NASHVILLE - Tennessee House Speaker Cameron Sexton and at least two other legislators have been subpoenaed to go before a federal grand jury Monday as part of an FBI investigation that's already netted a guilty plea by former state Rep. Robin Smith, R-Hixson, to wire fraud in a kickback scheme involving taxpayer-funded constituent mail.
"We have been fully cooperating with the federal authorities since I became speaker in 2019," Sexton said in a statement. "It is not unexpected that I and other members would be called to appear before a federal grand jury to provide factual statements as part of this ongoing investigation."
Others confirming they have been called to testify are Reps. Esther Helton, R-East Ridge, and Rep. Bud Hulsey, R-Kingsport.
Neither they nor Sexton have been accused of any wrongdoing.
"I imagine I'm a witness for the prosecution," Helton told the Times Free Press during an interview in her office on Wednesday.
Helton said she was interviewed by the FBI in February 2021, weeks after federal agents raided the homes and legislative offices of Smith, a campaign consultant, and former House Speaker Glen Casada, a Franklin Republican. Others raided were freshman Rep. Todd Warner, R-Lewisburg, and Casada's former chief of staff, Cade Cothren.
"They were just questioning me about the mailers, wanting to know if I'd met a Matthew Phoenix, etc.," Helton said. "And, of course, I had not."
Matthew Phoenix, according to federal filings in the fraud investigation of Smith, was the fake name Cothren created to portray himself as the head of New Mexico-based Phoenix Solutions LLC. Tennessee taxpayers footed the tab for Phoenix bills totaling $28,500 for constituent mailers, which updated local voters on bills before the legislature and often included surveys on issues.
"I'm really not concerned giving testimony," said Helton, who spent $10,671 on campaign mailers but no tax dollars through Phoenix on constituent mail. Legislative records show Smith billed $4,300 for Helton through Smith's own firm, Rivers Edge Alliance.
All told, Phoenix billed the state some $28,500 on constituent mail and surveys during 2020, legislative records show. Another $202,600 was spent with Phoenix on campaign mailers, including $44,400 by the House Republican Caucus campaign arm after Smith went to bat for Phoenix to become a caucus vendor in the 2020 election cycle without telling colleagues she was involved in the firm.
"Basically it's just recapping what we talked about over a year ago," Helton said.
Federal officials said Smith and Casada, who had his own political firm, Right Way Consulting, received kickbacks from Cothren for vouching for the unknown firm with statehouse insiders. Federal officials did not identify Casada and Cothern by name in documents, but instead referred to them as a former House speaker and a former House speaker's aide.
Earlier, Cothren was forced to quit his state job in 2019 in a scandal involving racist and sexist texts he had exchanged with Casada that included the young Casada aide boasting of having snorted cocaine in a state office building. The scandal ultimately helped led to Casada resigning the speakership under pressure from fellow Republicans.
Other factors leading to his resignation included Casada's hard-charging style and his full-throttle effort to get Republican Gov. Bill Lee's private school voucher bill through the House.
Casada was replaced by Sexton.
Earlier this month, Casada would not say whether he was cooperating with the FBI.
Smith also did extensive work behind the scenes for Phoenix on legislators' campaign mailers as well as for the House Republican Caucus.
Hulsey, a retired police officer, said he wasn't interviewed previously by the FBI.
"I got a subpoena to testify in a federal grand jury," Hulsey said in an interview in his legislative office. "They didn't say anything."
Officials emailed Hulsey the subpoena, which surprised him.
"Who made it legal to send a stinking subpoena over email?" a frustrated Husley asked. "You would think the legality of a just service would have to have a piece of paper."
Another of Smith's clients, House Finance Committee chair Patsy Hazlewood, R-Signal Mountain, said she has not been subpoenaed.
But Hazlewood said in response to a follow up question by the Times Free Press that the FBI did interview her last year over constituent mail work Smith had done for her last year using Phoenix.
"I think primarily it was about the constituent mail because I believe that's the one that Phoenix did for me, if I remember correctly," Hazlewood said.
Legislative records show Phoenix billed the state $3,257 for her mailer. Hazlewood last year recalled that some of the charges were offset with her campaign funds.
Rep. Dan Howell, R-Georgetown, said he hasn't been subpoenaed but noted he, too, was interviewed last year by an FBI agent about his dealings with Phoenix.
"He just asked me if I'd done any business with Phoenix Solutions. And I said yeah, they did a mailing for me and a print job. They did the graphic design, the printing, the sorting, the mailing and the postage. And I paid them. They did their job, I paid them for the services rendered, that was the extent of it. The conversation did not last long, they thanked me for taking for taking their call, and that was it."
With no expenditure of that listed in legislative records, Howell's expenditures appear to have been funded through his political campaign account to the tune $6,187 for the campaign mailers - not funded with taxpayer dollars.
Rep. Mark Hall, R-Cleveland, whose legislative account shows a $2,753 payment to Phoenix for a legislative update for constituents, said he has not been subpoenaed.
Phoenix's mailings and a number of little-known independent expenditure groups operating during the 2020 campaign all utilized a 383 postal code in Hixson.
Smith herself spent $3,259 through Phoenix on government-funded mailers and another $39,439 on campaign mailers. At the time, Smith through her leadership PAC was pouring money into contributions as well as independent expenditures in an ultimately unsuccessful bid to replace House GOP Caucus Chairman Jeremy Faison, R-Cosby.
Rep. Jason Zachary, R-Knoxville, declined to say Wednesday whether he had been subpoenaed.
Rep. Warner said Wednesday he has not been subpoenaed. In 2020, Warner defeated then-Rep. Rick Tillis, R-Lewisburg, a Casada critic, in the GOP primary.
One of the issues leading to Casada's downfall was his controversial effort to push Republican Gov. Bill Lee's private school voucher bill across the finish line in the House. The bill was deadlocked 49-49 for some 40 minutes as Casada, Cothren and others sought a 50th vote and engaged in furious horse trading to get it across the finish line.
Zachary became the 50th vote after winning an agreement to keep school vouchers out of Knox County
But Republican leaders also offered enticements to other lawmakers in the form of pork-barrel projects and, it has been alleged, something else.
Nashville station WTVF reported that a lawmaker had overheard Casada suggesting that - in exchange for his vote - Rep. John Mark Windle, D-Livingston, a lieutenant colonel in the Tennessee National Guard, could be promoted to the rank of general in the Tennessee National Guard if he voted for the bill. Windle rejected it.
It later prompted a federal inquiry. Windle told the Times Free Press that "people with guns and badges" later questioned him about the episode.
But Rep. Kent Calfee, R-Kingston, this week reiterated previous comments to the Tennessee Lookout that he had overheard the conversation in which Casada said he would call Lee about the offer of a generalship. Calfee also relayed that to the FBI.
Asked about that Tuesday by reporters, Lee said, "I don't know anything about this offer you're talking about."
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.