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End of Contracts Case Leaves Questions

Former Gov. Don Sundquist Former Gov. Don Sundquist
Sundquist with John Stamps Sundquist with John Stamps
Sundquist with Al Ganier Sundquist with Al Ganier
Joanna Ediger after conviction Joanna Ediger after conviction
John Stamps after sentencing John Stamps after sentencing
From Phil Williams:

As "NewsChannel 5 Investigates" first reported, the plea deal reached by Al Ganier effectively ends the five-year criminal investigation of state contracts awarded to friends of former Gov. Don Sundquist.

The U.S. Attorney's Office has "concluded all previously-existing aspects of its overall investigation into the award of various state contracts ... during the Sundquist administration," the office says in a statement provided to NewsChannel 5.

Prosecutors cryptically add that they "cannot confirm or deny any current investigations" that may be off-shoots of the contract case -- a strong suggestion that there could still be more to come.

Still, the end of the contracts case -- which was prompted by NewsChannel 5's "Friends in High Places" investigation -- leaves plenty of unanswered questions.

Workforce Strategists

Take, for example, the $2 million contract awarded to Workforce Strategists, a Chattanooga company formed by longtime Sundquist friend John Stamps.

As I first revealed back in 2002, the Chattanooga company essentially didn't exist until it got a no-bid state contract to provide counseling and coaching for the unemployed.

That Labor Department contract was awarded based on a memo that declared Workforce Strategists was "the only company in Tennessee that has experience" for the job.

Sundquist appointee Joanna Ediger, who helped write that memo, was convicted on federal fraud charges and sentenced to three years in federal prison for helping to rig that contract.  She's scheduled to be released in January. 

A year later, Stamps pleaded guilty to making false statements in a memo to justify that contract.  He just finished a two-year prison sentence.

At Ediger's trial, prosecutors blamed an "atmosphere of corruption" within the Sundquist administration. 

So where was the former governor on the Workforce contract?

Ediger's lawyer told jurors in closing arguments that the rigged contract "was not her doing. This was done in high places." 

Another witness testified that Stamps "boasted that he is friends with the governor and made it clear that what he could provide ... was access to contracts."

Sundquist's labor commissioner, Mike Magill, testified at Ediger's trial that he got no pressure from the governor's office to approve the Workforce contract. But one of Magill's deputies testified that Magill had complained about that very issue. 

No testimony ever directly implicated the governor, and Stamps steadfastly refused to talk ill of his friend.

But here's my question: after I first revealed the bogus contract, why didn't Sundquist order his staff to investigate and fix the problem?

I also raised questions about whether the company was filing bogus invoices with the state, which auditors later confirmed

Did Sundquist ever ask his friend to repay taxpayers?

Instead, he defended Stamps as "a good person" and attacked my reporting about the Workforce Strategists contract as "tabloid journalism."

Education Networks of America

Sundquist came into office with a laudable goal of connecting every Tennessee school to the Internet.

To spearhead that effort, the Sundquist administration handed a $128,000 no-bid contract to a company formed by Ganier, Technology Partner LLC.

Sundquist's education commissioner, Jane Walters, wrote that Ganier alone had "the right mix of business, government, technological and financial expertise [to] accomplish these goals."

Then, instead of just overseeing Sundquist's plans, Ganier decided to try to cash in.

Technology Partner became Education Networks of America, with Stamps as one of its officers. ENA, as it became known, became a bidder for the contract to provide Internet service for all the state's schools, touting Ganier's experience under the no-bid contract.

ENA won two contracts worth more than $180 million even though it wasn't the lowest bidder.

In pretrial memos, prosecutors wrote that they were prepared to delve into "allegations that Defendant had a romantic relationship with, and received inappropriate assistance" from a woman involved in overseeing the bidding process for the first ENA contract.

(There were also hints of a romantic relationship between a key state official and an ENA official on the second contract, although there was no evidence of collusion.)

And where was Sundquist on ENA's contract?

"There is, in fact, some evidence that Sundquist interceded in some way on behalf of ENA with respect to at least one contract," wrote U.S. District Judge Karl Forester in one opinion as the Ganier case dragged through the court system.

As to the nature of that evidence, that remains sealed in the court files.

Other Questions:

How did Sundquist's former deputy governor get into the TennCare business with Stamps?  My reporting back in 2002 revealed how Alex Fischer had become a TennCare subcontractor, along with Stamps and the governor's cousin, Bonnie Currey.  That deal came despite TennCare rules that prohibit its contractors from paying money "directly or indirectly to any officer or employee of the State of Tennessee."

Did another Sundquist official cross the line in trying to steer a contract to a company with ties to former deputy governor Wendell Moore?  E-mail messages that I obtained show that the official steered a big computer company to hire Moore as its lobbyist, tried to direct a state contract to them, asked bureaucrats to change scores on the bidding process to help that company and, when that didn't work, wrote that "after considerable thought, we should defer this project for now."

Did Sundquist's economic development officials illegally steer state funds to political friendsAs I reported back in 2003, the Sundquist administration took economic development funds that are designed to lure businesses to Tennessee and paid them to a company that was already building a facility to Oak Ridge.  Then, someone hatched the idea of backdating the documents to cover up the use of the money.

Did Sundquist benefit from his relationship with an East Tennessee developerMy reporting back in 2004 detailed how the governor had personally interceded on behalf of a man who was developing the Laurel Valley golf community in Townsend.  One letter that I found in Sundquist's papers included a request for help from the developer, concluding: ""You know you and Martha have an open invitation to use one of our vacation homes any time you would like."  That developer later fixed Sundquist up with a prime mountain-top parcel that backs up to the Great Smoky Mountains National Park.  Sundquist got that 20-acre parcel for $125,000 in 1998 -- although it would be appraised three years later for almost twice that value.

Why didn't Sundquist follow his own ethics policy?  When he came into office, he implemented an executive order that required Cabinet officials to disclose "all gifts of any kind valued at $100 or more ... from any individual or entity that seeks to influence legislation before the General Assembly or that does business or seeks to do business with the State of Tennessee." As part of that ethics policy, Sundquist filed voluminous disclosures of all sorts of gifts, including books, candy, even popcorn.  But my investigation discovered that the governor repeatedly took trips to the Caribbean and elsewhere that he conveniently left off those disclosures.  

And, finally, what's next?  Could there be a new chapter to the investigation?

NewsChannel 5 Investigates: Friends In High Places (2004 Documentary)

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