Cate’s consulting (not lobbying) helps clients

The Tennessean has a Sunday story raising the question of whether Mark Cate has engaged in lobbying since he stepped down a year ago as Gov. Bill Haslam’s chief of staff. Cate says he has not, though clients of his consulting firm have done quite well in their dealings with state government.

The clients Cate represents have landed $3 million in state funding, successfully secured approval to open a new mental health facility in East Tennessee and navigated a thorny legislative session for the tourism industry in the last year. Cate also was hired for a $10,000 per month job by a private foundation to oversee the construction of the new state museum, a project he helped lead as one of Haslam’s top advisors.

Cate and his deputies did not register with the state to lobby for 2016. State law forbids high-ranking officials from lobbying for one year after they leave office. Cate, who left the governor’s office on July 31, 2015, said he played no role in landing the state funding for clients because he and his firm were only consultants.

…The Tennessean reviewed nearly two years of emails and text messages between Cate and top state officials from six departments. The hundreds of emails and texts, from late 2014 through early this year, paint a picture of Cate’s broad influence on state government during his time as chief of staff and his continued clout as the principal for his new company, Stones River Group.

Stones River Group works for the National Museum of African American Music, planned to open in Nashville; Strategic Behavioral Health, a mental health company in Memphis; the Nashville Convention and Visitors Corp.; and three nonprofit organizations created while Cate worked under Haslam to support policy initiatives favored by the Haslam administration. Cate says all of his contracts note that his company is not allowed to lobby.

…”The governor and Mark have been friends since 2009 and worked together for six years. As with any other friend, they might discuss the news of the day. The conversations never included anything that remotely approached lobbying,” said Haslam spokeswoman Jennifer Donnals in an email.

…The state museum project was entangled last year with the National Museum of African American Music (NMAAM), another ambitious concept in its planning and fundraising stage. The NMAAM had the rights to the land where the Haslam administration wanted to build the state museum.

The NMAAM eventually decided to move to the former convention center downtown, which is planned for a redevelopment. A NMAAM spokeswoman said in June that it recently hired Cate’s Stones River Group to assist “with strategic planning and corporate and board development counsel.”

After years of struggling to get public funding for the project, the Haslam administration committed a $2 million grant in the 2017 state budget for the NMAAM fundraising effort. The state building commission just officially confirmed that state funding in July.

…The Stones River Group, based in Nashville, also includes co-founder Stephen Susano, whose professional background is primarily in finance; Jeremy Harrell, a former Haslam administration official; and Alexandra Sollberger, a veteran political strategist.

The company shares a floor in a downtown office tower with three Stones River Group clients — The Governor’s Foundation for Health and Wellness, Tennesseans for Students Success and Tennessee Business Partnership. Each of those three unaffiliated organizations are nonprofits with interests frequently aligned with initiatives pushed by the Haslam administration.

The governor’s office created the Governor’s Foundation for Health and Wellness to serve as an organization that could take a different approach to health care than the state Department of Health, Cate said. He said eventually that organization “spun off” and became a private foundation. When that happened, the governor asked Cate and Martin, the general service’s chief, to be on the foundation’s board.

During Cate’s tenure on the board, the foundation received $6.2 million in grant funds in the 2014 budget, according to tax filings. The organization received another $1 million in the most recent budget.

…The Nashville Convention and Visitors Corp. hired Stones River Group in the fall of 2015 to serve as a government consultant. During a contentious legislative session, the CVC opposed some proposed bills, including legislation to dictate which bathrooms transgender people use in schools.

Cate said he was hired by CVC President and CEO Butch Spyridon last September to “kind of be a consultant to him to help think through you know, what all’s going on across the state from a public policy standpoint, and how that affects his business, their business, their industry.”

But initially, when The Tennessean asked the CVC about the nature of its relationship with Cate’s company, the statement described the role of a lobbyist.

“The NCVC periodically engages government relations professionals to help with legislation important to us. This is no different,” said Bonna Johnson, a spokeswoman for the CVC.

“We have retained Stones River Group since last legislative session to assist with legislation that pertains to the hospitality industry. During the session we usually have more than one firm assisting with our efforts.”

Unsolicited, about three hours after emailing that statement Johnson emailed another statement. She said Cate’s firm provides “general public affairs and policy counsel, including during this last legislative session. Our contract with SRG explicitly states that they do not lobby for us at this time.”

…Now that his one-year anniversary of leaving the state has passed, Cate is free to lobby, though he must register. He recently registered with Metro Nashville to lobby on behalf of an engineering company called Volkert.

Cate said he has been deliberate in ensuring his firm did not lobby.

“I can tell you this: if clients want us to do anything after kind of this year of cooling off is over with, then I will make sure we have a bright line, and register for anything that might be perceived as lobbying moving forward,” Cate said.

“We were really clear when I left the administration… we’re going to be very clear: Number 1, I know that there’s a bright line between what I can and can’t do for this year.”

Note: A sidebar story focuses on “hundreds” of email and text messages back and forth between Cate and Stephen Smith, a top Haslam education official recently named senior advisor to the governor. Some of the messages deal with legislation.