FBI-TBI Open Criminal Investigation of State Contracts - NewsChannel5.com | Nashville News, Weather & Sports

NewsChannel 5 Investigates: Friends in High Places

FBI-TBI Open Criminal Investigation of State Contracts

(Story created: 9/13/02)

There's been a major development in our investigation of insider contracts within the Sundquist administration.

NewsChannel 5 has learned those contracts are now the subject of a joint federal and state criminal investigation.

Sources say the Federal Bureau of Investigation and the Tennessee Bureau of Investigation have formed a joint task force to try to determine whether any laws were broken.

Agents are looking for answers to questions first raised by our NewsChannel 5 investigation --questions about how a small circle of friends landed millions of dollars in state contracts to provide Internet services to Tennessee schools and counseling for the unemployed.

That exclusive contract to provide counseling for the unemployed was handed to a Chattanooga company, Workforce Strategists, that had only existed on paper for six days.

Our NewsChannel 5 investigation also revealed how a member of the governor's Cabinet -- Alex Fischer -- had a financial stake in a company that got all its money from TennCare.

The FBI-TBI investigation is in its earlier stages. Agents have started conducting interviews with potential witnesses.

Sundquist's press secretary dismissed the investigation as a "routine review." She added, "'We believe the review will show the state did nothing wrong."

Recently, the governor told the Associated Press that the questions raised in the NewsChannel 5 investigation are "a lot of baloney" and that no laws have been broken.

"Favoritism is as old as politics -- merely favoring one's friends is not necessarily, by itself, illegal," says Nashville lawyer Gary Blackburn.

Blackburn, a former federal prosecutor, represented one of the defendants in the public corruption case that ultimately sent former Gov. Ray Blanton to prison for selling liquor licenses.

Among the questions that Blackburn expects investigators to be asking are:

  • Did any state official receive anything of value for approving the contracts?
  • To get the money -- much of it from the federal government -- did anyone make any false statements?
  • And were the services actually performed under the contracts?

"They would want to know if the entity was capable of and did, in fact, perform the service."

Still, Blackburn cautions, an investigation is a search for the truth -- and nothing more.

"What the officials will want to do is find out what really happened in a situation that, on its face, raises some questions."

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