NewsChannel 5 Investigates: Friends in High Places
Jury Hears Secret Tape Recording of Former Sundquist Official
(Story created: 5/21/04)
Day four of the fraud trial of a former Sundquist administration official brought dramatic evidence in the voice of the defendant herself. That evidence -- a secret tape recording -- was played for the jury.
On it, former Labor Department appointee Joanna Ediger reacts to the fallout from our "Friends in High Places" investigation of a questionable state contract.
The recording came in October 2002 just two days after agents hauled away boxes of files from Workforce Strategists -- the Chattanooga company that got the big, no-bid contract from the Sundquist Labor Department.
It's owner: friend of the governor, John Stamps.
On one end of the phone: former Workforce Strategists vice president John Tucker, working with FBI agents. On the other: the defendant, Joanna Ediger.
Ediger tells Tucker:
"There's nothing in the financial records unless Mark (Burrows, the company's president) has written a lot of checks to Governor Sundquist..., which he hasn't done, which ... we would be aware of, I would think."
Later, she added, "nothing's been done like, so there's nothing illegal."
In fact, Ediger repeatedly denies that she had done anything wrong. And even if company officials had given money or gifts to a state official, she tells Tucker:
"We would not have been the one that would have ... done anything illegal. It would have been him.... I mean we can give anybody we want to money. It's whether that's what got us the contract or not."
But state Labor Department employee Joan Craig testified Ediger took charge of seeing the contract through the approval process. Craig testified Ediger said she was doing that "because it came from John Stamps, who was good friends with the governor."
Still, Ediger says on the tape that the blame should fall on her boss, Sundquist Labor Commissioner Mike Magill, who ultimately signed the contract.
"They should be taking Mike Magill and trashing him as commissioner of the Department of Labor... allowing things like this to happen because, by God, the buck stops there."
However, a TBI agent testified that Ediger admitted to investigators that she wrote the controversial memo that helped rig the contract.
And an IRS agent presented testimony that Ediger made $138,000 off the contract after she left state government.
The defense contends it was all above board -- payment for consulting work that she did for the company.
But Ediger's replacement, Susan Cowden, testified that when she later confronted Ediger about a financial interest, she denied it.
Cowden also said she thought the contract itself was highly suspicious.
"I never saw how that contract made it through the chain of command," Cowden testified. "I always felt there was something strange with that."
And, after our NewsChannel 5 investigation began raising questions, she just wanted to cancel the whole thing.
But she testified:
"There were very powerful people who wanted this to happen, and I didn't have the authority to terminate it."