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NewsChannel 5 Investigates: Friends in High Places

Former Governor's Papers Detail Efforts to Help Developer

(Story created: 5/4/04)

Townsend, Tennessee, calls itself the peaceful side of the Smokies.

Here, high atop a mountain where the Great Smoky Mountains National Park begins, former Gov. Don Sundquist lives in an elegant retirement home. The 4,000-square-foot house overlooks the Laurel Valley golf community, developed by Sundquist supporter Gil Heinsohn.

"Heinsohn's a big buddy of the governor's, and they are doing everything they can up here together," Townsend resident Jerry Grant told NewsChannel 5 back in 2002.

Now, for the first time, Sundquist's officials papers -- many in the former governor's own handwriting -- reveal exactly how much of his administration's efforts were aimed at helping a campaign supporter.

In fact, just days after Sundquist's first inaugural, Heinsohn had a favor to ask.

"I know you are buried with 'requests' from those who supported your campaign," he wrote the new governor.

And his request wasn't a small one.

It was this state-owned wetlands area, next to Laurel Valley, that Heinsohn wanted. He wanted the state to turn it into a park that would enhance his development.

Heinsohn concluded his request:

"You know you and Martha have an open invitation to use one of our vacation homes any time you would like."

Sundquist scribbled on the proposal, "I want to discuss."

"There's clearly a tie to the political patronage and what they are asking for in this letter," says WWTN talk radio host Steve Gill.

In fact, when Heinsohn wrote a follow-up letter, someone attached this note:

"DKS" -- Donald K. Sundquist -- "at Laurel Valley this week."

And it noted Heinsohn "hosted a fundraiser during campaign."

"It's for those who are getting it passed around on the staff to say, the governor knows this guy is important -- you need to know it as well," Gill adds.

The problem was that, before Sundquist took office, the state had leased the land to an environmental group.

So Heinsohn just wanted the Sundquist administration to just evict them -- which is exactly what they tried to do.

In 1998, Heinsohn sold Sundquist the property where he would build the governor's house.

And the request for favors didn't stop there.

For example, when the four-laning of the main road through Townsend was slowed by the discovery of Native American artifacts, Heinsohn wrote his friend:

"If there is anything you can do to help" get the project moving, "all the tourist businesses myself included would be greatly benefited."

When Heinsohn couldn't get BellSouth to bury phone lines all the way to the top of the mountain where Sundquist's home was being built, he wrote the governor.

Sundquist personally wrote BellSouth's president.

"Marty -- I'd appreciate any help for my Townsend neighbor."

And when Heinsohn bought a rafting business that didn't have any parking, the Sundquist's Department of Transportation found an excuse to build a parking lot for him.

"Only one person wanted this parking lot, and that was Mr. Heinsohn," another Townsend resident, Frank White, said.

Steve Gill says "the whole Townsend example is a prime example of the abuse, the arrogance and the abuse of power that we saw with the Sundquist administration in small ways. It all just kind of comes together in Townsend."

In the case of the wetlands, the environmental group was able to get a court order blocking the eviction.

Then, they got the federal government to declare it a protected wetlands to keep it from ever being developed.

"What would have been lost if this had been developed?" NewsChannel 5's chief investigative reporter Phil Williams asked Townsend environmental activist Janice Sullivan.

"Wow," she replied. "We would not have a home for these beavers."

The land that almost became a favor for a friend... now belongs only to nature.

"It's kind of wonderful to see what nature has done on her own."

So how much did Sundquist's house cost?

  • Records show he paid $125,000 in 1998 for 20 acres that back up to the Smokies.
  • Property assessors looked at it three years later and decided it was worth $236,600.
  • The Sundquists took out a $240,000 mortgage.
  • But the land and house are valued at $626,900.

It's not known how much cash he put down.

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