March 9, 2005

Did A State Senator Use His Position and Tax Dollars to Enrich Himself?

State Sen. John Ford, D-Memphis, isn't the only member of the Tennessee state Senate under investigation for alleged financial and ethical improprieties. State Sen. Jerry Cooper, (D-Smartt), who has served in the state Senate for 20 years and is chairman of the powerful Senate Commerce Committee. Cooper is currently under investigation by a federal grand jury, the Tennessee Bureau of Investigation and the IRS for allegedly using his position to influence the spending of tax dollars in order to net himself $1.3 million in a real estate sale.

The following story is an edited version of a story published last month at TeamGOP.net, a website produced by Tennessee Republican activists, where it was published last month as part of a new feature, "Under the Radar," meant to bring attention to important stories that are being under-covered by the mainstream Tennessee news media.

Even though Sen. Cooper is currently under investigation by a federal grand jury, the Tennessee Bureau of Investigation and the IRS, the story has gone largely uncovered by the mainstream Tennessee media - except for the work of Nashville TV investigative reporter Phil Williams, the scandal probe has receive scant media coverage.

TeamGOP's Reuben Watkins reports:

State Sen. Jerry Cooper, a key sponsor of the billion-dollar sales tax increase of 2002 and of legislation that gave illegal aliens easy access to Tennessee drivers licenses, finds himself the subject of federal investigations.

With investigations underway by TBI, the IRS and a federal grand jury, one might think more people would be up in arms about the alleged fraud and potentially criminal activities by Sen. Cooper. Unfortunately, this is one of the least covered scandals Tennessee has ever seen. Investigative reporter Phil Williams of News Channel 5, Nashville broke the story well over a year ago and provided source documentation for every assertion. Williams has followed it closely since but it is difficult to find anyone outside of Nashville that is aware of the details.

NewsChannel 5 sums it up nicely, "It was a deal involving a piece of land that Cooper couldn't sell... until he convinced state officials to commit $300,000 of your tax money to build a rail connection to the property. That commitment... on top of another $500,000 state loan to help his buyer purchase equipment... brought the senator a sale price of $1.3 million dollars."

While all the details may never be known, what we know now is enough to question the Senator’s judgement and ethical standards. Cooper, deeply in debt from his sawmill operation, turned a property he could not sell into a hefty profit by using his political position and friends in government to approve $300,000 in taxpayer dollars to build a railroad spur to the property. Then sold it for $1.3 million. (See page 3 of this PDF file.)

The buyer, Huntsville contractor Tony Auyer, told Phil Williams the spur was critical to the deal.

Once the spur had state approval, Cooper used another political connection - then-U.S. Rep. Bob Clement to secure a federally guaranteed loan for $1.8 million. You can read Cooper’s letter to Clement here. That loan was made by BankTennessee and guaranteed by the U.S. Department of Agriculture. Oddly enough, Tennessee Lt. Governor John Wilder is one of the owners of BankTennessee.

NewsChannel 5 uncovered documents showing payment from Auyer to Cooper for $1.3 million. $800,000 of that went to pay off Cooper’s mortgage. $500,000 went into Wilder’s bank to guarantee the loan. Other documents uncovered in the investigation indicate the value of the property would decrease without the spur.

Cooper then went back to the government and persuaded friends in the Department of Economic and Community Development to approve a $500,000 equipment loan for Auyer, using federal Community Development Block Grant funds.

The loan was approved despite concerns that “the project was above average risk,” a “large amount of debt” was being incurred, “the deficiency of the collateral,” and the “inexperience of the owner.”

Despite all the hard work by Sen. Cooper to provide Auyer with hundreds of thousands in taxpayer dollars and protect his own security deposit, Auyer managed to go bankrupt. Auyer was indicted for wire fraud for allegedly submitting fake invoices to the state and was thought to have pocketed most of the $500,000 equipment loan.

Luckily, the state was able to stop the railroad spur project in time to save most of the $300,000 earmarked for the spur construction.

Shortly before his scheduled trial date, prosecutors dropped charges against Auyer, who purchased Cooper’s property with a federally guaranteed loan that Cooper used his position to secure - after using his position to approve a $300,000 railroad spur which was critical to the sale) and shifted focus to Sen. Cooper.

Charles Lewis, Executive Director for the non-partisan national legislative watchdog group Center for Public Integrity, called Cooper’s actions’ “an outrageous act by a sitting legislator – one of the worst I’ve seen, in fact.”

Cooper recently resigned as chairman of the Fiscal Review Committee, the committee described as the “watchers of the money,” probably a good move given his fiscal history. After defaulting on multiple loans, a Warren county judge ordered Cooper’s state senatorial pay garnished to repay the loans, but the interest on the loans is accumulating quicker than Cooper is paying it, leaving him with a total debt of close to $1 million.

Union Planters Bank is also reported to be foreclosing on Cooper's property claiming he owes $200,000.

That’s Not All
Sen. Cooper has also been in the news recently regarding the Federal Grand Jury investigation into state contracts handed out under questionable circumstances during the administration of Gov. Don Sundquist.

According to a b> report from NewsChannel5's Phil Williams, while reviewing email records, investigators found an email from Sundquist’s chief administrative officer relating to a homeland security project stating, ”I would like to be able to tell Senator Cooper when he calls, again, that I am getting a response out to her by the end of the day”. The “her” refers to Senator Cooper’s wife, a lobbyist, working for a company that wanted in on talks about the contract. This occurred in a process supposedly set up to be free from political influence.

Cooper’s friends have also been making headlines recently. John Stamps, of Sundquist Administration Indictment fame, is a longtime friend and campaign donor. Documents requested under the Freedom of Information Act should be able to clarify rumors that Cooper used his position to steer no-bid contracts to Stamps’ companies, Privatization Strategies and Workforce Strategists.

In a state that is growing tired of political corruption and the good ol’ boy mentality, Sen. Cooper is unlikely to find much sympathy. Staggering job losses in his district and his love of tax hikes have hurt his constituents and the state. There is some hope that the Senate Ethics Committee will take up the issue now that it is under Republican leadership. However, the committee can’t act without a written complaint from a Tennessee resident.

Sen. Cooper indicated to Reporter Phil Williams that he did not feel there was an ethical violation because the Senate was not in session at the time the deals were made. Apparently ethics are a part-time concern for Sen. Jerry Cooper.

NewsChannel5's coverage of this story is indexed here.

PostScript:
During a legislative committee hearing concerning the financial scandals of then-University of Tennessee President John Shumaker, Sen. Cooper poked fun at Shumaker’s inability to craft a believable lie.

"I could have done better than that," said Cooper.

It looks as if the Senator may have an opportunity to prove his storytelling abilities in front of a federal grand jury and, hopefully, the Senate Ethics Committee as well.

_______

The residents of the 14th district, which includes parts of Franklin, Bledsoe, Coffee, Grundy, Sequatchie, Van Buren, and Warren counties, deserve better.

Senator Jerry Cooper can be contacted via the address, phone and email address below:

309 War Memorial Building
Nashville, TN 37243-0214
Phone (615) 741-6694
Email sen.jerry.cooper@legislature.state.tn.us