NASHVILLE - A Republican political campaign vendor whose firm received $202,600 in payments from Tennessee House Republicans during the 2020 election cycle was also involved in independent expenditures aiding at least two Senate GOP incumbents last fall, records show.
Registered in late 2019 as a business entity in Sante Fe, New Mexico, Phoenix Solutions LLC and its head, Matthew Phoenix, have come under public scrutiny since the Jan. 8 raids by the FBI on the offices and homes of certain Tennessee legislators.
One common thread among the players being investigated has been their dealings with Phoenix and another new political entity, the Faith Family Freedom Fund.
Transactions involving Phoenix and House member campaigns and even "constituent mail" sent at taxpayer expense have already been reported, but the Chattanooga Times Free Press has also identified state senators who benefited from the firm's work.
Phoenix Solutions reimbursed the Tennessee Republican Party's campaign committee for $7,650 in postage expenses, according to state Registry of Election Finance records. Payments were for direct mail created by Phoenix and then sent out by the party under its low-cost postage rate in support of Sen. Todd Gardenhire, R-Chattanooga, and then-Sen. Steve Dickerson, R-Nashville.
Repeated efforts to reach Matthew Phoenix have been unsuccessful. The telephone number he provided to state and GOP officials is not in service, and he has not responded to emails.
Since the firm's address is a mailbox at a printing and shipping storefront 1,200 miles from Nashville, some have questioned whether Phoenix even exists or is some kind of cover operation.
The FBI searches focused on the legislative offices of Tennessee Rep. Robin Smith, R-Hixson, former Tennessee Republican House Speaker Glen Casada of Franklin and freshman Rep. Todd Warner, R-Chapel Hill. Federal officials have yet to reveal the intent of their investigation.
Others hit in the raid included Cade Cothren, Casada's former chief of staff whose lewd and sexist texts with his then-boss helped lead to Casada's 2019 downfall as speaker.
Smith, a political and business consultant, extensively used and promoted Phoenix to her legislative clients for their campaigns and taxpayer-funded legislative updates and surveys in 2020. Smith has declined to discuss her ties with Phoenix. But Smith and her attorney, Ben Rose, have said the former Tennessee Republican Party chair is not a "target" of the federal probe. Rose noted last month that Smith was ready to "cooperate fully with the investigation in all respects."
Tennessee state Sen. Bo Watson did not hire Phoenix Solutions, but a contractor did. / Staff Photo by Robin Rudd
A NEW FRONT
Phoenix's appearance in Gardenhire's Senate District 10 and Dickerson's Senate District 20 races adds a new wrinkle to the firm's activity.
It stemmed from a $76,350 independent expenditure made by Senate Finance Committee Chair Bo Watson, R-Hixson, through his BOW-PAC to help GOP colleagues who had Democratic general election opponents.
State filings show Watson paid the money to Chattanooga-based Waterhouse Public Relations for a "multi-media" independent expenditure effort. Watson said he played no role in selecting vendors.
"I came up with a strategy that I wanted to have executed, and I paid Waterhouse as a PR company to do it," Watson said. "I did independent expenditure in the Todd Gardenhire race - he knew nothing about it, which the rules require. And I did the independent expenditure in the Steve Dickerson race."
As for what vendors were chosen and "all that kind of stuff, [Waterhouse] does all that. I just pay the bill. and I paid him to do all that," Watson said. "You'd need to talk with him about that."
The mailers "weren't negative pieces," emphasized Watson, noting the message was "these were good guys, I encourage you to support them."
Independent expenditures are legally permissible provided there is no coordination with the candidate's campaign. There was no indication of any coordination, at least judging by Gardenhire's apparent surprise when informed by the Times Free Press about Phoenix's $1,628 payment to the state GOP account for direct-mail postage in his defeat of Democratic challenger Glen Scruggs.
The remaining $5,840 went to the state GOP for postage in support of Dickerson.
During his general election campaign, Gardenhire had blasted the Senate Republican Caucus for its direct mail attack on Scruggs and told them to stay out of the contest. Gardenhire was initially speechless after being informed by a reporter about the Phoenix expenditure in his race. He vowed to get to the bottom of it and later suggested a reporter call Watson.
Albert Waterhouse said in an interview that Phoenix was one of multiple vendors his firm used to further Watson's goal of helping his GOP colleagues last year. Working with Waterhouse on the effort was Republican political consultant Vince Butler of Hixson, who has his own firm.
"Vince hired Phoenix, I'd never heard of them and haven't worked on anything else since with them," Waterhouse said. "That's the only time I worked with them."
Butler, who has previously done work with Smith, said the lawmaker did not recommend to him that he and Waterhouse use Phoenix.
"No one recommended or vouched for Phoenix Solutions," Butler said. "I learned about Phoenix Solutions after seeing some mailers they did. I liked the work, so I contacted the firm for additional information."
Butler said that although he had spoken with Matthew Phoenix by phone, he never met him. Butler said he couldn't say whether Matthew Phoenix is anyone other than who he said he was.
"You know, there's a ton of vendors I've dealt with I've not personally met face to face, especially in times of COVID," Butler said. "That is not out of the norm right now. I talked to him on the phone and corresponded by email and text but have never met him personally."
Butler said he and Waterhouse also used Phoenix for get-out-the-vote text messages in advance of the Nov. 3 election. All the texts were positive and involved no attacks on Democratic candidates, Butler said.
Phoenix Solutions' website domain was booked anonymously in November 2019. The firm registered in New Mexico as a business, using an agent known for maintaining the secrecy of its clients.
'A LITTLE BIT ODD'
After last year's August GOP primaries, the House Republican Caucus campaign committee selected Phoenix Solutions as one of its approved vendors for independent expenditures.
But questions were first raised during the meeting. Some members were suspicious about whether the firm had been involved in attacks on at least one Republican during the primary election.
House Whip Johnny Garrett, R-Nashville, an attorney, said he reached out to Matthew Phoenix to ask him about that along with other vetting questions normally asked when determining whether to use a new vendor. But it wasn't Matthew Phoenix who returned his call. It was an associate, Garrett said.
Garrett said he pressed the associate to have Matthew Phoenix call, which Phoenix did, later explaining to Garrett he had had a crisis in an unrelated campaign.
"I can tell you when he didn't appear on that first phone call, and I wasn't given a heads-up, that was a little bit odd," Garrett said. "But once I talked to him and he cleared it up, I didn't think twice about him.
"He had a response or an answer for all my questions that I asked him about," Garrett said, and he was satisfied with "their availability, how responsive they will be, that we will have approval for what they do, that nothing will go out without kind of our approval that typically happens with every mail piece."
Matthew Phoenix was "personable" and "appeared to be knowledgeable, confident that they would do the best work that they could, nothing from the conversation that I had with him appeared to be - that I wasn't talking to who I thought I was talking to. Or that he lacked the experience in the campaign world," Garrett said. "I was talking to a seasoned campaigner, whoever it was."
Given the FBI raids and ensuing uproar, Garrett said he's not sure who it was he spoke to on the phone. And Garrett now has more questions.
"One of my questions right now would be: Where is Matthew Phoenix? He was very reachable when we were going to use them, and now he's not. To me, that's a problem, because you shouldn't have any problems reaching this fellow. I shouldn't have any problems in reaching this fellow if there was something that wasn't, what I would call the doesn't-pass-the-smell test. That would be one question I would have."
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow on Twitter @AndySher1.