Is Haslam running government like a business?

TN Gov’t Contracts 101: Question 1. Are you a friend, friend of a friend, or paying a friend for counsel?
Back in 2010, when Gov. Haslam used millions of his personal wealth to win both the GOP primary and eventually the general election, a constant theme was that he would “run government like a business”.

Now, anyone with half a brain in their head should have looked at this promise pretty skeptically. Its just like any other promise a politician makes, subject to change based on future events.

And while the notion of “running government like a business” may seem like a good idea, 2010 was just two years after businesses…really big businesses…essentially tanked the economy by screwing over people who just wanted to own a home.

So, maybe we didn’t ask the right question at the time. Maybe we should have asked, “What kind of business?”

Of course, a fawning media, ready to crown a victor well before the election, didn’t help with the questions. They were falling all over themselves to use every adjective they could to make Haslam seem inevitable.

30 months into this term, the shine is starting to wear off with the media, and problems both inside and out of his administration have more than a few observers wondering about the Governor’s decision-making and the patronage system that has emerged.

Lead by the Legislature

Riding a wave of Republican victories across the state, Gov. Haslam was inaugurated with a newly ensconced GOP led House and Senate. While the Governor was just getting settled in, the legislature went to work, removing collective bargaining for teachers, instituted a photo ID bill for voting, and passed a bill allowing corporate contributions to political campaigns, among other things.

By the end of the 2011 session, many on both sides of the aisle rightly asked who was in charge of the state…the Governor or the Legislature? By 2012 the Governor started getting his sea legs, even if the legislature continued dragging him further to the right than most thought possible.

A post-mortem of the Gov.’s second year in office, noted that Haslam had a hard time reigning in the far right elements in the legislature. In the days following the end of the 2012 session, a slew of articles noting both the secrecy of the legislature and the Executive Branch intent on keeping information about the workings of government from the people, under the guise of “privacy”. One such effort sought to shield the owners of companies from public disclosure of their receipt of cash grants from the state.

All of these things led to the state being saddled with the dubious distinction of having the worst State Legislature in the US in 2012, and led to many questions, including those wondering if Gov. Haslam would ever live up to his “moderate” public image?

Apparently, the Gov. had other things in mind…like fulfilling the worst fears of what “running Government like a business” can be.

Patronage and personal interest

With the passage of the TEAM Act, a bill that radically changed the way Civil Service jobs are awarded, and which led to the hiring of what one writer called his patronage chief, Larry Martin, the nature of that “business climate in government” began to emerge.

Martin, who retired from First Tennessee Bank in 2006, also served as Chief of Staff for the Haslam Administration in Knoxville. While its not unusual for a political appointee to follow an executive from one place to another, Martin’s connections to the Haslam family are deeply rooted.

Both Jimmy Haslam and R. Brad Martin (U of Memphis interim president and chief Pilot internal investigator) served on the First Tennessee board while Larry Martin was COO of First Tennessee’s Financial Services division.

Another Haslam staffer, Mark Emkes, a Director at First Horizon (Parent Co. of First TN) became Director of Finance and Administration until he retired recently and was replaced by Larry Martin.

While the tangled web of business friends of the Haslam family that litters the upper echelon of the Haslam Administration is interesting, I’ll leave that for a future post to deal directly with the personal interests that have been rearing their ugly head for months now.

In June, a committee tasked with oversight of state contracts deferred the review of a contract for the Dept. of Corrections, that was awarded to a company employing the wife of Correction Commissioner Derrick Schofield…and cost the state $15m more.

This same group was also exploring looking into contracts offered to Enterprise Rent-a-car and Bridgestone, the latter formerly headed by recently retired Director of Finance and Administration, Mark Emkes.

But it doesn’t end there.

The Governor recently awarded a $330 million contract to a company he listed on his disclosures as an investment, one of the scant few I might add. He also signed a law that benefitted a business buddy in Gatlinburg and says he’s unconcerned about a coal company that has ties to his family business.

All of this leads us to a report from NC5 yesterday that alleges inside dealings on contracts by Tom Ingram, who, until recently was paid privately by the Governor.

This after several administrative problems involving child deaths at DCS, and the rewards totaling $1m that went to the TN Dept. of Labor after misspending $73m of unemployment money, which ultimately led to the Governor seeking cover behind newly appointed State Chief Operating Officer Greg Adams.

Apparently, “running government like a business” in part, at least, means placing layers of folks between you and government so you don’t really have to take responsibility for governing.

Cloudy skies ahead?

Of course, this is going on while the FBI and IRS are investigating the family business. An investigation that, while not directly connected to the Governor yet, certainly puts a pall on the overall outlook for Tennessee’s first family.

Which brings me back to something I said at the beginning…just what kind of business did candidate Haslam intend to model Tennessee government after?

While the jury may be out on that question as a whole, the evidence is pointing to the same kind of crony capitalism that brought down the banks in 2007-08 and is causing his family business all kinds of trouble right now. The kind that works with its friends at the expense of everyone else.

And while the Governor has enjoyed a certain measure of teflon like “unstainable” status in public opinion, one has to wonder how many scratches that surface can withstand before the public turns their back on the Governor.

What should be even more troubling for the Governor is that while he’s taken some dings to his image, the investigations into poor management and potential misdeeds in his administration are just beginning.

And just like most things, the bandwagoneers in the media will eventually jump on this en masse to do the thing they like doing more than building someone up…taking them down.

6 thoughts

  1. Consider:
    Pilot Flying J has one “numbers guy”– CFO, CIO, treasurer and comptroller is one person.
    Jimmy told us that PFJ prides itself on “quick and thorough” audits.
    PFJ had no compliance officer.
    PFJ had no effective whistleblower policy
    The Haslams have told us they run PFJ according to General Neyland’s football maxims of 1926.

  2. Good article; and Channel 5 NEWS here in Nashville has also been running some good exposes as well. Trouble is, compared to what is really going on with this administration–and the equally venal majority in the legislature–what has come to light so far is only the tip of the iceburg. But back to the original question: is Haslam running Tennessee like a business? Why yes–The Cossa Nostra!

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