NASHVILLE - Tennessee's top House and Senate leaders are pushing a bill to bar legislators from doing any business with the state following the Jan. 8 FBI raids on two lawmakers who as political consultants handled taxpayer-funded constituent mail for some colleagues as well as for themselves.
House Speaker Cameron Sexton, R-Crossville, and Lt. Gov. Randy McNally, the Republican Senate speaker from Oak Ridge, said their bill is intended to expand the state's existing ban on legislators selling goods to the state into a new arena - that of "services."
The speakers acknowledged their effort comes at least in part as a result of the FBI's raids on the homes and legislative offices of Reps. Robin Smith, R-Hixson, and Glen Casada, R-Franklin, the former House speaker who forced to step down in 2019 amid scandal.
Both Smith and Casada have political consulting firms that offer campaign services and have provided those services to send legislative updates and surveys for some GOP colleagues through members' state-funded postage accounts. A third lawmaker whose home and legislative office were hit by FBI agents was freshman Rep. Todd Warner, R-Chapel Hill.
The FBI has yet to specify what it's investigating. Smith and Casada did extensive business during the 2020 election cycle with two little-known political vendors. Smith also recommended one of them, New Mexico-based Phoenix Solutions LLC, to lawmakers not only for their campaign mail but for their state constituent mail accounts.
Asked about his new bill on Thursday, Sexton said, "this discussion has been around for a long time, it's not just related to that [FBI investigation], but that did help move it forward a little faster."
Sexton said, "we're moving into a different kind of economy where services are more than they were, and so we decided to go forth and put together a bill that says members of the General Assembly, their service is to the state of Tennessee. It should not be service to state employees or to the state of trying to get paid for work."
Smith's attorney, Ben Rose, said in a statement that "all such mailings involving Rep. Smith were submitted, reviewed, edited and approved by the speaker's office, as were all payments."
Sexton became speaker in August 2019, succeeding Casada, who resigned the post as a result of a scandal over sexist and racist texts exchanged with his then-chief of staff, Cade Cothren, and his bare-knuckled efforts to win approval for Gov. Bill Lee's school voucher measure amid charges of favors being exchanged for yes votes.
On Wednesday, House GOP Caucus chair Jeremy Faison, R-Cosby, added an amendment to Sexton's bill in the Public Service Subcommittee. The amendment reads that it "is an offense for any member of the General Assembly, any member's relative, or any entity in which a member of the General Assembly has a controlling interest to bid on, or offer for sale, any service to the state during the tenure of such member's office, or for six (6) months thereafter."
Faison told the panel that "I believe in Tennessee, that has probably blurred the lines of some of the things we do in here, and I feel like moving forward, we would best serve the people and the people's money by putting 'services' into the bill."
Smith, who runs Rivers Edge Alliance, billed the General Assembly's Office of Legislative Services $10,969 in early January 2020 for mailers created for Reps. Esther Helton, R-East Ridge, Dan Howell, R-Georgetown, and Casada, copies of invoices show.
Casada, who owns Right Way Consulting, meanwhile, submitted billings totaling $12,439 for mailings on behalf of Reps. Andrew Farmer, R-Sevierville; Chris Hurt, R-Halls; Bud Hulsey, R-Kingsport; Susan Lynn, R-Old Hickory, and John Ragan, R-Oak Ridge.
Tennessee Lt. Gov. Randy McNally, R-Oak Ridge, presides over the Tennessee Senate on the first day of the legislative session Tuesday, Jan. 12, 2021, in Nashville, Tenn. (AP Photo/Mark Humphrey)The House GOP Caucus in the 2020 cycle also approved Phoenix Solutions LLC as one of its vendors. Smith, who recommended the firm to lawmakers both for their campaigns and on constituent mailings, has declined to say what her relationship to the firm is.
Asked about Phoenix's use by the caucus, Sexton said, "we've had a policy with the caucus, with the whips that have come in, whenever I was whip, we put it in that the caucus would not use the businesses of members. I think if you go back and look at those disclosures, we have not done that knowingly."
The name listed as the head of Phoenix on billings submitted electronically to the state and other areas is "Matthew Phoenix." Repeated efforts to reach Phoenix have been unsuccessful. The phone number on the firm's invoices is not in service, and the address is a mailbox at a PostNet storefront in Santa Fe.
Another vendor told the Times Free Press that he was told by Casada's former top aide, Cothren, to bill some of his work to Phoenix. Efforts to reach Cothren have also been unsuccessful.
Asked about the bill Thursday, McNally, the Senate speaker, said it came from Sexton but he was happy to sponsor it in the Senate.
"I think what they're dealing with is where a company is set up by legislators and then legislators are encouraged to use that company with campaign money. And it's, in my mind, it's money laundering, that type of thing," said McNally, who as a young senator in the 1980s helped the FBI expose bribery efforts to pass a horse-racing bill and protect the scandal-ridden "charitable" bingo industry.
McNally added: "We just need to find out who Mr. Phoenix is. Any ideas?"
Said Smith's attorney, Rose, "I am not sure what Governor McNally is referring to there. However, there is probably a good case to be made for scrapping the entire constituent mailer practice for all members. It has become antiquated. Nobody does that on the federal level."
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow on Twitter @AndySher1.