Gov. Bill Haslam says he’s likely to sign into law a bill updating the state’s 2009 liquor distillery statute despite questions raised about two real estate investments he has with a Knoxville developer who helped push the bill, reports the Chattanooga TFP. “It was passed by the Legislature,” Haslam said. “I don’t see any constitutional issues. I don’t think there’s a lack of clarity. I don’t know at this point and date why I wouldn’t [sign it].”
The bill was sent to Haslam on May 6. Governors have 10 days to decide what action to take. The governor can sign, veto or allow the bill to become law without his signature.
Haslam emphasized earlier this week the bill was not an administration initiative. And he said he didn’t know developer Ned Vickers was involved in the bill and a proposed Gatlinburg distillery, let alone discuss the matter with him.
“Y’all’s job is to ask questions, but it’s also your job to get the answer right,” the irritated governor lectured reporters about a news report on the issue.
He said previous investments he made with Holrob Investments, with which Vickers was associated, were placed in a blind trust he created when he became governor in 2011.
The Tennessean reported this week that before placing most of his holdings in the blind trust, Haslam listed 18 Holrob-affiliated investments on a disclosure. The newspaper reported he still has two. (Previous post HERE.)
Haslam said he can’t say for sure whether he still has the two investments because they’re part of the blind trust, controlled by a trustee.
East Tennessee developer Ned Vickers, who will be able to build a moonshine distillery in Gatlinburg thanks to legislation awaiting Gov. Bill Haslam’s signature, has worked with the governor on multiple private real estate deals, including at least one in Gatlinburg, according to the Tennessean. Vickers’ plan to open Sugarlands Distillery on the city’s main tourist drag had been denied by the Gatlinburg City Commission because it would share a property line with Ole Smoky Moonshine Distillery, violating its distance requirement.
But in a remarkable power play in the state legislature that turned Gatlinburg’s own lobbyist against the city and involved two prominent Republican lawmakers, Vickers managed to push a bill to overturn Gatlinburg’s ordinance and limit other local governments that want to regulate the burgeoning industry.
Critics say Haslam should have disclosed his ties to Vickers during the fiery debate in the legislature, and that his continued secrecy about his business investments stretches the limit on state ethics requirements for public officials.
But Haslam said he didn’t even know that Vickers was the co-owner of the proposed distillery until he was contacted by The Tennessean. Haslam said through a spokesman that his investment ties to Vickers are managed by a blind trust.
The bill, which Haslam has until May 16 to veto, sign or let become law without his signature… specifically takes aim at Gatlinburg (by exempting) distilleries from any local government’s distance requirements between liquor stores, as well as any limits on the number of retail licenses to sell packaged liquor.
Gatlinburg had wanted to prevent a concentration of stores selling liquor through its distance laws, city officials said.
…. Haslam has numerous ties to Vickers through a real estate firm called Holrob. On six different ethics disclosure statements dating back to his time as mayor of Knoxville, Haslam listed his stake in Holrob companies 49 times. On the 2011 form, Haslam listed 18 different Holrob-affilated investments, such as Holrob Gatlinburg and Holrob-HH Partnership.
Though his ethics statements do not disclose the magnitude of his investment in Holrob, Haslam told The Tennessean in 2011 that when he guaranteed a $5.5 million loan to a Knoxville developer, it was handled through Holrob.
Vickers said he was a developer at Holrob for more than 10 years. He said Holrob functions as a real estate investment fund for proposals brought to the company by individual developers.
“Holrob was an umbrella of a lot of different business entities,” Vickers said. “The way that we worked, the developers would bring deals to the company and the company would decide whether to invest in them or not.”
Vickers said Haslam does not have a financial stake in the proposed distillery, though the governor remains invested in at least two of his developments through Holrob — Holrob Gatlinburg and Holrob Henderson Chapel.
Vickers said he also sold his stake in a Gatlinburg Walgreens, located two doors down from the proposed moonshine distillery, to Haslam. He also purchased a property — across the street from the distillery — that he had co-owned with Holrob.
Vickers said he doesn’t see it as a conflict if the governor signs the legislation clearing the way for his distillery because their co-investments are through the blind trust that has managed Haslam’s investments since he took office in 2011. Vickers said he hasn’t spoken to the governor since a charity event in 2011.
(Haslam) is an owner of a couple entities through a blind trust … that are still part-owners, or minority owners, in a couple of real estate entitites that I own,” Vickers said, adding that he deals with the trustee of Haslam’s blind trust and not the governor. “I have absolutely no contact with the governor.”
….The bill (SB129) was sponsored in the House by state Rep. Joe Carr, R-Lascassas, who is raising money for a run against U.S. Rep. Scott DesJarlais next year, and in the Senate by Sen. Bill Ketron, R-Murfreesboro, a longtime champion of wine sales in grocery stores.
David McMahan, a prominent lobbyist for the state liquor store association, which opposes the wine-in-grocery-stores effort, helped raise support for the distillery bill. McMahan had been the city of Gatlinburg’s lobbyist but became an investor in the distillery and began to work on the opposite side.
McMahan said his concern was that Gatlinburg was trying to box out competition for the city’s existing distillery, Ole Smoky’s.
“At the time, we had no idea we would need any legislation passed,” Vickers said. “At that time, (Gatlinburg) was saying yes. And so we did include David in the project and, obviously, that’s turned out to be a very fortuitous thing.”
The Ned McWherter Center for Rural Development has been led by former state Sen. Roy Herron, now a candidate for chairman of the state Democratic Party, since 2008 without accomplishing much, according to Steven Hale.
The center, a nonprofit organization that provides scholarships to Tennessee students, was created with a $900,000 state grant in 2008. The grant was part of that year’s state budget during Herron’s term as senator and while he was the president of the organization.
But since that time, the center’s output has been minimal, according to tax records examined by The City Paper. Between 2008 and 2010, the center awarded no scholarships. The nonprofit began 2011 with $1,045,052 in assets but awarded only $35,750 in scholarships to students that year, the most recent available for public examination.
Herron announced in 2012 that he would not seek re-election, noting that he would devote his efforts to the McWherter center.
The center still bears the name of the late former governor, who died in April 2011, despite a nearly year-old request from the McWherter family that his name be removed from the organization.
Along with Herron, House Minority Leader Craig Fitzhugh and former Democratic Rep. Mark Maddox are listed as officers for the organization. Michael McWherter, son of the former governor, made the request in a letter to all three dated Feb. 20, 2012.
News release from Tennessee Democratic Party:
NASHVILLE – For 38 years, Speaker Emeritus Jimmy Naifeh has served the 81st House District with honor and distinction, 18 of those years were as one of the most effective and revered Speakers in Tennessee history. Last week after a lifetime of serving the district and state, Speaker Naifeh announced he would be stepping aside to make way for the next generation of leaders who will seek to follow in his footsteps.
On March 31st the Tennessee Democratic Party will honor Speaker Naifeh’s service with the Governor Ned Ray McWherter TNDP Legacy Award at our annual Jackson Day Dinner. In 2011 we were proud to honor Speaker Pro-Tem Emeritus Lois DeBerry with this award, and now we are proud to honor the man she calls her mentor and close friend.
“Throughout his many years of service, Speaker Naifeh has worked hard to mentor a generation of lawmakers in the art of representing their districts and the people of Tennessee,” said Chairman Chip Forrester. “While they may not have known it at the time, all Tennesseans have benefitted from his exceptional leadership in state government during his time as Speaker and as a Representative of the 81st House District.”
The McWherter Legacy Award will carry a special meaning for Speaker Naifeh. In his farewell address on the floor last week, Speaker Naifeh remembered Gov. McWherter fondly as his mentor in both life and politics. Speaker Naifeh inherited the gavel he held for 18 years at the start of Gov. McWherter’s second term, he then worked to implement the policies of the McWherter administration that improved our education, roads, and health care system in this state for a generation.