Wednesday, July 7, 2004

CITY BEAT

As FBI probes bond deal, Herenton says he's 'rejuvenated.'

Posted By on Wed, Jul 7, 2004 at 4:00 AM

RECONNECTED: HERENTON AND MLGW In January, in a column headlined "Get the Mayor," I suggested that the FBI would soon investigate Willie Herenton, if it wasn't doing so already. Last week, Herenton confirmed it in this letter to MLGW president Joseph Lee at Lee's swearing-in ceremony: "I feel compelled to define your new realities," he wrote. "You will amass an interesting array of new friends and supporters. Many who seek to benefit from your position and a few who genuinely wish you well. Often you will be faced with denying and considering the requests of self-serving elected officials. You have entered a political and social world that will test who you are as a man and the values and principles that will guide your actions. I trust you recognize that there are some community leaders and Memphis Light, Gas & Water employees who are not happy with your appointment. They are anxiously hoping that you will fail. Always place God first and your abilities, strength, and knowledge will follow. "It's predictable that you will become the target for an often bias [sic] media. The ugly cartoon in today's is just the beginning. Remember, Joseph, I have been a public official for 25 years and I know the challenges you will face. I am glad to know you are a man of faith, vision, and integrity. "Upon personal reflection, it is ironic that after 25 years of public service as CEO of two of the city's most important institutions, I am possibly facing an FBI investigation for simply being a man and doing the right thing. Young man, welcome to a new world. I have confidence in you and I will often keep you in my prayers." Herenton had learned the night before that the FBI had interviewed an MLGW official about MLGW's $1.5 billion bond deal with TVA and the allocation of the underwriting business to firms in New York, Memphis, and Arkansas. The FBI asked about Herenton, Lee, and Rodney Herenton, the mayor's son, who works for one of the underwriters, First Tennessee Financial. Sources identified the official as general counsel Max Williams. He and former MLGW president Herman Morris did not return calls. It has been widely reported that last August Herenton urged Morris to include more Memphis and minority-owned firms in the deal, including a Little Rock firm that made a $25,000 contribution to his reelection campaign. An October e-mail from Morris to MLGW's finance chief, John McCullough, which became public this week (see Politics), indicates that it was Lee who handled details of the deal for the mayor. Morris notes the mayor's "suggestions" and the stressful nature of the deal but concludes that "this matter seems to be headed back on track." The TVA deal was completed on schedule, but Herenton decided to replace Morris with Lee. In January, City Council members and The Commercial Appeal called for an investigation of Herenton's role in the bond deal. The FBI has not said when its investigation began or whether it will present evidence to a federal grand jury for possible criminal indictments. Herenton preempted leaks about the latest news by announcing it himself. Herenton said this week that news of the FBI probe made him recall the ordeals he underwent as the Memphis City Schools superintendent. "I learned how you navigate through political turbulence when I had no one to teach me," he said. "God gave me a little wisdom, and I got to thinking about Joseph and sat at my conference table and wrote him a letter." The mayor said he figured in January that an FBI investigation might be in the pipeline amid at least four ongoing investigations of state and county government. "Someone has decided to say this government can't be that clean, Herenton can't be that clean," he said. "They simply want to come up and nitpick on some damn campaign contributions." He promised to cooperate with the investigation and said he won't resign. "Now that I know there seem to be some forces and people that want me out, man, I'm rejuvenated," he said. "I'm looking forward to being mayor a long time. At one point I was considering retiring. There are some business opportunities looming that if I were not mayor I would like to pursue. I was leaning toward getting out of elected office, but now that I see political forces trying to put a blemish on my record, I'm a fighter." There is a recent historical precedent. In 1982, then-Mayor Wyeth Chandler resigned to become a judge a little more than a year before the end of his third term and changed the course of Memphis history. Barely a month before the November 1982 general election, the Chancery Court ruled that the mayoral election must be on the ballot. Dick Hackett won in a runoff election. The next scheduled Memphis mayoral election is more than three years away.

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