Agents Seize Records from Business Owned by Governor's Friend - | Nashville News, Weather & Sports

NewsChannel 5 Investigates: Friends in High Places

Agents Seize Records from Business Owned by Governor's Friend

(Story created: 10/1/02)

For weeks, the governor's office had dismissed the joint FBI-TBI investigation of state contracts as a "routine review."

Tuesday, that investigation -- which was sparked by our own investigation, Friends in High Places -- took a not-so-routine turn -- as federal and state agents seized records from a Chattanooga business with close ties to the governor.

FBI and TBI agents were tight-lipped as they hauled seven boxes of records out of Workforce Strategists.

"Can you say what you are looking for?" asked NewsChannel 5 investigative reporter Phil Williams.

"Not at this time," an FBI agent replied. "No comment."

At a side door, employees of the human resources agency toted out personal belongings, as the company's attorney dodged reporters' questions, telling Phil Williams "no comment."

FBI and TBI officials aren't talking about the seizure of the records -- neither is John Stamps or anyone from Workforce Strategists.

But political sources tell NewsChannel 5 that agents seized the records based on a subpoena from a federal grand jury.

The Chattanooga company had come under increasing scrutiny as a result of questions raised by our NewsChannel 5 investigation... questions about how a friend of the governor, Monteagle insurance agent John Stamps, landed an exclusive state contract worth almost $2 million.

Those are questions that Gov. Sundquist has brushed off.

"Nothing to respond to -- we've done nothing wrong," Sundquist said two weeks ago.

Under the contract, Workforce Strategists was supposed to offer intensive psychological counseling and coaching to help the unemployed get back to work.

Administration officials justified not offering the contract to any other companies, saying Stamps' company was "the only company in Tennessee" with experience for the job.

That was written just six days after Workforce Strategists was incorporated.

The seizures came a day after an FBI agent, apparently watching the business, stopped a longtime Workforce Strategist official as he left and asked permission to search his vehicle to see what he might be taking out.

One of Workforce Strategists' clients, Wayne Gray, showed up Tuesday to find the doors locked while agents searched for records.

"I'm disappointed that they are gone," he said.

The Chattanooga man says the thousands of dollars spent by taxpayers bought him a lot of encouragement.

"What to expect out an interview," Gray explained.

"Any psychological counseling?" Williams asked.


Despite such questions, the Sundquist administration had prepared to give Workforce Strategists another $744,000 contract.

But facing a widening criminal investigation, they decided to put that contract on hold -- leaving the governor's friend without taxpayer funding, but with a lot of questions to answer.

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