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Staff photo by Erin O. Smith / Tennessee House Speaker Cameron Sexton speaks during a news conference at the Hamilton County Courthouse on Thursday, Sept. 5, 2019, in Chattanooga, Tennessee.

This story was updated at 3:44 p.m. on Thursday, March 18, 2021, with more information.

NASHVILLE — An amended Tennessee House bill would prohibit state legislators from having a "controlling interest" in firms seeking to provide services to state government and applies criminal penalties as well as a permanent ban on holding future public office for anyone convicted of violating it.

The bill was brought by House Speaker Cameron Sexton and Lt. Gov. Randy McNally, the Senate speaker, following the FBI's Jan. 8 raids on the homes and legislative offices of Rep. Robin Smith, R-Hixson, Rep. Glen Casada, R-Franklin, and others.

It is not known exactly what the FBI is investigating, and no charges have been brought against Smith nor Casada, a former House speaker. Nor is it known if there will be any charges.

Both Smith and Casada are political consultants — Casada's also a campaign fundraiser — and have done work for GOP colleagues on their taxpayer-funded constituent surveys and mail, charging the state thousands of dollars.

None of that is unlawful. But it could become so going forward under Sexton and McNally's House Bill 1040/Senate Bill 1270. The measure adds to an existing law dating back to the 1950s that bars legislators from selling physical goods to the state during their term of office or for six months afterwards. It does that by adding the services category.

The Sexton/McNally legislation does not affect political campaign services such as mailers and brochures. But it does restrict lawmaker dealings with the government and with the government-funded constituent mail program for Tennessee senators and representatives.

The current prohibition on state employees, including legislators, selling physical items is a Class E felony punishable by up to six years in prison. The bill extends that to include services. It says if a member of the General Assembly has a controlling interest or more than 50% stake, the member cannot bid on, sell or offer for sale any service to the state during their tenure or for six months after leaving office.

It would not apply to employment contracts, including indigent defense contracts, unless otherwise prohibited by the Tennessee Constitution nor would it affect fulfillment for service contracts entered into prior to the member's election to the legislature.

Another provision states that if someone is convicted under the provision, they "shall be forever disqualified from holding any office under the laws or constitution of this state."

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It further states that if at the time of the conviction, the person still holds office, the prohibition would apply at "the end of the person's term."

Asked if the bill would apply to Smith or Casada's previous work with the state after the measure becomes law, Sexton said in a statement to the Times Free Press that it would not.

"Regardless of any criminal activity in the past, you cannot hold someone accountable for an action that wasn't illegal at the time," Sexton said. "This would apply to anyone moving forward."

When presenting the bill, House GOP Chairman Jeremy Faison of Cosby said the penalty and ban on holding future office was borrowed from current state code provisions regarding bribery.

"If you're found guilty of this then the same consequences would happen," Faison said.

The revised measure removes a previous bill provision seeking to prohibit a lawmaker's relatives from performing services under contract with the state. State Government Committee Chairman Kelly Keisling, R-Byrdstown, said the provision did not fit the bill's "caption," the legal description for a measure, and thus could not be included.

Smith had been pushing for her own amendment which sought to extend the prohibition not only to legislators' family members but members' political consultants, agents and employees. Sexton said the caption wasn't wide enough to legally bar consultants, agents and employees' involvement in the mail program.

In a statement to the Times Free Press, Smith said, "While I am encouraged the bill passed out of committee, it does not include a few additional words which would also cover consultants." Adding them "would ensure constituent mail was reformed to be official communication to one's district," added Smith, a former Tennessee Republican Party chair.

It's a "loophole that could be easily fixed," Smith said. She also noted that because Tennessee's 95 counties are extensions of the state, "this bill likely applies to county government services as well."

Smith's attorney, Ben Rose, continued to allege the FBI investigation was spurred by a political vendor "turf war" and blames Sexton's political consultant, Chip Saltsman, as a driver of the probe, an assertion which Sexton dismisses. Sexton said FBI agents told him after he became speaker that there was an investigation, which he kept quiet about.

Smith, who runs Rivers Edge Alliance, billed the General Assembly's Office of Legislative Services $10,969 beginning 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 he was involved in 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.

Also last year, Smith began recommending to her legislative clients that they begin using New Mexico-based Phoenix Solutions LLC both for their legislative postage accounts and, separately, for their political campaign mail. The firm was also approved as a vendor by the House GOP Caucus.

Little is known about the Phoenix firm. Its owner, listed on documents as Matthew Phoenix, has not responded to Times Free Press telephone calls and emails. Another GOP political vendor, however, has previously told the Times Free Press that he was asked by Cade Cothren, former Speaker Casada's onetime chief of staff, to bill some of the work he was doing to Phoenix and invoice yet other work to a Utah-based group called the Faith Family Freedom Fund.

Cothren's home was among those searched by the FBI in January.

Smith has not answered questions about her connection to Phoenix. Rose, her attorney, has said she is not a target of the FBI probe. He also said Smith has not spoken with federal agents.

Cothren lost his job and Casada was forced to resign his speakership in 2019 under pressure from GOP caucus members. That came following revelations of sexist and racist texts the two men had exchanged with a third man as well as anger among some Republicans over Casada's hard-charging style and horse-trading to pass Republican Gov. Bill Lee's school voucher bill.

The voucher bill was hung up for 40 minutes on a 49-49 tie before Casada secured the 50th vote from Rep. Jason Zachary, R-Knoxville, required to pass a bill.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.

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