By Marc Perrusquia
The Commercial Appeal
WALLAND, Tenn. - Here in the shadow of Chilhowee Mountain, Memphis transplant Susan McGroom relishes her "slice of heaven," yet worries over a budding real estate development backed by a group of high-powered investors that includes Republican gubernatorial nominee Bill Haslam.
"The number of (planned) homes has about doubled," says McGroom, 53, who lives with her husband on 11.5 sloping acres below one of Chilhowee's three peaks, known as the Three Sisters.
The Three Sisters project has received wide attention in East Tennessee, hailed as an environment-friendly development that will help preserve thousands of acres along an impressive 9-mile ridge south of Maryville.
Less visible, however, is the project's financing - including tax breaks that Haslam and his partners stand to realize from conservation easements placed on the property.
Bucking a tradition among Tennessee gubernatorial candidates, Haslam has declined to release his tax returns, documents that would help detail his considerable wealth, tax credits and deductions, and potential conflicts of interest.
State government regulates several of Haslam's business interests. The Tennessee Department of Environment and Conservation uncovered a minor violation on the Three Sisters tract in 2007. Two years later, the state sued Pilot Corp., the Haslam family's chain of truck stops and convenience stores, for alleged price gouging.
A look inside Haslam's financial portfolio reveals scores of other ventures, including insurance and real estate interests that could potentially intersect with state government.
Figures released by his campaign show he's earned an average $4.4 million annually over the past seven years through investments and interest alone. That doesn't include Haslam's income from Pilot, a nationwide firm with annual sales of $16 billion. Haslam declines to disclose his Pilot income or his net worth.
Democratic challenger Mike McWherter argues that Haslam owes the public greater transparency, a sentiment echoed by public-interest advocates who embrace disclosure of tax returns by candidates for high office.
THE PUBLIC INTEREST
There's no legal requirement to release personal tax returns, but it's been done in varying degrees in Tennessee by officials ranging from former governors Don Sundquist, Phil Bredesen and Ned McWherter (father of the current Democratic nominee) to former U.S. Sen. Fred Thompson.
"The bottom line is the more the public can know about the (finances) and potential conflicts of interest of the candidate, especially for the higher offices, it makes the public more confident," said Dick Williams, chairman of Common Cause of Tennessee, a nonpartisan public watchdog group.
Haslam says he'll put his non-Pilot assets in a blind trust if elected.
He contends that his tax returns wouldn't tell the public anything more about any potential conflicts and says he's aware of just two groups demanding release of his returns - the media and his political opponents.
"The public knows everything I own. And there's no secret about the Pilot connection at all," said Haslam. He has released figures detailing his tax payments - $1.6 million over 2007 and 2008, the most recent years available - and has provided numbers of personal financial details through his accountant.
"I understand in running for public office there's a public obligation ... but at the end of the day you decide what is the right thing to do for voters. And I honestly believe we've done that," Haslam said.
HASLAM HOLDINGS
Records show Haslam holds more than 350 separate investments, including hedge funds and stock in corporations ranging from pharmaceutical giant Abbott Laboratories to Coca-Cola, Kimberly Clark, First Tennessee Bank and more obscure entities such as Cash Store Financial Services, a Canadian firm that makes payday loans.
Like the Three Sisters project, about 60 are private and closely held investments They include investments in the Bay Point Marriott resort in Panama City Beach, Fla., condominiums in nearby Seaside, a New York insurance firm, a failed Illinois biodiesel plant venture and a smattering of apartment complexes and commercial properties across the Southeast.
"Typically it's some business relationship or family relationship. That's how most of these are going to come about," said J. Todd Ellis, Haslam's CPA.
An example of such a connection is Anderson Growth Partners, a Birmingham, Ala., investment firm Ellis said is run by the Anderson family, founders of the Books-A-Million, the nation's third-largest book retailer.
Haslam holds 11 separate investments with Anderson, including some with exotic names such as "Anderson New Russia Fund," and "Anderson Emerging Markets Macro Partners."
The investments appear on paperwork Haslam is required to file with the state as a candidate for governor. The state's personal financial disclosure law doesn't require candidates to cite specific profits or dollar values of investments. A candidate must simply list the name of any "major sources of private income of more than $1,000," and "any investment ... in excess of $10,000."
Haslam allowed The Commercial Appeal to interview his certified public accountant at his campaign headquarters in Nashville.
There, Ellis released Haslam's investment income totals - $2.4 million in 2009 - which included a $74,392 cash distribution from one of the Anderson funds, Anthony Anderson LLC.
Little information also was available on Memphis-based NFC Investments, where Haslam holds two investments including one that paid him $37,250 last year. NFC has a web site that lists some phone numbers and an address but little else. The head of the firm, Charles Slatery, declined comment.
Both NFC and Anderson are registered with the U.S. Securities and Exchange Commission as investment advisers with fewer than 100 clients each.
CAMPAIGN SCUFFLE
Such information doesn't provide meaningful disclosure, said Bill Allison, editorial director for the Sunlight Foundation, a Washington, D.C.-based nonprofit, nonpartisan organization advocating transparency in government.
"How can you know if a gubernatorial candidate has a potential conflict or not?" he asked.
Democratic challenger McWherter, the owner of a Jackson beer distributorship who disclosed his returns and estimates his net worth between $7 million and $20 million, pounced on Haslam for his stance last month.
McWherter accused the Republican of engaging in a "shadowy" deal through Pilot that indirectly linked the firm to clients in Iran.
Responding through a spokesman, Haslam called the allegation "silly and insulting to the voters of Tennessee."
Still, Allison said a gubernatorial candidate's personal tax returns should be disclosed because they not only help flag conflicts but provide details on tax credits and deductions as well as insight into tax policies the candidate might pursue as governor.
WEB OF RELATIONSHIPS
Returns also can help flag business relationships, like the one at Three Sisters.
The Haslam family teamed with other prominent East Tennessee families in 2007 to buy 5,000 acres along Chilhowee Mountain in Blount County for $19.1 million. Partners include Ruby Tuesday restaurant chain founder Sandy Beall; former Sak's CEO Brad Martin, of Memphis; and the four children of U.S. Sen. Lamar Alexander.
Beall said the Haslam family's share in the project is 15 percent. Bill Haslam said his personal interest is 5 percent.
"This isn't about making money. ... It's a social responsibility," said Beall, whose family has a huge investment nearby at the Blackberry Farm resort. "We've protected the most critical nine miles of all ... whether we get money out of it I don't know."
The families teamed to place restrictions that will forever ban development atop Chilhowee, but the Three Sisters group has plans to eventually put about 100 homes on 1,200 acres along the mountain. It also stands to benefit from tax breaks associated with the conservation easement.
"You'll get a little of (the investment) back,'' agreed Beall, who declined to release the value of the easement on Chilhowee. "It's not significant to (Haslam). I can tell you that."