MISERY LOVES COMPANY
If Mayor Willie Herenton gets weary of being a target, he can read about federal investigations in at least three other cities that involve individuals and companies he knows.
In Philadelphia, an investigation of corrupt practices at city hall, including minority-participation deals, has been going on for more than two years. Last week, an investment banker was acquitted on charges stemming from a probe of bond deals involving firms including J.P. Morgan and Goldman Sachs, two Wall Street firms that helped underwrite the MLGW-TVA bond deal and FedExForum.
The FBI bugged the Philadelphia mayor’s office, but the bug was discovered. The investigation was further hampered when the mayor’s power-broker, who was a central figure in the allegations, died of cancer. The Philadelphia Inquirer wrote Sunday that “this probe still is giving people a detailed, distressing glimpse of a pay-to-play culture” and “federal prosecutors will forge ahead in courtrooms in 2005.”
In Atlanta, former mayor Bill Campbell is under indictment on racketeering and bribery charges. Campbell, who was mayor from 1994 to 2002, is accused of trading city contracts for illegal campaign contributions, free travel, and cash to support his gambling trips to Tunica and other locations.
The middleman in one of the deals was Reginald French, a former aide to Herenton who runs a political consulting firm and is head of the Memphis Alcohol Commission. French, who was not charged in the case, testified during a trial last year that he passed $10,000 from an Atlanta contractor to Atlanta city officials. Prosecutors said the two officials also came to Memphis to urge Herenton to hire the contractor but Herenton turned them down. Both officials were convicted last August.
In Baltimore, a money manager named Nathan A. Chapman Jr. was convicted last year on federal charges of defrauding Maryland’s retirement system and looting his own firm. Last month he was sentenced to seven and a half years in prison in prison and ordered to pay $5 million in restitution. Chapman was one of the managers of the city of Memphis pension fund from 1996 to 2002, according to city finance director Charles Williamson. He was terminated when his $74 million portfolio failed to match the performance of its peer group.
“We did not lose any money,” said Williamson.
One of the witnesses against Chapman was his former employee, Tracey Rancifer Henderson. Testifying under a grant of immunity, she said she had a sexual relationship with Chapman and received “bonus”payments from a business development account but lied about it to a federal grand jury in 2002.
Henderson, 34 or 35, is a graduate of Rhodes College who briefly served on Herenton’s staff in the mid-1990s. The Flyer has filed an open-records request with the city to get her exact dates of employment, age, title, and salary, but it had not been answered at press time. She joined Chapman’s company in 1998 to handle Tennessee government investment accounts. Reverend Benjamin Hooks, the Memphis minister who was formerly head of the NAACP, was a vice president of the Chapman company in Memphis from 1993 to approximately 2002.
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Herenton says reporters are encroaching on his personal space. Since 1982, I have covered three city mayors Wyeth Chandler, Dick Hackett, and Herenton and three county mayors Bill Morris, Jim Rout, and A C Wharton.
At one time or another, reporters either delicately handled or backed off “personal” stories about all six mayors or their families. Herenton has pushed the envelope. Three examples:
Herenton’s frequent female companion for 15 years has been Joyce Kelly. For at least ten years, Kelly was referred to in news stories as the mayor’s “fiancee.” Herenton is single and can see anyone he wants, but 10 years is one long engagement.
Herenton is co-developer of Baneker Estates, the upscale South Memphis subdivision where he lives. As far as is publicly known, his role is passive. But subdivisions need city permits and inspections and services. Some might say a mayor who is also a developer has an inherent conflict of interest.
Herenton’s son, Rodney, has worked in public finance for Morgan Keegan and First Tennessee (now First Horizon), both of which do business with the city of Memphis. That potential conflict of interest would not be tolerated by many corporations and could be eliminated if Rodney Herenton worked in another line of work or in another city.
