River City Company: Commissioner Graham NOT Independent

In a stunning admission from River City Company (“RCC”), it has acknowledged that County Commissioner Joe Graham is not “independent” as he serves on the River City Company Board and also sits as a County Commissioner in evaluating projects that RCC brings to the Commission to approve. 

In layman’s terms, County Commissioner Joe Graham, City Councilman Chip Henderson, County Mayor Jim Coppinger and City Mayor Andy Berke, are subject to a “conflict of interest” as they sit on the board of RCC while at the same time they cast votes or attempt to influence RCC projects that might come before their respective legislative bodies.

But let’s back up just a bit to find out how it is that RCC came to this admission, perhaps unwillingly.

A few weeks ago a friend of mine secured RCC’s 2013 IRS tax Form 990 and then posted it on Facebook (see form here). As a CPA myself, I have looked at plenty of tax forms in my life, although I acknowledge that I am no tax accountant.  As I perused RCC’s Form 990 I noted that RCC disclosed that it had a total of 21 voting members of the governing body (the Board).  However, on the same Form RCC affirmed that only 17 of the voting members are “independent.”

A simple math calculation reveals that RCC affirmed that 4 members of their Board are not “independent.”  Upon realizing this, I wondered if the four members that were not “independent” might be the four elected officials of RCC’s board.  So, based on my suspicions, I sent an email to Ms. Kim White, CEO of RCC, asking who the four board members are that she reported are not “independent” (email is here).  A couple of days after my inquiry, I received an acknowledgment from Ms. White and her attorney that the four RCC board members who are not “independent” are in fact the elected officials. (Ms. White’s email is here.)

But does it even matter that these elected officials are not independent and that there is a conflict of interest?  Does it matter that they sit and cast votes on RCC’s board and at the same time also cast votes as elected officials for RCC projects or attempt to influence their colleagues to approve these projects that come before their respective legislative bodies? 

To answer these questions let’s go back to a meeting at the Hamilton County Commission on February 18.  Prior to the meeting I privately asked Commissioner Graham, who is one of the four “non-independent” board members of RCC, to recuse himself from the vote that day because he was not “independent.”  When he informed me he would not, I then called on Commissioner Joe Graham to recuse himself during the public comment period of the meeting.  I reminded Graham that, because he sat on RCC’s Board and he also was already on record that he would cast a vote as a county commissioner in favor of granting a $1 million tax break to a wealthy developer, that this gave the appearance of a conflict of interest.  

A reasonable person would conclude that Commissioner Graham is NOT independent (as RCC had reported to the IRS).  However, Commissioner Graham refused to recuse himself. Over the next three weeks I publicly asked Commissioner Graham to recuse himself on two more occasions (February 25th and March 12th) but he continued to refuse, alleging that he was “independent.”  

Of course, we now have confirmation that Graham is not independent according to RCC and reported to the IRS.

Since the $1 million tax break that was approved on February 18, Commissioner Graham as well as Councilman Henderson have both gone on to grant an additional $500,000 tax break to another wealthy developer, former Mayor Jon Kinsey, who is also a former RCC Board member himself.  Additionally, Kinsey’s partner, Ken Hays, was previously the President of RCC.  Both these men are now beneficiaries of a $500,000 “gift” from city and county taxpayers, courtesy of Commissioner Joe Graham and Councilman Chip Henderson, along with their colleagues and two Mayors who strongly supported and lobbied for Kinsey’s project — the Chattanooga Choo Choo. 

Even though RCC’s tax return reports to the IRS that these elected officials are NOT independent, we are asked to believe Commissioner Joe Graham when he continues to assert he is independent.  Really?

It should be noted that all RCC board members are provided a copy of Form 990 each year and they must each affirm to RCC that the information on the Form 990 is accurate. So, on the one hand RCC Board member Joe Graham affirms via Form 990 (reported to the IRS) that he is NOT independent.  But when citizens call on Commissioner Joe Graham to acknowledge that lack of independence and recuse himself, the Commissioner denies what is declared on Form 990.  

So are we seeing duplicity, a double standard, naiveté or something worse?  You decide.

Commissioner Graham cannot have it both ways.  So I once again call on him, as well as the other elected officials who serve on the RCC Board to recuse themselves from voting on all RCC projects.  In addition they should refrain from attempting to influence their colleagues in a manner that would appear to benefit River City Company — the company on whose Board they serve.  

It’s your turn Commissioner Graham.  Will you do the right thing now?  Or will you continue to feign “independence” to the benefit of River City Company but to the significant cost to Hamilton County taxpayers, to whom you owe your allegiance as an elected official?

And for all you Hamilton County Taxpayers, if you’d like to weigh in on this with your County Commissioner and/or Commissioner Joe Graham, you can find their email and phone numbers here:  http://www.hamiltontn.gov/Commission/

Additional resources:

Form 990 Overview:  http://www.guidestar.org/rxa/news/articles/2009/revised-form-990-a-how-to-guide.aspx

Standards of Conduct:  http://www.oge.gov/Laws-and-Regulations/Employee-Standards-of-Conduct/Employee-Standards-of-Conduct/

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