NewsNewsChannel 5 Investigates


State Agency Not Sure Its Funds Are 'Public Funds'

Posted at 1:08 PM, Mar 11, 2014
and last updated 2015-09-07 14:44:10-04

By Phil Williams
Chief Investigative Reporter

NASHVILLE, Tenn. -- Officials with Tennessee's Housing Development Agency say they're just spending money like lots of businesses do.

That follows a NewsChannel 5 investigation that revealed the state agency has spent tens of thousands of dollars having fun.

But THDA officials seemed confused about whether they're really a state agency at all.

For this year's Governor's Housing Summit, THDA brought in stand-up comedian and motivational speaker Ron Culberson.

"Sometimes we have to look at things with the right perspective and say 'so what?' The government shuts your organization down, so what? OK, maybe not a good example," Culberson said, drawing laughs from the attendees.

His bill: $8,000, plus expenses.

Three years before, it was a guitar-playing motivational speaker.

That bill: almost $5,000.

It's the same agency where employees regularly put on a talent show and spend staff time creating humorous videos to tout THDA events.

"We want to be the best housing finance agency that we can be and developing good employees -- people who are engaged and prepared to serve their customers -- they are worth the investment," said THDA spokesperson Patricia Smith.

And it's more than just the agency's outing this summer to Dave and Busters and the stretch limousine that our investigation first documented.

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

There's also all the food.

Our investigation found tens of thousands of dollars for restaurants -- Maggiano's being a favorite -- and catering.

"Any idea how much you all spend on catering?" we asked Smith.

"I have not added it up," she answered.

In fact, caterers provide food for meetings of the agency's board, as well as all sorts of other staff events.

"Food is a celebration for staff," Smith said. "It gets us together. Again, we mix and mingle throughout our different divisions.

"So, yes, we feed our employees."


"As needed," she said.

But the state board that oversees the state agency has never questioned those kinds of expenditures. 

In fact, after we began asking questions, board member Mike Stevens emailed the agency's executive director, saying: "I'm sorry you have to put up with a mindless reporter."

NewsChannel 5 Investigates asked Stevens, "Have you looked at how they are spending money?"

"We actually don't get that report," he admitted.

THDA Chair Brian Bills said that, "in an agency of this size and caliber of success they've had, it's reasonable to assume that some of these things will occur."

Bills is a banker who was appointed to the THDA board by former Gov. Phil Bredesen.

"Is this the way that a state agency should behave?" NewsChannel 5 Investigates asked.

"I can't speak for state agencies," Bills answered.

"But you're the chair of a state agency," we noted.

"Well, this is Tennessee Housing -- this is not a state agency," he insisted.

That may come as a surprise to state lawmakers who created the agency and approve its budget.

THDA gets its money by selling state revenue bonds to provide housing loans -- bonds that figure into the state's debt.

"There are no state tax dollars being spent on these events," Bills said.

"They are public dollars," NewsChannel 5 Investigates noted.

"I think that's a fair statement," he agreed, "that they are public dollars."

Patricia Smith, however, had another take.

"I would not call them public funds."

Who Serves On THDA's Board?
Click here for names, contact info

But it is money that families like Fred Goodson and his elderly mother thought would help get them out of their dilapidated house.

Earlier this year, they were told those THDA funds had run out.

NewsChannel 5 Investigates noted to Smith, "When you look at all of this spending, you have to wonder whether some of that money could not have been used to help some poor person out there who needs a roof over his head."

"It could," she acknowledged. "But part of running a good program is to have an engaged employee."

Despite the atmosphere and the spending, THDA officials say they don't think the public or lawmakers will care.

"Yes, they might be confused by the limousine -- and you'll tell them all about it," Smith said. "But I don't think they are going to criticize us for it."

In the case of the housing summit, officials say most of the money came from registration fees and sponsorships. They also claim sponsorship money pays for alcohol the agency serves at various events.

But all that money is mixed in with the public money, so it's hard to trace who's really paying for what.

THDA officials note that auditors have not questioned any of the agency's expenditures in years.

The agency has an internal auditor, but he's in a lot of these photos obtained by NewsChannel 5 Investigates, right in the middle of the fun.

The state comptroller, whose office is responsible for state audits, also serves on the THDA board.

NewsChannel 5 reached out to him for comment, but so far there's been no response.


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