Wamp weaves tangled web

Monday, May 31, 2010 at 8:45pm
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For the duration of his campaign for governor, Republican U.S. Rep. Zach Wamp has been touting the Tennessee Valley Corridor as a prime example of why he should be the state’s next chief executive.

He says the economic development tool has brought much business and acclaim to Tennessee — specifically, his part of the state — and portions of neighboring states. As governor, he says he would establish new such corridors in Middle and West Tennessee based on the existing model.

On the campaign trail, Wamp has taken credit for companies like Wacker Chemie AG and Volkswagen opening factories in the area, making no mention of the economic incentives and tax breaks Gov. Phil Bredesen and the state legislature created to attract the businesses.

The people who helped him create the TVC are also heavily involved in his gubernatorial campaign. They are all connected through work on the flagship corridor and other projects; they orbit Wamp like planets to his sun.

The TVC is at once a facilitator for networking among high-impact businesspeople and politicians, and a cash cow for Wamp’s friends and political allies. There are significant ethical questions swirling around Wamp’s most ardent supporters, some of whom draw a check from his campaign. And a portion of the money that has moved from the TVC to Wamp’s allies has wound its way back into Wamp’s campaigns, both for Congress and Tennessee governor.

The corridor

Aside from being a geographic region that stretches through most, if not all, of Wamp’s congressional district (touching parts of North Carolina, Alabama, Kentucky and Virginia), the Tennessee Valley Corridor is a nonprofit organization whose stated goals are to promote the region as a hot spot for science and technology jobs, and to recruit new businesses to the area.

The organization puts on annual “summits” where companies in the region can showcase their products, services and research. The summits feature the state’s blockbusters of business, and they offer access to those shaping the political realities in the state as well. They are, in short, impressive gatherings for and of the initiated.

Staffing those summits is AkinsCrisp Public Strategies, a public relations firm with offices in Nashville, Oak Ridge, Huntsville, Ala., and Alexandria, Va. The firm, which is also paid $9,000 a month for its work for the Wamp gubernatorial campaign, has made millions of dollars off these events.

John Crisp runs the Nashville office. In addition to his work with the firm, Crisp serves as Wamp’s “campaign strategist and communications consultant.” Darrell Akins, who serves as a senior campaign adviser for Wamp, runs the firm’s Oak Ridge office.

Among the companies and organizations that show at these events are Tennessee-based majors like the Y-12 National Security Complex, Bechtel Jacobs, UT-Battelle and Oak Ridge National Laboratory, Erlanger Health System, and Eastman Chemical.

The most recent summit was held in Washington, D.C., last week and cost $295 per person. There were a number of corporate sponsors, many of which are the recipients of significant government contracts and funding, including those listed above. The companies pony up as much as $40,000 per sponsorship, per conference. There have been 23 such summits, as well as smaller conferences.

Sponsorships were sold at $40,000 (purchased by the Y-12 National Security Complex), $30,000 (purchased by the University of Tennessee), $20,000 (purchased by NASA, University of Alabama-Huntsville and UT-Battelle/ORNL), and $10,000 (purchased by the U.S. Department of Energy, Oak Ridge Associated Universities), to name several.

The TVC lists numerous universities and “Congressional Partners” as examples of its success, and indeed, the organization has been adept at delivering politicians to speak before the group’s annual summits. Last week’s summit featured, among others, Rep. Lincoln Davis, Sens. Bob Corker and Lamar Alexander, and Transportation Secretary Ray LaHood.

Those politicians and many of the TVC members themselves might be surprised to learn just how much money is collected by the TVC and where that money goes.

Privately, at least three major sponsors complain of the expense of supporting TVC activities without seeing many, if any, tangible results for their expenditures. They question the semantics used by TVC when they take credit for a business like Volkswagen moving into the geographically designated Tennessee Valley Corridor when the organization itself was minimally involved, if at all.

But the same sponsors who are frustrated with the TVC have also been reluctant to speak publicly for fear of recrimination. Wamp, who is seated on the powerful House Appropriations Committee, maintains a tight relationship with the firm that draws the biggest paycheck from the organization. These companies fear a public complaint could result in slow-walking — or outright death — for federal budget requests and earmarks.

The money

The Tennessee Valley Corridor Inc. is a 501(c)6 organization — common for business leagues and chambers of commerce — and is not required to report donations made to it. The organization is also free to lobby.

Until now, the organization’s financial records have remained largely hidden or ignored. Some board members claim they are unfamiliar with or have no recent information regarding the group’s expenditures.

But an initial investigation of financial records from the last two years that The City Paper has obtained via request from the TVC reveals, on average, AkinsCrisp collected 60 percent or more of the total expenditures of the TVC over that period. The TVC, according to firm partner Crisp, has totaled some $5 million in income in the last decade, of which his firm has been paid some $2 million.

AkinsCrisp has received about $250,000 per year (not counting any mark-ups for printing or other services) from the organization, according to the financial records this newsweekly has reviewed. The TVC has employed AkinsCrisp — with which it shares a physical address — as its de facto operator throughout its existence.

“I didn’t realize it was that high,” TVC Chairman Doug Fisher told The City Paper of the fees AkinsCrisp has collected. Fisher’s connections to Wamp are also prominent: He is a former district director for the congressman.

Fisher went on to defend the firm. “[AkinsCrisp does] all the work and puts on the conferences,” he said. “They do a great job. You really need to come to one of these events to see all the work that goes in and what it is all about.”

Meals, golf tournaments, cocktail receptions and other events account for an average of 25 to 30 percent of TVC expenditures. The remaining 10 to 15 percent is for travel, mailings and miscellaneous expenses.

In one case — management of a TVC project called the Safe Skies Alliance — the fee AkinsCrisp drew made up more than 95 percent of the project’s entire cost.

According to financial statements provided by the TVC, 55 percent of the budget of the 2008 summit in Huntsville, Ala., went to an AkinsCrisp management fee. In 2009, a similar event was held in Oak Ridge, and 60 percent of the budget went to the same.

Other than a couple of two-day meetings per year, the TVC does not appear to spend any money on actual corporate/job recruitment. There are no line items for any specific programs, such as job or company recruitment.

“That type of thing really happens at the summits and conferences,” Fisher said when asked why the organization didn’t appear to be dedicating funds to one of its stated missions.

He added that Adaptive Methods, a company based in Centreville, Va., (with offices in Chattanooga, Florida, Maryland and Rhode Island) that works in surveillance technology, located in the corridor because of the TVC. The company is a major supplier to the U.S. Navy.

The connections

No one is closer to Wamp politically than Darrell Akins.

He, his family, business partners and employees have donated at least $40,000 to Wamp campaigns over the years, including more than $10,000 so far in his race for governor.

Akins has accumulated a small fortune, primarily representing Oak Ridge federal contractors, all the while cultivating his image as the doorkeeper to Wamp. Together, Wamp and Akins created the Tennessee Valley Corridor.

This has also translated to significant financial gain for Wamp’s campaign coffers. During his eight terms in Congress, he has collected more than $1 million in campaign contributions from the Oak Ridge business community, including more than $100,000 in 2008 — a race in which he was unopposed.

At least 13 of the companies on the current AkinsCrisp client list have also been regular TVC sponsors. In fact, 14 of the sponsors — half the total — at last week’s TVC summit are also AkinsCrisp clients. Many have received significant support or funding through the House Appropriations Committee, on which Wamp serves.

The Y‑12 National Security Complex is a major part of the U.S. Department of Energy’s “Nuclear Security Enterprise” and, in general, a big-time government contractor. The company manufactures nuclear weapons components, retrieves and stores nuclear materials, fuels naval reactors, and performs similar work for other government and private-sector entities. In essence, the company is a private contractor operating a government entity.

UT-Battelle was established in 2000 as a private nonprofit company that manages and operates the Oak Ridge National Laboratory for the U.S. Department of Energy. Formed as a 50-50 limited liability partnership between the University of Tennessee and Battelle Memorial Institute, UT-Battelle is the legal entity responsible for delivering the Department of Energy’s research mission at Oak Ridge National Laboratory.

WSI-Oak Ridge, also known as Wackenhut Security, is a government contractor that provides armed and unarmed guards at federally owned facilities throughout the world. The company provides security for military and government personnel from Iraq to East Tennessee — and many points in between.

Wamp wants to expand the corridor model into the rest of the state, creating similar designations for defense and agricultural industries. They would be based on the current Technology Corridor.

The line, as it were, is fairly easy to trace: Money comes to the TVC in the form of sponsorships from companies that also maintain federal government contracts doled out and approved in the House by the appropriations committee, on which Wamp sits. Much of that money — up to 60 percent of the TVC’s overall income since 1999 — has gone to AkinsCrisp for management services.

The principal partners at that firm also hold high-ranking positions on Wamp’s gubernatorial campaign, and they have been fully or partly responsible for at least $1 million in contributions to Wamp’s campaigns over the last decade. Their firm has found the TVC — Wamp’s crowning achievement as a congressman — an extremely lucrative business partner.

And the more Wamp promotes it — including calls on the campaign trail for an expansion into Middle and West Tennessee — the more money enters the loop.

The City Paper presented a version of this summary both to Wamp’s campaign and AkinsCrisp.

“Any such assertion is completely untrue and without merit,” Sam Edelen, the campaign’s spokesman, said in a brief email response. Asked whether Wamp has ever used his seat on the appropriations committee to advance the interests of TVC-sponsoring businesses, Edelen said, “No.”

In a lengthy and wide-ranging email response, John Crisp defended the firm, Wamp and the TVC, calling The City Paper’s interpretation “bogus” and “insulting.”

“There is absolutely no intermingling of funds or resources between the Tennessee Valley Corridor Inc. and Zach Wamp for Governor, and the Tennessee Valley Corridor Inc. has played no role in the Zach Wamp for Governor campaign,” he said. “Moreover, the Tennessee Valley Corridor Inc. will move forward regardless of the outcome of this governor’s race.”

Asked to characterize the relationships between Wamp and the firm’s partners, Crisp said they’re simply supporters. He gave examples of other prominent Republicans whom they’ve supported in elections, including Knoxville Mayor Bill Haslam, one of Wamp’s opponents in the gubernatorial primary.

“[Darrell Akins and I] have been longtime supporters of, contributors to and volunteers for Congressman Zach Wamp throughout his long and successful public service career,” Crisp said.

13 Comments on this post:

By: dnewton on 6/1/10 at 1:47

I think I see a diving board but can't tell if there is anything in the pool, water or otherwise. To what conclusion are we to leap? What do we need with all of these development organizations while we have TNINVESCO, Reagan Farr and Matt Kisber on the job? Why can't the Economic and Community Development function of government plus all of the stimulus drive us back to the good old days and prosperity?
All of this is not going to matter if the national GDP/debt is not addressed. All of these wonderful dreams will sink like deck chairs on the Titanic.

Wamp has a troubling progressive streak and seems to me a person who believes that it is OK if the government modulates the economy with tax money and subsidies as long as it is the Republicans getting the real or imagined credit. If they were trying to build a convention center across the street from the new on, I could then agree that Wamp has lost his mind.

By: idgaf on 6/1/10 at 3:51

I wouldn't be bragging about Volkswagon if I were he.

Anyone can bribe and overpay to get businesses to set up here. (see Brede$en)

He sounds like another RINO but don't get your hopes up leftys we are not about to elect another democrap. If we do then we get what we deserve.

By: joekirkpatrick on 6/1/10 at 6:04

Joe Kirkpatrick for Governor
http://joe4gov.com

idgaf either:

Zach Wamp is the reason I entered this race with no money believing I have a statistical chance. People have had their fill of the graft.

Bill Haslam won't release his financials: Pilot Casinos? Red Light Cameras? CCA? How many places does this guy's family have their hand in Tennessee's till?

Ron Ramsey seems like a nice enough guy, but he won't call any attention to all of this other stuff. At the same time, like the other guys, he rolls over to support state government's 101 ways to deprive us of our God-given, natural rights.

By: govskeptic on 6/1/10 at 6:29

"Oh what a tangled web we weave when we first yatta- yatta yatta---

By: Observer 2010 on 6/1/10 at 7:18

This is really slimy...

Typical Washington politics that Wamp is trying to bring to the Governor's office.

Wamp keeps demanding everyone else release their records. Let's see if he does the same with this outfit. What a bunch of sleazeballs.

By: AmyLiorate on 6/1/10 at 7:59

Just another career politician if you ask me.

Joe, best to you. You and McWhirter must be the only people in the race who have real jobs.

By: idgaf on 6/1/10 at 8:26

HEY JOE

Your website dosn't tell us who you are or where you came from.

By: Kosh III on 6/1/10 at 8:59

Also Joe, as one who allegedly supports individual freedom, do you support repeal of Amendment One to allow marriage equality?

By: Saveusall on 6/1/10 at 11:55

Hey, isn't that Justin Timberlake in the pic behind the woman?!

By: brrrrk on 6/1/10 at 2:01

I find it curious that no one seems to want to address Wamp's association with the Family. I would like to know who subsidized Wamp's "rent" while living on C Street. Could it be that the powers that be are AFRAID of addressing the issue; or could it be that they are passively ignoring the problem because Wamp is a Christian? Either way, the media in Tennessee are doing the voters a disservice by not exposing the issue.

By: ROTCMom on 6/1/10 at 5:49

ROTCMom

brrrrk...sorry, I'm just a blonde here, and fairly new to the shenanigans that are politics in Tennessee (not to be confused with the shenanigans that are politics in ______, insert place name here)...but what are you talking about? Which Family? Just who are you alledging subsidized his rent? What issue is who afraid to address, and what does being Christian have to do with it?

I'm afraid you're doing the voters a disservice by being so cryptic in your remarks!

By: WittySage on 6/2/10 at 5:58

A Republican running a scheme to put our tax dollars in his buddies pockets. Surely you jest?

By: oldhickorytony on 6/2/10 at 11:24

Didn't know brrrrk was being cryptic when referring to this guy being part of the C Street Family while in Congress... thanks for bringing it to our attention...

Two words for ROTCMom: google it