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Former TVA and MLGW Heads Criticize Nuclear Power Proposal

TVA

Bellefonte nuclear plant

The former chairman for the Tennessee Valley Authority (TVA) joined former Memphis Light, Gas, and Water (MLGW) president in speaking out against a proposal for Memphis to switch to a nuclear power source.

Dave Freeman, former TVA head, and Herman Morris Jr., former MLGW leader, sent a letter dated November 19th to the Memphis City Council and Memphis Mayor Jim Strickland, urging them not to support the proposal for MLGW to switch from TVA to the Alabama-based nuclear plant, Bellefonte.

A representative from the group Nuclear Development LLC told the council last month that the switch could save Memphis $500 million a year.

“We write to express our grave concern that the city of Memphis is considering the purchase of electricity from the unfinished Bellefonte nuclear power reactors,” the letter reads. “This plant is so outdated that even TVA couldn’t complete them after a half of century of trying.”

The letter continues, urging the mayor and council to heed the advice of current MLGW president J.T. Young, who told the council he was skeptical about the proposal at its October 9th meeting.

One of Young’s concerns was whether or not Nuclear Development would be able to complete the construction of the plant.

The pair said that the plant’s two unfinished reactors, which were first designed in the 1960s are “woefully out-of-date.”

Even if construction of the reactors is completed, Morris and Freeman argue that the cost to maintain the plant would be “enormous,” meaning the price of power would be more expensive than from TVA or from other “clean, safe, renewable resources like solar and wind power.”

“This fact is why old nuclear power plants around the country are closing,” the letter reads. “They simply cannot compete against safer, cleaner, and better 21st century energy technologies.”

Additionally, the letter cites that Memphis is TVA’s largest customer, and that Bellefonte could not provide power to all of the city, as it is “too small to meet all our needs.”

“At best, Bellefonte could provide only a fraction of the power supply that Memphis would need,” while the rest would have to come from other sources outside of Nuclear Development’s ownership.

The duo urged the council to await the December release of MLGW’s study on long-term power supply options

“We therefore urge you to say ‘NO!’ to an attempt by Nuclear Development LLC to mislead Memphians with unsupported claims of cost savings in order for it to obtain a handout from the federal government.”


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Opinion

Memphis Makes Peace with Wells Fargo on Mortgages

blight.jpg

Can something good come out of the biggest real estate collapse and mortgage fiasco in Memphis history?

Mayor A C Wharton hopes so. On Wednesday, Wharton along with Shelby County Mayor Mark Luttrell and Wells Fargo officials held a news conference to talk about “our relationship” and the settlement of a lawsuit over people who had “unpleasant experiences” with home loans. The harmony was in stark contrast to the nasty lawsuit alleging that Wells Fargo made deceptive loans to poor people that caused a foreclosure crisis and depleted city coffers. The lawsuit became a touchstone for media reports about subprime mortgages and poverty in Memphis at a time when the city is losing residents to the suburbs and trying to improve its image.

In the agreement, described as a “term sheet” with details yet to be completed, Wells Fargo gives $7.5 million to Memphis and Shelby County to assist low-income borrowers who want to buy or fix up homes. Some of that will go to financial education (“Hands-On Banking” Wells Fargo calls it) for students as young as middle school as well as adult would-be homebuyers. A total of $4.5 million is marked for grants of up to $15,000 for renovation assistance. The homes do not have to be financed by Wells Fargo. Luttrell said “the lion’s share” of the money will go to Memphis.

“This is a good and sound starting point,” Wharton said. “Quite frankly, if you look at the age at which most lawsuits come to an end, this one was filed in 2010, and now its may 2012, to bring about this kind of relief, that’s a baby walking in two months.”

Wharton said he was mainly concerned about putting money in the hands of consumers now as opposed to what they might get six or seven years down the road.

“Lawsuits tend to go on and on,” he said. “When you see an opportunity to get some money on the table, sometimes it’s best to take that opportunity.”

Wells Fargo was represented by Leigh Collier, regional president for the Mid-South.

“What a win-win for the citizens of Memphis and Shelby County,” she said. She touted the benefits of “financial literacy” and said “we are thrilled to come to an agreement with the city and the county.”

Wells Fargo has set a goal of making $425 million in loans to local borrowers in the next five years, with $125 million of that targeted for low-income and middle-income buyers. Collier said the amount is “based on historical data we don’t publish” when asked how it compares to the amount that Wells Fargo loaned in the five years preceding the housing collapse and the amount it would probably have loaned in Memphis and Shelby County over the next five years without this agreement.

The loans will be market rate, currently under 5 percent, rather than the sub-prime loans with confusing details and higher rates that got so many borrowers in trouble, Collier said.

Memphis City Councilman Harold Collins, whose Whitehaven district was the focus of a story in The New York Times in 2010 about blacks losing decades of economic gains because of foreclosures, was not impressed with the agreement.

“Typical of most settlements like that,” he wrote in an email. “They place some crazy restrictions on people that might apply. You have to go to some training from a non profit? They know most people will NOT do that stuff and thereby Wells Fargo will not have to forgo the money. Question: Did Wells Fargo impose these kinds of challenges on these people BEFORE they approved their loans? What about doing these BEFORE they were foreclosed?”

One question is whether anyone will want to buy a blighted house in a declining neighborhood under any terms. Wharton said that with the assistance of community development corporations, he thinks there will be a market.

“Some of these neighborhoods are remarkably stable, and with the idea that I am not gong to be the only one trying to renovate a house, that is what’s going to bring them in,” he said.

City Attorney Herman Morris, who grew up in the Binghampton neighborhood in Memphis, said the deal will help stabilize neighborhoods by promoting ownership over renting.

“I think folks would rather live in homes that they own if they can,” he said.

Webb Brewer, the former head of Memphis Legal Services now working as a private attorney with the city and county on the housing issue, said “We were in for a long haul had we continued on with the litigation. It would have been a long, grueling, expensive fight for everyone. You don’t know what you would get down the road.”

Brewer said the important parts are the $7.5 million in “hard money” and the commitment to make $125 million in standard loans in low and moderate-income areas once targeted for sub-prime loans.

He agreed that the issue of fraudulent loans remains unresolved.

“Education does not address cases where pretty sophisticated borrowers were deceived. I am an attorney who practices in that area and sometimes I wold look at a loan and say, ‘hey, what does that mean?’ Education doesn’t fix that, but a lot of that lending has gone by the wayside anyway with the change in the market.”

If nothing else, the settlement lets Memphis move on with a best-foot-forward campaign that was going to be difficult enough without the worst-foot-forward campaign in the lawsuit against Wells Fargo.

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Cover Feature News

The Man Behind the Moustache

“There are some things I don’t apologize for,” he says during a somewhat tense interview at his campaign headquarters on Union Avenue in Midtown. The generally soft-spoken mayoral candidate and former MLGW president is furious with the Flyer‘s John Branston for a recent column that correctly stated that Morris’ Overton Park home never lost power during Hurricane Elvis. The reason his neighborhood didn’t lose power, Morris says, is that it is served by underground cables, which helped minimize power outages.

“Nobody knows what my family went through,” Morris says, smoldering at the implication that he got special service. “A huge tree came crashing through my daughter’s roof, and, but for the grace of God, she’d be dead.”

Contradicting his critics, Morris says his leadership in response to Hurricane Elvis is the crowning achievement of his time as president of MLGW, and he supports his claim with data relevant to the size of the disaster and the speed of the recovery. “We were able to get full reimbursement from FEMA,” Morris says.

For a candidate whose measured speech and low blood pressure are considered a political liability, Morris’ temper flare-up is perhaps more assuring than alarming. He’s got some fire in the belly after all. He isn’t afraid of his critics. In fact, he has long, painstakingly detailed answers for all of them. Here are a few:

Memphis Flyer: How will you manage Memphis’ money? You were a driving force behind MLGW’s failed $30 million telecom venture, Memphis Networx. Even in a good market environment, that kind of business requires the frequent investment of millions of dollars to create revenue streams paying tens of thousands monthly. Have you learned anything from the disaster?

Herman Morris: On further review and reflection, I probably got too ambitious in terms of making Memphis Networx a public/private endeavor. If we hadn’t had the private investors with issues of “don’t release our proprietary information,” the media might have been less aggressive. That’s the kind of thing that really makes the media’s hair stand on end. Handled differently, it could have been built out faster, and it could have become profitable sooner, and we wouldn’t have gotten stuck with the terrible deal we were stuck with.

So you still think Networx was a good idea?

It’s not that the idea doesn’t work. It just didn’t work here.

There was a great deal of controversy over the generous benefit packages enjoyed by top executives at MLGW during your tenure. Again, you’ve never apologized. How will this sit with voters who are angry with the current mayor’s reputation for cronyism and patronage?

[Former MLGW president] Joseph Lee is being investigated. I’m not being investigated. When I left MLGW, it was one of the best utility companies in the nation. Now it’s one of the worst. Look, I try lawsuits. You put expert witnesses on the stand to explain some difficult math problem. Well, some juries’ will understand every nuance of the complex mathematical equation, some juries’ eyes will glaze over. At the end of the day it will come down to “I trust this man or I don’t.”

You’ve campaigned on a platform to reduce crime, reverse urban sprawl, and bring in jobs. Where do we get all the money and the skilled labor?

We’ve got to be smart about that. I’m an assembler of good ideas. I just visited with a company in Binghamton that does precision machine work for surgical devices, and another company that does similar skilled machine parts for NASCAR. These companies take people and send them to school to develop the level of skill required to do these things. I asked these people what it would be worth if employees came in with a competency level that would cut that learning curve in half … if I could get these folks together with folks the academic arena. We did that at [MLGW] with the first two years of the utility’s apprentice program. Now you can go to Shelby State and get a two-year degree as an apprenticed lineman.

Where does the money come from?

Fort Wayne, Indiana, deployed a total-quality-management tool called Six Sigma. They deployed this private-sector tool in their government in order to take something that usually takes 10 steps and cut it down to two. And they have enjoyed tremendous savings as a result. We have to be creative in applying private-sector approaches to a public arena. That’s not always as easy in government as it is in private business because the bureaucrats are all in place. It’s like storming the ramparts with rocks being thrown down on you.

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Politics Politics Feature

POLITICS: In the Spotlight

There come times when you wonder why everyone isn’t a
political junkie. Last year’s nail-biting U.S. Senate race between winner Bob
Corker
and (narrow) loser Harold Ford Jr. – climaxing with the now
famous Battle of Wilson Air, when the GOP’s Corker deftly out dueled Democrat
Ford at the latter’s ambush of a Corker press conference — was one such time.

Another, believe it or not, is this year’s Memphis mayoral
race, which — despite the opting out of one potential lead actor, Shelby
County Mayor A C Wharton, and the refusal of another, incumbent Memphis
mayor Willie Herenton, to play ensemble – has had its dramatic, as well
as its comedic, moments.

Much of the entertainment value has come, as expected, from
the scramble involving the three major contenders to Herenton – city
councilwoman Carol Chumney, former MLGW head Herman Morris, and
former Shelby County Commissioner John Willingham. We’ll get to that core
drama in a moment.

But besides this main plot, which some have called by the
shorthand initials A.B.H. (for “Anybody-but-Herenton”), there’s running
mini-drama involving the several supporting players in the 14-member mayoral
field. We can call that one A.G.H. – for “Ain’t Gonna Happen.”

For, if there is real doubt as to whether Willingham, whom
the polls have shown to be hovering in the low single digits, is delusional in
his hopes of winning, it’s a dead-level cinch that these others are. None of
them even blip the radar screen.

Which is not to say that they haven’t made their
contribution to the dialogue. Nor that they haven’t made for compelling theater
on those rare occasions when they’ve been admitted to a forum involving the Big
Three (as for the Big Unit himself, the incumbent mayor, fahgitaboutit!, he’s
made it clear he’s not about to show in tandem with the others).

Consider this piece of wisdom from Laura Davis Aaron,
delivered at the League of Women Voters’ omnium gatherum affair at the
Main Library on Poplar on Sunday:

Knowing what she was about to unleash, Aaron first issued
this full-disclosure caveat to the attending audience (fairly numerous, all
things considered): “I want you close your eyes for a minute. I wanted to be a
lawyer once, but they ran out of the courtroom.” Non sequitur or not, we got the
drift of that. Then came the moment she was preparing us for:

“God gave me a plan and a vison: “Dr. Aaron, you must put
senior citizens in The Pyramid!'” (Pause.) “And I said: ‘To do what?'”

Once again the voice of the Almighty: “‘Take what they’ve
got in their homes to the Pyramid. and you’re gonna have them run a flea
market
in that Pyramid!'”

And that, mind you, was only the first of two instances of
divine intervention at Sunday’s forum. Aaron was followed minutes later by
fellow candidate Dewayne A. Jones, who proclaimed more modestly, “God
makes the leader. I am your David,” and promised at some point to bring
forth his own “vision of empowerment.” He may even have had it ready on Sunday,
but wisely decided to hold it in reserve after Aaron’s bombshell.

There were contributions of a more secular sort from the
candidate chorus on Sunday. Roosevelt Jamison, in particular, proved
himself something of a phrasemaker. At one point, the youthful-appearing
Jamison, a Desert Storm vet, said disarmingly to the crowd, “I know I don’t
look
old, but I am old.”

And he certainly got his fellow also-rans on his side when
he complained that “the media isn’t playing with a full deck” – meaning that he
and the other unsung names on the mayoral ballot weren’t getting their proper
share of attention.

The line from Jamison that got the whole audience going,
though, was this zinger, in response to the issue of gang activity and what to
do about it: “”We need to stop the gangs on top!” — a clear reference to
the rascals in charge of the governmental and business status quo.

Jamison was not done. He went on to insist, “Our government
has corrupted us in our city,” designating as particular problems “welfare” and
“babies having babies.” He got murmurs of approval from the conservatives in the
audience when he said, “We need mens [sic] to stand up to be mens. Stop leaving
everything to our women!”

Then there was Randy Cagle, who embraced past
traditions as well, calling, among other things, for a return to corporal
punishment in the schools. As he pointed out, “I got busted a lot of times at
school, but I’m not dead.”

Businessman Cagle, who has made every forum so far to which
all mayoral candidates have been invited, obviously relished the attention.
Often Cagle was gently corralled by a hint from LWV moderator Danielle
Schonbaum
that he was about to exceed his allotted time limit.

On one such occasion, he said the obvious: “I could go on
forever. I love it.”

As candid and direct as that remark of Cagle’s was in its
own right, it had the ancillary virtue of prompting a rare understatement from
the famously voluble Willingham. “I’m like Cagle,” said the former commissioner.
“I can talk to you for three hours.”

Three hours was not quite what Willingham and fellow
top-tier candidates Morris and Chumney enjoyed during Monday night’s prime-time
broadcast forum on News Channel 3, WREG-TV, but the three of them managed a
compelling hour.

Observers’ opinions differed afterward as to who came out
ahead in a format that culminated with direct exchanges between the candidates
themselves.

But there were several discoveries to be had by the
viewers, who learned, among other things, that Chumney has been endorsed by the
AFL-CIO (she mentioned the fact four, maybe five times) and that Willingham, who
would seem to be about as white as white can be (ditto for his supporters),
considers himself the exponent, first and foremost, of “my base in the black
community,” which he helpfully enumerated as being in the vicinity of 13,000
voters.

Cynics may dispute it all they want, but the former
commissioner made it clear several times in his opening statement and thereafter
that he thinks of himself as the candidate of black Memphians. Willingham also
made the claim that his commission race of 2002, which resulted in an upset
victory over then incumbent Morris Fair, had been but a trial run for the
two mayoral races he’s run since (three, counting one for county mayor last
year).

He had run back then, Willingham confided, “to get my name
out.”

Whatever.

More to the point, he certainly got his name out Monday
night, sparring with the other two candidates (and occasionally, lightly, with
moderators Claudia Barr and Richard Ransom) and discoursing on
several of his pet schemes, two of which – converting the Fairgrounds into a
mini-Olympic village for international competitions and reserving desk jobs in
the Memphis Police Department for returning vets of the Iraq war – were
distinctly original.

In WREG’s own post-debate viewer poll, Willingham was, in
fact, running a strong second to Chumney.

As for the councilwoman, she had boasted on air – as she
has every right to – that such scientific polls as have been taken all position
her at the lead of the mayoral pack or tied for it. That was the basis for her
no-thank-you answer to commentator Norm Brewer‘s first question, asking
all the candidates if they shouldn’t back out, making room for a single
consensus contender to take on Herenton, who remains a not-quite-prohibitive
favorite.

(No one else volunteered for self-sacrifice, either.)

Though occasionally lapsing into some repetitive-sounding
spin, Chumney certainly managed to seize her share of the spotlight and to get
out large chunks of her crime plan (also available on her Web site) and other
proposals.

Morris, too, had his moments, staking out his claim to be a
racial uniter and unflappably fending off his opponents’ attacks on his record
at MLGW (Chumney on the alleged V.I.P. list he’d kept while head of the utility
and Willingham on what he – but not Morris, still a true believer – saw as the
folly of investing in Memphis Networx).

With some logic, Morris could claim afterwards that the
others’ persistent questioning of him meant that they must have regarded him as
“the frontrunner.” He wishes.

The bottom line is that all three candidates handled
themselves well and did themselves no damage, as each continued to vie for the
right to be regarded as the main contender to Herenton.

To Be Continued, you may be sure.

Categories
Politics Politics Feature

Mayoral Shuffling

Memphis mayoral candidates continued to campaign, as is their wont, over the weekend:

Incumbent mayor Willie Herenton, who is eschewing formal debates with his opponents, spoke briefly to a rally at a Frayser mall Saturday but mainly spent his time there autographing campaign T-shirts and demonstrating his prowess at the “Cupid Shuffle” as a sound system blared out some music.

Opponent Carol Chumney held a well-attended opening at her Poplar Avenue headquarters on Sunday, once again chiding Herenton for being willing to spar with Joe Frazier while ducking debate, but she seemed to broaden her attack to include rival Herman Morris as well as Herenton: “My opponents love to walk you through their humble beginnings, but their actions both in political office and as executives demonstrate that they have long forgotten where they came from.”

Morris held at least one major fund-raiser over the weekend, while John Willingham presided over a headquarters open house that spread over Sunday and Monday.

Present at Mt. Olive C.M.E. Church for an all-candidates forum Sunday were Chumney, Morris, and Willingham, but not Herenton. A wide representation of other mayoral candidates also attended, including Laura Davis Aaron — who cited as two reasons for running the fact that “Mayor Herenton reads my mail” and that she needs a job — and Dewayne A. Jones Sr., who shouted so loudly as to temporarily short out his microphone.

• With Congress in recess, 9th District congressman Steve Cohen is much in evidence locally. Among other things, Cohen presided (along with Tennessee senator Lamar Alexander) over a ceremony formally changing the name of the Federal Building to the Clifford Davis/Odell Horton Federal Building, in honor of the late U.S. district judge Odell Horton.

Cohen also proposed to President Bush that he appoint former deputy attorney general James Comey to succeed the disgraced and now resigned Alberto Gonzales as U.S. attorney general. (Comey, along with the bedridden John Ashcroft, then the attorney general, had resisted as unconstitutional a Bush wiretapping plan aggressively pushed by Gonzales, then White House counsel.)

Cohen addressed a Chamber of Commerce-sponsored banquet as the first of its Frontline Politics speakers this year and took part in a panel on crime sponsored by the Public Issues Forum. The congressman’s remarks at the Frontline dinner at the Ridgeway Center Hilton struck a new note, in that Cohen, a longtime critic of the Iraq war, acknowledged for the first time that residual U.S. troops might need to remain in the war-torn country for some time to come.

Cohen also scheduled a meeting, tentatively set for Tuesday of this week, with members of the Memphis Black Ministerial Association, one of whose leaders, the Rev. LaSimba Gray, has led an assault on Cohen’s support for a congressional Hate Crimes Bill.

There are several anomalies associated with the ministers’ protest — among them, that Cohen’s predecessor, former congressman Harold Ford Jr., had consistently supported such legislation without drawing criticism from the association.

Pointing out further inconsistencies this week was an association member, the Rev. Ralph White, who originally expressed solidarity with the protest but later satisfied himself it was based on misconceptions. Said White: “I’ve read the bill, and I’m satisfied that it does not restrain a minister from expressing opposition to homosexual conduct or anything else that might be offensive to his conscience or Christian doctrine. The language of the bill specifically guarantees such freedom of speech.”

Turning the attack back on its maker, White said, “What LaSimba Gray has to answer to is whether he is consciously trying to aid the congressional campaign of Nikki Tinker. Nobody seems to be wondering what her attitude toward the Hate Crimes Bill is.”

Actually, many people have so wondered, but a Washington, D.C., spokesman for the elusive Tinker, a 2006 Cohen opponent who has already filed to run a reprise of last year’s congressional race, has publicly said she will, at least temporarily, distance herself from discussion of such issues — as she did at an equivalent period of last year’s race. White, who also sought the 9th District seat last year, is holding open his options for another run of his own.

• Senator Alexander, just back from an extended fact-finding trip to Iraq in tandem with Tennessee Senate colleague Bob Corker, seems, like Cohen, to have moderated his stand on Iraq somewhat. Alexander continues to push for a bipartisan resolution, co-authorized with Colorado Democrat Ken Salazar, based on the findings of the Iraq Study Group and calling for an end to U.S. combat operations.

But the senator indicated in Memphis last week that he had been impressed by progress made by the ongoing U.S. troop “surge” in Anbar Province and other points and, pending a scheduled report to Congress next month by General David Petraeus, was keeping an open mind on continued troop commitments in Iraq.

• A casualty of County Commission voting Monday was Susan Adler Thorp, a former Commercial Appeal columnist and consultant who had been serving as public relations adviser to Juvenile Court judge Curtis Person but whose position ended up being unfunded. Somewhat later, a commission majority would authorize equivalent sums for a new “outreach” position, yet to be filled.

• The 2007 recipient of the Tigrett Award, funded by FedEx founder Fred Smith in honor of the late John Tigrett, will be former U.S. senator Howard Baker, it was announced last week. The award will be presented by the West Tennessee Healthcare Foundation at a gala later this year.

Next week: a systematic look at this year’s City Council races.

Him Again

Richard Fields was back on the attack, battling his foes by means of publicly circulated letters.

To be sure, one of the epistles was written not by Fields but by Lambert McDaniel, an imprisoned ex-club owner, to Gwen Smith, the point person in Mayor Willie Herenton‘s accusations concerning a lurid blackmail plot against him orchestrated by lawyer Fields and other alleged “snakes.” In the letter, McDaniel, who was incarcerated on a drug charge, refers to Smith by pet names and advises her to stay in touch with “the Mexicans” — presumably drug connections.
What relevance the letter has to Herenton’s charges against Fields — who, according to the mayor, urged Smith to seduce and entrap the mayor — is uncertain. Clearly, it does milady’s reputation, already sullied, no good. But, by association, it wouldn’t seem to entitle Fields — or Nick Clark, his acknowledged confederate in the purported topless-club investigation — to any merit badges, either.

Fields is a textbook illustration of the adjective “unabashed,” however. Confirming reports that the lawyer’s own poison pen had been unsheathed for yet another epistolary crusade, Shelby County commissioner Sidney Chism denounced Fields in the commission’s public session Monday, during a debate on whether to assign Head Start children to the non-profit Porter-Leath Children’s Center.

In one of Fields’ widely circulated broadsides, Chism, a child-care provider himself, was taken to task for his initial opposition to the Porter-Leath arrangement and was told, among other things, he should be “ashamed” of himself.

Chism’s response was scornful. Citing a variety of allegations against Fields that have been insistently put forth by blogger Thaddeus Matthews, Chism challenged Fields’ bona fides, saying that, if all that was said about Fields was true, “he shouldn’t be anywhere around children, anyhow.”

Whatever the accuracy of the charges and counter-charges swirling about Fields, there was little doubt about one thing: With an election happening, the odds were better than even that there will be, in some guise or another, a Richard Fields ballot this year, as there was in each of the last two local election cycles. If so, would this be good or bad for Fields’ endorsees? This, too, remains to be seen.

Categories
Politics Politics Feature

Forum Fever

Forums are all the rage these days as Labor Day approaches — after which the crowded 2007 pre-election calendar starts to overflow big-time.

Among the events to watch are two forthcoming candidate debates co-sponsored by the Flyer and the Memphis Rotary Club. On September 4th, candidates for the hotly contested District 9, Position 2 seat will square off, and one week later the major mayoral candidates will have at it. Both events are at noon at the Cook Convention Center.

Having thus done my duty by our own events, I must next tip the hat to the Coalition for a Better Memphis, which actually succeeded in getting all four major mayoral hopefuls — including the debate-leery Mayor Willie Herenton — on the same stage, though only one after the other, answering the same series of across-the-board questions.

The event last Thursday, at the Bridge Builders site downtown, wasn’t therefore a debate — as moderators Roby Williams and Bobbi Gillis stressed — but it may have been the next best thing.

Standing in front of a climbing wall in a cavernous, well-filled room, the four hopefuls appeared in sequence before the same audience and answered the same questions from Williams and Gillis, while members of the coalition set about grading the answers according to a four-level scale.

Based on what the candidates said, how they said it, and what others said about it later on, these are some broad conclusions:

John Willingham, who was first up, clearly meant to demonstrate that he was no crank but a serious man with serious proposals. The former Shelby County commissioner was a beneficiary, as he always is from time-restrictive formats, of the two-minute-per-answer limits on the nine questions asked.

Kept thereby from waxing prolix, Willingham was still able to offer a host of specific proposals. Some of them, e.g., drastically curtailing a mayor’s contractual authority and the number of his patronage positions, seemed good fits for the current debate on charter changes. Others, like his concept of turning the Fairgrounds into an Olympic training village that could generate 2,000 jobs and $2 billion in annual revenues, were of the sort that Willingham fans would consider visionary and non-fans might regard as fanciful.

Even under the time and format constraints, Willingham put forth too many proposals and statistics to be easily summarized. All that was consistent with the suggestion that the mayor’s job was to be both an executive and an idea man. Conversation among attendees afterward indicated that those who tend to see him as a crank will continue to do so; those who regard him as farsighted and misunderstood, likewise. A point of general agreement concerned his limited base and the small likelihood of his being elected.

Herman Morris was the second candidate to appear. He spoke briskly and without hesitation, letting general statements substitute for extended elaboration.

Contrasting his up-from-poverty background with his quality education (Rhodes College, Vanderbilt law school), Morris characterized himself as an able executive with a proven track record, especially at MLGW, which he headed for seven years. He also noted such involvements as his former chairmanship of the Greater Memphis Chamber of Commerce, experience on industry-seeking missions, and 20 years’ membership on a state lawyers’ ethics panel, two years as chairman.

In answer to a question about achieving diversity in government, Morris, an African American who emphasizes his potential appeal to both races, gave an answer that might resonate better with whites than with blacks.

The standard for city employment, he said, should be “not just diversity, but … merit, experience, talent, skills, history, track record of success,” as it was at MLGW under his administration, he said. That was a head-scratcher, unless, as a Republican well-wisher opined, it was one means of distancing himself from recent publicity regarding his well-received remarks at gay/lesbian forums.

Verdict: Morris, markedly less stiff than when he first announced, held his place in line. He’s viable if he can somehow generate better across-the-board traction than he’s managed so far. Among other things, he repeated his challenge for other candidates to follow his lead in taking a drug test. For all the trying, that one has not yet so much as blipped on the public radar screen.

He may have a way to go before convincing a majority that he is something “new and different and better.”

Willie Herenton was the third candidate to appear. Unsurprisingly, the mayor wanted to talk specifics — or at least those stats and achievements that suggested his first four terms had been a success.

Herenton eschewed the “hating on me” rhetoric of an earlier speech to the Whitehaven Kiwanis Club. Appearing stately and dignified, he warned against “novices,” boasted of his “40 years in public service,” recapped his career as a school principal, school superintendent, and mayor, and repeated his series of rhetorical challenges to the Chamber of Commerce concerning which mayor had presided over the city’s best economic growth, per capital income, etc. “Of course, I already know the answer to that,” he said.

Herenton declared, “We have virtually eliminated decayed public housing as we have known it in the past.” He also boasted a blameless personal record on ethics matters and claimed to have achieved the most diverse city workforce in Memphis history. Other professed achievements were more familiar — like downtown redevelopment in general and, in particular, the FedExForum and the NBA franchise that came with it.

So far, so good, except that such accomplishments are no longer regarded as unalloyed benefits and are the subject these days of a critical second sight.

All in all, the mayor may not have provided a fresh prospectus or a convincing rebuttal to his opponents’ insistence that it’s “time for a change.”

Carol Chumney was the final speaker, and her reception was every bit as revealing as anything explicit she said at the event. Council member Chumney’s persona as a persistent scold of the administration and of government and politics as usual continues to serve as both medium and message.

Unlike the other candidates, the former state legislator made few concrete proposals, couching her statements almost solely in terms of the shortcomings she perceives in the current city administration or in terms of general goals. Her very first sentence said it: “I’m running to bring about safe streets, safe schools, and safe neighborhoods and to clean this city up once and for all.”

Though her Web site contains specific proposals, Chumney on the stump rarely deals in such specific terms. Her remedies at the forum were more broadly stated: e.g., “more accountability … a mayor more capable of inspiring the city … stronger on children and youth … neighborhood watch programs … stronger code enforcement … partnerships with all kinds of people,” and so forth.

As during the nearly four years of her service on the council, Chumney proved most compelling when she presented herself as the avenger, as the dedicated scourge of everything that is wrong with city government. “You know, we have a lot of moonlighting going on at City Hall. People don’t talk about that,” she said at one point. And ears perked up.

Overall, to judge by word-of-mouth afterward, Willingham’s presentation was discounted more than it might have been if his prospects were deemed brighter; Morris held his own; Herenton came off well (if somewhat out of answers on the freshness front); and Chumney, questions about her financial wherewithal notwithstanding, is still getting the benefit of the doubt.

• Among the several other groups sponsoring candidate forums are Mid-South Democrats in Action (MSDIA) and One Hundred Black Men, who collaborated in an event last week at the University of Memphis Law School featuring candidates for the three council positions in Super-District 8.

Turnout by the candidates was good — as, in the opinion of most observers, was the content of candidate responses. The major absentees for the forum were Position 1 incumbent Joe Brown and Position 2 challenger Janis Fullilove (who was apparently conducting a simultaneous campaign event).

• Two District 9 races are attracting much attention. That for Position 2 is widely regarded as a showdown between lawyer/broadcast executive Shea Flinn and businessman Kemp Conrad — a Democrat and a Republican, respectively, though both have support across partisan lines. Newcomer Frank Langston also has good support. “Memphis Watchdog” blogger Joe Saino will have an impact, as may Joseph Baier.

Contenders for Position 3 include another well-connected newcomer, Reid Hedgepeth, businessman Lester Lit, lawyer/activist Desi Franklin, neighborhood activist and former interim legislator Mary Wilder, and Democratic activist Boris Combest. The first three named have most of the sign action so far.

A detailed version of these items is available in “Political Beat” at www.memphisflyer.com.

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Cover Feature News

Four More Years?

We have seen the field. That is the hard, inescapable fact of last week’s filing deadline. The next mayor of Memphis will almost certainly be one of three contenders — two of whom are familiar properties: the proud (some say reckless, some say haughty) incumbent Willie Herenton, and the determinedly independent (some say foolishly stubborn) City Council member Carol Chumney. A third candidate, former NAACP official and MLGW head Herman Morris, has yet to make his profile clear, and that is perhaps his major problem.

Oh, there is yet a fourth candidate, former Shelby County Commissioner John Willingham, who is well enough known. Respected, even beloved, by some for his densely detailed plans to fix virtually everything and regarded as an eccentric by a perhaps greater number, Willingham constitutes a relatively distant second tier all by himself.

And after him, among the 12 other candidates who qualified by the July 19th filing deadline, there is naught but anonymity, lacking as of now even Robert “Prince Mongo” Hodges, the barefoot denizen of the Planet Zambodia and the numbing punchline to an old joke which, for some time now, has been told only by himself to himself.

A perennial, Mongo filed his papers correctly but was disqualified for one more run because of unpaid fines relating to state election requirements. The now officially irrelevant Mongo did have one moment of historical importance, shaking loose a few hundred frivolous protest votes that likely would otherwise have gone to then-incumbent mayor Dick Hackett in 1991 and thereby making possible the victory, by a margin of 142 votes, of former Memphis City Schools schools superintendent Herenton as the city’s first elected black mayor.

If not for that, Mongo would have been no more consequential than a candidate who remains on the ballot — Bill (formerly Willie) Jacox, the perennial’s perennial, who disappeared from Shelby County ballots for a decade, as did his crude self-advertising handbills that used to litter telephone poles throughout the city, but who is back this year. Two other candidates — bus driver Carlos Boyland and businessman Randy Cagle — were so obscure that, when they tried to launch early candidacies at the Election Commission’s downtown office in 1996, they were erroneously given petitions to run for county mayor that year.

Cagle made something of a fuss at a recent neighborhood forum in southeast Memphis when he accused the media of downplaying his prospects and keeping him, and others like him, out of the charmed ranks of acknowledged contenders.

It doesn’t work like that, of course. Though here and there over the years an effort has been made to logroll somebody into or out of prominence, the media don’t make or break anybody. They — we — are still merely chroniclers of moods and momentums that stir of themselves, or, as in the case of Shelby County mayor A C Wharton, the reluctant warrior who last week finally and firmly squelched insistent draft efforts by a multitude of well-known and unknown courtiers desperate for a change at the city’s helm, are put into motion by specific forces in the community itself.

Now, as always before and (one hopes) forever, ours is a representative system. That, for better and for worse, is the root fact.

Who, then, do the major players represent? Here is a capsule of sorts:

Mayor Willie Herenton: By his own testimony, the incumbent mayor is still the man who, as he told an almost hysterically happy, cheering crowd of mainly African-American citizens at The Peabody on an October night in 1991, was “willed” by them into power and prominence as the culmination of historical justice and inevitability, whose accession to power was attended, at the last rally and at the first post-victory celebration, by no less a figure than Jesse Jackson, the civil rights avatar who had been on the balcony of the Lorraine Motel in 1968 with the slain martyr Dr. Martin Luther King Jr.

One of the ironies of this mayor’s career is that he could not have represented outcasts from power and passions so long denied had he not, just prior to his ascension, been suddenly cast into disrepute with a civic establishment that had once embraced him and appointed him to its major power boards. Forced from his perch as head of the Memphis schools system by a sexual scandal (the late 1980s were post-Gary Hart and pre-Clinton times) and by alleged administrative irregularities, Herenton became a martyr for that moment of change.

Justin Fox Burks

The mayor, an able and commanding figure and (as he never tired of reminding people) a once-undefeated Golden Gloves champion, won three subsequent elections on the strength of his personal dominance and visible successes — mainly in civic (read: downtown) reconstruction and a record of (apparent) fiscal solvency. But his fourth term, which began with a thunderous denunciation of his City Council and a heady claim of divine sponsorship, proceeded into financial difficulties, an era of resurgent crime, and all-too-mortal wrangles with disbelievers, who included both council members and those members of a disaffected population who were challenged by Herenton to “leave” if they didn’t like how he did things in his dominion.

As it happens, the number so aggrieved has risen to the point, among blacks as well as among whites, that the mayor actually ran second (to Chumney) in the first set of polls conducted in this electoral season. Hence his reaching again for the martyr’s mantle and African-American solidarity, as in the now famous press conference of mid-June when he accused various disloyal “snakes,” in concert with a vengeful power establishment, of scheming to overthrow him with — shades of those late 1980s — a sexual-blackmail plot.

But as the Rev. Bill Adkins, a major ally in Herenton’s campaign of 1991 and co-founder of the ill-fated “Draft A C” movement, observed last week, “He really hasn’t done what he promised to do for black people. The truth is, on matters like minority contracting, he’s not even been as good as Dick Hackett was!”

Outlook: Though favored at the moment by prognosticators looking down track, Herenton fared no better than even with Chumney in the last major Wharton-less poll, taken the week before last for The Commercial Appeal by Ethridge and Associates. The mayor still has much to prove, even to his presumed hard-core base in the black community.

Carol Chumney: A maverick’s maverick, first-termer Chumney is, hands down, the most unpopular City Council member among her colleagues in city government, both on and off the council. More than once, she has put on the table a motion for an action or cause with more than plausible rationale, only to look in vain for a second. The most recent and telling case of this came back in April, when Chumney proposed a resolution asking Mayor Herenton to reverse course and accept the proferred resignation — initially rejected by the mayor — of the then beleaguered MLGW president Joseph Lee.

As so often before, Chumney’s motion failed for lack of a second. Accused by colleague Joe Brown of trying to advance her political chances and by member Brent Taylor of procedural irregularity, Chumney responded indignantly, “If I’m out of order, so be it!” A subsequent resolution by councilman Jack Sammons asking Lee to resign encountered racial-bloc voting and failed of approval by a single vote – Chumney’s. She had declined to vote for it on the technically correct ground that Lee had already tried to resign — or at least gone through the motions of doing so.

When Lee’s dormant resignation finally was accepted, on the heels of his misguided (and apparently misinformed) blackmail threat against an MLGW board member, the suddenly ubiquitous Nick Clark, Chumney claimed vindication. But the consensus among many neutral observers was that she had lost face — not just by virtue of her colleagues’ rejection but because she had appeared too unyielding and unwilling to consider compromise, that mother’s milk of consensus politics.

It is, of course, her very intransigence that has accounted for Chumney’s surprisingly high standing in the polls and for the fact that the former Democratic state representative from Midtown draws cheers when she appears before government-bashing conservative groups anywhere in the city.

If Herenton has cast himself as the symbol of a long-suffering race, Chumney has succeeded in becoming the Joan of Arc of the disaffected. Moreover, she has genuine reformer’s credentials, having played a leading role in exposing and correcting child-care abuses while a member of the state House and, as a council member, taking damn-the-torpedoes positions against questionable, if long-accepted, practices in city government. A case in point was the now-vanished arrangement whereby only 12 years of city service entitled one to a comfortable lifetime pension.

Chumney can also take credit for go-it-alone probes that in the last year or two turned up evidence of the city’s fluctuating credit rating and its tenuous budgetary predicament.

Jackson Baker

Mayoral candidate Carol Chumney: Joan of Arc of the disaffected?

Outlook: Though boosted by a grass-roots network of sorts and by recent trends that arguably favor female candidates, all other factors being equal, Chumney seems doomed to run a cash-poor campaign, and though her unquestioned ability to garner free media will help her in that regard, her long-range prospects among black voters remain a mystery, while at the same time she has real competition for the city’s white vote.

Herman Morris: Once a star scholar and athlete and, in his adult years, a man of considerable professional attainment, this up-from-humble-origins success story has found himself cast all too often as a contemporary member of what used to be called “the black bourgeoisie.” This is despite a long early history of legal and political activism on behalf of civil rights causes and candidates.

Morris’ reputation in the public mind is largely fixed from his seven years’ service as president of MLGW, an important (and, these days, crucial) administrative venue that depends disproportionately on behind-the-scenes activity, even more so than other appointed positions of less obvious public urgency. Even in moments of crisis — like the “Hurricane Elvis” windstorm of 2003 — it is elected officials, notably the mayor, who bear the brunt of public attention.

Until this year, when he followed through on a long-nursed ambition to run for mayor — at least partly, many think, to atone for what he regarded as ill treatment by Herenton — Morris was mainly known for the falling-out with Herenton that led to his ouster from MLGW in late 2003 or for the supposed “golden parachute” that, perhaps unfairly, he was considered to have left with or perhaps even for his championing of utility investments, including the now-controversial Memphis Networx, a public/private fiber-optic venture that is popularly believed to have been a financial bust and is on the verge of being abandoned, at a fire-sale price, to a private financial concern.

Morris is the kind of public figure who requires careful scrutiny to properly “get” him, and the same is apparently true of Networx, which, in February of this year, long before the taxpayer-funded investment became an issue, newly announced mayoral candidate Morris made a point of publicly touting. Indeed, in an age in which Memphis is encumbered by a “connectedness” gap (see Editorial, p. 16), Networx might, as the Flyer‘s Chris Davis has suggested in a series of articles, have been the foundation of a viable public utility in its own right.

If Morris is to succeed in the politics of this year, however, he has to stake out some basis for popular appeal. He is funded well. This month’s disclosures showed him well into the six figures — though still considerably below the half-million dollars and up that Herenton has in cash on hand. Morris’ voter support, too, has so far depended largely on affluent sectors of the community and on Republican sources as much as on Democratic ones.

With that need in mind, we may be treated to further quirky moves like Morris’ recent demand that other candidates join him in having drug tests — a patent play to so far wholly unsubstantiated rumors concerning the incumbent mayor.

Outlook: With his mixture of black and white support, based disproportionately in the middle class, Morris may well turn out to be the default anti-Herenton candidate, but his long-term prospects depend on further progress in what has been a slow evolution from his naturally reserved private persona into the kind of glad-handing bonhomie type that a mayoral race requires.

John Willingham: What can we say that we have not said many times already about this gallant and largely misunderstood public figure, to whose gadfly-like prodding of the governmental structure the public owes much — not only in the realm of exposing abuse (à la the now-notorious FedExForum deal, private garage and all) but in the determined venting of alternate public courses, like Willingham’s various proposals for serious tax overhaul?

Willingham has a reputation in too many quarters as a crank, though he overcame it big-time with his upset victory in 2002 over an establishment pillar, the late Morris Fair, to become a member of the Shelby County Commission. That triumph was owing to Willingham’s becoming a channel for massive discontent over the way public funds were used, sans public consent, to bait the Grizzlies into relocating to Memphis.

Forced into an ill-advised race against Shelby County mayor Wharton in 2006 by his correct perception that too many forces, financial and otherwise, were committed to defeating his bid for reelection to the commission, Willingham is once more a private citizen, and, unfortunately for his electoral prospects, even many of his veteran well-wishers have written off his chances, casting their lot with other candidates. His devoted but long-suffering wife Marge has made no secret of her wish that her husband would cease and desist from his flirtations with public office, especially now that his chances seem so slim.

But he is still there, for one more Revere-like ride, it would seem, passing out pamphlets showing he still has an ambitious eye for redesigning the public sphere (most recently to convert the much-pondered-over Fairgrounds into an Olympic Village).

Outlook: The ex-Nixon administration aide, multi-patented inventor and engineer, and well-known barbecue maven is the longest of long shots, eminently more qualified than, say, the unlamented Mongo, but in most quarters given no greater potential for success than the Zambodian would have had. Indeed, some longtime friends wonder if Willingham isn’t taking votes away from the other potentially viable challengers.

Whoever is destined to be mayor of Memphis after October 4th is guaranteed to be dealing with a City Council with a majority of newly elected members. That outcome was foreshadowed by accelerated attrition and by the wave of indictments for public corruption that swept aside two veterans, and it was made certain when council mainstays Tom Marshall and Jack Sammons, both of whom apparently considered mayoral runs themselves, opted out of reelection races just before filing deadline.

That means that such front-burner issues as what to do with the Fairgrounds (a legislatively vetted proposal from developer Henry Turley awaits possible implementation), whether or not to seek functional merger of the city police with the Sheriff’s Department, and how finally to dispose of the ghost facility known as the Pyramid (tomb of a previous governmental generation’s civic imagining) will all come under the purview of fresh eyes and — we are entitled to hope — fresh perspectives.

This new council and the newly elected (or reelected) mayor will also have the advantage and the challenge of dealing with recommendations for change by the Charter Commission that was elected last year and has dutifully and quietly gone about what could turn out to be momentous labors.

In any case, a new team will be taking the field, and the game of Memphis city government will almost surely take new and unexpected turns, no matter who the manager of record turns out to be.

Categories
Politics Politics Feature

Coming to Shove

As was noted here last week, momentum for a mayoral candidacy by Shelby County mayor A C Wharton — and pressure on that famously reluctant (or coy) official — has seriously intensified as the clock keeps on ticking toward next week’s filing deadline.

Things were patently coming to a head with the public emergence of a “Draft A C” movement led by, among others, the Revs. La Simba Gray and Bill Adkins. Despite Mayor Willie Herenton‘s attempted dismissal of the effort, and of the two African-American ministers as relatively unimportant figures motivated by “personal” or even mercenary reasons, the fact is that both had once been key members of Herenton’s political team.

Adkins especially was a major force in the epochal first race by Herenton in 1991, relentlessly proselyting for the then “consensus” black candidate on his daily radio show.

These days, neither Adkins nor Gray is regarded as necessarily “first tier” among African-American leaders, though Gray made a serious effort to become so last year in his sponsorship of forums designed to produce a single black candidate around whom other blacks might cohere.
No such figure materialized in a race ultimately won by then state senator Steve Cohen. But if Wharton, who agreed to meet with his newly energized suitors, ended up saying yes to their entreaties, there would be no need to look further to find consensus, and the resultant combination of African-American forces with a business community already avid for A C to run was bound to be a first-tier effort.

In famous lines by T.S. Eliot, the poet’s probable stand-in, J. Alfred Prufrock, opined, “I am not Prince Hamlet, nor was meant to be.” Well, A C was meant to be. And it has to be remembered that in the play Eliot was referencing, Hamlet does finally act.

Meanwhile, other mayoral candidates were increasingly making themselves available. Several hopefuls were scheduled to appear at a Tuesday night meeting of the Southeast Memphis Betterment Association at Asbury Methodist Church, including newcomer Randy Cagle and, er, oldcomer Robert “Prince Mongo” Hodges.

Among the promised attendees generally acknowledged to be “serious” challengers were council member Carol Chumney, former MLGW head Herman Morris, and former Shelby County commissioner John Willingham.

Scheduled to make what would seem to be his first public appearance as a candidate for mayor was former FedEx executive Jim Perkins, who is the unknown quantity of the mayoral race so far. Perkins reportedly has a million dollars of his own money to spend on the race, and that fact alone has been enough to encourage speculation that he might figure significantly in the outcome.

Coincidentally, Tuesday happened also to be the deadline for candidates’ filing disclosures for the second quarter of the year, just ended. Preliminary indications have been that candidate Morris will show cash on hand in the six figures, with Chumney lagging behind, and Willingham pulling up the rear.

Meanwhile, Willingham is doing what he can to engender what, in our time, is rather quaintly called “free media” (i.e., news coverage).

At a recent meeting of the Southeast Shelby Republican Club at the Pickering Center in Germantown he used the club’s traditional “introduce-yourself” round asked of all guests by delivering what amounted to a campaign address that was standard Willingham.

Contained within it was a litany of the maverick former commissioner’s sworn foes — including old ones like establishment Republicans David Kustoff, Kemp Conrad, John Ryder, Maida Pearson, and Alan Crone, all former party chairmen who announced their support of his then potential 2006 commission opponent, Mike Carpenter, early enough to help persuade Willingham out of a reelection race and into one for county mayor.

But there were some new names, too — prominent among them Bruce Saltsman, former governor Don Sundquist‘s transportation commissioner, whom Willingham, without further explanation, held liable for the “shenanigans” of the now suspect FedExForum deal. And the former commissioner intimated he knew of dark deeds committed by some well-known developers.
But all of this would definitely play second or even third feature to the potential restaging, right here in River City, of Shakespeare’s most famous play.

Categories
Cover Feature News

Unplugged

Talk about your bitter ironies. Days after MLGW announced that it would eat a multimillion-dollar loss and sell its 49 percent share in the public/private telecom venture Memphis Networx, subscribers to Business Week were reading all about the telecom industry’s triumphant comeback.

The magazine’s cover story — “Telecom: Back from the Dead” — cited a growing body of research indicating that investments in high-speed communications play a more vital role in “stimulating economic growth and productivity” than money spent on “roads, electricity, or even education.” If all of this is true, how can MLGW even consider dumping its $29 million investment in Networx for the paltry sum of $994,000?

At least part of the answer can be found in the third paragraph of the story, in which Business Week cites the example of a video clip being uploaded in New Jersey. The video exits Google by way of Level 3 Communications’ 47,000-mile fiber-optic network, is then “handed off” to a “new fiber loop” run by Verizon, and “milliseconds later,” the video is showing in an apartment in New Brunswick. What does any of this have to do with Networx? Plenty.

Communications Infrastructure Investments (CII), the Colorado-based holding company that’s trying to buy Memphis Networx for $11.5 million, was founded by Dan Caruso, a founding executive of Level 3 Communications. Caruso is also the former CEO of ICG Communications, which Level 3 bought out in 2006, adding 2,000 miles of fiber in Colorado and the Ohio Valley to its already substantial holdings.

ICG’s backers — Columbia Capital and M/C Venture Partners — picked up $30 million in cash on the deal and $127 million in Level 3 stock. Columbia Capital and M/C Venture are two of the five venture-capital groups backing Networx’ potential buyer, Communications Infrastructure Investments.

The bottom line? Big venture-capital money is being invested in telecoms again. And it seems likely that Memphis Networx fiber-optic cable is destined to become just another piece of the increasingly valuable conduit for moving YouTube clips of bathtub farts and nipple slips from Google central to your computer.

If you build it …

In the film Field of Dreams, Iowa farmer Ray Kinsella (played by Kevin Costner) was told famously, “If you build it, they will come.” The analogy isn’t exact, but Memphis Networx built a broadband fiber network for Memphis, ran out of money, and now “they” — in the form of venture-capital communications companies — are coming.

It’s important to understand that the telecom failures of 2001 — the year Memphis Networx became operational — represent the largest industry crash since the Great Depression. The spectacular decline has been blamed, in part, on overaggressive investment in expensive infrastructure. And now, holding companies like CII and American Fiber Systems can acquire and resell ready-made infrastructure systems and customer bases of companies like Networx for a fraction of the build-out and maintenance cost.

“It’s interesting to me that [Networx] is where it is,” says Herman Morris, the soft-spoken mayoral candidate who served as president of MLGW when Networx was created. “It’s an asset that’s been built out with 50 or 60 years of life left in it, and probably less than 10 and certainly less than 20 percent of that asset is being used.”

Morris asserts that in spite of Networx’ failure to turn a quick profit for its private investors, the company has already achieved its primary goal, which was to improve Memphis’ communications infrastructure by building an underground loop of high-speed fiber.

“When we got the loop, it took us from a third- or fourth-tier city in terms of infrastructure to a tier-two,” Morris says. “We’re not New York, clearly … but we were doing what we needed to do in terms of building an attractive component for businesses looking to relocate or expand here. It’s kind of like building out an airport so FedEx can expand its operations. And it was important that we weren’t the last city with an infrastructure that would serve the high-tech sector in the 21st century.”

Morris describes Networx’ public/private partnership as “a marriage of convenience” and says he knew on the front end there would eventually be a “divorce.” “Venture capitalists are high-risk investors,” Morris says. “They want big fluctuations [in market value], and they want to catch [the market] on a high. We were kind of like savings-bond investors. When you’re investing for 50 years, the investment doesn’t have to kick out more than 1 or 2 percent a year. That’s a good steady return, and stability is important.”

The big payoffs in this kind of investment, Morris notes, aren’t necessarily measured on a spreadsheet listing Networx’ profits and losses.

“When [a business] relocates to or expands its operations in Memphis, [MLGW] gets more revenue from old infrastructure,” Morris says. “From the wires, the pipes, and the gas.

“It’s not just that a company comes to town and folks get jobs and all that good stuff. The utility company now has a customer that instead of having a 200-square-foot operation has a 20,000-square-foot operation or a 200,000-square-foot operation. And that operation is filled with computers and air conditioners and all the things it takes to run a business. It’s not exactly a self-feeding system, but there is a lot of synergy.”

The wisdom of Morris’ decision to launch a telecom venture at a time when every market analyst was predicting a crash is debatable. But in spite of a marketplace burned by everything ending with “com,” Networx survived and grew at a reported rate that was at or above anticipated levels. The company showed a miniscule profit for the business cycle ending in 2005 and seemed to be on its way to making the 1 to 2 percent return that would have made Morris happy.

Small, slow profits, however, are less meaningful to the private investors who assumed a majority stake in Networx in 2005, when the City Council turned down MLGW president Joseph Lee’s proposal to secure a $6 million loan and prevent MLGW from losing its superior equity status in Networx. Now Networx is on the auction block, and Memphis is positioned to lose big in what appears to be a winning field.

City Council Concerns

Last week, MLGW’s board decided to remove the vote to approve Networx’ sale from Thursday’s board agenda. The decision was made to satisfy concerns raised by the City Council, particularly that the $11.5 million offer made by Communications Infrastructure Investments was not the highest bid. According to MLGW commissioner and Networx board member Nick Clark, the delay is risky but shouldn’t impact the deal.

The council’s concerns come in light of a odd arrangement between Networx and CII: that Networx’ sale price will drop by $1 million if the Memphis City Council gets too deeply involved in the process. And although he agreed to provide the council with requested information about the top companies bidding for Networx, Clark offered words of caution:

“It’s like when you’re selling a house,” he said. Tipping your hand on the low bids might give the winning bidder second thoughts about the asking price.

The council’s stepped-up interest in the Networx sale comes in the wake of last Tuesday’s news that American Fiber Systems (AFS) of Rochester, New York, claimed to have offered a bid for Networx valued at $13.5 million. And it was recently revealed that another company submitted a bid valued at $20 million.

Clark was mildly dismissive of the council’s concern, noting that the AFS offer included stock. He drew a round of knowing laughter from observers by comparing AFS’ stock options to promises made by Memphis’ all-purpose bogeyman Sidney Schlenker, the smooth-talking chiseler from Denver who sold Memphis on The Pyramid, a rideless theme park on Mud Island, and, predating a memorable episode of The Simpsons, a monorail.

But, Clark’s dismissiveness aside, the venture firms behind CII were quite pleased to receive $36 million and $127 million in stock when Level 3 bought Caruso’s ICG. The Rocky Mountain News reported that the venture capitalists behind CII acquired ICG for $6 million, along with the assumption of $100 million in debt, adding that the firms “stand to profit handsomely from the Level 3 deal.”

Prior to last week’s council meeting, Clark held a digital “press conference,” where traditional media and bloggers such as Richard Thompson of Mediaverse-Memphis were given equal access to e-mail questions.

But Clark’s explanations about how Networx lost so much value in so little time leaned heavily on private business concerns, without explaining MLGW’s failure to control the company’s inexplicable spending or to find a business model that served both the public and private interest.

The Business Model Ate My Homework

There were moments last week when Clark sounded like a CD with a nasty scratch. “The ‘business model’ was failing,” he said repeatedly. “We realized we had to change the business model” … “The business model had to change” … “Changes to the business model weren’t working.” Etc.

Until we understand what Clark means exactly when he references Networx’ various misfired plans, his explanation explains … well, nothing. Meanwhile, the City Council has to mull over a deal they can’t stop, concerning an investment they could never control.

Herman Morris

For eight years, Memphis Networx had a basic pass to operate without media and rate-payer scrutiny. The company kept some rather large decisions under the radar, specifically to avoid the theoretically watchful eye of the City Council. There was no announcement made when original Networx CEO Mark Ivie left the company in 2005. Nor was there any public announcement of Ivie’s replacement, Dan Platko.

Clark has described the tight-lipped approach as “fortunate.” He said the decision not to publicize the departure of Ivie was political in nature, citing “the longstanding concerns [about] Networx’ financial strength,” “the negative press [Networx] tended to receive due to MLGW’s ownership,” and “politics at City Council.” Clark said “the desire was for a simple transition in executive management.”

Clark further explained that Networx made Platko COO because he was already employed in the Networx sales division, and the board didn’t think it was financially in a position to search for or attract a potentially better candidate.

In comments at Mediaverse-Memphis, a blog that parses what local media is and isn’t reporting, Clark claimed that secrecy about Networx’ various misfires and misfortunes was probably in the “best interests” of the ratepayer. If “best interests” means MLGW taking a $29 million bath without any public oversight, he would be correct.

In 2005, Doug Dawson, president of CCG Consulting, studied Networx’ fair-market value, and his determination was grim. According to Dawson’s report, the company was overstaffed, overpaid, and overvalued.

“Wholesale companies in any industry by definition live on slim margins,” he was quoted as saying. “It’s the nature of being wholesale … and Memphis Networx pays about the highest commissions I have ever seen anywhere.”

But Networx wasn’t only secretive about its generous compensation packages and its excessive overhead. The company’s marketing strategy was also a catastrophe — one that did nothing to earn public confidence. It was a partly municipally owned company that ate truckloads of money while doing nothing to woo or wow the public — a recipe for political disaster.

In addition to spending issues, there are also questions about the zeal with which Networx approached some potentially lucrative business relationships.

Conversations with Clark revealed that Networx may have missed out on some big opportunities … or liabilities, depending on whom you ask. Clark confirmed rumors that had circulated throughout 2006, that Networx had been approached by Atlanta-based Internet provider EarthLink concerning a potential build-out and municipal wi-fi deal. This is relevant, particularly if the deal in question was anything like the recent partnership struck between Earthlink and Wireless Philadelphia, a not-for-profit organization committed to making Philadelphia the most wired city in America.

In October 2005, about the time Networx stopped communicating with the public, Earthlink signed on with Wireless Philadelphia to create the largest wireless network in the nation. Shortly thereafter, Earthlink started building a 135-square-mile wi-fi mesh connecting the entire city. Earthlink’s investment in the Philadelphia project has been valued at $15 million to $18 million.

Clark was cagey in his descriptions of how such a deal might have affected the value of Memphis Networx and how it ultimately fell through. He cited various competitors in the wireless market as a potential reason for cold feet on both sides. But Clark’s final concern is somewhat puzzling in light of recent news. According to Clark, there was some concern that if a deal was struck with Earthlink, that company or some other competitor might eventually try to buy Networx.

“The challenge [was whether or not] Networx could control the muni wi-fi system so it could profit, or would an outside entity just attempt to buy Networx on the cheap for the benefit of its fiber ring and not recognize value elsewhere.”

There’s one tiny problem with Clark’s answer: By the time negotiations with Earthlink broke down in 2006, the decision to sell Networx on the cheap was only months, if not weeks away. The decision to hire a private consultant to broker the deal had likely already been made.

Morris says MLGW “planned for the utility to be in the equity superior position and have a super-voice in the decision to continue operations or sell or to accept a new partner.”

Clark says finding private investors who want to answer in any way to a public utility is hard. He has yet to show that Networx ever actually answered to the utility in any meaningful way.

The Deal

There are a number of questions that beg to be asked before this deal goes down. What high-profile investors like Fred Smith and Pitt Hyde made or lost in the deal may turn out to be less important than the value Networx infrastructure may or may not have brought to FedEx and AutoZone at a time when nobody else would build such a network.

From a public utility’s standpoint, Networx’ ability to attract companies like ServiceMaster may reflect a more substantial loss than the $29 million MLGW has invested in the project. These are just some of the things both the media and the City Council need to wrestle with before MLGW’s board puts Networx’ sale to a vote on July 5th.

Perhaps all the suspicious behavior surrounding the sudden anouncement and haste of the Networx sale amounts to nothing more than the death throes of a failing venture struggling to find a quiet exit strategy. But telecoms are back, MLGW is out, and such a spectacular crash couldn’t have come off better if it had been planned.

Categories
Politics Politics Feature

Still in the Game

It would seem that mayoral candidate Herman Morris, whom some have sought to write off, remains a force to be reckoned with.

A generous crowd of attendees turned out for the former MLGW head at a Racquet Club fund-raiser May 24th, where Morris showed off his gracious wife Brenda and his two academically excelling sons. He may have over-promised somewhat, though — calling himself the only potential mayor “with a real first lady.” John Willingham, for one, has a potential “real first lady,” and so, presumably, do many of the 14 or so others in the race.

Even so, Morris has served notice that he’s in the mayor’s race for the long haul, with at least a chance to be regarded down the line as the major alternative to incumbent Mayor Willie Herenton. (That presupposes a foldo from City Council maverick Carol Chumney, though — and that’s not guaranteed to happen.)

Morris’ chief liability would seem to be that he isn’t entirely comfortable while greeting individuals or crowds. As his handlers say, though, there’s time — four months plus — for Morris to grow into the role.

The fund-raiser was the second of two timely events scheduled for challenger Morris last week. The first was a Tuesday night appearance with Willingham in a unique two-candidate mayoral forum sponsored by the East Shelby Republican Club.

The crowd at Pickering Community Center in Germantown (strange place that, for a Memphis mayoral forum!) seemed somewhat predisposed to Willingham, a longtime club member himself. The former commissioner, who is given to verbal prolixity the way Britney Spears is given to nights out, profited from the one-minute-per-answer rule imposed by moderator Stan Peppenhorn.

Another reason for his relatively strong showing was that Willingham, no fool despite his sometime air of eccentricity, knew the subject matters asked about in greater detail — whether they concerned governmental subjects at large or Willingham hobby-horses like the FedExForum “Garage Gate” scandal which he did as much as anyone to uncover.

Morris came off as able and responsive, though his answers were generally delivered in over-broad outline, even in the case of a brief discourse on the utility he once headed.

Sometimes that penchant worked to his advantage, as when he began an answer to a question about prospective new taxes by saying, “We don’t need any.” (Really that’s all his audience wanted to hear, and any explanation as to why that was the case was so much icing on the cake.) Similarly, Morris deftly dispensed with a question about term limits with the line: “Good idea. Three terms too late!”

Quips, Ideas, and Red Flags: The most intriguing new idea came from Willingham, who indicated that it might be “worth it” to look into public financing of an on-campus football stadium for the University of Memphis if the school and the state of Tennessee could provide as much as two-thirds of the funding. Morris seemed more open to a Fairgrounds site at some point down the line.

All in all, though, Morris may have done what he needed to for the long haul of a race that, after all, ends in October. His very reason for being there was to indicate to the attending Republicans that he was amenable to their concerns — a point reinforced as well by the presence of his co-campaign manager, party veteran John Ryder. (The other co-chair is former officeholder Minerva Johnican, a longtime Democrat.)

And though Shelby County Republican chairman Bill Giannini has publicly said there was “no chance” that Morris would get an endorsement from the local GOP, the chairman has also asserted that there was “no chance,” either, that Willingham could get elected — a belief widely held in political circles, even among members of Willingham’s own circle.

An End-Game Strategy: Under the circumstances, Morris needs only to hold on long enough — meanwhile building up name identification, credibility, funding, and support — to become identifiable in the public mind as the logical alternative to incumbent Mayor Herenton, who polls suggest is plumbing the depths of unpopularity right now.

Presupposing that there is no bounceback for Herenton (which cannot be ruled out), Morris’ hopes depend largely on a stall developing in the campaign of Chumney, who was the leader in early mayoral polls but whose go-it-alone reputation may at some point cost her.

In any case, the Willingham-Morris mano a mano — ridiculed in some quarters for not being more inclusive — served its purpose as a friendly intramural sparring match, put on for the edification of Republicans looking for a candidate to get behind. One note of caution for both men: One influential Republican commented afterward that Chumney, who has a following among grass-roots sorts alienated from politics as usual, might get as many GOP votes as “both these guys put together.”

STATE POLITICS

“Tired Blood”: Another legislative week begins with the ever-surprising saga of state senator Ophelia Ford unresolved, and, as things now stand, unlikely to be.

After weeks in which her chronic absenteeism from the ongoing legislative session in Nashville and a mystery illness were the main facts discussed about her, Ford made up for lost time in the last couple of weeks with some conspicuous acts of commission.

There was her odd performance week before last in a subcommittee hearing on the Department of Children’s Services’ handling of investigations into child deaths. Ford, member of a family known for its funeral home business as well as for its total immersion in politics, may have mistakenly chastised the DCS for negligence in the matter of death certificates (not a departmental concern), but it was her manner, seemingly both confused and overbearing, that gave rise to doubts about her sobriety.

When the senator was hospitalized the next day after falling off a bar stool in her Nashville hotel, those doubts were magnified, especially when brother Joe Ford, chairman of the Shelby County Commission, talked of a likely alcohol problem and proposed to journey to the state capital personally in order to get his sister into rehab.

Nor was that all. Next a Nashville cabbie complained of being manhandled by an “intoxicated” Ford, though the driver has declined so far to press charges.

For all that, Senator Ford’s situation seemed to have stabilized as this week got under way. Denying an alcohol problem, she issued a statement attributing her recent problems to clinical “anemia,” which she also described by the popular name “tired blood.” She also insisted that she intended to continue serving in her office, at least until the election year 2010, and meanwhile Commissioner Ford apparently dropped his rehab plans.

One factor in staving off a more drastic resolution is the fact that Ford’s vote could be crucial in determining the outcome of several key issues as the legislature winds down this week and next. Senate Democrats were of no mind to sacrifice one of their own, and Senate Republicans were not pressing the issue.

Kurita resolution advances: Having passed the first major obstacle by getting a favorable vote on her proposal to elect Tennessee’s constitutional officers in her own chamber last week, state Senate Speaker Pro Tem Rosalind Kurita hopes to gain approval by the House this week.

If successful, she would then need to get two-thirds approval in both bodies next year in order to put the proposal, in the form of a constitutional amendment, on the statewide general election ballot in November 2010. The offices affected would be lieutenant governor, attorney general, treasurer, comptroller, and secretary of state.

While visiting Memphis the week before last, Governor Phil Bredesen took a stand against the proposal, contending that in all instances (save, possibly, the office of lieutenant governor) the proposed change would put the affected officials under too much direct pressure from “special interests.”

In any case, Kurita’s success so far was a counter of sorts to the fact that key Senate Democrats still resent her vote in January in favor of Republican Ron Ramsey as Senate Speaker and lieutenant governor.

Down to the Wire: Voters in state House District 89, centered on upper Midtown, go to the polls this Thursday to determine the winner of two special primary elections.

Democrats choose between Kevin Gallagher and Jeanne Richardson, each of whom — to judge by endorsements and turnouts at their events — would seem to command a decent-sized share of the party base.

Two relatively unknown Republicans — Wayne McGinnis and Dave Wicker Jr. — vie for their party’s nomination.

The two winners will compete in a special general election on July 17th. — JB