TN TAX BATTLE: FRIENDS IN HIGH PLACES (GOV SPENDQUIST REWARDS CRONIES WITH TAX DOLLARS)

News 5 Nashville ^ | 8/8/02 | Phil Williams

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http://newschannel5.com/news/investigates/friends/gov5.htm

NewsChannel 5 Investigates: Friends in High Places Officials join in unauthorized fund drive (Original Date: August 2002.) View video of this story

Would you give to a charity that wasn't legally allowed to solicit money?

If you're a Tennessee taxpayer, you already have.

In fact, you've given hundreds of thousands of dollars.

State officials say it was all for a good cause.

But investigative reporter Phil Williams says they can't tell you how every penny was spent.

In 1997, the Sundquist administration invited ad agencies to compete for the state's business. That contract was awarded to Akins and Tombras, a firm with longstanding ties to the governor. It's a contract that would be worth more than $10 million.

Still, when Alex Fischer became the state's deputy commissioner of economic and community development, he had an idea to pump even more money into the state's marketing efforts. Fischer, a former top official with Akins and Tombras, later became the ECD commissioner and then deputy governor.

The Millennium Fund was a $5 million fund-raising drive, with the money being funneled through a non-profit business group, known as the Tennessee Economic Partnership.

"The over-arching mission of the Millennium Fund is to promote Tennessee as a premier place to do business," says Amy Bunton, assistant ECD commissioner.

With the governor serving as honorary chairman for the drive, state officials began hitting up some of the state's biggest businesses to contribute to Economic Partnership.

The state even kicked in $300,000 of your money -- with no contract, no audit requirements, nothing to show taxpayers how their money was being spent.

"Taxpayers should know that these funds were spent to support Tennessee as a premier business location, and it was done so in courting decision makers to make those decisions to bring business to Tennessee," Bunton says.

State economic officials say the money helped pay for recruiting tours, such as one tied to a promotional campaign aimed at California businesses hit by the energy crisis.

But Tennessee Economic Partnership officials acknowledge the state's politically connected ad agency also has received some of the money, although they won't say how much.

In addition, insiders complain about state officials getting the presidential treatment, with limos and fancy dinners -- an allegation that's not exactly denied.

Says Bunton, "We try to reach those decision makers on their level and in doing so we've done so through executive transportation, travel, accommodations and entertainment."

"We don't have any idea what is happening with the money," says Barbara Toms, director of the state Division of Charitable Solicitations. Her office regulates charities and other non-profits in Tennessee.

She says her files show the Economic Partnership never registered with her office as they are required to do -- and never filed any sort of audit that's also required by law.

"It is unlawful to solicit funds in Tennessee without registering," Toms explains. "You are asking people to give money. You ought to be transparent in who you are, and what you are doing with the money."

In response to a request from NewsChannel 5, the Economic Partnership produced its latest tax return.

It shows about $100,000 spent last year on travel, $200,000 on public relations and advertising, and more than $200,000 on conferences. But no details about exactly who benefited from those expenditures.

So why did your tax dollars go to a fund-raising campaign that wasn't following the law?

"I think that's a question for TEP," Bunton tells Phil Williams.

"But state money has been going to the TEP," Williams replies.

"That's true."

Officials with the Economic Partnership say they will get in compliance with the law -- only then, regulators say, will you get some idea what you've been paying for.

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lINK TO PART 3, 2, 1Parts, 1, 2, 3

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