PORK REPORT

The Beacon Center of Tennessee’s Pork Report is in its second decade of exposing waste, fraud, and abuse of taxpayer dollars at the state and local level. Each year, we chronicle the most egregious cases of Tennessee governments’ disrespect for the people they represent. Click on each image to read the full entry You can download the full version of the report at this link, http://www.beacontn.org/wp-content/uploads/2018/12/BCN_PorkReport2018_WEB_spreads.pdf Pork Report® is a registered trademark of Citizens Against Government Waste and is used with their permission.

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Pork of the Year: Former Nashville Mayor Megan Barry

On January 31, 2018, news broke that Nashville Mayor Megan Barry was having an extramarital affair with her bodyguard. Paying him $174,000 in overtime pay for his work to protect and chauffer her around, the two took junkets to far off locations such as Paris (France, not Tennessee) and Greece on the taxpayers’ dime. Things came crashing down when the security guard’s confiscated cell phone revealed a nude photo of Barry and a nearby black purse that was later proven to be hers. In a salacious twist to an already steamy saga, a caller phoned NewsChannel 5’s tipster hotline and informed the hosts, live on air, that Barry and her beau were frequently witnessed stopping off at the graveyard in her taxpayer-funded SUV, disappearing for 12 to 24 minutes at a time. Soon thereafter, the once rising star appeared in court and pled guilty to felony theft, halting her illustrious political career.

Joey Garrison, Nate Rau, and Adam Tamburin, “Special report: Inside the final 34 days before Megan Barry resigned.” Tennessean. January 31, 2018. https://www.tennessean.com/story/news/2018/01/31/nashville-mayor-megan-barryadmits-extramarital-relationship-top-securityofficer/1082374001.

Phil Williams, “Security video shows mayor, bodyguard during early-morning cemetery visits.” NewsChannel 5. February 22, 2018. https://
www.newschannel5.com/news/newschannel5-investigates/city-hall-scandal/security-videoshows-mayor-bodyguard-during-early-morningcemetery-visits.

Mega-Millions Down the Drain

If you have followed Beacon at all over the past few years, you know that we are firmly against taxpayer money going to select private businesses at the expense of taxpayers. The practice of corporate welfare is bad enough, but the Memphis Regional Megasite really takes the absurdity of this practice to a whole new level. Tennessee decided to spend $144 million of taxpayer money and eight years to “develop” an empty field, with the hope of attracting businesses at some point. That means we spent nearly $150 million with absolutely no commitment from any business to open up shop there.

What’s worse is that apparently the $144 million and nearly a decade still wasn’t enough to make that site “shovel-ready,” so now the Department of Economic and Community Development (ECD) received another $30 million for wastewater improvements. Several businesses have passed over the site for other states, yet officials want to waste even more of our hard-earned dollars on a job site with no actual jobs. To top it all off, the government will have to take people’s private land through eminent domain to bring the project to fruition.

This entire project has been a complete and unmitigated disaster. We are going to spend over $170 million and still have absolutely nothing to show for it. Even if a big company does eventually move to the Megasite, there is no possible way that taxpayers will get our money back. The worst part about this is that there is no end in sight. Who is to say that ECD won’t ask for another $100 million next year if the site is still unoccupied? Tennessee needs to learn the idea of a lost cause and sell this barren land to the highest bidder. Jordan Buie, “ECD Commissioner: $80 million more needed to make Memphis Regional Megasite ‘shovel ready.’”

Commercial Appeal. January 26, 2018. https:// www.commercialappeal.com/story/news/2018/01/16/ecdcommissioner-80-million-more-needed-make-memphisregional-megasite-shovel-ready/1035750001

An Unholy Alliance

In what has to be one of the most secretive corporate welfare deals in Tennessee history, the state gave Wall Street firm AllianceBernstein at least $17.5 million of taxpayer money to move its headquarters from Wall Street to another taxpayer-funded project, the 5th + Broadway development in downtown Nashville. The reason the term “at least” is so important here is because we have no idea how much more the state and city of Nashville are giving AllianceBernstein. In records released by the state, it actually blacked out all of the information on the estimated tax incentives, insulting taxpayers by not even disclosing how much money we are involuntarily “investing” in this Wall Street firm.

Adam Sichko, “How many incentives will AllianceBernstein receive? The state won’t tell.” Nashville Business Journal. July 11, 2018. Updated July 19, 2018. https://www.bizjournals. com/nashville/news/2018/07/11/how-many-incentives-will-alliancebernstein-receive.html.

Verification Frustration

You know when you buy a shirt you think you’ll like and then you take it home, never actually wear it, and realize you just wasted $20? That’s basically what the government did with $600,000 of our taxes that it used to purchase verification software for unemployment claims. After buying software to stop fraud, the Department of Labor and Workforce Development just kind of forgot about the software for 17 months, never turning it on.

Believe it or not, the amount spent on the software isn’t even the worst part for taxpayers. During the time after the software was purchased but before it was actually implemented, there were fraudulent unemployment claims exceeding $1.3 million that this software was purchased to stop. That means that the failure of the department to use this software in a timely manner cost taxpayers nearly $2 million. This is another example of how government incompetence costs us money. It shouldn’t be too much to ask the government to remember to flip a switch.

State of Tennessee. Comptroller of the Treasury. “Single Audit Report, Division of State Audit For the Year Ended June 30, 2017.” March 27, 2018. http://www.comptroller.tn.gov/repository/SA/2017_TN_Single_Audit.pdf.

A FOREgone Conclusion: Hitting Taxpayer Money Out of Bounds

Golf is a sport that you can play until you can’t walk anymore. It teaches honesty, integrity, and responsibility. But don’t expect golf to teach governments to be responsible with your money.

Instead of spending tax dollars on essential public services like roads, public safety, and schools, local governments across Tennessee spend millions on city-owned golf courses that continue to lose money. In 2017 alone, Memphis lost over $2 million dollars trying to operate eight golf courses.

Why should fans of any other sport have to subsidize the hobby of golfers, a sport that is generally played by wealthier constituents? Even worse, why are governments competing with private businesses that offer the same service but don’t have access to taxpayer funding, putting them at a severe disadvantage? Even if you love golf, it’s not the role of government to use your tax dollars to enter the golf business. Taxpayers should demand their local governments take a mulligan on the concept of funding golf courses and focus instead on vital services.

City of Memphis. “Proposed Operating Budget 2019 Fiscal Year: Parks.” https://www.memphistn.gov/UserFiles/Servers/Server_11150732/File/Gov/Financial%20Division/FY2019_Proposed_Budget/261_298_Parks.pdf.

Seeking Taxpayer Dollars

Former band director and band booster for Collierville Middle School Jason Seek was charged with embezzling after a state Comptroller investigation discovered that Seek misappropriated $133,064 of band booster funds. Seek was found forging signatures and creating elaborate schemes to cash checks and withdraw funds from ATMs over the course of roughly five years. Seek was caught using these funds on personal gambling trips to Mississippi, Arkansas, West Virginia, and even Las Vegas.

The investigation found that even after creating an elaborate cover-up scheme, Seek couldn’t manage the money well, racking up hundreds of dollars in ATM withdrawal and transaction fees. Before admitting the extent of his fraud to investigators, Seek created fake bank statements and financial reports to mislead investigators. In addition to the uncovered fraud, the investigation found that the school was unable to account for over $46,000 of instrument purchases. That may not be enough to fund a whole “Music Man” parade, but that’s a lot of instruments. How hard is it to keep track of a trombone? In the case of Seek, it just goes to show you that it’s not just football boosters capable of violations; you’ve got to keep an eye on those band folks.

State of Tennessee. Comptroller of the Treasury. “Collierville Middle School Band Boosters, Comptroller’s Investigative Report.” November 28, 2017. http://www.comptroller.tn.gov/repository/ia/colliervillemiddleschoolbandboosters.pdf.

Extreme Makeover: Taxpayer Edition

Earlier this year, employees for ServiceMaster began reporting to their newly renovated office in the old Peabody Place mall in downtown Memphis after relocating from their former location on the edge of town. The renovation and relocation was announced in 2016 and cost more than $35 million. Everybody loves a good ol’ HGTV-style renovation with an open concept and natural light for their office, but does government need to fund it? The Tennessee Department of Economic and Community Development, which has never seen a taxpayer handout it doesn’t like, gave ServiceMaster $5.5 million to aid in the move across town, despite knowing that ServiceMaster would not create a single job in exchange for the grant money. Company officials are hoping the renovation helps the company “recruit technologically savvy and creative millennials.” What’s next? The government giving money to the McDonald’s across the street to serve kale chips and kombucha to get them to spend money eating out for lunch instead of brownbagging it? If ServiceMaster has trouble attracting programmers with man buns, that’s their problem to fix, not the problem for Tennessee taxpayers to subsidize.

Eryn Taylor, “ServiceMaster awarded $5.5 million grant for renovations to Peabody Place.” WREG News 3. June 9, 2016. https://wreg.com/2016/06/09/servicemaster-awarded-5-5-million-grant-for-renovations-to-peabody-place.

State of Tennessee. Tennessee Department of Economic and Community Development. “FastTrack Project Database.”
https://www.tn.gov/transparenttn/jobs-economicdevelopment/openecd/fasttrack-project-database.html.

Poverty Pockets Full of Cash

It’s no secret that Nashville politicians are fond of lavishing the city’s biggest companies with heaps of cash. Via various incentive programs, companies are able to take in cash grants, avoid decades of property taxes, and even buy some nice furniture. Wait what? After receiving $66 million in incentives to relocate its headquarters to downtown Nashville, the Hospital Corporation of America—better known as HCA—needed to fill its new digs. Enter the city, which used federal grant funds designated for “pockets of poverty” to fork over $1 million to the nation’s largest hospital company to furnish its new headquarters.

Purchases included obvious necessities such as a guitar pick-shaped conference table at $4,190, a “tuxedo sofa” costing $6,540, and another conference table topping out at more than $8,300. For a city facing a gaping budget hole, paying for a private company’s plush office furnishings, especially with money specifically dedicated for those in poverty, shows an astounding lack of priorities and common sense alike.

Ben Hall, “Metro buys HCA $1 million in office furniture.” NewsChannel 5. May 22, 2018. https://www.newschannel5.com/news/newschannel-5-investigates/metro-buys-hca-1-million-in-office-furniture.

Major League Screw Up

In mid-2018, Nashville leaders announced that the city was effectively broke. It had a gaping budget hole, could not offer cost of living pay raises to first responders and teachers, and some even called for a whopping $150 million property tax increase to just make ends meet. Many Nashville residents were left scratching their heads when the city then ponied up a prime plot of real estate and hundreds
of millions in bonds to help pay for a stadium for the newly acquired Major League Soccer team. And when many of those residents pushed back, the Metro Council wouldn’t even put the question on the ballot to let voters decide the issue. To them, voters were apparently just too stupid to understand. Now that voters have been denied a say and their elected council members have given away the farm, let’s hope the soccer team actually draws enough of a crowd to pay off the debt service, or else taxpayers will be left holding the bag. Given the track record of stadium deals elsewhere, we’re not optimistic. But we are getting tired of saying “we told you so” over and over again.

Joey Garrison, “Nashville budget battle: See the winners and losers in a fight where few came out clean.” Tennessean. June 20, 2018. https://www.tennessean.com/story/news/2018/06/20/nashville-property-tax-winnerslosers-budget-debate-mayor-david-briley/719014002.

Joey Garrison, “Nashville MLS stadium project wins final Metro Council approval.” Tennessean. September 4, 2018. https://www.tennessean.com/story/news/2018/09/04/nashville-mls-stadium-soccer-council-vote/1162074002.

WTF: What the TIF?

There are more than 60 hotels in Bristol, but the Sullivan County Commission and Bristol City Council are giving a tax break to one new hotel project. The proposal includes a 143-room full service hotel and restaurant that would require Tax Increment Financing, or TIF. The city and county will forego a percentage of property tax on the property for up to 20 years to help repay the debt. TIF is supposed to be used to revitalize blighted areas, but in this case it looks like the tax break is for a new downtown hotel at the expense of competitors and taxpayers.

Tammy Childress, “New hotel planned for West State Street.” Bristol Herald Courier. January
18, 2018. https://www.heraldcourier.com/news/new-hotel-planned-for-west-state-street/article_02333cb5-b373-5b9a-a466-5f8b0c2ddf5a.html.

Chattanooga Consultant Conundrum

An item on the Chattanooga City Council budget is resulting in some raised eyebrows: $100,000 directed to allow members to hire “consultants” to work with them on a variety issues. Finance Committee Chairman Chip Henderson said that amount would be partially accounted for in the $92,000 vacancy left by a staff member position that will not be filled. Is it just me, or do you think that $100,000 could be better spent on, say, roads or schools? If I was a taxpayer in Chattanooga, I would offer my council members free consulting on how to make better use of my money.

“City Council Budget Includes $100,000 For Consultants For Council Members.” The Chattanoogan. March 6, 2018. http://www. chattanoogan.com/2018/3/6/364607/City-CouncilBudget-Includes-100000.aspx.

UT Is Paying Millions of Dollars for People Not to Show Up to Work

It’s not you; it’s me. University of Tennessee officials should hire a new attorney to review their contracts when they are
negotiating them since they cleaned house this past year…and cleaned out the piggy bank. UT bought out Chancellor Davenport’s
contract for $1.33 million after firing her, but that was just the end to a tumultuous time period where UT sports fans have begged
to get off the never-ending merry-go-round. The recent list of buyouts to leave includes former head coach Butch Jones and his
assistants, and former athletic directors John Currie, Dave Hart, and Mike Hamilton, totaling tens of millions of dollars more.
Maybe in the future, UT should consider making better hires so taxpayers won’t continue paying for their mistakes.

“Tennessee to Buy Out Ousted Chancellor for $1.33 Million.” Associated Press. June 1, 2018. https:// www.usnews.com/news/best-states/ tennessee/articles/2018-06-01/tennessee-to-buy-out-oustedchancellor-for-133-million.

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