Senate, House Leaders Call For Review Of State Contract - NewsChannel5.com | Nashville News, Weather & Sports

NC5 Investigates: Questionable Contracts

Senate, House Leaders Call For Review Of State Contract

Posted: Updated: June 14, 2013 06:54 AM

by Phil Williams
Chief Investigative Reporter

NASHVILLE, Tenn. -- Leaders of both the House and Senate called Thursday for review of contracts awarded by the Haslam administration to a company that the governor once listed among his personal investments.

Both Lt. Gov. Ron Ramsey and House Speaker Beth Harwell were careful to say they did not believe there had been any wrongdoing.

Still with so many questions -- and with millions of dollars at stake -- both said lawmakers need to take a look at how your money is being spent.

"Obviously Phil broke this story," Ramsey said as he and Harwell faced a barrage of questions from Capitol Hill reporters about the Haslam administration's recent decision to outsource the management of all state buildings to Jones Lang Lasalle.

The $330 million state contract came after little debate in the legislature.

"Was there a specific bill that was brought for that? Probably not -- because it wasn't needed," Ramsey said. "Again, the implication is there's something wrong with that. I don't necessarily believe that right now."

As our NewsChannel 5 investigation first revealed, JLL was a company that candidate Bill Haslam listed among his major investments.

"We have people who haven't been in government all of their life," the lieutenant governor said. "There are going to be inherent conflicts of interest. That just happens."

Last year, JLL was selected as the winning bidder for a $1 million contract to study the condition of state office buildings.

But just weeks after a dinner meeting with JLL officials, the Haslam administration began pushing amendments to give the company new business -- without taking any bids.

The State Building Commission approved those amendments, including one to let JLL demand a 4 percent commission from anyone who wanted to lease the state a building.

"I think again what the lieutenant governor and I are both saying is perhaps we should have looked at going back in and having that rebid," Speaker Harwell said.

In fact, documents obtained by NewsChannel 5 show that the Department of General Services had first tried to quietly let JLL collect those lease commissions even though nothing in the original million-dollar contract allowed it.

A department lawyer "implied that everyone knew that JLL was going to make their money charging such a commission," according to notes from a contract reviewer in the state comptroller's office.

Now, with Jones Lang Lasalle recommending that state buildings like the Cordell Hull be demolished, the company stands to make money from negotiating leases in buildings to relocate those state employees.

"JLL gets paid more, the higher that the lease is," NewsChannel 5 Investigates noted.

Ramsey replied, "That may be something we need to look into."

General Services officials note that the original $1 million contract and the most recent $330 million contract were put up for bids.

But the real question is how did that $1 million contract become an $11 million-dollar contract?

Harwell said the review would best be conducted by the legislature's Fiscal Review Committee.

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