Tape Missing, Includes Discussion About State Contract - NewsChannel5.com | Nashville News, Weather & Sports

NewsChannel 5 Investigates: Friends in High Places

Tape Missing, Includes Discussion About State Contract

(Story created: 5/5/04)

A key piece of evidence uncovered in our "Friends in High Places" investigation of insider state contracts is missing. It's a tape that may help link a questionable contract directly to the office of former Gov. Don Sundquist.

The tape may be the only tape-recorded discussion of how friend-of-the-governor John Stamps was given an exclusive, no-bid contract that would be worth almost $2 million.

Stamps' company, Workforce Strategists, contracted with the Sundquist's Labor Department to provide entensive counseling and coaching for the unemployed.

Now, former Labor Department appointee Joanna Ediger is charged with helping to rig that contract.

"Any time you spend state dollars you are responsible for those state dollars," Tennessee's Labor Commissioner Jim Neeley told NewsChannel 5's chief investigative reporter Phil Williams after he testified Tuesday before a federal grand jury.

Neeley chaired an advisory group during the Sundquist administration that was asked to endorse the contract back in 1999.

And on the tapes of those meetings, he's heard recounting a conversation with Sundquist's Labor Commissioner Mike Magill. Portions of the tapes were first broadcast by NewsChannel 5 in August 2002.

"This is the governor's discretionary money," Neeley told the panel. "The governor can spend his money any way he wants to. He's got sole discretion. If he wants to burn it, I guess he could do that."

Williams asks Neeley, "Had you been told that Gov. Sundquist specifically wanted this contract approved?"

"Let me just say," he responds, "that during this whole planning process, we were told that this was the governor's discretionary money, and they wanted the contract approved."

In other portions of the tape-recorded discussions, Workforce Strategists is described as a "sister program" to an out-patient mental health facility in Chattanooga.

That company, Comprehensive Community Care, was started by Stamps, former deputy governor Alex Fischer and Sundquist cousin Bonnie Currey.

But Labor Department officials tell NewsChannel 5 that when they went to pull those tapes for investigators, they discovered they were not all there.  Something had happened.

"One of those tapes is missing," Neeley says.

"Any idea what happened to it?" Williams asks.

"I have no idea, I have no idea. It was gone when I got there."

Neeley and the rest of the Bredesen administration say they're doing anything that investigators ask to help with the investigation.

Investigators have also asked about Sundquist's papers -- and an incident when the Tennessee State Library and Archives was suddenly asked to return some 30 boxes in the administration's closing days.

"So when that happened did you think, that's odd?" Williams asks Jay Richiuso of the Tennessee State Library and Archives.

"Well, it puts us in a quandry because we are here as a permanent repository," Richiuso replies. "We don't normally allow original materials to go."

That came just 10 days after federal and state agents raided Education Networks of America -- another company started by two longtime friends of the governor.

One of the boxes contained a file that dealt with the controversy over that contract.

"We are pretty sure that one of the boxes that went over did not come back," Richiuso adds.

As for the rest of the boxes, Williams asks, "Do you have any idea whether anything was taken out?"

"No," the archivist replies.

The question is: is there some attempted cover-up? Or was the retrieval of those files just coincidence -- and the tape just misplaced?

No one from the Sundquist administration reached by NewsChannel 5 had any explanation.

But state officials say those are among the questions that investigators are now asking.

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