PAC donates big money to legislators sponsoring bill to help co-ops

PAC donates big money to legislators sponsoring bill to help co-ops

Bureau Chief’s Note: This is the second of a two-part series about the Tennessee Broadband Accessibility Act. Part one was published last week. 

Most of the state legislators sponsoring a bill to let electric co-ops offer internet and cable to rural areas have accepted generous sums of money from the Tennessee Electric Cooperative Association, records show.

TECA is composed of 23 of the state’s electric co-ops.

Photo courtesy of Flickr.com and https://creativecommons.org/licenses/by/2.0/

Photo courtesy of Flickr.com and https://creativecommons.org/licenses/by/2.0/

Members of the organization greatly favor the bill, which Tennessee Republican Gov. Bill Haslam calls the Tennessee Broadband Accessibility Act.

Under current state law, electric co-ops may not provide video or high-speed internet, but the proposed bill would change that to help people in rural areas, where the services aren’t widely available.

As reported in 2015, TECA has its own PAC. Members told the IRS they don’t use any of that money for political activity and that it comes from co-op employees who donated voluntarily.

State records show most of the donors are general managers, executive directors or presidents of co-ops from around the state. Other donors are high-powered attorneys, most with professional ties to the co-ops, either as legal counsels or lobbyists.

RELATED — Report: 11 Tennessee utilities squander taxpayer money on broadband

According to TECA’s website, Tennessee Action Committee for Rural Electrification is the formal name of its PAC, which, state records say, TECA created in 2004.

Since then, TECA has donated roughly half a million dollars to candidates for the Tennessee General Assembly and to Haslam. The most recent records available on the Tennessee Bureau of Ethics and Campaign Finance’s website end at July of last year.

Another TECA PAC is tailored for federal politicians.

“Both PAC’s support candidates for political office — those in office now and running for office — who will speak for and protect the interests of electric cooperatives and their consumer owners,” TECA officials said on their website.

TECA spokesman Trent Scott declined to discuss the PAC in email correspondence with Tennessee Watchdog.

‘Those people at Ruth’s Chris Steakhouse’

Private internet providers insist they plan to offer service in rural areas, but they say this legislation, if enacted, would scare them away. They say electric co-ops are already monopolies and, logically, those same co-ops would form monopolies selling cable and internet.

Customers would pay higher prices as a consequence.

Jonathan Harlan (photo courtesy Jonathan Harlan)

Jonathan Harlan (photo courtesy Jonathan Harlan)

One of those internet providers, Jonathan Harlan of Jackson, said as a small business owner he couldn’t afford to hire lobbyists to wine and dine state legislators. He said no one in Haslam’s office consulted him before pushing this bill.

Harlan previously said co-ops already enjoy tax benefits a private business does not.

RELATED — No profits, no worry, TN group says about municipal broadband

“We just don’t have time to talk to those people at Ruth’s Chris Steakhouse,” Harlan said.

“We have a super-Republican majority and a GOP governor who all profess to be pro-private enterprise. Yet this is anti-private enterprise legislation.”

Harlan said he has asked legislators to amend the bill to protect his business investments in certain geographical areas. He also said those officials are “deaf to our petitions.”

“It’s a dispiriting exercise,” Harlan said.

Harlan said he knew nothing of the TECA PAC yet knows “exactly how things work.”

“It’s not what the General Assembly does for me every year, it’s what they do to me. I fear every time they meet. Every time they meet there’s some new action that hurts my business,” Harlan said.

“This has been going on for decades. There will be something they do to hurt my business next year, too. I am really scared of them.”

Harlan declined to name specific legislators but said, “Just look at the sponsors of this new legislation.”

Who got what

According to state records, Haslam and the following sponsors of the Tennessee Broadband Accessibility Act have accepted money from TECA’s PAC:

• State Sen. Mark Norris, R-Collierville:  $13,500

Mark Norris (photo courtesy of the Tennessee General Assembly)

Mark Norris (photo courtesy of the Tennessee General Assembly)

• State Sen. Ken Yager, R-Kingston: $11,000

• State Rep. Art Swann, R-Maryville: $7,250

• State Rep. Pat Marsh, R-Shelbyville: $5,800

• State Sen. Mike Bell, R-Riceville: $5,650

• State Sen. Bill Ketron, R-Murfreesboro: $5,500

• State Rep. Bill Sanderson, R-Kenton: $4,500

• State Rep. Kevin Brooks, R-Cleveland: $3,500

• State Rep. Barry Doss, R-Leoma: $2,750

Ken Yager (photo courtesy of the Tennessee General Assembly)

Ken Yager (photo courtesy of the Tennessee General Assembly)

• Gov. Bill Haslam: $2,500

• State Rep. Kent Calfee, R-Kingston: $2,500

• State Rep. Glen Casada, R-Franklin: $1,850

• State Rep. Dan Howell, R-Georgetown: $1,750

• State Rep. Jay D. Reedy, R-Erin: $1,750

• State Rep. Dennis Powers, R-Jacksboro: $1,750

• State Rep. Ron Travis, R-Dayton: $1,750

• State Rep. Jimmy Eldridge, R-Jackson: $1,700

• State Rep. John B. Holsclaw, R-Elizabethton: $750

Glen Casada (photo courtesy of the Tennessee General Assembly's website)

Glen Casada (photo courtesy of the Tennessee General Assembly’s website)

• State Rep. David Byrd, R-Waynesboro: $750

• State Rep. Patsy Hazelwood, R-Signal Mountain: $750

The names of other sponsors, including State Rep. David Hawk, R-Greeneville; State Rep. Mike Carter, R-Ooltewah; Ron M. Gant, R-Rossville; and State Rep. Gary Hicks, R-Rogersville; didn’t turn up on TECA’s expenditure list.

The donors

Among the PAC’s donors are general managers or CEOs for various co-ops, including Volunteer Energy, Fort Loudon Electric, Cumberland Electric Membership Corp., Chickasaw Electric, Fayetteville Public Utilities, and the Gibson Electric Membership Corp.

Of the attorneys who donated, James C. Cope is listed as an attorney from Murfreesboro. Cope defended the Middle Tennessee Electric Membership Corporation, a TECA member, in a 2012 lawsuit, court records show.

According to a Tennessean story last year, an attorney from Murfreesboro with that name pleaded guilty to insider trading. Cope, the paper said, was a board member for the Nashville-based Pinnacle Financial Partners. The insider trading charges related to the bank’s merger with Avenue Financial Holdings.

Bill Haslam (photo courtesy Bill Haslam's Official Facebook page)

Bill Haslam (photo courtesy Bill Haslam’s Official Facebook page)

RELATED — Rural areas could have broadband in five years, even without taxpayer involvement

WGNS Radio, meanwhile, said Cope was the Rutherford County attorney.

Someone at Cope’s former law firm said Thursday she would relay a request for comment, but Cope, as of Friday, had failed to return that message.

Another donor, John Lee Williams, is an estate-planning lawyer, according to several websites. Williams failed to immediately return a request for comment.

A third attorney, Richard Lodge of Nashville, is identified in one government document as TECA’s corporate counsel. Lodge’s law firm, Bass Berry and Sims, has represented the organization and five other co-ops in the state. The law firm identified Lodge as a lobbyist for various industries, including utilities.

Lodge failed to return a request for comment.

‘This boy does not take bribes’

Most of the politicians who took TECA’s money also failed to return comment requests.

Norris, who took the largest amount, said in an emailed statement the donations had no bearing on his decision to sponsor the bill in the state Senate.

“The Act embraces the findings of an 18-month study by the Tennessee Advisory Commission on Intergovernmental Relations,” Norris wrote.

That study suggests Tennessee authorize electric co-ops to provide broadband service — but not cable TV — in their electric service areas, provided electric ratepayer revenue isn’t used to subsidize the cost of service.

Ron Travis (photo courtesy of the Tennessee General Assembly's website)

Ron Travis (photo courtesy of the Tennessee General Assembly’s website)

On the governor’s end, Haslam spokeswoman Jennifer Donnals said the PAC money had no sway over his decision to push for this bill.

“The governor’s office reached out to multiple stakeholders, including large and small providers and representatives for such providers,” Donnals said in an email.

“In addition, we had numerous stakeholders reach out to us and share concerns once the legislation was introduced.”

In the state House, Travis, another sponsor, said he has talked with “mom-and-pop owners” about the issue.

“I’m telling you the truth as gospel. If you brought that check in there and asked me, ‘Ron who are these people?’ I could honestly look you in the face and say I really don’t know what they do. I don’t vote on who gives me money. I really, really, really try not to make my decisions based on any of the lobbyists that come into my office,” Travis said on the phone Thursday.

“I listen to what they say. You want to hear both sides, but at the end of the day if Ron Travis can vote on it, and I can go to sleep at night, then I’ve made the right deal. If I have to vote with one of the PACs because they’ve given me money then, at the end of the day, I have failed myself and what I was sent up here to do.”

Travis said his vote isn’t for sale, but not all politicians are like him.

“When you get in a game like that you should be fired on the spot at the next election. That is the wrong way to do business,” Travis said.

“Now, we have a lot of that going on, I’m sure, but I can promise you one thing. This boy does not take bribes or does anything for PAC money.”

Bell, another legislator, responded to our request for comment by email, but he did not say whether the PAC money held any influence.

In a statement, Reedy said he wanted his constituents to have reliable services long before this bill was introduced.

“Individuals and PACs choose to support me because they believe in my conservative values and understand that I am willing to work with my fellow Republican colleagues to pass legislation that benefits all Tennesseans,” Reedy said.

No quid pro-quo

As reported in 2015, Scott said no ratepayer money goes into this PAC. Scott also said TECA’s PAC a 501(c)6 complies with all state, federal and IRS regulations.

As reported in 2013, more than half of the state’s public electric co-ops pay their top executives more than $200,000 in salary and benefits, putting them in the top 2.8 percent of Tennesseans in household income.

Jennifer Donnals (photo courtesy of LinkedIn)

Jennifer Donnals (photo courtesy of LinkedIn)

Four of the 23 were paid more than $350,000, including benefits for retirement, 401(k) and health and life insurance, according to an examination of federal tax returns for 2010. Customers in those areas struggle to make even one-tenth of those amounts every year.

RELATED — TN legislators who support taxpayer-backed Internet getting tough with AT&T

As Harlan braces for the new law, he said he hoped for better things from the governor.

“I donated to Haslam because I am a Republican and a pro-private enterprise guy. I did not know how he was going to turn out for my industry.”

“I don’t do a quid pro-quo. I’ve never done that, and I’ve never received any help specifically from any legislator. I haven’t contributed expecting that. But I do expect like any other citizen to be able to express a concern and be given thoughtful reception.”

Contact Christopher Butler at chris@tennesseewatchdog.org

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