Thursday, November 18, 2004

Former MLGW Official Larry Thompson Alleges Misconduct in Bond Deal

Former MLGW Official Larry Thompson Alleges Misconduct in Bond Deal

Posted By on Thu, Nov 18, 2004 at 4:00 AM

A former MLGW senior officer told the Memphis City Council Thursday in an e-mail that he believes Rodney Herenton, son of Memphis Mayor Willie Herenton, may have received money from the MLGW-TVA bond deal through First Tennessee Bank.

Larry Thompson, forced out in September as MLGW chief operations officer, also makes accusations against bond attorneys Charles Carpenter of Memphis and Richard Mays of Little Rock. He sent the e-mail from Florida in response to the City Council's inquiry on the bond deal. The deadline for responses is November 18th.

Thompson said he had "no direct involvement with or communication with the parties involved in the bond deal" and got his information "second-hand" from discussions with former MLGW President Herman Morris and others. As a veteran MLGW top executive, Thompson is fully aware of the seriousness of the inquiry and the controversy over the bond deal which began more than a year ago. Yet his response is curiously explosive and casual at the same time and, by his own admission, based on hearsay.

"I have been told specificly (sic) that some of the particiapnts (sic) brought no value and in some cases work had to be redone-- Charles Carpenter. In other cases (Mays), no one ever showed up to do anything, but expedted (sic) a check. In the case of First Tennessee, the calculations were adjusted after the deal was signed to assure that First Tenn got the promised amount of money when they were unable to sell any significant amount of bonds. Rodney Herenton was never visible per these discussions, but was suspected as the recipeint (sic) of the First Tennessee payments. I will be glad to help as I can when I return."

Thompson's unsupported charge contradicts the responses of Willie Herenton, Morris, and First Tennessee Financial vice president Deke Iglehart. Mayor Herenton and Iglehart said Rodney Herenton was not involved in the deal and did not benefit from it. Morris said in his written response that during a meeting with Herenton last year "I asked whether Rodney Herenton was interested (and) the mayor stated Rodney could not be a part of it."

Carpenter ran Herenton's historic 1991 campaign for mayor in which he edged incumbent Dick Hackett by 142 votes. He denied Thompson's charge in an interview Thursday and defended his firm's work for the utility company over the last 13 years.

"We've worked on nine different bond financing deals and were sole counsel on two of them," he said. "I have never heard any complaints about the quality of our services."

Carpenter said his firm has participated in more than $6 billion in tax-exempt bond financings. He said Thompson was never in any meetings with him about MLGW business.

"I don't know where he is coming from," Carpenter said.

Mays held a fundraiser last year and made a political contribution to Herenton during the months in which attorneys and bond firms were jockeying for position in the lucrative bond deal. Mays was named co-counsel.

The Flyer confirmed with City Council staff that the e-mail came from Thompson. In his e-mail, Thompson said he learned from his wife Thursday that the City Council had been seeking his response but "I did not see either letter." The first letters to Thompson and others went out on October 29th. His is the only e-mail response so far. The others are formal letters, many of them accompanied by documentation, including the one from FTN Financial, the bond subsidiary of First Tennessee Bank (now First Horizon). n

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