Corruption 101 and Tennessee Governor Bill Haslam
A battle involving Tennessee’s public workers, its Republican governor and the former chancellor of the University of Tennessee-knoxville is providing us all with a master class in how corruption works in action.
The leader of all of this is Bill Haslam, the Pilot Flying J truck stop billionaire Republican governor of Tennessee.
He has been on a campaign to shake up the public employment system in the state through unusual means. To do this, he brought in Jones Lang Lasalle (JLL), the biggest facilities management firm in the world, on a no-bid, sole-source contract to privatize what are literally thousands of facilities and management positions at all public buildings in the state. The contract was negotiated just by bringing in JLL, letting it define what the contract needed to be and then letting it name its price. JLL was given a five-year, $330 million contract to carry out the privatization and do the required work.
This was all done under a process called “vested outsourcing,” but it still amounts to an enormous solesource contract no matter which government might be paying the bill.
As for why JLL might have been selected, one obvious thing that Haslam revealed publicly while he ran for governor is that he had a major investment in JLL at one time. That investment was put in a blind trust, and Haslam has claimed he does not know if the trust benefited from this deal or not. But how could it not?
The privatization plan was also a convenient way to get rid of unionized workers throughout the public employment system in the state – especially at the University of Tennessee’s (UT) campuses.
To make that even easier, Haslam leveraged another coup when the UT FOCUS Act was approved in April 2018. This put in place a restructuring of the UT’S Board of Trustees, cutting the number of people on the board from 27 to 11. It also gave the office of the governor the authority to appoint every member of the board, on staggered, overlapping terms.
With that bill passed, Haslam quickly moved to consolidate his power by naming nominees for the new board. Half of the nominees were Haslam donors, so one can safely assume they have a degree of strong loyalty for what he wants to do with the board. John Compton, one nominee, used to be CEO at Pilot Flying J, the truck-stop chain across the United States that made Haslam a wealthy man and was prosecuted for massive fraud. Of the seven CEOS nominated in this batch, Raja Jubran just happened to be the most vocal backer for the JLL privatization plan pushed through by the previous board. Two other lobbyists, Melvin Malone and Brad Lampley, were also nominated.
As of this writing, six of the 11 voting members of this board have been confirmed.
This board will have as one of its biggest tasks that of addressing how best to make use of that $330 million contract the state has with JLL. Many of these appointees said in their confirmation reviews that they would oppose outsourcing, but it seems like this may have been for political posturing more than anything else. Part of why is that prior to the new appointments, Haslam already had just about every part of the UT school system lined up with his plan – except for the Ut-knoxville campus, the flagship of the state university system.
The person behind the resistance at Ut-knoxville was its chancellor, Beverly Davenport. A former professor at the school, Davenport was voted in unanimously by the previous board in December 2016. On October 31,
2017, she announced that Ut-knoxville would not be a part of the proposed outsourcing plan Haslam was attempting to ram through. She did so as an advocate for the workers who were already there on campus and who had loyally and effectively served the state for some time. This included the United Campus Workers, the lead union for facilities employees at Tennessee colleges, plus faculty and other staff.
On May 2, not long after Haslam had been given the gift of the UT FOCUS Act, UT president Joe Dipietro announced that Ut-knoxville chancellor Davenport had been fired, effective July 1. In his announcement about the dismissal, Dipietro noted “numerous areas of unsatisfactory performance.” Others were told that Davenport had various “communications problems.”the irony of this move is that Davenport is being demoted to the position of professor of communications despite the criticism of her ability to communicate. She will be okay – for a while – and will be getting a whopping salary of $439,000 a year.
For those wondering if Dipietro might attempt to challenge Haslam and the new UT board in any way, that is unlikely. Dipietro was already rumored to be readying himself to leave the UT system. When he goes, Haslam and his hand-picked board will have free rein to select whoever they want for the role – and to carry out the rest of whatever else Haslam has planned for the UT organization.
Time will tell if the new regime is an improvement over the previous system or if it is just the usual scenario of criminal politicians looting public assets for their themselves and their sponsors.