Lawmakers Steer Millions to Ford-Connected Firms - NewsChannel5.com | Nashville News, Weather & Sports

NewsChannel 5 Investigates: Capitol Hill Corruption

Lawmakers Steer Millions to Ford-Connected Firms

(Story created: 5/2/05)

FIRST ON 5: An exclusive NewsChannel 5 investigation has discovered that millions of dollars -- your money -- went to companies with ties to a very powerful lawmaker. And he may not want you to know what's being done with it.

How Memphis came to be known as home of the blues isn't much of a mystery.

But what happened after it came to be home to millions of your tax dollars?

That, it turns out, is a mystery -- even to the man who hands over the money.

"That's a question we ask," says Matt Kisber, commissioner of the state Department of Economic and Community Development.

"Do you know where the money goes?" NewsChannel 5's chief investigative reporter Phil Williams asks Kisber.

"I cannot say that I know where the money goes."

In this case, it's money doled out by lawmakers through the state budget - a process that has sent millions of dollars to 5 North Third Street in Memphis.

Inside, our hidden cameras found a suite of offices shared by Senate chairman John Ford... and a reception area where the checks are delivered... alongside the Memphis Democrat's own mail.

"All we do is perform a perfunctory administrative role in processing the paperwork and cutting the checks," Kisber adds. "We have no authority or ability to do anything outside of that."

In fact, Ford -- a member of the Senate Finance Committee -- has personally sponsored at least some of the amendments, which steered your tax dollars into entities run by Banks & Holeyfield.

That's a management and consulting partnership headed by Ford's campaign treasurer, Frank Banks.

"Sen. Ford has been instrumental in that?" Williams asks Banks.

"Well, he's a part..., he's aware of it. We've been getting that for a while."

Among the payouts to Banks' companies in the past decade:

  • $1.5 million to West Tennessee Venture Capital Corporation, a fund that's supposed to make loans to minority businesses.
  • $290,000 to the Tennessee Valley Center for Minority Economic Development.
  • And almost $700,000 to Southern Cooperative Development Fund.

ECD officials say they don't have any audits to show where any of the money has gone.

Kisber says, "One is left to just conjecture where these dollars are going, how they are being spent."

One of those entities, Southern Cooperative Development Fund -- a for-profit company -- gets $95,000 of your money every single year.

But even Banks admits almost all of that winds up in his company's bank accounts.

"Most of that goes to management fees to you, correct?" Williams asks Banks.

"To Banks & Holeyfield, yeah."

And what's the taxpayer money for? Helping a minority owned call center, for one thing - or so Banks claims in a status report to the state.

He claims his taxpayer-financed expertise helped Ashaun LLC get loans from West Tennessee Venture Capital and from MemphisFirst Community Bank.

Which surprised the company's owner, Anthony Tate.

"You have a relationship with MemphisFirst?" Williams asks.

"Right, I'm one of the founders -- and I'm on the board of directors," Tate replies.

"And you have a relationship with Mr. Banks?"

"Frank is chairman of the MemphisFirst Community Bank."

Banks tells Williams, "One of our mandates was to assist minority businesses, and that's what we do."

"But you're helping one of your business partners."

"Still, it's a minority business."

Kisber says, "Not knowing what's going on in a particular activity that we are giving money to gives me concern."

The ECD commissioner says he asked Banks to sign the same disclosure agreements that he expects of everyone who does business with his department. But, then:

"We were told when we tried to imposed our partnership protocols on these appropriations, that we had no authority to do that."

"Who told you that?"

"We had calls from some members of the legislature."

Was it Ford? ECD insiders say yes, but Kisber declines to say.

But he admits, it's the type of pork barrel spending that's enough to give taxpayers the blues.

Another corporation once at the same address gets a $100,000 every year through the state budget.

But the state has revoked the corporate status of that company and Southern Cooperative because they haven't paid their own taxes.

Banks insists Ford has not received any money from those corporations.

But the Tennessee Valley Center first got federal funding back in 1979, with help from then Congressman Harold Ford Sr. The center then turned around and hired his brother, John Ford.

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