents more than once, because he used former House Speaker Glen Casada for consulting work, as did Hulsey. Others admitted being questioned, too, but not subpoenaed.

NewsChannel5 reported Thursday that Zachary was subpoenaed, but he wouldn’t confirm it. The Knoxville Republican flipped his vote in the April 2019 voucher vote with the understanding Knox County Schools would be removed from the bill.

Who’s been served:

  • Speaker of the House Cameron Sexton
  • Rep. Esther Helton, R-East Ridge
  • Rep. Bud Hulsey, R-Kingsport
  • Connie Ridley, director of Legislative Administration

Connie Ridley, director of Legislative Administration, also confirmed Thursday she was subpoenaed. She declined to comment further. Ridley’s main role was in policing the use of third-party vendors in 2020.

Sexton, who says he’s been cooperating with the FBI since mid-2019, reiterated his position Thursday to reporters that he wasn’t surprised at being subpoenaed. When pressed by reporters, he also questioned why it would be considered “significant” to be a witness.

Attorneys take a different view of the matter. Some say it just means the grand jury is wrapping up the investigation. Others say being subpoenaed means you might not have been as congenial as the feds would like.

When Sexton took the speakership, the FBI was already looking into the potential for bribery in connection with the House vote on Gov. Bill Lee’s education savings account program when then-Speaker Glen Casada held the board open for nearly 45 minutes and worked the chamber to find a tie-breaker.

Rep. Kent Calfee told The Lookout he was on the chamber balcony when he heard Casada talk about getting Democratic Rep. John Mark Windle a promotion from colonel to general in the National Guard in return for his vote.

Republican Rep. Bob Ramsey to The Lookout this week he was offered a new pod for his county’s jail. He didn’t go for it.

After Sexton took over, the FBI’s investigation widened.

Casada, who is leaving the Legislature and running for Williamson County clerk, has denied making illicit offers and connections to shadowy campaign vendors and political action committees.

Yet a guilty plea by former Rep. Robin Smith shows that she and the person who served as House Speaker from January 2019 to August 2019 (Casada) received kickbacks from that former speaker’s ex-chief of staff (Cade Cothren) who ran Phoenix Solutions. It was a bogus campaign vendor that made more than $200,000 off the House Republican Caucus and caucus members, in some instances doing work on their taxpayer-funded mailer accounts.

Members of the Tennessee House and Senate Caucuses had plenty to say on Thursday. (Photo: John Partipilo)
Members of the Tennessee House and Senate Caucuses had plenty to say on Thursday. From left, Reps. Bo Mitchell, Vincent Dixie, John Ray Clemmons, Sen. Jeff Yarbro and Rep. Sam McKenzie. (Photo: John Partipilo)

Sexton would not say Thursday when he first knew Phoenix Solutions was phony. Nor would he say whether Chip Saltsman, a consultant for the House Republican Caucus campaign committee, had been subpoenaed. Saltsman did not respond to text messages Thursday. 

Former House members Matthew and Timothy Hill and Micah Van Huss, all allies of Casada, did not answer phone calls either to see if they were ordered to testify.

“We’ll go before the grand jury as a witness and answer any questions they have,” Sexton said. “And then they’ll come out of there with an indictment on whoever they want. I think it’s interesting to look at who probably did not get subpoenaed and that would probably give you why everybody’s getting subpoenaed.”

Who’s saying what

The Capitol/Cordell Hull complex has been buzzing this week with talk about who was served, who will get indicted next and whether this is the tip of the iceberg. Conventional wisdom is that the feds are using Casada to get to someone else. He’s got nothing else to lose.

Republican Lt. Gov. Randy McNally said Thursday he thinks the subpoenas are mainly for witnesses, which will help the grand jury set up the case for the federal government to prosecute.

Democrats, of course, aren’t so sure if everyone under subpoena is in the clear.

“If you’re cooperating, you don’t need a subpoena. They don’t force you to come in,” said Rep. Bo Mitchell, D-Nashville. 

Mitchell pointed out Thursday he and other Democrats have been “screaming from the mountaintops” for years about attempted bribery in the House and “no-show” jobs for political operatives, as well as the scheme to funnel money through vendors to lawmakers and others.

If you're cooperating, you don't need a subpoena. They don't force you to come in.

– Rep. Bo Mitchell, D-Nashville, on assertions by Republicans subpoeanas in a corruption case are purely for witnesses.

“It’s time for the public to know who’s involved in this and who’s still on the House floor casting votes,” Mitchell said.

Senate Minority Leader Jeff Yarbro noted it’s “not a normal day” for a dozen subpoenas to be issued by a grand jury in a criminal investigation.

But then again, in the Legislature, it’s nothing out of the ordinary. It happens every 15 years, give or take a couple.

Getting a handle on it

State Rep. Sam Whitson put his ethics reform legislation on notice Thursday, a measure he hopes will clean up some of the “shenanigans” going on in the Legislature.

While some lawmakers say they can’t legislate against “dishonesty,” Whitson’s bill, which is made up of four amendments, could make it harder to game the system.

For instance, more expenses and donations will have to be reported and explained, even up to the night of an election. More disclosures will have to be made by those involved in politics, including operatives who played a bigger role under Casada. 

Lawmakers and staff members such as those working for the governor also will have to provide more information on disclosure forms, even details about what companies they do business with outside state government.

Penalties for treasurers and chairmen of political action committees will be increased to a Class A misdemeanor. And there are many other changes in the proposal.

Considering you have to show a certain photo ID to vote, it only makes sense to prove who you are to raise thousands of dollars to funnel money to elections and lawmakers’ accounts.

The Registry of Election Finance would add two non-partisan members from an open government committee, in addition to facing tighter rules on publicizing meetings and term limits.

Another move could require a photo identification to start a political action committee.

Doh, I could have had a V-8! Considering you have to show a certain photo ID to vote, it only makes sense to prove who you are to raise thousands of dollars to funnel money to elections and lawmakers’ accounts. 

Whitson’s bill was on hold early in the week, but when news broke of the grand jury subpoenas, the dam apparently broke.

Watered-down brains

The Senate passed its anti-divisive concepts bill this week, enabling people who feel they’ve been harmed by a college professor to take legal action. The House already passed its version.

Sen. Mike Bell is making his presence felt in his last year in the Legislature, sponsoring the bill that some senators said is designed to protect “conservative” students from being punished by their teachers. Republicans passed the bill with ease.

One wonders if they thought about this scenario. Or, maybe they did: Suppose a student writes a paper commending former President Donald Trump and the lug-heads who stormed the U.S. Capitol in January 2021, ready to kill VP Mike Pence for refusing to stop approval of the Electoral College that put President Joe Biden into office. 

Regardless of whether you voted for Trump or Biden, it’s clear that Trump lost the election. Even the Republican election leaders in battleground states acknowledged their vote counts were legitimate after conducting all sorts of audits. Every legal challenge also fell short.

The bill focusing on “critical race theory” or “quit blaming white folks” is a slippery slope to glossing over America’s history and questions that have plagued us since Jamestown.

Suppose a professor gives a student an F for writing such a goofball paper. Then, that student could take that professor to court, gumming up the system and making a mockery of our universities.

The legislation also contains the same wording as a bill the General Assembly passed in 2021 allowing sanctions against K-12 teachers who have the temerity to teach something that might make students feel bad about themselves, for instance slavery, Jim Crow laws, lynchings and beatings.

Dubbed “critical race theory,” or the “quit blaming white folks” bill, it is the slippery slope to glossing over America’s history and the questions that have plagued our founding since anyone stepped foot in Jamestown.

Here’s a novel idea: Let’s stop trying to act like our founding fathers were gods, admit our mistakes and deal with it.

“Three G’s” advances in House

Legislation enabling the city of Germantown to take over three schools operated by Shelby County cleared the House Education Administration Committee this week.

The advancement wasn’t unexpected, since Chairman Mark White, an East Memphis Republican, sponsors the bill.

But it still has to make its way through the Senate where it is sponsored by Germantown Republican Brian Kelsey. The outgoing senator has been absent from several meetings this year and has run into roadblocks on other measures. 

Germantown wants to regain control of the schools after they were given to Shelby County as part of a federal court agreement nine years ago when the municipal school district formed amid the dissolution of Memphis City Schools.

Officials have been negotiating for months, but Shelby County isn’t ready to give up the property or the students.

Rep. Mark White, R-Memphis (Photo: Tennessee General Assembly)
Rep. Mark White, R-Germantown.(Photo: Tennessee General Assembly)

White notes the students who are in the elementary, middle and high schools will be able to remain there.

“They would like them to remain community schools for their community,” White says.

However,  Shelby County students who live in the vicinity but not within Germantown would have to go somewhere else.

White disagrees with the notion that Germantown doesn’t want Shelby’s Black students, saying someone’s just “trying to throw bad oil into the equation.” 

Others say that’s the sticking point.

The Education Committee chairman points out he had to sponsor the legislation last year just to bring Shelby County to the bargaining table.

Shelby doesn’t want to give in and is “adamantly opposed” to the bill, according to Shelby County Schools lobbyist Tony Thompson.

“The problem is the property is not worth what it would take to replace what we would lose,” Thompson said. “We think we could absorb elementary and middle students into existing schools. But we would need a new school,” which would cost about $90 million.

The properties are appraised at a total of about $30 million, Thompson said, yet the bill seems to allow Germantown to take the property and pay only fair market value for the land.

“And the land is priceless to us, because of what we would lose and what we would need to replace it,” Thompson said.

And the old “tiny town” battle continues. The two lawmakers who sponsored this set-up are no longer in the Legislature.

Cheaper groceries, for a minute

Gov. Lee announced Thursday he is seeking a 30-day suspension of the 4% grocery sales tax to give people a break amid inflation.

Republicans immediately blamed President Biden. Democrats pointed out they’ve been proposing a break on grocery taxes for more than a decade.

The proposal will have to go through the Legislature.

More questions raised

Gov. Bill Lee’s K-12 education funding formula plan started moving in committees this week. 

Education Commissioner Penny Schwinn, though, heard an earful from lawmakers who complained about numerous amendments coming down after they wrap their brains around the bill.

For instance, charter schools were removed from the funding formula and would be funded directly by the state under one amendment. Several other changes were made, as well, including the way the financial capacity of counties will be measured.

But before everyone develops a migraine, let’s move on to lighter subjects.

On the road to nowhere

Another piece of legislation by Sen. Bell that would prohibit any sort of affirmative action from being practiced in state government appears to be dead.

Bell, a Riceville Republican, said this week he doesn’t have the votes to pass it in committee.

Likewise, a wide-ranging bill dealing with the bail bond industry by Sen. Ferrell Haile, R-Gallatin, was sent to a general subcommittee, which typically means it is done for the year. Haile spent much of last summer studying it and held lengthy meetings but couldn’t muster enough support to enact more oversight and tougher rules for bonding agents.

Leave it to Niceley

Sen. Frank Nicely, R-Strawberry Plains, blamed Congress for setting stringent campaign finance rules as he spoke in support of Kelsey. (Photo: John Partipilo)
Sen. Frank Nicely, R-Strawberry Plains, (Photo: John Partipilo)

Sen. Frank Niceley, R-Strawberry Plains, is good at interjecting interesting and odd comments into Senate proceedings, claiming to be Senate historian.

During Thursday’s session, he got up and pronounced that the nation lost its way when it “drifted toward public schools” from Christian ones.

“Now we’re drifting back to Christian schools and I think we’re on the right path,” Niceley said. 

Well, at least one person admits it.

They’ve been here for a while

An eerie silence enveloped the House chamber Thursday morning when state Rep. Jason Hodges, D-Clarksville, welcomed the FBI to the chamber during the usual session lolly-gagging. Hodges, who is not seeking re-election because he’s fed up with nonsense, is good at bringing out the knife and twisting it deep. His sense of humor will not be missed by lots of people on Capitol Hill.

“Ain’t it hard when you discovered that/ He really wasn’t where it’s at/ After he took from you everything he could steal.”


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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.