fbi

Report: Feds asked lawmaker if he knew Casada, Cothren were owners of Phoenix Solutions

House Speaker Glen Casada (R-Franklin) checks his phone as he awaits the joint convention to hear Gov. Bill Lee’s first State of the State address in Nashville on March 4, 2019. (Erik Schelzig, Tennessee Journal)

State Rep. Kent Calfee (R-Kingston) tells the Tennessee Lookout’s Sam Stockard federal agents asked him whether he was aware of the roles of former House Speaker Glen Casada and his onetime chief of staff, Cade Cothren, in a mysterious campaign vendor.

“They asked me if I knew Cade Cothren and Glen Casada were owners of Phoenix Solutions,” Calfee told the publication.

The FBI raided the homes and offices of Casada, Cothren, and Reps. Robin Smith (R-Hixson) and Todd Warner (R-Chapel Hill) on the eve of the legislative session in January.

Calfee said FBI agents searched the computer of his assistant, Nadine Korby, who has been placed on administrative leave along with Casada aide Carol Simpson and interim chief of staff, Holt Whitt.

Calfee, a critic of the way school voucher legislation was passed in 2019, told the Lookout he believes the FBI is conducting three investigations, but declined to give specifics.

As first reported by The Tennessee Journal, federal agents had conducted interviews throughout the legislative session of lawmakers who engaged Casada and Smith for political consulting work.

As recently as the last day of the session, state Rep. Jason Zachary (R-Knoxville) told colleagues he had spoken to federal agents in his office. Zachary spent $4,408 with vendor Phoenix Solutions (though he misspelled it as “Phenoix Solutions” on his disclosures), the outfit believed to be at the center of the FBI probe.

Several colleagues have said Smith was a vocal advocate for steering more political work to Phoenix Solutions. She and Casada have both declined to say whether they have an ownership stake in the business.

“They did not tell me I couldn’t disclose the information that we discussed,” Zachary explained to Chattanooga Times Free Press reporter Andy Sher earlier this month, adding “even with my colleagues, I’ve still tried to be very careful about disclosing what we discussed.”

“Everything centered around the investigation with my colleagues, specifically Rep. Casada, Rep. Smith… I did a survey with Glen and it went through the Phoenix Solutions,” Zachary told the paper.

Warner a no-show at Registry hearing over failure to file disclosures due to FBI raid

Rep. Todd Warner (R-Chapel Hill) is sworn into the House in Nashville on Jan. 12, 2021. (Erik Schelzig, Tennessee Journal)

Freshman Rep. Todd Warner (R-Chapel Hill) was a no-show at Wednesday’s meeting of the Tennessee Registry of Election Finance to take up his request to waive his campaign finance disclosure requirement due to an FBI raid on his home and office.

Executive Director Bill Young said Warner had indicated he or his attorney would attend the meeting. But nobody appeared on his behalf.

“The FBI confiscated all files and documents related to my campaign including check copies from donations and checking account ledgers,” Warner said in last month’s email first reported by The Tennessee Journal. “They also took all computers and back ups for the campaign and my business.”

Registry member Hank Fincher said nothing prevented Warner from reconstructing his fourth-quarter disclosure from electronic bank records.

“The FBI took my bank records is not much of an excuse,” Fincher said.

The Registry agreed to send a letter to Warner saying the panel doesn’t have the authority to waive filing requirements.

Rep. David Byrd (R-Waynesboro) also missed filing his report while hospitalized for COVID-19. Family members had alerted the panel only the lawmaker had access to the information needed to make the disclosure. The Registry again determined it wasn’t in a position to give Byrd a pass on filing requirements.

Phoenix calling: Mystery vendor received more than $200K in 2020 (UPDATED)

Reps. Robin Smith (R-Hixson), left, and Mark Cochran (R-Englewood) are sworn into the 112th General Assembly on Jan. 12, 2021. (Erik Schelzig, Tennessee Journal)

A mystery campaign vendor believed to be at the center of an FBI investigation into three sitting House members and a former chief of staff was the beneficiary of more than $200,000 in Republican spending.

As of Monday evening, Phoenix Solutions was reported to have received $82,450 during the fourth quarter to bring its total haul for the year to $200,850. About $72,000 of that has come from Rep. Robin Smith, a Hixson Republican who was among the lawmakers who had their homes and offices searched, and her Leadership Pioneers PAC.

Smith and the PAC spent $14,500 on the company in the quarter, with the money going toward get-out-the-vote efforts, a digital fundraising campaign, and independent expenditures in support for Reps. Mark White of Memphis, John Gillespie of Germantown, and Mike Sparks of Smyrna.

Also reporting spending on Phoenix in the quarter were Republican Reps. Esther Helton of Signal Mountain ($10,700 for advertising), Charlie Baum of Murfreesboro ($7,300 for advertising) and Patsy Hazlewood of Signal Mountain ($5,600 for consulting fees). The state Republican Party spent another $44,500 on Phoenix’s services, including on Gillespie and unsuccessful House candidates John Dawson of Clarksville and Patti Possell of Cordova.

The subjects of the FBI searches were Reps. Todd Warner (R-Chapel Hill) and Glen Casada (R-Franklin), along with Cade Cothren, who was Casada’s top aide when he was speaker.

“I am fully cooperating. I plan to be doing that,” Smith told reporters after the FBI raids. Her attorney said in a statement that Smith was not a “target” of the investigation.

Pressed by the Chattanooga Times Free Press’ Andy Sher about whether she had any connection to Phoenix, Smith replied: “All I will tell you is we’ve issued a statement. I’m fully cooperating. I don’t want to do anything to jeopardize what’s going forward. And I look forward to being able to issue another statement in the future.”

Phoenix has become a new player since Smith’s election to the General Assembly, with several lawmakers saying she was a major advocate for using the New Mexico-based outfit.

Before Monday’s disclosures, Phoenix had received $118,400 in 2020, including $22,800 from Kent Calfee of Kingston, $21,900 from Paul Sherrell of Sparta, $6,200 from Dan Howell of Cleveland, $4,400 from Jason Zachary of Knoxville (who misspelled the name of the company as “Phenoix” in his disclosure), $1,900 from Baum, $1,700 from Hazlewood, and $1,700 from Mark Hall of Cleveland.

McNally: Lawmakers should resign if arrested

Rep. Glen Casada speaks to fellow Republicans in a caucus meeting on Jan. 10, 2019. (Erik Schelzig, Tennessee Journal)

Senate Speaker Randy McNally, an Oak Ridge Republican who wore a wire for the FBI in the Rocky Top investigation in the 1980s, says state lawmakers who who had their homes and offices searched by federal agents should resign if they are arrested.

“Of course nobody’s been arrested. They’ve just had search warrants,” McNally told the Chattanooga Times Free Press. “But, if somebody’s arrested, I think they should resign.”

The lawmakers who had their offices and homes raided on Friday include former House Speaker Glen Casada (R-Franklin), Rep. Robin Smith (R-Hixson), and Rep. Todd Warner (R-Chapel Hill). The FBI is also looking into former top Casada aide Cade Cothren, interim House Chief of Staff Holt Whitt, and two legislative staffers.

So far we’ve heard from the lawyers of Smith and Whitt:

[Smith] intends to cooperate fully with the investigation in all respects. while she would have preferred to do so voluntarily, Robin understands this may not have been possible…. [She] “is not the target of the investigation, and she has not done anything wrong. Please understand that due to the ongoing investigation, Robin will not be providing any further comment.”

— Smith attorney Ben Rose to the Chattanooga Times Free Press.

Holt Whitt was one of several individuals contacted by agents with the Federal Bureau of Investigation regarding an ongoing investigation. Mr. Whitt is a well-respected legislative aide with an impeccable reputation, and he has not been charged with any wrongdoing. He is cooperating fully with the investigation. Out of respect for the legal process, Mr. Whitt will have no further public comment regarding this matter.”

— Whitt attorney Ty Howard.

Federal agents descended on Rep. Warner’s home and business in Marshall County with search warrants, the contents of which remain shrouded in mystery by the government. Significantly, Rep. Warner has not been charged with any wrongdoing.”

— Warner’s attorney Peter Strianse

FBI raids state lawmakers’ homes, offices

Federal agents and legislative staffers confer outside the office of Rep. Glen Casada (R-Franklin) on Jan. 8, 2021. (Erik Schelzig, Tennessee Journal)

Federal agents descended on the homes and legislative offices of Republican state Reps. Glen Casada of Franklin, Robin Smith of Hixson, and Todd Warner of Chapel Hill on Friday. They also executed searches at the home of former Casada chief of staff Cade Cothren and three current legislative staffers.

The FBI didn’t say what it was investigating, though speculation spread around the Cordell Hull Building that agents were looking into efforts supporting Warner defeat of Rep. Rick Tillis (R-Lewisburg) in last year’s primary and the previous year’s push to pass a controversial school voucher bill.

Feds charge Democratic state Sen. Robinson with embezzlement

Freshman state Sen. Katrina Robinson (D-Memphis) is facing federal theft and embezzlement charges.

Prosecutors allege Robinson stole stole more than $600,000 from her business, the Healthcare Institute, by paying herself more than what was allowed under the terms the grant she received, the Daily Mempian reports.

Robinson defeated the late Sen. Reginald Tate in the primary in 2018 and went on to win the heavily Democratic district.

The Senate Democratic Caucus issued the following statement:

It’s clear that Sen. Robinson’s work in the state legislature on behalf of her constituents is not in question here today. Just like every other American, Sen. Robinson deserves the presumption of innocence and due process under the law. Her case should be resolved by a court of law, not by the court of public opinion.”

Investigators this week searched Robinson’s home and business again after conducting earlier raids in February. The complaint alleges Robinson used the money to buy a vehicle for her daughter, clothing, and beauty products. She is also charged with spending grant money on her wedding and honeymoon, followed by legal fees for her divorce.

Robinson’s company, the Healthcare Institute, in 2015 received a $1.6 million grant from the U.S. Department of Health and Human Services in 2015 to educate people  “looking for a jumpstart to their education and also to provide patient education to the elderly community.”

An anonymous complaint filed in 2016 alleged Robinson had spent $550 in grant funds to buy a Louis Vuitton handbag. The agency’s inspector general opened an investigation, which the FBI later joined.

FBI searches nursing school founded by Democratic state senator

The FBI has executed search warrants at a Memphis  home and nursing school of Democratic state Sen. Katrina Robinson.

Toranio Bishop, who works at the nearby Detroit Barbershop, told the Commercial Appeal he said he saw what appeared to be FBI agents enter the nursing school at at 7 a.m. Friday.

“They came in like a parade,” Bishop told the paper, adding that  students arriving  at the school then left immediately.

The lawmaker didn’t immediately respond to questions from the Commercial Appeal or the Daily Memphian.

“We’ve been made aware of the investigation and have received no indication that it relates to the legislature or her legislative service,” said Senate Democratic Caucus spokesman Brandon Puttbrese. “Because the investigation is ongoing, we will not be making additional statements and will defer any further questions to Sen. Robinson’s attorney. Our thoughts are with Sen. Robinson and her family.”

Robinson founded the Healthcare Institute in 2015, according to its website. The for-profit school received at least $1.6 million in funding from the U.S. Department of Health and Human Services.

Robinson in 2018 defeated incumbent Sen. Reginald Tate in the Democratic primary. Tate died last year.

Former Senate speaker among those interviewed by feds in Brian Kelsey probe

Sen. Brian Kelsey (R-Germantown), right, attends a Senate Education Committee meeting in Nashville on April 16, 2019. (Erik Schelzig, Tennessee Journal)

Former Senate Speaker Ron Ramsey is among officials interviews by federal officials investigating fundraising related to state Sen. Brian Kelsey’s failed 2016 congressional bid, The Tennessean reports.

That Kelsey’s campaign money matters are under the federal microscope has been known since this spring. But the newspapers Joel Ebert is first to reveal some of the name of who agents have contacted in the matter.

Ramsey told the paper he was interviewed by an FBI agent in May or June.

“They wanted to subpoena me to appear before a grand jury,” Ramsey said.

Also interviewed was Nashville Councilman Steve Glover, who gave money to Kelsey’s federal PAC during a 2016 after receiving money from the senator’s federal PAC.

“They just had several questions about several things,” Glover said in a phone interview. “I just didn’t have much to share.”

Agents also flew in from Washington in August or September to interview a current lawmaker, whom the paper did not identify in its report.

Candidates are prohibited from using money raised for state races in federal campaigns. As The Tennessean reported in 2017 (and
later augmented by a complaint filed with the Federal Election Commission), Kelsey’s state committee, Red State PAC, gave thousands of dollars in campaign contributions to fellow state lawmakers, who then turned around and gave donations to his congressional account.

The former state Senate Judiciary chairman also had more than $100,000 from his state account transferred to the Standard Club PAC, which then gave money to the American Conservative Union — both directly and through another committee run by conservative businessman Andy Miller Jr. The national group then made independent expenditures on Kelsey’s behalf.

The American Conservative Union’s director of government affairs at the time was the former Amanda Bunning. She and Kelsey married in January 2018.

Kelsey has denied any wrongdoing.

A deep dive into the Rocky Top corruption scandal

The Rocky Top investigation of the 1980s revealed bingo parlor operators had taken over state charters of legitimate Tennessee charities to run illegal gambling operations. Several state officials were indicted in the probe and two committed suicide. Randy McNally, then a backbencher in the state Senate, played a key role in the investigation by wearing a wire for FBI. Today, he’s the speaker of the Senate.

The Tennessean’s Joel Ebert has taken a deep dive into the scandal — and its lessons for the current political climate — for the paper’s its Grand Divisions podcast and in a print story with lots of great archival images.

It’s a great read (or listen) for a rainy fall day in Tennessee. Check it out here.

 

 

Report: Feds and TBI involved in probe of voucher vote

Rep. John Mark Windle (D-Livingston) speaks with House Finance Chair Susan Lynn (R-Mt. Juliet) in the House chamber on April 23, 2019. (Erik Schelzig, Tennessee Journal)

Despite the housecleaning that has taken place in the lower chamber of the General Assembly, state and federal officials are still looking into allegations that former Speaker Glen Casada offered inducements to lawmakers in exchange for supporting controversial voucher legislation, The Daily Memphian’s Sam Stockard reports.

The publication confirmed that agents with the FBI and Tennessee Bureau of Investigation have spoken to lawmakers about allegations that Casada and his staff about made promises as part of an effort to break a 49-49 vote on the bill in May. Casada kept the board open for more than 40 minutes to try to make the case to various lawmakers, including on the balcony outside the House chamber.

Casada has denied any wrongdoing, calling allegations of inducements “unequivocally false.”

State Rep. Jim Coley (R-Bartlett) said the move to keep the board open  set a bad precedent for close votes.

“It’s going to be very interesting to see what happens because it was certainly improper and one of the things Glen did that unraveled his speakership,” Coley said.

Democratic Rep. G.A. Hardaway of Memphis, the chairman of the Tennessee Black Caucus of State Legislators, is preparing a letter to TBI Director David Rausch requesting an investigation into potential “public corruption,” in connection with the voucher vote.

One area of widespread speculation is whether Rep. John Mark Windle (D-Livingston), who recently became a full colonel in the Tennessee National Guard, was offered a promotion to general if he switched his vote to favor the voucher bill.

Windle has confirmed a conversation took place in which Casada suggested he could be made a general if he supported the bill. But he remained in the ‘no’ column.

“I voted no on the bill as a matter of principle, and that vote decision did not change. The people of Fentress, Jackson, Morgan and Overton counties are fiercely independent, and their vote is not for sale,” Windle said in a statement after the allegations were first made public. “After the vote, as a former prosecutor, I sought the guidance of Tennessee ethics authorities and followed their recommendations.”