Henry steered cases to son's law firm

Henry steered cases to son's law firm

May 1st, 2011 by Dan Whisenhunt in News

The Hamilton County Commission chairman has both a personal and a political interest in a state project to widen East Brainerd Road, and advocacy groups say he also may have an ethical dilemma.

Chairman Larry Henry's son, Gary Henry, is an attorney who represents three property owners who claim the Tennessee Department of Transportation owes them more money than it has offered for right of way in the area to be widened. Such right of way challenges often lead the state to spend more taxpayer money to purchase the property.

Larry Henry said he recommended his son's firm, Gearhiser, Peters, Cavett, Elliott & Cannon, to the three property owners, all family friends. He said his son's firm in the past represented him in a similar dispute with TDOT. He said he does not see any problems with his or his son's involvement.

"[The property owners] didn't really call me as their county commissioner," Henry said. "They called me as someone who went through a similar situation."

Gary Henry also said he does not see a conflict with his father recommending his firm.

"This firm represented my father back in the late '80s and early '90s, and when these individuals contacted him, he recommended them to what he considers to be the best firm," Gary Henry said.

But state advocacy groups see potential problems with Henry recommending his son's firm.

Dick Williams, chairman of the government ethics lobbying group Common Cause Tennessee, said it's "less than appropriate."

"If the commissioner is directly involved in it, it at a minimum raises the issue of if he's steering business to his son," Williams said. "Even if the business is appropriate and the price is fair, it raises at least a question of appearance for a commissioner to be directly involved."

"I've heard of arm's-length policies in doing business, and it sounds to me as if that's a pretty short arm," said Nancy Stewart, co-president of the League of Women Voters of Tennessee, which advocates for ethics and good government. Tennessee Citizen Action also said the situation warrants more transparency.

Drew Rawlins, executive director of the state Bureau of Ethics and Campaign Finance, said there's nothing in the ethics policy for state employees that would prohibit Henry's involvement in cases where his son is an attorney.

County attorney Rheubin Taylor agreed, saying the county's ethics policy doesn't address it either.

"It sounds like a commissioner representing his district," Taylor said.

Attorney of record

Henry represents District 7, which includes East Brainerd Road.

The County Commission approved the East Brainerd Road project in 2002, and county records show Henry voted for the project.

It would widen a 2.1-mile stretch of the road from east of Graysville Road to east of Bel-Air Road. Jennifer Flynn, TDOT regional spokeswoman, said the state will spend $16 million buying the necessary rights of way. She said money for the actual road widening has not been allocated.

Details in the three cases involving Henry's son are documented in court records and TDOT files.

In a case involving property owner Jesse Riggs, Larry Henry was present when the TDOT negotiator discussed the value of the property with Riggs.

Another property owner, Catherine Haney, said Henry introduced her family to his son.

Both Haney and Riggs said Larry Henry is a personal friend.

"We've known the family for years, and that's why we [hired Gary Henry]," Riggs said.

Haney said Henry is a "friendly man. He always gets my vote."

Gary Henry also represents property owner Marti Cox-Hood, who did not return multiple calls seeking comment.

TDOT offered the Haneys $61,560, according to court records; the agency offered the Riggses $144,550. Both cases are pending.

When a property owner and the state can't agree about the purchase price, the state exercises its right of eminent domain to take property; it's known as a condemnation proceeding. Most cases result in the state spending more taxpayer money to acquire the property than was initially offered, according to William James, senior counsel with the local state Attorney General's office. The AG's office handles condemnation cases.

"It's rare for a condemnation case to end up with no increase at all," James said.

A random review of settled condemnation cases shows a pattern of substantial increases. In one settled in 2006, TDOT initially had offered Gordon Hulgan $21,750 but settled for $93,305. In a 2009 settlement with Carriage Funeral Holdings, the state paid $191,600 after it initially offered $53,300, according to court records.

How things shake out

Riggs said Larry Henry was present during the negotiations "to see if we got a fair shake, which we didn't. They appraised it way lower than it was supposed to be."

Henry said he was there as an observer.

"They asked me to come, and I sat in on that," Henry said.

Flynn, the TDOT spokeswoman, said the property owner has a right "to invite anyone of their choosing to attend the negotiations should they so desire."

"The property owner is free to follow the advice of whomever they trust to assist them in these proceedings," she said.

TDOT officials denied an open records request to inspect a negotiator's report that would have provided additional details about the meeting between Riggs and the state negotiator. The state cited Tennessee law, saying the records are not open until the purchase is completed.

In the Marti Cox-Hood case, her husband, Lonnie Hood, met with the TDOT negotiator in 2008, according to a negotiator's report found in court records. James said the Hood case is being settled.

According to the report, the Hoods were not satisfied with the state's offer, $144,000 for two pieces of property. The Hoods told the negotiator they wanted $100,000 for each tract. The report says $160,000 for both tracts would pay the Hoods' mortgage and they would pocket $40,000. After rejecting the offer, Lonnie Hood told the negotiator he would get a lawyer and see "how things shake out."

The Hoods hired Gary Henry.

On the firm's website, Gary Henry is not listed as an attorney who handles condemnation cases, but he said he does have condemnation experience. Gary Henry has signed the bulk of the court records on behalf of the three East Brainerd Road property owners, but Sam Elliot, another firm attorney who does handle condemnation work, also is listed on the documents.

Williams, of Common Cause, said Larry Henry's involvement in the cases creates an "appearance issue."

Mary Mancini, executive director of Tennessee Citizen Action, said her main concern with Henry's involvement would be transparency and added it "seems like there's a conflict of interest." She said Henry should have disclosed his involvement.

"What our organization believes in is the more sunlight you can shine on government and who's involved in what, the better," she said.

Henry said his actions were aboveboard.

"I was representing my constituents and friends," Henry said. "I think they would have called me whether I'd been a county commissioner or not."

Other owners

Other property owners along the road said Henry discussed the East Brainerd Road widening project with them, but none said Henry got directly involved in their negotiations with TDOT. None said he or she had hired the commissioner's son.

Henry said he only recommended his son's firm in the Riggs, Haney and Hood cases.

"Those are the only three I've ever talked to," Henry said. "They called me. I didn't call them."

Gary Henry said he is not working on any other cases along the road.

Jackie Wolfe, a right of way manager for TDOT, said 13 cases currently are in condemnation. TDOT declined to provide information about any of those cases.

Bones Smokehouse owner Johnny Hennen said he spoke to Larry Henry about when the project would be completed, but said he has not hired an attorney. The state is looking to purchase right of way from his business.

Hennen said there was "no need to contact attorneys yet."

Property owners in the Hurricane Creek subdivision have been wrestling with TDOT over plans to tear down the notable entrance walls along the road to make room for the widening.

Sabrena Turner, a board member of the neighborhood homeowners association, said a TDOT official met with homeowners at her realty office on Feb. 21 to discuss it. She said Chattanooga Councilman Jack Benson and Larry Henry were present.

"We wanted them there and hoped it would bear some weight," Turner said. "We just wanted [TDOT] to know we did have our local representatives there."

Benson called it an "informational meeting."

Several people who attended the meeting, including Turner, said Henry did not give his opinion about TDOT's offer.

Virginia Million, who owns several tracts along the road, said she spoke to Henry about the project but declined to comment about their discussion.

Property owner Tom Ryall said he and Henry spoke about his property along the road when the two men met by chance. He asked Henry for specifics about the project, Ryall said.

TDOT's Flynn did not comment directly on whether the agency considered Henry's involvement a conflict of interest.

"TDOT has no control over whom the property owner retains as their attorney should negotiations fail and the case go into condemnation," she said.

Henry reiterated that he did not contact property owners and ask them to hire his son. He said they asked him his advice on whom to hire, and he gave it to them.

"The Gearhiser Peters firm is, in my opinion, the best law firm there is in Chattanooga," he said.