New TNJ edition alert: The end or the beginning on FBI probe?
The latest edition of The Tennessee Journal is out. Here is what’s in it:
— Are indictments the conclusion of FBI probe or opening gambit?
— Casada poised to lose legislative pension if he strikes plea deal.
— From the campaign trail: FEC flags filings for errors – but nothing yet on Andy Ogles, a temporary replacement for Mike Bell, and a soft landing for Amy Weirich.
— Obituary: Former longtime state research chief dies at 89.
Also: Bartlett puts ordinance seeking to limit campaign signs on hold, Shelby County clerk takes issue with being called AWOL for Jamaica trip, Asian-American groups oppose Biden’s nominee for federal prosecutor in the Eastern District, and Susan Lynn is sorry about all those things she said about Mae Beavers.
As always, access the your copy of the TNJ here.
Or subscribe here.
Achy breaky vendor? Informants say Smith called purported operative ‘Matthew Cyrus’
Three confidential informants within the Cordell Hull Building assisted federal investigators in a probe into the activities of former House Speaker Glen Casada, then-Rep. Robin Smith, and ex-legislative staffer Cade Cothren, according to court documents obtained The Tennessean’s Adam Friedman, Melissa Brown, and Mariah Timms.
An affidavit filed in support of the search of the FBI’s search of Smith’s home and electronic devices in January 2021 was apparently inadvertently left open for public perusal in East Tennessee federal court. The document has since been sealed, but not before the Tennessean reporters got their hands on it.
The affidavit recounts how the confidential informants began relaying details to investigators in May 2020, specifically about how Smith promoted a vendor called Phoenix Solutions to colleagues. According to Smith’s guilty plea earlier this year and last week’s indictments of Casada and Cothren, the outfit was run by Cothren and the two lawmakers allegedly received kickbacks for directing business to it.
The informants told the FBI there had been several gaps in the efforts by Smith and Casada to hid Cothren’s participation. They included his endorsement of checks meant for Phoenix Solutions and having money direct deposited into a Davidson County bank even though the company was ostensibly based in New Mexico.
Smith told caucus members Phoenix Solutions was run by a man named Matthew Phoenix who had previously worked for Jamestown Associates, a real political consulting company based in Washington. But investigators established nobody by that name had worked for Jamestown. After the meeting, Smith appeared to slip up while speaking to a confidential informant, calling the operative “Matthew Cyrus.” She later tried to correct herself by saying Cyrus was Phoenix’s middle name, the warrant said.
A third informant recorded a call in which Smith said she sometimes got confused because the consultant went by both Matthew Phoenix and Matthew Cyrus.
Meanwhile, Andy Sher of the Chattanooga Times Free Press reports Smith has asked for her sentencing to be delayed from its original date of Oct. 17 to at least the end of January 2023.
“The plea agreement . . . contemplates the defendant will cooperate with the government in this and related cases,” the motion said. “It is anticipated the defendant will testify in United States v. Casada.”
The judge in the Casada and Cothren case has scheduled the trial to begin Oct. 25, though it’s likely proceedings will be delayed if the defendants waive their right to a speedy trial.
UPDATE: Smith’s sentencing has been rescheduled for Jan. 30.
‘Make sure no one knows it’s me:’ Read the 20-count indictment of former speaker, top aide
Here is the the 20-count federal indictment of former state House Speaker Glen Casada (R-Franklin) and his onetime chief of staff, Cade Cothren:
Continue readingUNITED STATES OF AMERICA v. [1] GLEN CASADA, [2] CADE COTHREN. No. 3:22-00282
INDICTMENT
THE GRAN JURY CHARGES:
BACKGROUND ALLEGATIONS
At all times material to this Indictment unless otherwise indicated:
1. The Constitution of the State of Tennessee (“the State”) established that the legislative authority of the State shall be vested in a General Assembly, which shall consist of a Senate and House of Representatives.
2. The Tennessee House of Representatives (“Tennessee House”) consisted of approximately ninety-nine members appointed among counties and electoral districts. Representatives served two-year terms. The Speaker of the House was the presiding officer of the Tennessee House.
3. GLEN CASADA was a member of the Tennessee House, representing District 63, which included part of Williamson County, Tennessee. CASADA was first elected to the Tennessee House in or around 2003 and was reelected to serve as a Representative in each subsequent General Assembly. CASADA served as Speaker of the Tennessee House from in or around January 2019 until in or around August 2019. In or around August 2019, CASADA resigned as Speaker after allegations became public regarding his then Chief of Staff, CADE COTHREN, but CASADA remained as a member of the Tennessee House.
4. Individual 4 was a member of the Tennessee House, representing District 26, which included part of Hamilton County, Tennessee. Individual 4 was first elected to the Tennessee House in or around November 2018 and was reelected in or around November 2020.
5. Individual 4 owned and operated a political consulting company called Company 1. Company 1 provided political consulting, mail, and project management services. Company 1 held Bank Account x0738 at Financial Institution 2.
6. CASADA owned and operated a political consulting company called Company 2. CASADA started Company 2 in or around October 2019. Company 2 held Bank Account x4447 at Financial Institution 2.
7. As Representatives, CASADA and Individual 4 each held an office of trust under the Constitution of the State of Tennessee and owed a fiduciary duty to provide honest services to the State and its citizens. As members of the State of Tennessee’s 111th General Assembly, on or about January 8, 2019, CASADA and Individual 4 each swore that they would “not propose or assent to any bill, vote or resolution, which shall appear to me injurious to the people, or consent to any act or thing, whatever, that shall have a tendency to lessen or abridge their rights and privileges.”
8. The Tennessee House adopted Permanent Rules of Order for the 111th General Assembly. The Rules included an Ethics Code, which stated that “Representatives should avoid conduct that even appears to violate the trust that the people have placed in them.” Conduct violating the Ethics Code included: “Actions that destroy a representative’s independence of judgment as a legislator”; “Actions that are an abuse of the representative’s official position, including, but not limited to, placing undue influence upon any state department, agency, court or governmental subdivision”; and “Actions that are a personal interest in conflict with the proper discharge of the representative’s duties.” The Tennessee House adopted the Rules of Order under CASADA’s name as Speaker, and, while he served in this role, CASADA was responsible for preserving them. As Speaker, CASADA was also responsible for appointing members of the House Ethics Committee.
9. COTHREN was a businessman and former Chief of Staff to CASADA when CASADA was Tennessee House Speaker. In 2019, multiple news forums published allegations that COTHREN had engaged in inappropriate conduct. On or about May 3, 2019, COTHREN resigned his position as Chief of Staff.
10. In or around November 2019, COTHREN established Phoenix Solutions, LLC, with CASADA and Individual 4’s knowledge and support. Phoenix Solutions provided constituent mail services to members of the Tennessee General Assembly and to political campaigns for State offices. Phoenix Solutions held Bank Account x3886 at Financial Institution 1 and Bank Account x9665 at Financial Institution 3.
11. The State allocated Tennessee Representatives $3,000 annually to fund postage and printing of items to be sent to the legislators’ constituents (the “Mailer Program”). According to Tennessee House guidelines, Representatives were permitted to use Mailer Program funds to design and mail legislative update mailers and legislative surveys to their constituents. Representatives were permitted to use campaign funds to offset additional expenses beyond the $3,000 allocated under the Mailer Program.
12. The Tennessee House Speaker’s Office had the authority to approve or deny a vendor to provide services or any mailing funded by the Mailer Program.
13. The Office of Legislative Administration (“OLA”) managed the operation of the Mailer Program in consultation with the Senate and House Speakers. OLA’s Director of Legislation, in consultation with the Senate and House Speakers and their Offices, was responsible for approving invoices related to the Mailer Program and managing disbursements of State funds to vendors.
14. In each of the calendar years 2019, 2020, and 2021, the State of Tennessee received more than $10,000 in federal benefits.
COUNT ONE
18 U.S.C. § 371
(Conspiracy)
15. Paragraphs 1 through 14 are incorporated and realleged as if fully set forth herein.
I. Objects of the Conspiracy
16. Beginning in or around October 2019 and continuing until in or around January 2021, in the Middle District of Tennessee and elsewhere, CASADA and COTHREN did knowingly conspire and agree with each other and with other individuals known and unknown to the Grand Jury, to commit the following offenses against the United States:
a. Theft Concerning Programs Receiving Federal Funds: that is, for CASADA and Individual 4, agents of Tennessee, a State which during each of calendar years 2019, 2020, and 2021 received federal benefits in excess of $10,000, and together with and aided and abetted by COTHREN, and others known and unknown to the Grand Jury, to embezzle, steal, obtain by fraud, and otherwise without authority knowingly convert to the use of any person other than the rightful owner and intentionally misapply, property that is valued at $5,000 or more, and was owned by, and was under the care, custody, and control of the State of Tennessee, in violation of Title 18, United States Code, Sections 666(a)(l)(A) and 2;
b. Bribery and Kickbacks Concerning Programs Receiving Federal Funds: that is, for CASADA and Individual 4, agents of Tennessee, a State which during each of calendar years 2019, 2020, and 2021 received federal benefits in excess of $10,000, aided and abetted by others known and unknown to the Grand Jury, to corruptly solicit, demand, accept, and agree to accept for their own benefit, things of value from COTHREN, intending to be influenced and rewarded in connection with a business, transaction, and series of transactions of the State of Tennessee valued at $5,000 or more, that is, payments of State funds to Phoenix Solutions, both directly and through Company 1 and Company 2, for mailer services, in violation of Title 18, United States Code, Sections 666(a)(l)(B) and 2;
c. Bribery and Kickbacks Concerning Programs Receiving Federal Funds: that is, for COTHREN, aided and abetted by others known and unknown to the Grand Jury, to corruptly give, offer, and agree to give things of value to CASADA and Individual 4, agents of Tennessee, a State which during each of calendar years 2019, 2020, and 2021 received federal benefits in excess of $10,000, intending to influence and reward CASADA and Individual 4 in connection with a business, transaction, and series of transactions of the State of Tennessee valued at $5,000 or more, that is, payments of State funds to Phoenix Solutions, both directly and through Company 1 and Company 2, for mailer services in violation of Title 18, United States Code, Sections 666(a)(2) and 2; and
d. Honest-Services Wire Fraud: that is, for CASADA, COTHREN, and Individual 4, and others known and unknown to the Grand Jury, to devise and intend to devise a scheme and artifice to defraud and to deprive Tennessee and the citizens of Tennessee of their right to the honest services of a public official, namely, the honest services of CASADA and Individual 4, members of the Tennessee House of Representatives and elected state officials, through bribery and kickbacks, in violation of Title 18, United States Code, Sections 1343 and 1346.
Casada, Cothren indicted on federal bribery, kickback charges
Former Tennessee House Speaker Glen Casada and his onetime chief of staff, Cade Cothren, have been indicted on federal bribery and kickback charges. The FBI arrested both at their homes on Tuesday morning.
Casada is retiring from the House this year after stepping down from the speakership amid scandal in 2019. He was overwhelmingly defeated in his bid for Williamson County Clerk earlier this year.
The charges stem from the operation of Phoenix Solutions, a shadowy campaign mail vendor that also led to the guilty plea of former Rep. Robin Smith (R-Hixson) earlier this year.
Casada and Cothren pleaded not guilty in a court appearance later on Tuesday morning.
Here’s Tuesday’s release from the U.S. Attorney’s Office:
NASHVILLE –Tennessee State Representative Glen Casada, 63, of Franklin, Tennessee, and his former Chief of Staff Cade Cothren, 35, of Nashville, were indicted by a federal grand jury yesterday and charged with conspiracy to commit the following offenses: theft from programs receiving federal funds; bribery and kickbacks concerning programs receiving federal funds; honest services wire fraud; and conspiracy to commit money laundering. Both were arrested at their homes this morning by FBI agents and will make initial appearances before a U.S. Magistrate Judge later today.
The announcement was made by Mark H. Wildasin, U.S. Attorney for the Middle District of Tennessee and Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.
The 20-count indictment, unsealed this morning, also charges Casada and Cothren with using a fictitious name to carry out a fraud; theft concerning programs receiving federal funds; eight counts of money laundering; six counts of honest services wire fraud; and two counts of bribery and kickbacks.
According to the indictment, beginning in and around October 2019, Casada, while representing Tennessee House District 63, Cothren, and another conspirator, also a member of the Tennessee House of Representatives, engaged in a fraudulent scheme to enrich themselves by exploiting Casada and the other conspirator’s official positions as legislators to obtain State approval of Phoenix Solutions as a Mailer Program vendor to provide constituent mail services to members of the Tennessee General Assembly. Casada, Cothren, and the other conspirator further sought to obtain State funds for Phoenix Solutions, Casada’s political consulting business, and a political consulting business owned by the other conspirator. It was further part of the conspiracy for Casada and the other conspirator to enrich themselves by obtaining bribes and kickbacks from Cothren, in exchange for securing the approval of Phoenix Solutions as a mailer program vendor.
The indictment alleges that Casada and the other conspirator told members of the Tennessee General Assembly that Phoenix Solutions was run by an individual named “Matthew Phoenix,” an experienced political consultant who had previously worked for a Washington, D.C.-based consulting firm. In fact, Cothren operated Phoenix Solutions, and Casada, Cothren, and the other conspirator knew that “Matthew Phoenix” was a fictitious person and secretly profited from the fraudulent venture. Casada, Cothren, and the other conspirator concealed their involvement in Phoenix Solutions by submitting sham invoices to the State of Tennessee in the names of political consulting companies owned by Casada and the other conspirator, for the purpose of secretly funneling money from the State to Phoenix Solutions through the bank accounts of these companies. In 2020, these companies and Phoenix solutions received approximately $51,947 from the State in payments associated with the mailer program.
The indictment also contains a forfeiture allegation in which the United States seeks to recover all proceeds of the crimes, including a money judgement representing the value of the proceeds traceable to any offense of conviction.
If convicted, Casada and Cothren each face up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by the FBI. Assistant U.S. Attorney Amanda J. Klopf and Trial attorney John P. Taddei of the Justice Department’s Public Integrity Section are prosecuting the case.
An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.
Here are the 10 most-read TNJ blog posts so far this year
Here are the most read stories on the TNJ: On the Hill blog through the first half of the year:
10. GOP attorney John Ryder dies. May 15.
9. Here’s who is retiring from the General Assembly this year. March 29.
8. Guess who’s back? Judge restores Starbuck to ballot. June 3.
7. Lee chooses Campbell to fill Supreme Court vacancy. Jan. 12.
6. Drew Alexander, son of former governor, dies at 52. Jan. 1.
5. Robin Smith resigns, pleads guilty. April 7.
4. Ex-girlfriend testifies Cothren had her register PAC for him. Jan. 14.
3. Lee declines to sign ‘truth in sentencing’ bill. May 5.
2. Trump endorses Ortagus in 5th District. Jan. 25.
1. Hargett charged with DUI after Bonnaroo visit. June 18.
Grand jury hears from lawmakers, staffers
State lawmakers and staffers have testified before a federal grand jury believed to be considering charges related to a campaign vendor promoted by former Rep. Robin Smith (R-Hixson), who recently pleaded guilty, former House Speaker Glen Casada (R-Franklin), and his onetime chief of staff, Cade Cothren.
Appearing Monday were House Speaker Cameron Sexton of Crossville, along with fellow Republican Reps. Patsy Hazlewood of Signal Mountain, Esther Helton of East Ridge, Bud Hulsey of Kingsport, and Jason Zachary of Knoxville.
Also giving testimony were Holt Whitt, a former interim chief of staff to the speaker, and Connie Ridley, the director of legislative administration.
Zachary told reporters afterward that he couldn’t speak about his testimony, but said it did not relate to his controversial decision to break a 49-49 tie in favor of Gov. Bill Lee’s signature school voucher bill in 2019.
House members subpoenaed in federal probe of shadowy vendor
House Speaker Cameron Sexton (R-Crossville) is among lawmakers subpoenaed to testify before a federal grand jury about a shadowy campaign vendor linked to former Speaker Glen Casada (R-Franklin) and his onetime chief of staff, Cade Cothren.
“We have been fully cooperating with the federal authorities since I became speaker in 2019,” Sexton said in a statement. “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.”
The subpoenas, which were first reported by WTVF-TV’s Phil Williams, follow a guilty plea by former Rep. Robin Smith (R-Hixson) earlier this month in which she admitted participating in a scheme to hide who was behind the vendor called Phoenix Solutions. The charging document makes thinly veiled references to Casada and Cothren being the other participants.
Smith has agreed to cooperate with the ongoing investigation as part of her plea agreement.
New TNJ alert: Will lawmaker’s guilty plea spur ethics overhaul?
In this week’s print edition of The Tennessee Journal:
— It took months after the Tennessee Waltz bribery sting to overhaul ethics laws. Will latest scandal prompt quicker response?
— Legislative roundup: Residency requirements, AG confirmation, pipeline priority, and Confederate artifacts.
— From the campaign trail: Hargett’s chief of staff leaving to run Lee re-elect, Curcio hanging ‘em up.
— Obituaries: Former Shelby County sheriff and a perennial candidate.
Also: Lee isn’t sold on gas tax moratorium, Nashville DA finds no evidence former vax chief sent muzzle to herself, Curcio calls investigative reporter a “silly person,” and liquor store owners complain of getting hammered.
As always, access the your copy of the TNJ here.
Or subscribe here.
Grip and grin: News photo shows figures at center of federal investigation
An August 31, 2021, photo in the Elk Valley Times shows Cade Cothren, the disgraced former chief of staff to then-House Speaker Glen Casada, at a ribbon cutting for a new location of his family’s Highway 55 restaurant chain in Fayetteville. Cothren is joined by Rep. Todd Warner (R-Lewisburg) and Ava Korby, the daughter of suspended legislative staffer Nadine Korby.
Cothren, Warner, Casada, and the elder Korby were among the subjects of FBI searches in January 2021. So was Rep. Robin Smith (R-Hixson), who pleaded guilty this week to a federal wire fraud charge over the creation of a front company called Phoenix Solutions, which obtained contracts to design, print, and send political mailers on behalf of Republican lawmakers.
According to the charging document, Cothren posed as a man calling himself Matthew Phoenix. He and an unnamed girlfriend calling herself “Candice” allegedly corresponded on the company’s behalf. A source with knowledge of the investigation tells The Tennessee Journal the girlfriend in question was Ava Korby.
Sydney Friedopfer, another woman once romantically involved with Cothren, testified to the Registry of Election Finance in January that she had created a PAC called the Faith Family Freedom Fund on his behalf. She told the panel she didn’t know anything about the group’s subsequent attacks on then-Rep. Rick Tillis (R-Lewisburg) in his primary campaign against Warner.
Warner spent $75,500 on a vendor called Dixieland Strategies of Rainbow City, Ala., which had never before done work in Tenenssee and didn’t appear to be registered as a business. Warner told reporters later he couldn’t remember whom he had dealt with at the outfit. Rainbow raised eyebrows in the Tillis race for using the same postal code out of Chattanooga as Phoenix Solutions and the Faith Family Freedom Fund. Another campaign vendor told reporters that Cothren had commissioned him to do work that was billed to both the FFFF and Phoenix Solutions.
No one other than Smith has been charged so far.
Whoever signed this Phoenix Solutions document has some explaining to do
According to federal prosecutors, Matthew Phoenix, the purported proprietor of political vendor Phoenix Solutions, was not a real person. They say it was actually Cade Cothren, a onetime chief of staff to then-House Speaker Glen Casada (R-Franklin). Cothren allegedly posed as Matthew Phoenix because he knew the company wouldn’t otherwise get approval to do work on taxpayer-funded constituent mailers from the General Assembly.
Rep. Robin Smith (R-Hixson) is scheduled to strike a plea deal with the U.S. Attorney’s Office in federal court on Tuesday afternoon. Smith, who resigned from the House on Monday, was aware of Cothren was posing as Phoenix, according to the charging document.
An IRS W-9 form submitted to the General Assembly in January 2020 carries the signature of Matthew Phoenix, right under a section outlining the certification is made “under penalties of perjury” that the person singning the document is a “U.S. person.”
