Monthly Archives: March 2016

TN cancer charities face $75M fraud penalty

By Travis Loller, Associated Press
NASHVILLE, Tenn. — Two Tennessee-based cancer charities labeled “shams” by the Federal Trade Commission have settled a massive fraud case, along with their president, by agreeing to a $75.8 million judgment and the dissolution of the businesses. But the government may never see much of that money.

The complaint filed last year accused James T. Reynolds Sr. and others of spending donations meant for cancer patients on six-figure salaries and luxury vacations. The FTC said it is the largest joint action ever undertaken by the FTC and state charity regulators.

FTC attorney Tracy Thorleifson said the agency does not yet know how much money the government will recover, but she said it “won’t even be close” to the judgment, which reflects the amount of money the public donated to Cancer Fund of America and Cancer Support Services between 2008 and 2012.

According to court documents, Reynolds went on a spending spree after he was first advised of the complaint.

“Not only did he sell his house in the fall of 2014, in the months since he has run up tens of thousands of dollars of credit card debt and spent almost all his available cash. He has been on multiple cruises and traveled nationally and internationally, always paying the way for himself and companions. Cash withdrawals from his checking accounts and credit card purchases since January 2015 have exceeded $101,000, not including payments for rent, utilities, insurance, automobiles, boats, or tithes to religious institutions,” court documents state.
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Blackburn subpoenas bring ‘witch hunt’ claims

Medical researchers and abortion-rights groups accused a special investigative panel headed by U.S. Rep. Marsha Blackburn of conducting a “witch hunt” after the panel issued a dozen subpoenas Wednesday to compel medical supply companies and others involved in fetal tissue research to divulge information about their practices, reports Michael Collins.

The subpoenas seek documents related to fetal tissue research and the names and titles of current and former personnel involved in the procurement of fetal tissue.

Blackburn, a Brentwood Republican, said the information is needed to get a complete picture of what the organizations are doing.

But medical researchers and others argued the committee’s investigation could slow or halt important research into cures for diseases such as Ebola and the Zika virus. What’s more, they said, demanding the names of researchers, graduate students, laboratory technicians and others could potentially put their lives at risk.
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Senate committee kills de-annexation bill

NASHVILLE , Tenn. (AP) — A Tennessee Senate committee has voted to kill a legislative proposal seeking to allow communities to hold elections to reverse annexation by cities.

The State and Local Government Committee voted 5-3 on Wednesday to study the measure sponsored by Republican Sen. Bo Watson of Chattanooga after the Legislature adjourns for the year.

The mayors of Memphis, Knoxville and Chattanooga had urged lawmakers not to adopt the bill, arguing that de-annexation could end up shrinking the size of their cities.

The House earlier in the month passed the bill on a 68-25 vote. The full Senate had been poised to vote on the measure but ultimately sent it back to committee after Republican Senate Speaker Ron Ramsey of Blountville questioned the measure’s fairness and constitutionality.

EPA drops pollution complaint against Rep. Holt

NASHVILLE, Tenn. (AP) — The U.S. Environmental Protection Agency has dropped a complaint seeking $177,500 in fines from a state lawmaker for discharging waste from his northwestern Tennessee hog farm without a permit.

The EPA withdrew the filing against Rep. Andy Holt after the Dresden Republican agreed to an order of consent on the closure of two lagoons on his property. The agency reserved the right to refile the complaint if Holt fails to comply with the order.

Holt called the resolution of the dispute an “interesting process,” and thanked supporters for standing by his family.

According to the August complaint, Holt’s farm discharged a total of more than 860,000 gallons from lagoons on the farm raising nearly 1,500 swine without proper authorization. Holt said he self-reported the overflow after heavy rainfall.

Note: Rep. Holt’s press release on the matter is below. Continue reading

Darin Gordon stepping down as TennCare director

News release from the governor’s office
NASHVILLE – Tennessee Gov. Bill Haslam today announced TennCare Director and Deputy Commissioner of Health Care Finance and Administration Darin Gordon will enter the private sector at the end of June, leaving a nationally respected legacy of stability and innovation for a program serving some of Tennessee’s most vulnerable populations.

Started in 1994, TennCare is the state’s Medicaid program, a $10.5 billion health care enterprise that provides services to nearly 1.5 million Tennesseans and has earned customer satisfaction ratings above 90 percent for the past seven years.

Having taken on his role in 2006, Gordon is not only the longest serving TennCare director in state history but also is currently the longest serving director in the country. During the 12 years prior to his appointment, the position changed hands 10 times. Continue reading

Democrat running in House District 6

Johnson City businessman John Baker has announced he will seek the Democratic nomination in House District 6, a seat now held by Republican Rep. Micah Van Huss, according to the Johnson City Press.

Baker, 63, is the Pride Community Center of the Tri-Cities director. He has never run for public office, but he says he decided to enter the arena this year in an effort to open dialogue among all Washington County citizens.

His views on religion, and its place in government, run counter to the majority of Northeast Tennesseans and the incumbent. It’s something he’s well aware of, but he says his wish is not to bring discomfort to believers.

“There are 38 percent of Washington Countians who do not believe in God or the Bible,” Baker said. “But just because you don’t believe a certain way, you shouldn’t be ostracized. When you put your hand on the Bible (elected state/county officials), you’re pledging to honor the Constitution, not the Bible.

“We are not a country founded on the Bible. If you’re praying to only one god, what about the Hindus, Muslims and atheists here in Washington County? I think the majority in Washington County needs to realize there are other people that believe differently than you, and they are just as valid.”

Rep. Shaw may face Democratic challenger

Jackson City Councilman Ernest Brooks II is contemplating a run for the state House of Representataives, according to a press release reported by the Jackson Sun.

Brooks is a four-term councilman who represents District Three, which covers portions of East Jackson up to Interstate 40.

According to the release, Brooks would run in the Democratic Primary for House District 80, challenging current Rep. Johnny Shaw, D-Bolivar. The district is comprised of portions of Hardeman and Madison counties. It includes all of Jackson south of Interstate 40, including East Jackson, Bemis and Denmark.

“Our preliminary polling suggests that voters are ready for change, and I look forward to bringing a message of ‘A New Vision’ to the constituents of District 80,” Brooks told The Jackson Sun.

Brooks has been an outspoken advocate of Insure Tennessee and is the founder and chairman of Jackson’s “Do the Write Thing” challenge, a youth violence prevention program.

…Both Brooks and Shaw have already picked up petitions in Madison and Hardeman counties, respectfully.

Shaw said he admires anyone who runs for public office, but said he thinks District 80 is being well represented right now… “I plan to run like I’ve always ran,” Shaw said. “I don’t like dirty races. I’ve got my own reputation. I don’t have to destroy his. I expect him to do the same.”

Basar backs out of 8th Congressional District race

Shelby County Commissioner Steve Basar has announced he will not seek the Republican nomination for the 8th U.S. Congressional District seat being vacated by Rep. Stephen Fincher, reports The Commercial Appeal.

Basar said it’s not the right time for him to run and denied his decision had anything to do with county Mayor Mark Luttrell’s entrance in the race.

“It just makes sense for me right now to wait and find a better time to run, focus on my County Commission job and focus on my new position here at Smith & Nephew,” said Basar who recently joined the Memphis-based medical devices manufacturer as a supply chain director.

Basar’s withdrawal leaves at least 11 contenders for the Republican nomination, according to the Secretary of State’s office. They are Luttrell, state Sen. Brian Kelsey; former U.S. Attorney David Kustoff; Shelby County Register of Deeds Tom Leatherwood; Memphis radiologist George Flinn; Collierville businessman David Maldonado; Fayette County corrections officer Ken Atkins; Jackson businessman and political consultant Brad Greer; James Hart of Buchanan; Adrian M. Montague of Jackson and Mark J. Rawles of Jackson.

Two Memphis area Democrats, Michael McCusker and David Vinciarelli, have also expressed an interest in Fincher’s seat.

Revised refugee lawsuit legislation advances

A resolution that seeks to require the state to sue the federal government over refugee resettlement passed another key hurdle on Tuesday, says The Tennessean.

With a voice vote, the House State Government Committee approved the measure that seeks to force Attorney General Herbert Slatery to sue the federal government over the Refugee Act of 1980. In the event that Slatery refuses to sue the feds, the resolution includes a provision that would allow the legislature to hire outside counsel.

Proponents of the measure (SJR467) have argued a lawsuit is necessary because the federal government has failed to consult with Tennessee on the continued placement of refugees. In addition they say the feds have shifted the cost of administering the program to the state without lawmakers specifically authorizing the appropriation of funds, while also pointing to security concerns.

Gov. Bill Haslam has said he is not concerned about the safety issue, noting that those who come to the state through the refugee resettlement program are properly screened, while adding that he is concerned that hiring outside counsel could set a bad precedent.

Several opponents of the resolution say it ignores the financial benefits refugees provide the state and indicates the state is unfriendly to those who have fled their country because of persecution.

“We need to continue to be a welcoming place for refugees, for immigrants,” said Rep. Jason Powell, D-Nashville. “This definitely sends the wrong message.”

Rep. Bill Sanderson, R-Kenton, disagreed with Powell’s assessment, saying, “Tennessee, I think, has open arms. We’re not saying that we have closed doors.”

Sanderson said the resolution is simply an attempt to “hold those responsible in Washington accountable.”

Note: The Tennessee Immigrant and Refugee Rights Coalition contends the new amendment means “the only outside counsel who may take this case will be driven more by extreme ideology than sound legal reasoning and the best interests of Tennesseans.” News release below. Continue reading

Another audit criticizes DHS child nutrition program

For the third time this month, the state Comptroller’s Office has released an audit critical of a child nutrition programs overseen by the Department of Human Services, reports The Tennessean. In this one, $11.4 million in spending is questioned.

Most of the spending questioned in Tuesday’s audit involved food programs for low-income kids. The programs have been pored over by lawmakers and the U.S. Department of Agriculture, and have been the subject of an ongoing Tennessean investigation. Last week, the Comptroller issued two separate reports on private agencies now under criminal investigation for pocketing tens of thousands of dollars in food program funds that never made it to children.

The $80 million food program is intended to provide meals and snacks to kids who lack access to nutritious food in a Tennessee, where one in five children is at risk for hunger. The funds come from the federal government, but DHS is responsible for overseeing the programs. DHS contracts with private agencies, providing the money for food purchases distributed in child care centers, after-school and recreational programs.

Tuesday’s audit called into question more than 10 percent of the food program’s annual operating budget, based only on a review of a small sample of private agencies participating. The audit described multiple violations of federal regulations and basic accounting practices, including a lack of documentation for monies spent on food, a lack of verification that the agencies DHS contracts with are eligible to participate in the food programs and staffing shortages at DHS that threatened its ability to provide oversight and prevent potential fraud, waste and abuse.

In several examples cited in the audit, DHS provided cash advances for food purchases to agencies that never requested them. In one example, DHS provided a $311,993 cash advance to an agency whose entire annual operating budget was $124,000. In another example, an agency receiving an un-asked-for cash advance said it was waiting for DHS to ask for it back.

The audit places responsibility for the oversight failures on DHS management, including its commissioner, Raquel Hatter.

Hatter — through spokeswoman Stephanie Jarnagin on Tuesday — declined an interview request… Jarnagin sent a statement from DHS that said, in part: “It is important to note that while State Audit has questioned costs in their findings, it does not mean that the questioned costs are specifically the result of fraud, waste or abuse.”