Posted on 05/03/2005 6:18:06 AM PDT by Blood of Tyrants
An exclusive NewsChannel 5 investigation has discovered that millions of dollars -- your money -- went to companies with ties to a very powerful lawmaker. And he may not want you to know what's being done with it.
How Memphis came to be known as home of the blues isn't much of a mystery.
But what happened after it came to be home to millions of your tax dollars?
That, it turns out, is a mystery -- even to the man who hands over the money.
"That's a question we ask," says Matt Kisber, commissioner of the state Department of Economic and Community Development.
"Do you know where the money goes?" NewsChannel 5's chief investigative reporter Phil Williams asks Kisber.
"I cannot say that I know where the money goes."
In this case, it's money doled out by lawmakers through the state budget - a process that has sent millions of dollars to 5 North Third Street in Memphis.
Inside, our hidden cameras found a suite of offices shared by Senate chairman John Ford… and a reception area where the checks are delivered… alongside the Memphis Democrat's own mail.
"All we do is perform a perfunctory administrative role in processing the paperwork and cutting the checks," Kisber adds. "We have no authority or ability to do anything outside of that."
In fact, Ford -- a member of the Senate Finance Committee -- has personally sponsored at least some of the amendments, which steered your tax dollars into entities run by Banks & Holeyfield.
That's a management and consulting partnership headed by Ford's campaign treasurer, Frank Banks.
"Sen. Ford has been instrumental in that?" Williams asks Banks.
"Well, he's a part…, he's aware of it. We've been getting that for a while."
Among the payouts to Banks' companies in the past decade:
ECD officials say they don't have any audits to show where any of the money has gone.
Kisber says, "One is left to just conjecture where these dollars are going, how they are being spent."
One of those entities, Southern Cooperative Development Fund -- a for-profit company -- gets $95,000 of your money every single year.
But even Banks admits almost all of that winds up in his company's bank accounts.
"Most of that goes to management fees to you, correct?" Williams asks Banks.
"To Banks & Holeyfield, yeah."
And what's the taxpayer money for? Helping a minority owned call center, for one thing - or so Banks claims in a status report to the state.
He claims his taxpayer-financed expertise helped Ashaun LLC get loans from West Tennessee Venture Capital and from MemphisFirst Community Bank.
Which surprised the company's owner, Anthony Tate.
"You have a relationship with MemphisFirst?" Williams asks.
"Right, I'm one of the founders -- and I'm on the board of directors," Tate replies.
"And you have a relationship with Mr. Banks?"
"Frank is chairman of the MemphisFirst Community Bank."
Banks tells Williams, "One of our mandates was to assist minority businesses, and that's what we do."
"But you're helping one of your business partners."
"Still, it's a minority business."
Kisber says, "Not knowing what's going on in a particular activity that we are giving money to gives me concern."
The ECD commissioner says he asked Banks to sign the same disclosure agreements that he expects of everyone who does business with his department. But, then:
"We were told when we tried to imposed our partnership protocols on these appropriations, that we had no authority to do that."
"Who told you that?"
"We had calls from some members of the legislature."
Was it Ford? ECD insiders say yes, but Kisber declines to say.
But he admits, it's the type of pork barrel spending that's enough to give taxpayers the blues.
Another corporation once at the same address gets a $100,000 every year through the state budget.
But the state has revoked the corporate status of that company and Southern Cooperative because they haven't paid their own taxes.
Banks insists Ford has not received any money from those corporations.
But the Tennessee Valley Center first got federal funding back in 1979, with help from then Congressman Harold Ford Sr. The center then turned around and hired his brother, John Ford.
Here's what our NewsChannel 5 investigation discovered about the companies that have received your tax dollars.
West Tennessee Venture Capital Corp.
A for-profit corporation formed in 1981, WTVCC is operated out of Banks & Holeyfield Management Co., 5 N. Third St., Memphis. The last annual report filed by the corporation in 1998 lists Frank Banks as president and TennCare figure Osbie Howard as secretary.
Both Banks and Howard have been affiliated with the controversial TennCare contractor OmniCare; Howard has also been linked to the consulting firm Managed Care Services Group that includes state Sen. John Ford. Banks is Ford’s campaign treasurer, while Howard has prepared the senator’s tax returns.
WTVCC’s stated mission is “to identify and provide financing for minority owned or controlled ventures.”
In 1998, a proposed $1.5 million grant to WTVCC was included in the Sundquist administration’s budget for the Department of Economic and Community Development (ECD).
After some debate, lawmakers adopted language appropriating that amount only to “a qualifying organization.” The clause stated that the money was “for the purpose of demonstrating the beneficial impact of capital enhancement on minority business enterprises.” It required ECD officials to adopt rules that set loan guidelines and required annual audits. In fact, the department adopted rules for an “enterprise demonstration project,” but did not openly advertise availability of the money for competing organizations to offer proposals. In July 1999, the Sundquist administration signed a contract, making the $1.5 million grant to WTVCC. Under that agreement, the corporation can use 2% of project funds annually for salaries and other administrative costs.
That contract requires annual audits, but state officials say they cannot find any such documents.
Banks says at least one audit was filed during the year of the contract, but officers did not believe they were obliged to continue reporting what they had done with the money. Annual audits are still completed, Banks said, but he refused to provide them.
Limited available documents indicate that WTVCC has loaned money to Ashaun LLC, a telephone call center owned by Anthony Tate (who is a member of the board of MemphisFirst Community Bank, which is headed by Banks).
Tennessee Valley Center for Minority Economic Development
A non-profit corporation formed in 1979, it is operated out of Banks & Holeyfield Management Co., 5 N. Third St., Memphis. The last annual report filed by the corporation in 2003 lists Aubrey Howard as president, Osbie Howard as secretary, and Banks as registered agent.
Its stated purpose is “to encourage full participation by minority and disadvantaged persons in the free enterprise system and provide ways and means for each person to accomplish this goal, to provide affordable and safe housing.”
In 1979, Sen. Ford’s brother, Congressman Harold Ford Sr., helped secure $875,000 from Tennessee Valley Authority to start the center. A controversy developed in January 1980 when it was learned that John Ford had been hired as a “special assistant” to the center. The congressman told reporters that his brother was involved in planning the center. Reports indicated that Ford’s position was later eliminated by budget cuts.
The Tennessee Valley Center previously had an ownership interest in a downtown Memphis hotel now owned by Banks.
Tennessee lawmakers appropriated $100,000 to the center in 1994, $65,000 in 1996, and $125,000 in 1998. A 1999 news article specifically noted that Ford had filed a budget amendment to direct $125,000 to the center, which was apparently not approved that year.
Southern Cooperative Development Fund
Banks describes his operation at 5 N. Third St. as the Memphis office of SCDF. That’s a for-profit organization based out of Lafayette, La., that also assists minority businesses. Banks signs documents as office manager, while Aubrey Howard signs as chairman.
SCDF also previously had an ownership interest in the downtown Memphis hotel now owned by Banks. The organization has previously been cited by the U.S. Small Business Administration over alleged insider dealings.
In documents filed with the state, Banks says the organization has assisted “many community-based organizations and small business enterprises in the Memphis area. Under the management of Banks & Holeyfield Management and Business Development Co., SCDF Memphis office has served as a technical and support arm to West Tennessee Venture Capital Corp., including the Enterprise Demonstration Project and the Tennessee Valley Center for Minority Economic Development.”
State records show the company’s corporate status was revoked by the state Department of Revenue in July 1995 for failure to pay state taxes.
SCDF has received about $95,000 a year since first being placed in the Sundquist administration’s ECD budget as a recurring expenditure back in 1998. The most recent budget submitted by Banks shows the funds are expended as follows:
In August 2003, Bredesen ECD officials asked Banks to submit to the department’s new “partnership protocols” designed to impose stricter controls over use of state funds. After apparently being rebuffed by Ford, ECD officials backed down.
Memphis Business Development Corp.
A for-profit consulting firm incorporated in 1998, it grew out of the Banks & Holeyfield operations at 5 N. Third St., Memphis. It shares offices at 283 N. Bellevue, Memphis, with the non-profit Black United Fund of Tennessee. Corporate records list its president as Gary Rowe (who has previously served on Ford’s campaign committee) and its secretary as Minous R. Powell.
Its brochures say MBDC is “comprised of consultants” who offer services to minority entrepreneurs.
The company received $100,000 in 1998 and $100,000 every year since 2000 through budget amendments.
Rowe says MBDC is reorganizing as a non-profit, Minority Education Development Week.
In response to inquiries by ECD officials about the use of state funds, Rowe submitted financial information relating to Minority Enterprise Development Week activities. But a 2003 tax return for MBDC, provided by Rowe to NewsChannel 5, shows $55,000 went to “compensation of officers” – Rowe says $30,000 to himself, $25,000 to Powell. (That’s in addition to an estimated $53,000 that Rowe receives from Black United Fund of Tennessee.)
State records show the company’s corporate status was revoked by the state Department of Revenue in February 2003 for failure to pay state taxes.
EVEN MORE!
States dispute Ford's consultant role (link only as per complaint from Tennessean).
bookmarked for later read
Sue-prahs! Sue-Prahs! You'll actually find the "D" word (democrat) in this article. Make tagline wrong, but will take it anyway.
BTT. I made sure our local Memphis talk host has this latest on unfortunately, my senator...john ford. I got redistricted into his last redistricting.
Gee, what a surprise! Whodda thunk that a Memphis Democrat was robbin' us blind here in Tennessee?
It's alright they are democrats and minority, they can do whatever they want and nobody will ever hold them accountable for it. It's just a liberal thing. Get over it and Move On. </Sarcasm Off
Even more...
Senator’s new baby called ’John-John’
AP Photo planned.
cawbt2
MEMPHIS, Tenn. (AP) — The mother of state Sen. John Ford’s new son says she plans to call the boy “John-John.”
“This is my future here,” Tamara Mitchell-Ford said of the 2-week-old infant.
Mitchell-Ford is the ex-wife of the senator at the center of a legislative debate over standards of ethics for state lawmakers.
Ford and his ex-wife were divorced in 2002 but he recently said at a Juvenile Court hearing that he still maintains a residence with her while keeping another home with a longtime companion who is the mother of two of his seven minor children.
Mitchell-Ford said she named her son John Newton Ford Jr.
“Given the controversy that’s going on right now, I think it will only strengthen the fact that I have confidence in the Ford name,” Mitchell-Ford told The Commercial Appeal of Memphis.
Mitchell-Ford, 40, also has three other children with Ford, 62.
Fellow lawmakers and federal prosecutors are looking into Ford’s finances amid questions whether he has had financial dealings with state contractors.
“John has done some good things. ... It’s just his personal life and those personal choices that he makes that are human,” Mitchell-Ford said. “I have ample time to teach my son right from wrong. What better way to do it than to have the example of his own father?”
Mitchell-Ford was jailed last year after she drove a Jaguar into the home of the other woman Ford stays with.
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Information from: The Commercial Appeal, http://www.commercialappeal.com
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