Housing Agency: 'We Have Fun' - With Public Money

By Phil Williams
Chief Investigative Reporter

NASHVILLE, Tenn. -- It's a state agency that's supposed to help meet the housing needs of the Tennessee's neediest families.

But a NewsChannel 5 investigation discovered the Tennessee Housing Development Agency also spends lots of money having fun.

They call it "employee development."

"We work together as a team, we play together as a team," agency spokesperson Patricia Smith insisted.

Our exclusive investigation discovered that the state housing agency spent tens of thousands of dollars having fun.

We caught up with longtime THDA executive director Ted Fellman.

"Can you say that you've used the public's money well?" NewsChannel 5 Investigates asked.

"Yes, sir," he answered.

While Fellman refused to sit down to answer our questions, photos of him in various costumes show how he has run the state agency with a style he summarized at a THDA function: "You've heard me say a lot of times, I don't want to work anywhere where it's not fun."

"It's a different way," Patricia Smith said. "Play is part of growing a good employee base."

In fact, Smith noted that, if you look at THDA's mission statement, having fun is one of the values officially approved by the agency's board.

"Can you not have fun without spending money?" we asked.

"Ask a teenager," she replied.

"But you all are not teenagers," we noted.

"We are not teenagers," she said, adding: "We do great work and we spend money on our employees to encourage them to be great employees."

So, this past summer, the entire office took off to go to Dave & Busters.

In addition to a full-course, lunch buffet, each employee also got $40 for video games or for bowling.

The total cost: $9,939.

"The people who work in accounting get to know the people who work in tax credits," Smith explained. "The people who work in housing management get to know the people in public affairs."

"Can they not get to know each other here at the office?" NewsChannel 5 Investigates asked.

"Yes -- it's a little crowded here," she answered.

To celebrate Fellman's 50th birthday, THDA bought enough balloons to fill up the boss' office. They hired a balloon artist, as well as a caterer to serve up banana pudding.

The price tag: $1,300.

So if people wanted to celebrate the boss' birthday, why couldn't they pay for that themselves?

"They could," Smith agreed, adding: "We chose to do it this way."

For administrative professionals day, the agency brought in a stretch limo just to take its secretaries out to lunch.

The limo by itself: $641.

"They had a nice ride," the spokesperson said.

View the documents:
Check register for THDA trustee account
Selected THDA credit card statements
Selected invoices for THDA expenditures

There was also a laser tag outing for the agency's IT division and a ziplining adventure for Patricia Smith's own team -- again, at state expense.

"I was able to thank my team for bringing their best to create a great housing summit," she explained.

And a pat on the back would not work?

"It is not the same."

Then, there are the dragon boat races held each year on the Cumberland River.

After having competed in past years, the agency put down the $1,000 deposit this year -- but the team was a no-show.

"We thought you would not understand that, so we stopped," Smith told NewsChannel 5 Investigates.

"So you threw away a thousand dollars because it might not look good on TV?" we asked.

"That's right," she admitted.

We noted "that doesn't look too good either."

"No, it doesn't," Smith said. "It's a shame because we should have just went ahead and done it."

On top of that are the agency's holiday celebrations.

For the big shindig last year, they rented out the Country Music Hall of Fame and hired a caterer.

The year before, it was the Loveless Barn. 

The total cost of that event (including gifts): $26,261

"It is a lot of money," Smith acknowledged. "It includes training, it includes being together, it includes celebrating. We are not embarrassed by that."

THDA managers even put on a talent show -- in one case, two officials appeared dressed as Sonny and Cher.

But instead of putting together the outfits themselves, they took agency money to a costume store, buying items like white go-go boots, an orange leisure suit, fake chest hair, even "drag queen boobs."

"Why would a state agency ever need to buy 'drag queen boobs'?" NewsChannel 5 Investigates asked.

"Different choice -- what kind of costume is your child going to wear for Halloween?" Smith replied.

"But this wasn't my child," we noted. "It was a state employee."

"It was a state employee, using 5/100ths of a percent of our operating budget," the spokesperson said.

That raises the question of "doesn't every penny count?"

"It does, it does -- and that's why we are building our employees," Smith continued.

So is there anything that the agency regrets?

"No, no," Smith said. "We do good work, we do it well, and we have fun."

Our investigation also discovered other questionable spending, including thousands of dollars spent on catering, gift cards, even a political forum -- all of it public money.

THDA insists that any dollars it used was not taxpayer money.

But the agency gets its money by selling housing bonds. Those are state housing bonds that are guaranteed by Tennessee taxpayers.

Asked what how she thought the public would react to the agency's spending, Smith guessed: "I want to work for THDA."

E-mail: pwilliams@newschannel5.com