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Edited on Sun Jul-05-09 03:42 PM by doeriver
The Buying of the President 1996 - Lamar Alexander
The Center for Public Integrity
http://www.buyingofthepresident.org/index.php/archives/1996/46/
If anything distinguishes Lamar Alexander’s career as a public official, it is how much that career has benefited Lamar Alexander. After his re-election as governor of Tennessee in 1982 and the inaugural festivities in Nashville in 1983, several thousand dollars remained unspent from the campaign. Governor Lamar Alexander, with more than a little help from his friends, turned those leftover campaign funds and contributions of $5,000 and less made after the election into a personal fund for himself and his wife, Leslee, better known as Honey. According to Tennessee election records, from 1983 through March 1989, Alexander and/or his wife spent $313,012 from the “Alexander Committee” on travel (to everywhere from China to Super Bowl XVI in Pontiac, Michigan), consulting, gifts, and other personal matters. Having a personal fund created by contributions from private sources is not illegal in Tennessee. In fact, even though Alexander had just won his second term and could not run again, money kept pouring into the campaign treasury. “There are times when the governor has expenses and he doesn’t want the state to pay for it,” Susan Simmons, Alexander’s finance director for the 1982 campaign, said. “His close friends don’t want him to assume that financial burden.”
When Alexander was leaving office in January 1987, four of Alexander’s biggest campaign contributors — Jim Haslam, the owner of Pilot Oil Company; Amon Carter Evans, the former owner of the The (Nashville) Tennessean; E. Bronson Ingram, the chairman of Ingram Industries, Inc.; and W. Lucas Simmons, a partner of J.C. Bradford & Company — signed and sent a letter to 150 business executives, soliciting $1,000 contributions to the Alexander Committee. The mailing, which thoughtfully included self-addressed, stamped envelopes, asked that the money be forwarded by January 17, 1987, the day Alexander would leave the governor’s mansion. Throughout the seven-year life of the fund, expenditures were not dated or regularly accounted for. On March 15, 1989, for example, Jim Lattimore, Alexander’s campaign treasurer, filed a statement with the Tennessee Election Commission covering the preceding two years, and in the cover letter he wrote, “(I}t recently occurred to me that his political campaign , The Alexander Committee, still has an obligation to file a Campaign Financial Disclosure Form.”
The now-defunct Alexander Committee illuminates the puzzling paradoxes of this Republican presidential candidate: an earnest, innovative public servant who has reaped a small fortune because of the people he has met along the way; an intelligent man who has seen the ugliest American political scandals up close and yet seems unconcerned about the appearance of conflicts of interest; a red-and-black flannel-shirted “populist,” famous for walking hundreds of miles amid ordinary voters, who is actually a millionaire, personally and politically closest to society’s wealthiest interests.
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While Alexander was governor, he and Honey Alexander personally displayed an uncanny knack for reaping almost outlandish returns on very minimal investments, to the net effect of acquiring substantial wealth during his public service. Numerous news organizations have reported on it, and in 1991 the Senate Labor and Human Resources Committee for weeks delayed Alexander’s confirmation to become George Bush’s secretary of education because of questions surrounding Alexander’s financial activities. Alexander has continuously denied any impropriety, saying, “I have spent about 20 years going out of my way to make sure that if anyone is going to offer me favorable treatment, I wouldn’t take it.” To put it bluntly, the facts don’t support that statement.
In 1981, while governor, Alexander and six other investors, including Alexander’s close friend and mentor Howard Baker, who was the Senate majority leader at the time, each paid $1 for the option to buy The Knoxville Journal for $15 million. After Charles Smith, the owner of the newspaper, died, his heirs gave Alexander and the other investors the option to buy it. The new partners decided not to exercise their option to buy, and they instead began searching for a buyer and found one: Gannett Company, Inc., which agreed to pay $15 million for 94.8 percent of the newspaper’s stock. Alexander walked away with Gannett options and stock worth $620,000. According to Alexander, “I held onto the stock longer than anybody else and between 1981 and 1987, when I sold it, it had dramatically increased and I made a very good profit.”
Most investors, of course, do not net $620,000 from $1, or have the opportunity or information to reap such rich rewards. Precisely who invited Governor Alexander to participate in the transaction has never been revealed. His glib explanation for the entire episode, as recounted by The Wall Street Journal, was not particularly illuminating: “We all had the same idea at the same time. The Knoxville Journal is a great asset, a newspaper we all admired, and all of us dreamed of owning a little piece of it one day.”
U.S. Senator Lamar Alexander
His little piece of Blackberry Farm, a resort-conference center on the southern edge of the Smoky Mountains, became something of a nightmare. Alexander bought a one-third interest in the lodge for $9,516 from Sandy Beall in 1976, resold it to Beall in 1977 when he became governor, then bought it back from Beall in 1987 when he left office. But what Alexander did not relinquish control of during his governorship were some 991 acres of potential development land, upon which Blackberry Farm was situated. The acreage was owned by Alexander and five friends, including major campaign contributors Beall and Jim Haslam. In January 1986, Governor Alexander proposed opening up an interstate highway, part of what’s known as the Pellissippi Parkway, that would intersect the Blackberry Farm land. When The Tennessean exposed the conflict, Governor Alexander said it was “preposterous” to link the state road program with his ownership of the land, which he insisted would not be developed commercially.
Interestingly, it has never been reported that Alexander called John Siegenthaler, the newspaper’s publisher, before the investigative story appeared. “He called me and said the story would be unfair to him and . . . he asked me to hold the story,” Siegenthaler told the Center for Public Integrity. “I said I couldn’t do that.” Siegenthaler told Governor Alexander that from what he had seen, the situation “does suggest that this is self-serving.” Alexander ended the conversation angry and frustrated, Siegenthaler recalled. Within hours of the exposé appearing on the front page, Alexander halted the state road program, saying, “If there was a question yesterday about that part of the Pellissippi Parkway, there cannot be one today because there is now no proposal from me to build it.”
Alexander got into another jam over Blackberry Farm a few years later, when it was discovered that as president of the University of Tennessee he had steered university business to the inn. Following a state audit, the Tennessee comptroller of the treasury revealed that Alexander had informed senior university officials that he had “disposed” of his financial interest. Subsequently, according to a special report completed by the comptroller of the treasury in 1992: “The university held 14 functions costing $64,626.49 at Blackberry Farm. Only after the president left his position at the university and various facts about Blackberry Farm had been publicly disclosed, did university officials learn that he had apparently transferred Blackberry Farm stock he owned into a trust for the benefit of his wife.”
Alexander claimed that he had been advised by university lawyers and the state attorney general that a conflict of interest would be avoided if he merely transferred his interest to his wife... |
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