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Pellissippi Audit: Some Irregularities, but $10M a Reasonable Price

A review of a Pellissippi State Community College building purchase has concluded that there were some missteps and misinformation along the way, but it was reasonable for the state to pay $10 million, twice its previous purchase price, for a long-vacant office building in need of extensive repairs.
Further from The Tennessean:
In a nine-page report recently forwarded to John Morgan, chancellor of the Tennessee Board of Regents, the director of audits in the state comptroller’s office concluded that “the price of the property was negotiated and the acquisition price appeared reasonable.”
The report, however, found several irregularities, including two back-to-back six-month leases for that same Knox County building, which were not properly approved. The leases preceded the purchase and were signed by then-Pellissippi State Community College president Allen Edwards, the prime mover behind the purchase.
The report also found that there was a $2 million discrepancy in the reported purchase and repair estimates sent from the state Board of Regents to the state building commission before a key vote. The figure was later corrected.
In a Jan. 24 presentation, college officials pegged the estimated purchase price at $8 million, with an additional $2 million needed for repairs. In fact, the state already had offered $10 million for the property and $2 million more was needed for immediate repairs. “Although the $8 million offering price was presented as an estimate, it was known or should have been known that the offer price was $10 million at the time of the presentation,” the report states.
Minutes show that state Comptroller Justin Wilson, whose office prepared the audit report, was present at that Jan. 24 meeting, in which the purchase was approved without opposition. Wilson is a member of the state building commission and its executive subcommittee.
State building officials also were told at that meeting, according to the report, that the proposed expansion of Pellissippi State was included in a college master plan.
In fact it was Wilson, according to the minutes, who asked if the property “is in the master plan, and was told ‘yes.’ ”
“The (2007) master plan did not include a proposed new campus for eastern Knox County,” the audit report states.
As The Tennessean reported late last year, the building was purchased for $10 million on March 9, 2012, from a group of politically connected investors who bought it in 2007 for $5 million.
The investment group was headed by Samuel J. Furrow, a Knoxville auctioneer and developer. At the time of the purchase, Furrow’s wife had a $1 million mortgage on a Nantucket Island vacation home from James A. Haslam II, Gov. Bill Haslam’s father.

Trivia Question: Name 5 Tennesseans who became president

News release from Secretary of State’s office:
Here’s a quick trivia question: Can you name five Tennesseans who became president?
If you’re a good student of the state’s history, you probably won’t have any trouble naming former U.S. presidents Andrew Jackson, Andrew Johnson or James K. Polk. But a fourth or fifth?
It’s a trick question, because there were also Tennesseans who later became presidents of foreign countries, such as Sam Houston, who led the briefly-independent Republic of Texas, and William Walker, who was inaugurated as president of Nicaragua on this date in 1856.
Walker’s life is highlighted in one of the Tennessee State Library and Archives’ online exhibits. The exhibit can be found at http://tn.gov/tsla/exhibits/walker/index.htm.
Walker isn’t as famous as some Tennesseans chronicled at the State Library and Archives, but in his day, he was quite infamous for his efforts to colonize Central America.
Three years before he became president of Nicaragua, the Nashvillian led a group of 45 men who landed in Baja California, Mexico. Walker declared the land to be the Republic of Lower California and proclaimed himself to be the new country’s president. Mexican forces soon threw him and his troops out of the country and he was tried (but acquitted) for violating U.S. neutrality laws when he returned.
Walker then led a group of 57 soldiers into Nicaragua. After fighting a number of battles and eventually becoming president, he launched a plan to “Americanize” the country by declaring English the official language and encouraging U.S. residents to immigrate there. He was later ousted by the combined forces of El Salvador, Guatemala and Honduras. After unsuccessfully attempting to regain the presidency of Nicaragua, he was eventually captured and turned over to the Honduran government, which executed him for piracy.
“The story of William Walker is one of thousands that can be found at the Tennessee State Library and Archives,” Secretary of State Tre Hargett said. “Because his life is chronicled in one of our online exhibits, it is accessible to Tennesseans free of charge, 24 hours a day and seven days a week. I encourage people to visit our web site and learn more about the resources that are just a few mouse clicks away.”

Rep. Sparks Organizes Program Honoring Confederate Spy

By simply relocating his office space at the Tennessee State Capitol, state Rep. Mike Sparks, R-Smyrna, learned a whole new side to local history regarding Civil War spy DeWitt Smith Jobe, reports the Daily News Journal.
“I asked (Speaker Beth Hartwell) for a new office overlooking the Capitol and the Sam Davis Monument because Sam Davis kind of represents Smyrna,” Sparks said. “I thought, ‘I’m going to do a little research on the Coleman Scouts and I came across (an article) about DeWitt Smith Jobe.”
Sparks, along with several local Civil War aficionados, convened Saturday at Giles Baptist Church on Rocky Fork Road for a program honoring the heroic life of Jobe, who was a member of the infamous Confederate spies known as the Coleman Scouts. About 50 people attended the presentation. Guest speakers included James Patterson, adjutant of the Sons of Confederate Veterans, Greg Tucker, Rutherford County historian, and John Moore, a descendant of Jobe.
“Here I was, born and raised in Smyrna and I didn’t really know what all (Jobe) went through,” Sparks said, adding that he also discovered John Bridges’ book, “Three Cousins from Mechanicsville,” chronicling the heroic life of Jobe and his two relatives.
Jobe worked alongside fellow Coleman Scout Sam Davis, who is well-known for having hanged after refusing to betray his source. Sparks compared the scouts’ tenacity to that of the modern-day “A-Team.”
….”He was as much a hero as Sam Davis. He just didn’t have the publicity Sam Davis had,” Bridges said.
Jobe met a much more gruesome fate. Right before being captured by Union troops in August 1864, Jobe destroyed information he was carrying — he swallowed it — and refused to divulge the message. He was brutalized for days. Eventually, his tongue was severed and he died after being dragged by a galloping horse.

Democrats Ask Investigation of State Property Deal

News release from Tennessee Democratic Party:
NASHVILLE, Tenn. — Democrats are calling for state auditors to investigate a $10 million purchase of a property that county officials valued at $4.4 million.
In a letter to the Comptroller of the Treasury’s Division of Investigations, Tennessee Democratic Party Chairman Chip Forrester said the business deal may have defrauded state taxpayers of more than $5 million dollars.
“Tennesseans deserve absolute disclosure on this suspicious land deal and a full explanation for why we paid $10 million for a property the county assessor valued at $4.4 million,” Forrester stated in the letter. “If citizens are to have faith in their government, there must be complete transparency on high-dollar transactions and accountability if abuse or fraud is found.”
According to The Tennessean, state taxpayers purchased a distressed and unusable Knoxville office building on March 9, 2012 for $10 million to expand Pellissippi State Community College. The building required more than $16 million worth of repairs and, according to the article, the county property assessor valued the building at $4.4 million at the time of the sale.
The chief financial benefactor was a Knoxville developer who has business dealings with Governor Bill Haslam and is a personal friend of the governor’s father, the article said.
“To any casual observer, it appears taxpayers overpaid — by more than $5 million — for a distressed office building and that the financial benefactor was a businessman with deep political connections to Governor Haslam, whose administration advocated for the purchase,” Forrester stated in his letter.

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Politically-Connected Businessmen Sell $5M Building to State for $10M

A group of politically connected businessmen earlier this year sold a long-vacant Knoxville office building in need of millions of dollars in repairs and upgrades to the state for $10 million, twice the price they paid for it five years earlier, reports The Tennessean.
The building, for Pellissippi State Community College, will cost an additional $16.6 million to make it suitable for a community college, according to a report commissioned by the college to assess the property before the purchase.
A series of emails obtained by The Tennessean under open records laws shows that the top aide to Gov. Bill Haslam stepped in late last year to try to make the purchase a priority after being contacted by an intermediary for the Knoxville developer selling the 220,000-square-foot building.
The developer, Samuel J. Furrow, has been a business partner with the governor in the past and a friend of the governor’s father, who loaned Furrow’s wife $1 million while Furrow was trying to sell the building to the state.
Furrow and his investment group bought the vacant property at 7201 Strawberry Plains Pike for $5 million on June 28, 2007, from North American Philips and sold it to the state on March 9, 2012, for $10 million, according to public records.
“We stole it (from Philips) and sold it to the state,” Furrow said in a telephone interview, attributing the gain on the investment to a low purchase price.
He said the deal did not produce a full$5 million profit because of expenses such as interest and maintenance.
“We did everything right and for the right reasons,” Furrow said, calling the sale “clean as a whistle.”
The state bought the building by tapping $87 million that it had previously budgeted for TennCare, the state’s Medicaid program for the poor. But that money was able to be shifted for other uses when the federal government boosted its share of Medicaid funding for Tennessee as part of the stimulus package. In addition to $8.5 million in state funds, $1.5 million was contributed by the Pellissippi State Foundation toward the purchase.
Tennessee officials set aside an extra $2 million for immediate repairs, including a new roof. Estimates for total repair costs ranged from $3.1 million to nearly $5 million, records show. And to make the entire building suitable for use as a community college, a report dated Nov. 28, 2011, by Community Tectonics to Pellissippi State concluded it would cost $16.6 million, or $75 a square foot. Among that report’s recommendations was replacement of the heating and air conditioning system.
…The governor’s press secretary, Alexia Poe, said the governor was aware of the Knoxville building’s purchase but noted the process began before he became governor in January 2011. She said Haslam had never discussed the sale with Furrow or any of the other investors.
…Records obtained by the Tennessean under the state public records law show that a flurry of email activity began on Nov. 3, 2011, when Raja Jubran, acting as an intermediary for Furrow, contacted the governor’s chief of staff, Mark Cate….Jubran, who has been involved in business dealings with the governor in the past, urged in his email that the deal be closed by the end of the year. Though the effort ultimately failed because promised repairs had yet to be completed by Dec. 31, 2011, Jubran’s email set off a chain of emails involving high-level Haslam administration executives that outline their efforts to make the deal a priority.

On the Origin of TN’s ‘Sunshine Law’

The Tennessee Legislature, which through much of the 1960s would routinely exclude the public and press from lawmakers’ “executive session” meetings, in February of 1974 adopted a landmark law that states in its preamble:
“The General Assembly hereby declares it to be the policy of this state that the formation of public policy and decisions is public business and shall not be conducted in secret.”
The statute is known as the “Sunshine Law,” and passage marked a change in attitude from prior years. It also marked a rare case of legislative advocacy by the state’s newspapers, represented by the Tennessee Press Association, with the late Ralph Millett, then editor of the News Sentinel, and Sam Kennedy, then editor of the Columbia Daily Herald, as point men.
“We decided to take the initiative, something that, as a matter of policy, we did not do,” recalled Kennedy in an interview last week. Normally, he said, the TPA became active in the Legislature only in opposing bills considered bad, not pushing legislation considered good.
The full article, written as part of a News Sentinel series on the newspaper’s history over the past 125 years, is HERE.

Knox Commission Rejects Campfield Censure Proposal

Officials on Tuesday night voted down Knox County Commissioner Sam McKenzie’s plan to ask state senators to censure colleague Stacey Campfield over recent controversial remarks the Knoxville Republican made about gays and the origin of the AIDS epidemic, reports Mike Donila.
The resolution would have directed commission Chairman Mike Hammond to ask state Sen. Becky Duncan Massey, R-Knoxville, to initiate proceedings against Campfield. Only McKenzie and Commissioners Amy Broyles and Tony Norman supported it during Tuesday’s work session. The other eight commissioners declined to sign off on it.
McKenzie said Campfield’s “false comments” attracted nationwide attention from a number of media outlets, including The Today Show and The View, and the “negative perception affects us — this affects our bottom line.”
Campfield made national news in late January after he blamed the AIDS virus on “a guy screwing a monkey” and called the disease “virtually impossible” to contract via heterosexual intercourse. He made the comments during a radio interview on Sirius XM’s gay-lesbian channel OutQ.
A few days later, Martha Boggs, owner of the Bistro at the Bijou, refused to serve him at her downtown restaurant in disgust. Prior to the radio interview, the senator made national headlines as sponsor of the so-called “Don’t Say Gay” bill. Campfield calls the bill “Don’t Teach Gay.”

Campfield said the censure proposal “was ludicrous from the beginning” and he was not surprise at the rejection of what he considered a “partisan game.”
He also characterized McKenzie as “somebody looking for a free meal at the Bistro.”

Knox Commissioner Seeks Censure of Sen. Campfield

Knox County Commissioner Sam McKenzie wants Stacey Campfield’s state Senate colleagues to censure him over recent controversial remarks the Knoxville Republican made about gays and the origin of the AIDS epidemic, reports Mike Donilla.
He is spearheading a County Commission resolution that directs the board’s chairman to ask state Sen. Becky Duncan Massey, R-Knoxville, to initiate proceedings against Campfield.
“For a New York educated gentleman, he’s really come down here and put a tarnish on the people of Knox County with these outlandish statements,” McKenzie said. “A censure is a reprimand and I think it’s called for in this particular case.”
Campfield made national news in late January after he blamed the AIDS virus on “a guy screwing a monkey” and called the disease “virtually impossible” to contract via heterosexual intercourse. He made the comments during a radio interview on Sirius XM’s gay-lesbian channel, OutQ.
A few days later, Martha Boggs, owner of the Bistro at the Bijou, kicked him out of her downtown restaurant in disgust.
Prior to the radio interview, the senator made national headlines as sponsor of the so-called “don’t say gay” bill. Campfield calls the bill, “don’t teach gay.” It passed the state Senate last year after being revised to permit only sexuality involving “natural human reproduction” to be discussed in public schools. It still awaits a House vote.
Campfield on Wednesday said he believes McKenzie’s opposition really stems from the bill and “this is just one of those old tactics that they use to try and scare people away (from supporting it).”
“The liberals always appreciate everybody’s point of view until someone actually has another point of view,” Campfield said. “(McKenzie) thinks we should have sex education on homosexuality taught in schools. I don’t.”
Massey said she had not heard about McKenzie’s proposal and was noncommittal about it Wednesday.
“We’ll just wait and see what happens,” she said, before listing a number of Legislative activities including budget hearings, that would take up her day. “Right now, that’s where my focus needs to be.”