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Haslam Administration Pays $100K For Contract Claim

Haslam Urges Durham To Resign
Posted at 10:11 PM, Nov 05, 2014
and last updated 2021-03-10 22:49:12-05

NASHVILLE, Tenn. -- NewsChannel 5 Investigates has uncovered a secret, $100,000 settlement with your money.

The state paid the money to a company that claimed it lost business after the Haslam administration broke the law on state contracts.

But the settlement keeps that company from talking about what led to that deal.

In fact, our investigation discovered the Haslam administration never even told the lawmakers who watch over the state's contracts.

"I didn't even know there was a settlement," said Rep. Mark Pody, R-Lebanon. "It was my understanding that everything was worked out."

Pody, who sits on the legislature's Fiscal Review Committee, was talking about the secret "compromise and settlement agreement" obtained by NewsChannel 5 Investigates -- a settlement signed by the governor himself.

"When I heard there was a settlement, that was extremely concerning," Pody said. "And then when I hear that it's a confidential settlement where we can't even publicly find out what the issues are or why we settled ... that is extremely unsettling."

At the center of the dispute is a claim filed over the Haslam administration's massive effort to relocate thousands of state employees into new, redesigned offices.

Sanders Moving had the state's moving contract, but the Haslam administration abruptly cancelled it, awarding much of the work to Flood Brothers out of Atlanta.

Emails show one state employee, Kurt Herron, objected, writing: "We've already broken several laws."

"The original contract was broken, according to these emails, in order that Flood Brothers be brought on to the contract," said Sanders' lawyer, Harold Donnelly, in an interview last year.

Haslam administration officials assured state lawmakers last year that those claims were bogus.

But NewsChannel 5 obtained a check, written back in July, where the Haslam administration paid Sanders $100,000 to settle its claim.

The deal required Sanders to not only keep the settlement confidential, it also required that both sides must keep the negotiations of that settlement secret.


"A hundred thousand is a lot of money, it is a lot of money," Pody observed.

While the settlement agreement prohibited both sides from discussing the deal, NewsChannel 5 was able to obtain details by filing a request under the Tennessee Public Records Act. (Read the settlement documents.)

Even more disturbing, Pody said, is our discovery from emails that the state's settlement talks appear to have intensified after Sanders' attorney asked to take the testimony of the state employee who had written "we've already broken several laws."

"If laws were broken, we need to find out what happened and why and put processes in place in an open way where that does not or cannot happen," the lawmaker added.

"I want it to be out in the open. I want to know what's going on."

State officials refused to discuss the settlement, again citing the agreement that they signed saying that they would not talk about what they did with your money.

The Department of General Services, which handled the moving contracts, referred us to the Attorney General's Office.

An AG's spokesperson said in an email, "In representing our clients and the public interest, we don’t discuss what goes on in settlement negotiations or reasons behind a settlement."

NewsChannel 5 Investigates also discovered that the Haslam administration also agreed to pay $900,000 last year to the owner of the L&C Tower in downtown Nashville.

That came after the state canceled a lease it had there. (Read the settlement documents.)

Just like in the Sanders Moving case, that agreement was also labeled "confidential."