Sundquist Insiders Seek Homeland Security Funds - | Nashville News, Weather & Sports

NewsChannel 5 Investigates: Friends in High Places

Sundquist Insiders Seek Homeland Security Funds

(Story created: 9/10/02)

Since last year's terrorist attacks, a lot of companies have tried to make money off of homeland security.

But our NewsChannel 5 investigation discovered that, here in Tennessee, some friends of Gov. Don Sundquist were among the first in line.

Those friends are affiliated with Education Networks of America (ENA), whose owners include friends of the governor John Stamps and Al Ganier. Stamps, a Monteagle insurance agent, is a former business partner of the governor. Ganier was chief of Sundquist's 1995 inaugural.

As NewsChannel 5 reported, when the Sundquist administration decided in 1996 to connect every Tennessee school to the Internet, they gave the exclusive contract to ENA.

Then, when the state decided to take bids for the Internet service for those schools, ENA used that experience to two contracts, totaling more $180 million. That despite the fact they weren't the low bidders either time.

The deal became fodder for talk radio.

"It looks to me like classic cronyism where you are trying to reward some of your friends," says WLAC-AM's Phil Valentine.

Then, when the Attack on America came, the governor's friends saw an opportunity.

"There are a lot of companies that are taking advantage of a potential for a lot of money," John White, director of the Tennessee Emergency Management Agency, tells investigative reporter Phil Williams.

The TEMA director says Ganier came to his office last fall with a pitch to use the school Internet network for homeland security... all for a price tag that could reach $750,000 a year or more.

"That never went any further than this office," White says. "It's just too expensive."

That followed on the heels of another $100,000 contract two years ago where ENA would be paid to put weather warnings on the school computers. That project later fizzled.

State government insiders say the ENA team suggested the governor's office was very interested in the homeland security project.

"Did the governor ever ask you to take a look at what ENA was pitching?" Williams asks White.


Still, when the Sundquist administration began looking for federal funding last spring to prepare for a bioterrorist attack, the governor's friends reemerged.

ENA's Ganier e-mailed a proposal to key administration officials. The subject line indicates he's responding to a "request for information for governor."

That proposal claims "Tennessee Emergency Management Agency has applied for funds to integrate 7,000 first responders into this system in the fall of 02."

TEMA's White says that never happened.

Then, in a follow-up to the state's chief information technology official, Ganier wrote, "I'd like to visit on an idea to blend all of Tennessee's networks for Homeland Security."

"It's the old foot in the door -- now the cancer starts to grow," Valentine says.

The governor has refused to talk about his friends' contracts.

But his press secretary argues it was only natural that the administration would entertain proposals regarding use of the existing computer network. She says the administration was trying to find a way to implement telemedicine and homeland security plans "at the least cost."

But there's more.

Earlier this year, the Sundquist administration announced it had received a $3 million federal grant to offer on-line training to teachers in rural areas of the state. It turns out, most of that money will also go to ENA.

Another e-mail suggests deputy governor Alex Fischer was "very anxious" to get funding approved by the Appalachian Regional Commission.

In one e-mail, Ganier writes, "the plan that we presented last August ... I think got this reading quest started."

Valentine says the efforts appear to reflect the attitude, "Now that we've gotten inside, let's see how much money we can rake in while we are here because we've only got a few more months."

U.S. Senate candidate Lamar Alexander is also a paid consultant and member of the board for ENA. Still, there's no evidence that Alexander personally tried to drum up state business for the company.

The Sundquist administration insists it's just trying to maximize the state's resources.

The fact that it might mean more of your tax dollars going to the governor's friends, they say, has nothing to do with it.

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