CITY BEAT

City Council, not just feds, should investigate MLGW/TVA bond deal.

| November 23, 2004
CALLING LARRY THOMPSON Tom Marshall was on the Memphis City Council the last time it issued a subpoena. Robert "Prince Mongo" Hodges responded by climbing up on the conference table and making a Zambodian joke out of complaints about underage drinking at his Front Street club. Older and wiser, Marshall is now the council's senior member as he and his colleagues debate whether to use their subpoena power again. Only this time the issue is more serious the controversial MLGW/TVA bond deal. At stake are the reputations of, among others, Mayor Willie Herenton and the financial firms and attorneys who did the deal. "There is more sizzle than fizzle here," said Marshall, who is "confident" that a federal grand jury is also looking into the bond deal. Back in January, Marshall's colleague Jack Sammons called for a "Watergate-style investigation." But recently, several council members seem to have lost their stomach for an inquiry that for the benefit of younger readers would be patterned after the televised one in 1973 that brought down President Richard Nixon. But for Carol Chumney, the council might have ended its tepid inquiry a month ago. Chumney insisted Marshall send letters to participants in the bond deal, and, what do you know, most of them responded. The most damning response was the 11th-hour e-mail from Larry Thompson, fired from his senior vice-president job at MLGW in September. "I have been told specificly [sic] that some of the participants brought no value and in some cases work had to be redone Charles Carpenter. In other cases, no one ever showed up to do anything but expected a check. In the case of First Tennessee, the calculations were adjusted after the deal was signed to assure that First Tenn got the promised amount of money when they were unable to sell any significant amount of bonds. Rodney Herenton was never visible per these discussions but was suspected as the recipient of the First Tennessee payments." The easy thing for the council to do would be to drop the inquiry and, as Sammons says, "let the professionals handle it" via the U.S. attorney's office. But that would be a mistake. It's time for the council to make good on its bold talk. Memphis and Herenton have been dealing with a whisper campaign about corruption in the MLGW bond deal for more than a year. The campaign has poisoned relations between the mayor and the council and given Memphis a black eye. We now know that one of the whisperers is Thomp-son, a credible if embittered fired executive who was regarded highly enough to be a finalist earlier this year for the top job at Nashville Electric Service. Thompson says he got his information about hanky-panky in the bond deal second-hand from five other MLGW officers he names. In public session, the council, assisted by an outside attorney, should bring the six of them in for questioning. In one day, the public would learn more about the mayor, his accusers, MLGW, and the bond deal than it has in the last 15 months. Deferring to the feds would be the wrong move. The U.S. attorney's office can be a black hole where big cases disappear and rumors fester. Football booster Logan Young was indicted October 30, 2003; his accusers, Milton Kirk and Lynn Lang, were indicted August 29, 2001; the trial is set for 2005. Former Shelby County medical examiner O.C. Smith was attacked on June 1, 2002; he was indicted on February 10, 2004; his case is still unresolved. The feds began investigating former county mayoral aide Tom Jones in late 2002, indicted him in 2003, and sent him to prison in 2004. Three other former county employees have been indicted or convicted but their cases remain open, and a grand jury has looked into the county pension fund. Former county mayor Jim Rout has not been charged with anything but has been subjected to a whisper campaign for 27 months. His successor, Mayor A C Wharton, has had to deal with the fallout for two years. So it goes when everyone lawyers up. The feds get into the red zone but can't score. Disclosure goes out the window. Leaks, hearsay, and "informed sources" replace verifiable, attributed information. And rumor hath 1,000 tongues. The public deserves to know if the MLGW bond deal was politics as usual or criminal activity. A council inquiry doesn't preclude reporters, prosecutors, or the grand jury from doing their thing. But it's the fastest way to clear the air. So, call the first witness, Mr. Chairman. Don't let this inquiry fizzle.

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