Tag: political

Categories
Opinion Viewpoint

Don’t Complain. Pitch In!

As a commissioner, I am saddened when I hear blanket, broad, and baseless attacks from people concerning the Memphis City Schools (MCS). I was especially disappointed to read the comments of former city councilman John Vergos (Viewpoint, “Time for a School Takeover,” June 21st issue), since I would expect a former public officeholder to help educate our community on the challenges public officials face when trying to run any large urban government entity.

I certainly would not expect a former officeholder to misspeak so terribly. While I dare not point out each instance, I would be remiss if I did not address some of his blunders.

First, while Mr. Vergos attempts to compare the budgets of the city and the school system, he overlooks the fact that MCS has 16,500 employees (half of whom are teachers), versus the city’s 6,700. Since its work force is more than twice the size of the city’s, isn’t it logical that MCS would have the larger budget?

Further, Vergos opines that MCS is not fiscally responsible and attempts to illustrate as much by pointing to two projects that amounted to less than 3 percent of the budget (using his numbers). In addition to being just plain wrong (the nutritional center he mentions has only cost the district $2.8 million to date and is a revenue-generating venture), Mr. Vergos’ arguments are completely illogical.

He fails to acknowledge that people are about 85 percent of the MCS budget — that’s the principals, teachers, other instructional staff, and administration.

Perhaps Mr. Vergos has been out of the loop since 2003 when he was last on the City Council, but over that time MCS cut $55 million from its operating budget. Thus, we do not have much flexibility in our budget, and to suggest we would be more fiscally sound by forgoing projects that amount to less than 3 percent of the budget — including one that is actually generating revenue — is absurd.

Finally, Vergos states that while the MCS budget has consistently increased, the performance of the district has rapidly diminished. A look at the performance data of the system proves otherwise. This data is neither buried nor manufactured, as Vergos implies. Be assured, we do not have our heads in the sand. We know we still have a lot of work to do.

However, we can no longer sit quietly by while some people in this community continue to berate, degrade, and insult MCS with no real foundation or basis for their sentiments. Contrary to what Vergos says, MCS is not broken beyond repair. We have great administrators, principals, teachers, students, and parents who work hard every day to make our schools successful.

We have National Blue Ribbon schools and students who are National Merit Scholarship semifinalists; we have outnumbered all other systems in the state with the number of National Board certified teachers; we have increased the graduation rate over the last three years; and several of our schools have made vast improvements in student achievement. We have plenty to be proud of.

If people in this community would spend as much time constructively assisting us, we could do much more. Communities that have great schools do so because the entire community decided that the schools would be great. The people and businesses in the communities with successful schools believe in the system, they support the system — they don’t spend all of their time with destructive comments that do more harm than good.

You would think a former elected leader of this community would be outraged that the governor would threaten to take over MCS. This would not just be an indictment of the school board, but of us as a community for allowing it to happen. If nothing else, that possibility alone should make people decide that enough is enough and that it is time for us to take 100 percent responsibility for our school system, whether one has students in the system or not.

MCS has the structure and many ways for people to get involved — through the Our Children Our Future tutoring program, through the Connect mentoring program, through Adopt-a-School partnerships, and through simply showing up at a school and letting the principal know you want to do your part. (Note: You will need a background check.) Those simple actions will make a huge difference.

In the words of Forrest Gump: “That’s all I got to say about that!”
Tomeka Hart, an attorney and president and CEO of the Memphis Urban League, is a member of the Memphis school board. This essay is adapted from her online response to John Vergos’ Viewpoint column.

Categories
Editorial Opinion

Rush the Judgment

Ordinarily we favor patient deliberation in the pursuit of justice — particularly when, as in the case of the current special investigation into charges of a blackmail plot against Memphis mayor Willie Herenton, there are political implications involved. But since there is a mayor’s race on, and especially since this year’s city election is shaping up to be as epochal in its way as the one in 1991 which first elected

Herenton, we incline to the view that we as citizens are entitled to the equivalent of a speedy trial. Once so distant in our mind’s eye, the filing deadline for mayoral candidates and other city candidates — July 19th — is now almost upon us.

Given the gravity of our political situation — a City Council decimated by charges of corruption, a growing schism between the community’s economic leadership and the mayor’s office, a sense of civic confusion symbolized by the entangled Networx and MLGW dilemmas — this is one case in which due process could morph into “long overdue.”

There are two questions in particular that special prosecutor Joe Baugh should quickly get to the bottom of: 1) Was there a “blackmail” plot or any other criminal enterprise of the sort charged by Herenton in his bizarre press conference of some weeks back? 2) Has there been a legitimate ongoing investigation by law enforcement authorities into improper relationships between city officials and topless clubs or similar enterprises?

It seems clear now that answering those two questions would not constitute the be-all or end-all of everything we need to know politically or, for that matter, the completion of an investigation into possible corruption and illegalities. But having some sort of reliable focus on those two issues is crucial to our ability to shape our own destiny this election year.

We understand the unlikelihood that Baugh can provide those basic preliminary answers in the next two weeks. Depending on what he might say, accusations of haste or political slanting or whatever might well come from this or that quarter and become embedded in the dynamics of the campaign. It is far more probable that the special prosecutor could speak with completeness and authority at some later point before the October 4th general election itself, and that, too, would be worth something.

But we think some earlier resolution, before July 19th, is worth the risk. It should be possible, at least in partial or general terms, to provide some guidance to the community on the two indicated issues. Putting it bluntly: There is reason to believe that the mayoral field is still incomplete, and there is a definite “need to know” on the part of major candidates still meditating on whether their candidacies would be matters of genuine urgency for Memphis itself and for the city’s greater metropolitan area.

Let us say too: What we have learned in the last couple of weeks about private interventions into the public weal has been disquieting. We don’t doubt, for example, that Nick Clark is motivated by religious conviction in his concern about topless clubs. But there are aspects to his own freebooting investigation that smack of vigilantism and commercial self-interest. What we need, as quickly as possible, are public answers to public questions from a duly constituted public source.

Categories
Politics Politics Feature

One Mayor’s In

CREDIT: Jackson Baker

Willie Herenton made it official Tuesday. At the stroke of noon — surrounded by a medley of supporters, reporters, and the curious throngs that only a longtime officeholder of his stature (and none of his opponents so far) can command, a smiling mayor showed up at the Election Commission, wrote out his check, turned in his reelection petition, acknowledged his supporters, and named his adversaries.

In no particular order, they were the media, the power establishment, assorted plotters and schemers, and almost as an afterthought, his declared ballot opponents. Herenton was asked if he thought that any “major” opponents were yet to declare. (That was code for his longtime friend and governmental counterpart, Shelby County mayor A C Wharton.) “It doesn’t matter,” he boomed out, as a surrounding crowd cheered his confident declaration.

And it may not matter. But there is a general feeling now, with two weeks to go before the July 19th filing deadline, that the best bet — some think the only bet — to turn the mayor back from gaining a fifth four-year term is Wharton and that the county mayor is running out of temporizing time.

It seems clear that he must in very short order either declare his candidacy, risking an old friendship with the man whose campaigns he has more than once been the titular manager of, or make an unambiguous statement renouncing any possible shadow of ambition to move his mayoral chair across the downtown government mall to City Hall.

What is known is that Wharton has been tempted to run, but that, besides his native reluctance and his loyalty to Herenton, he fears a bitter campaign in which he ends up being mauled by his old friend, a former pugilist who has never been prone to pull any punches — in the ring or out.

It is further known that Wharton — or someone acting on his behalf — has researched various questions of governmental protocol, including the key one of whether he could run for one mayorship while occupying the other or even hold both offices at once.

Meanwhile, the rest of the field went on doing its collective thing:

Earlier in the week, former MLGW head Herman Morris perceptibly stepped up his schedule, appearing at a meet-and-greet on Wednesday, followed by a fund-raiser before an audience of lawyers on Thursday.

At the latter event, held at the University of Memphis-area Holiday Inn on Central, Morris pointedly condemned political appeals to “racial divisiveness,” an apparent reference to what many observers saw as a central element of Herenton’s now famous “blackmail plot” press conference.

It is now clear that Morris and his supporters are staking their hopes on his prospects of appealing to both black and white voters and thereby becoming the legitimate default candidate for those seeking an alternative to a continuation of Herenton’s tenure.

Jackson Baker

Mayor Herenton

As the leader in early mayoral polling, City Council member Carol Chumney, of course, wasn’t conceding anything. She too accelerated her campaigning over the last week, following up a Monday-night appearance before the Germantown Democrats with some extended shmoozing at Thursday night’s weekly “Drinking Liberally” event, held at the Cooper-Young bistro Dish.

Finally, on Saturday night, Chumney invited supporters to the Memphis Showboat for what she called a “kickoff” of her campaign. (For once, given the venue, the term “launch” might have been more appropriate.)

Chumney read a lengthy statement in which she noted the panoply of reformist positions and independent stances that have gained her a substantial following. Especially prominent in her audience Saturday night were a group of environmental activists.

Nor was former Shelby County commissioner John Willingham inactive. Appearing at Tuesday night’s meeting of the East Shelby Republican Club at the Pickering Center in Germantown, Willingham made the most of a brief cameo appearance before the main address by state representative Brian Kelsey, espousing a disdain for the city’s “power elite” that may have transcended even Herenton’s in its intensity.

Of James Perkins, the retired FedEx executive who is reputed to have a million dollars to load into a campaign, not much is yet known. His campaign so far remains invisible, and, to the electorate at large, so does he.

The fact remains: In the field as constituted so far, only Willie Herenton is a creature of genuine sturm und drang. Only he has demonstrated the dramatic potency that, beyond all issues and for better or for worse, can motivate a mass electorate.

What happens if Wharton does get in? Chumney insists that she will remain in the race and eschew a return to the District 5 City Council position, which three candidates — Jim Strickland, Dee Parkinson, and Bob Schreiber — now seek. Morris insists that he raised enough money and support to go the distance, and no one doubts that Willingham will stay the course.

What the other candidates — or their representatives — all say is that they have displayed a resourcefulness that the county mayor has not. “It’s easy enough for him to just say no. Why doesn’t he?” is a common refrain. The answer to that, of course, is that he may yet give the alternative answer.

• A new physical principle has been discovered about the known universe, or at least about that corner of it occupied by the Shelby County Democratic Party. It is this: That the likes of Richard Fields can be gotten rid of — perhaps permanently — but longtime gadfly Del Gill is irrepressible and will return again and again — perhaps till the end of time.

Fields, accused by Mayor Herenton of being ringleader of a “blackmail plot” aimed at deposing the mayor, was the subject of two votes at last Thursday night’s monthly meeting of the local Democrats’ executive committee. First, his resignation from the committee — tendered in a letter to party chairman Keith Norman in which Fields blamed his departure on complications arising from “my present investigation of problems in Memphis” — was accepted by a 36-0 vote.

That vote, however, came only after Gill — yes, Gill — tried to move for Fields’ expulsion and was talked by Norman into tacking that motion on to the acceptance motion as a second stage. The reason: As Norman explained it, only the state party could rule on an expulsion; hence, Fields’ resignation had to be accepted first, lest some discovered technicality bind him forever to the committee, and to the party.

And that, Norman explained, was what nobody wanted. The chairman opined that “we should never have elected him back on in the first place” after Fields was forced off an earlier version of the committee in 2006 for working with Republican lawyers to overturn the election of Democrat Ophelia Ford to the state Senate.

Norman allowed himself some additional rhetoric to the effect that Fields was best gone forever — a point that Gill and others thought had been incorporated into the resolution of expulsion, which passed 27-6. Both Norman and party secretary David Holt said afterward, however, that the word “permanently” — heard frequently in discussion on Gill’s motion — was not involved in the final vote. The point may be moot; it is hard to imagine a third coming for Fields.

The real miracle was the return to the committee of Gill, who has his own detractors. That resurrection occurred when Gill, a perennial member who was not, however, elected at this year’s party convention, got nominated by the newly formed Memphis Democratic Club as its representative on the executive committee.

The Memphis Democratic Club is chaired by Jay Bailey, the lawyer who was defeated by Norman for the party chairmanship, and numbers other dissidents among its members.

Also returned to the committee was another longtime maverick, Bill Larsha, who was accepted as the representative of yet another newly formed dissident club.

• Even as all parties to the County Commission’s Juvenile Court controversy await the state Supreme Court’s verdict on whether it will adjudge the legality of the commission’s vote for a second judgeship, the commission itself has established an oversight committee for the court. Its chair? First-term member Henri Brooks.

Categories
Opinion

Why Herenton Will Win

Mayor Herenton filed his reelection papers Tuesday. He could still drop out, and more candidates can get in the race until July 19th. But assuming that he doesn’t and even if they do, here’s why I think he will win.

Winner Take All. Even if the polls are right and at least two-thirds of the voters don’t like him, Herenton only needs one more vote than the second-place finisher. Mathematically, he could win with 32 percent of the vote, like Steve Cohen did last year in the congressional Democratic primary. A Herenton hater who lives outside the city or stays home on Election Day doesn’t hurt him. The more challengers he has, the better he does. I don’t see a 2007 version of the 1991 convention that chose Herenton as the consensus black candidate. Polls that show Herenton losing in a head-to-head race with so-and-so are misleading because he probably won’t be running against one person.

The Numbers. Democrats from Harold Ford to Bill Clinton to Herenton win elections in Memphis by rolling up huge margins in scores of black precincts. Clinton actually won every vote in some precincts in 1996. If Herenton gets 80 or 90 percent of the vote in several precincts, he can beat a challenger whose best showing is 50 or 60 percent. Where are Herman Morris or Carol Chumney going to win 80 percent?

The Record and the Rhetoric. The mayor’s recent rhetoric about racial solidarity was a nice try, but his record doesn’t live down to it. He’s been a supporter of optional schools, downtown development, and occasional Republican political candidates. He has appointed way too many white division directors and police directors. As a black racist, he simply doesn’t cut it. Absent a consensus candidate and public repudiation by key business leaders, he’ll hold his own in East Memphis.

Snakes. As Herenton knew they would, members of the media took the bait and are acting like Nick Clark and Richard Fields are the ones running for mayor, not the four-term incumbent. Clark and Fields are not running for anything. Fields is an attorney. Clark is a businessman and member of the MLGW board. They don’t work for the city of Memphis. They don’t make a single appointment to a public board or government job. They can’t award a single no-bid contract. But Herenton, who has done all those things hundreds of times for 16 years, called them snakes and the chase was on. The mayor’s hint that unnamed snakes are still out there was so much more useful than confronting them head-on — as Fields, whatever you may think of him, did with Herenton in a three-hour meeting in March when he suggested he look for another line of work. How old-fashioned! The way to slur someone these days, as everyone knows, is anonymously.

Machine Politics. Taking a page from Boss Crump’s book, Herenton has appointed or assisted scores of friends and even some former rivals to city jobs. People like former school board member Sara Lewis, former City Council members Janet Hooks and Tajuan Stout Mitchell, and former mayoral spokeswoman Gale Jones Carson know how to campaign and win elections. Ordinary incumbency is an advantage, but 16 years of control over power, access, contracts, and jobs is an overwhelming advantage.

The City Charter reads: “No full-time employee shall engage in political activity, directly concerned with city government or any candidate for political office thereunder.”

That means no political phone calls, e-mails, letters, or strategy meetings on city time. But the ban is a paper tiger, more toothless than an ethics ordinance. “Uncovering” politics in a government office would be like finding mud in the Mississippi River.

Money. The mayor has more than $500,000 in his campaign fund even if he did only raise $1,650 in the first reporting period this year. By August, if he makes a few phone calls, he should have more than all his challengers put together. Chumney, at last report, had under $30,000. But Herenton managed to turn even that to his advantage by accusing the media of giving her free publicity.

Crime and MLGW. There is no simple solution to crime, and the latest numbers are running Herenton’s way. What do you propose to do differently if you’re Herman Morris or Carol Chumney or even, say, FBI special agent My Harrison? On MLGW and Memphis Networx, Morris was running the show for seven years, and there is plenty of blame to go around.

Categories
News The Fly-By

Dog Day

Bumpus Harley-Davidson on Whitten Road may be known for its motorcycles, but last weekend, it was all about dogs, not hogs.

As part of the fifth annual Dogs Deserve Better Chain Off, a small group of people spent Sunday chained to telephone poles and doghouses in front of the dealership. The event, which is held around July 4th each year nationwide, strives to bring attention to what organizers call the inhumane and unethical practice of chaining dogs.

“We’re trying to bring attention to a national problem,” said Ona Cooper, a representative of Animal World, a free monthly publication. “We want people to start thinking about this.”

The state recently passed an anti-chaining law, which went into effect July 1st. The law states that any person who knowingly ties, tethers, or restrains a dog in a manner that is inhumane, detrimental, or injurious to the dog’s welfare and prevents a dog from getting adequate access to food, water, or shelter commits an offense.

The Memphis City Council will also consider a citywide version of the state law July 10th. If approved, that ordinance will take effect September 4th.

At the protest, one woman tied herself to a telephone pole with a heavy chain used to tow cars. After linking the end of a towing hook to the chain to create a dangerous loop, she attached the chain to a collar around her neck and explained that she’d once found a dog tethered that way.

Overturned food and water bowls surrounded a doghouse and the chained humans. Cooper said this was to re-create situations in which dogs have been found.

Dogs Deserve Better says that chaining is detrimental to the welfare of dogs because they are pack animals. In the absence of other canines, humans become the dog’s pack, but a chained dog is essentially “rejected” from its pack. It then becomes very territorial, and according to Dogs Deserve Better, a chained dog is more than twice as likely to bite someone.

“People are tired of [chaining],” said Cooper. “What we’re doing will bring awareness now and legislation later. It’s time for things to change.”

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
Opinion Viewpoint

Here’s the Deal

A couple weeks ago, I attended the Bonnaroo Music and Arts Festival, courtesy of the Manchester, Tennessee, paper that carries my column.

Bonnaroo is an amazing series of concerts on a 700-acre farm between Nashville and Chattanooga. It is like an annual Woodstock, where hippies and hipsters go camping and watch top bands play for four days. I did not camp, however, because camping outdoors involves the outdoors, and in my opinion, the outdoors is best left outdoors.

I was initially told that Bonnaroo is a made-up word that means nothing, just like “lollapalooza” or “congressional ethics.” Later, I found out that “bonnaroo” is Cajun slang for fun. And it was.

There were lots of kids with nose rings and tattoos. Many were wearing bathing suits that they should have reconsidered. In fact, although I am steadfastly against more government, I really think some of these people should have to apply for a permit to wear a two-piece. Bill Clinton could chair the committee to review applicants; he’d like that.

One person died, and I am sure countless kids had to be untangled from making out with another joyous soul wearing a nose ring. There was more sex going on than Paris Hilton’s last night before jail. (I bet some attendees are checking their crotches this week, just hoping that itch is only a bug bite.)

As you might imagine, the Birkenstock crowd was there with booths supporting all their social causes. As best I can figure, they like to “raise awareness” in hopes that someone else will actually do something about the problems. It is apparently more noble to be an activist for grand-scale issues such as the environment than cleaning up your own campsite.

Anytime young music fans get together, there will be drugs. And the drug use at Bonnaroo was so open that if a kid was arrested with pot in his system, he could probably have asked for it back.

Drug vendors on foot offered a wide array of pot, coke, and acid for reasonable prices. Capitalism at its purest. Drugs were sold at a more competitive price than the prescription drug benefit Congress gave us, because at Bonnaroo, drug dealers were forced to compete on prices.

The way dealers at Bonnaroo operated is that when they walked by, they said the name of their product. You heard the word “pot” said by a passerby. If you wanted to buy said product, then — unlike our government’s drug purchases — you engaged the vendor in price negotiations. (And as with most of my purchases, the conversation began with: You ain’t no cop are you?)

Being one of the oldest people at Bonnaroo, I didn’t get many offers to buy drugs, although I was a little nonplussed when one dealer walked by and whispered, “Geritol.”

They also registered voters at Bonnaroo. Organizers assume the young people they register are going to vote for Democrats since most of the participants probably get their political views from the drummer for Third Eye Blind. This is the same drummer who rails against 10-cents-a-gallon profit for the oil companies yet has no problem selling his band’s T-shirts for $35 a piece.

One vendor said that he was for Hillary Clinton because Hillary would fight global warming. I told him that he might be onto something, since there is nothing about Hillary that is the least bit warm.

Another activist told me he was going to vote for Dennis (“Munchkin”) Kucinich because of his strong environmental stance. He kept citing the fact that some scientists say the oceans will rise four feet because of global warming, which explains why Kucinich is fighting it so hard: He would probably drown.

In the end, I must admit I really enjoyed Bonnaroo. I would advise other fortysomethings to try it. On one hand, the festival made you feel old, yet the vibrant and infectious carefree atmosphere made you feel young and rejuvenated.

And it reminded me that while getting old is inevitable, acting old is optional.

Ron Hart is a columnist and investor in Atlanta. He worked for Goldman Sachs and was appointed to the Tennessee Board of Regents by Lamar Alexander. His e-mail: RevRon10@aol.com.

Categories
Editorial Opinion

What Gives?

Three members of the Shelby County Commission cast votes Monday for a proposal that may be good politics but makes for unsound public policy. This initiative — for a five-cent across-the-board reduction in the county property tax — came from Wyatt Bunker, who represents the county’s suburban and rural edge and its ideologically conservative edge, as well.

According to Bunker, the proposal, if enacted, would have cut $8 million out of county revenues for the next fiscal year — although the commissioner maintains that such a cut would, sooner or later, raise revenues. Right. The same logic pursued by the relentlessly tax-cutting Bush administration has driven the national deficit to new historical heights.

Various of Bunker’s commission colleagues expressed exasperation with the proposal, especially since A) it came just after a tense debate concerning the commission’s need to divert wheel-tax money originally earmarked as operating funds for the schools into the county’s general fund, where it can be tapped for future capital improvements, and B) it followed weeks of a painstaking budgetary process, now concluded, in which every stray corner of county government was scrutinized for real or potential waste.

Yet, two other commissioners, fellow suburbanite George Flinn and Chairman Joe Ford of Memphis’ inner city, joined with Bunker in voting for the proposal which, had it passed, would have thrown county government back to square one in its financial planning for the next cycle.

What gives? Well, the legitimate needs of the taxpayers would have been first. As several commissioners pointed out, the needs of the schools would have come asunder, closely followed by law enforcement. It made a certain political sense for Bunker and Flinn to vote the way they did, since they represent (or believe they represent) constituents who favor tax cuts at all costs. But what was Chairman Ford, who normally balances policy and service needs with the legitimate requirements of fiscal solvency, thinking?

Ford, who must have known the discussion and the vote were pro forma, urged Bunker to reintroduce the proposal next year. Fair enough. At least that will give the commission enough lead time to reorganize fiscal priorities so as to facilitate such an across-the-board cut, if that’s what they regard as needful. Given Governor Bredesen’s success in imposing drastic cuts when he took office in 2003, we’re not saying the idea of an across-the-board cut is impossible. But the last time we looked, the governor was taking some criticism of policy changes (his gutting of TennCare, for example) that we regard as legitimate.

Property owners are surely entitled to relief and deserve consideration of the sort just awarded in Nashville, where state senator Mark Norris and state representative John DeBerry won passage of legislation authorizing the state’s local governments to enact limited tax freezes for seniors.

Those eligible in Shelby County are homeowners at least 65 years old with incomes not exceeding $31,549. That amounts to 59 percent of the county’s senior households and is consistent with Shelby County’s unique need for balance between revenues and services. When it can, the commission should act upon the new law. Anything more drastic will have to wait.

Categories
Politics Politics Feature

New Mayor, New Council?

CREDIT: Jackson Baker

Naming “crime, cronyism, and corruption” as major issues in this year’s mayoral election, candidate Carol Chumney addressed the Germantown Democratic Club at the Pickering Center Monday night, pledging if elected to “get a good team” in order to bring renewed efficiency to Memphis city government.

Subsequently, City Council member Chumney fielded at least two questions from the membership (which includes several Memphis voters who live in Cordova) about her reported difficulties with the mayor’s office and fellow council members.

One member asked: What about her “relation-building” and “leadership style”? Would these be obstacles?

Chumney responded that she had developed good relations with fellow legislators while a state House member for 13 years and said, “City government has been a little different because there’s been, quite frankly, some corruption. Many times I would be the only one who would stand up and say anything. Some folks are going to get mad at you. I’m a strong leader, I will tell you that.”

When another member followed up by asking if the City Council would back her proposals if she were elected mayor, Chumney said, “We’re going to elect a new City Council.” Noting the virtual turnover of membership in the County Commission in last year’s elections, she expressed confidence that city voters would follow suit. “It’s going to happen here. They’re going to vote in a new team.”

Pledging to renew cooperation between city and county law-enforcement agencies, Chumney said, “It’s disrespectful to expect the police to go two years without a pay raise while asking them to risk their lives for us.”

She repeated her objections to the Riverfront Development Corporation’s proposals, including the recently approved Beale St. Landing project, and called both for the city’s retention of the Coliseum and for “something classy” in the downtown Pyramid.

Chumney said she’d heard “disturbing rumors” about the past management of Memphis Networx and reported plans for its pending sale and promised “to get to the bottom of it.” She said the council’s authority over a prospective sale was uncertain but said she was seeking authoritative word on that from the state Attorney General’s Office.

• Germantown is becoming an important campaign venue for candidates running for office in Memphis. A week or so earlier, members of the Republican Women of Purpose organization heard a presentation at the Germantown Public Library from Brian Stephens, City Council candidate in District 2, the East Memphis-suburban seat being vacated by incumbent Brent Taylor.

Stephens has been active in an effort to strengthen laws regulating sexually oriented businesses (S.O.B.s in the accepted jargon) and specifically to make sure that veteran topless-club entrepreneur Steve Cooper does not convert a supposed “Italian restaurant” now under construction in Cordova into an S.O.B.

He discussed those efforts but offered other opinions as well, some of them surprising (a statement that “consolidation is coming, whether we like it or not,” for example) and some not (like his conviction, à la Taylor, that tax increases are not necessary for the city to maintain and improve basic services).

In general, Stephens, who seems to have a head start on other potential District 2 aspirants, made an effort to sound accommodationist rather than confrontational, stressing a need for council members to transcend racial and urban-vs.-suburban divisions and expressing confidence in the ability of currently employed school personnel to solve the system’s problems.

• Also establishing an apparent early lead over potential rivals is current school board member Stephanie Gatewood, running for the District 1 council seat being vacated by incumbent E.C. Jones. Gatewood’s fund-raiser at Fresh Slices on Overton Park Avenue last Thursday night drew a respectable crowd, and her membership in Bellevue Baptist Church on the suburban side of District 1 provides an anchor, in addition to an expected degree of support from the district’s African-American population.

• Last Wednesday night was a hot one for local politics, with three more-than-usually significant events, and there were any number of dedicated and/or well-heeled visitors to all three:

Residents of the posh Galloway Drive area, where U of M basketball coach John Calipari resides, are surely used to long queues of late-model vehicles stretching every which way in the neighborhood, especially in election season, when Calipari’s home is frequently the site of fund-raisers for this or that candidate.

But Wednesday night’s event, a $250-a-head fund-raiser for District 5 City Council candidate Jim Strickland, was surely a record-setter — outdoing not only Calipari’s prior events but most other such gatherings in Memphis history, including those for senatorial and gubernatorial candidates. A politically diverse crowd estimated at 300 to 500 people netted Strickland more than $60,000 for the night and brought his total “cash on hand” to $100,000.

Meanwhile, mayoral candidate Herman Morris attracted several hundred attendees to the formal opening of his sprawling, high-tech campaign headquarters on Union Avenue, the same HQ that, week before last, suffered a burglary of computers containing sensitive information — a fact that some Morris supporters find suspicious in light of various other instances of hanky-panky currently being alleged in the mayoral race.

Yet a third major political gathering took place Wednesday night, as Shelby County mayor A C Wharton was the beneficiary of a big-ticket fund-raiser at the Racquet Club. Proceeds from that one have been estimated in the $50,000 range — a tidy sum for what the county mayor alleges (and alleged again Wednesday night) is intended only as a kind of convenience fund meant for charitable donations and various other protocol circumstances expected of someone in his position.

Right. Meanwhile, Wharton declined to address the most widely speculated-upon subject in Memphis politics: Will he or won’t he enter the city mayor’s race? As the county mayor has informally acknowledged, he is the subject these days of nonstop blandishments in that regard, and there’s very little doubt that these have accelerated since a recent press conference by Memphis mayor Willie Herenton alleging “the 2007 Political Conspiracy.”

While some of Mayor Wharton’s intimates at the Wednesday night affair were keeping to the line that the chances of his running for city mayor were minimal to nonexistent, their answers to inquiries about the matter were delivered after what we’ll call meaningfully inflected pauses. The door may be shut for now, but it clearly isn’t padlocked.

Jackson Baker

Carol Chumney

NASHVILLE — The name McWherter, prominent in Tennessee politics for most of the

latter 20th century, will apparently resurface in fairly short order, as Jackson lawyer and

businessman Mike McWherter, son of two-term former governor Ned McWherter, is

making clear his plans to challenge U.S. senator Lamar Alexander‘s reelection bid next year.

Apparently only one thing could derail Democrat McWherter: a renewed Senate candidacy by former Memphis congressman Harold Ford Jr., who last year narrowly lost a Senate race to the current Republican incumbent, Bob Corker. “I don’t think I would compete against Harold. But I don’t think he will run,” McWherter said in an interview with the Flyer at Saturday’s annual Jefferson-Jackson Day Dinner in Nashville.

The 52-year-old activist sees Alexander as a slavish follower of President George W. Bush.

“With one or two exceptions, he’s done everything the president has wanted him to do. He’s toed the party line,” said McWherter, who has recently paid courtesy calls on ranking Democrats, both in Tennessee and in Washington, D.C., informing them of his interest in running next year and soliciting their support.

• Keynote speaker at the Democrats’ dinner in Nashville was presidential hopeful Bill Richardson, whose situation somewhat paralleled that of former Massachusetts governor Mitt Romney, who earlier this month had been the featured speaker at the state Republicans’ Statesmen’s Dinner, also in Nashville.

On that occasion, Romney — who had been invited before the entrance of former Tennessee senator Fred Thompson became likely — was a de facto lame-duck keynoter, and mindful of the attendees’ expected loyalty to favorite-son Thompson, cracked wanly, “I know there’s been some speculation by folks about a certain former senator from Tennessee getting into the presidential race, and I know everybody’s waiting, wondering. But I take great comfort from the fact than no one in this room, not a single person, is going to be voting for — Al Gore.”

That bit of verbal bait-and-switch got the expected laugh, and so did a joke Saturday night by New Mexico governor Richardson, who uttered some ritual praise of native Tennessean and former presidential candidate Gore and then, when the crowd warmly applauded the former vice president, jested, “Let’s not overdo it. I don’t want him in this race!” — JB

Categories
Opinion

Don’t Ask, Don’t Tell

Two things are troubling about the selection of Henry Hooper to replace Rickey Peete on the Memphis City Council:

First, the IRS assessed nearly $400,000 in tax liens against Hooper between 2000 and 2005. Second, Hooper didn’t volunteer this information and explain it to the council, and members didn’t ask him about it.

Hooper, agent/owner of State Farm Insurance and Finance Agency and a former United States Secret Service agent, was chosen to replace Peete for the remainder of the term that expires at the end of this year. It’s not clear yet whether Hooper will be a candidate in the October election.

Peete resigned shortly before pleading guilty in federal court last week to bribery charges. It is the second time Peete has been convicted of bribery in the performance of his public duties. He was indicted in December along with Councilman Edmund Ford. Ford has pleaded not guilty and is still on the council. Ford’s unpaid MLGW bills have drawn federal scrutiny and taken up hours of council time.

If there was ever a time for full disclosure of potentially embarrassing money matters, this is it. With Memphis at the center of the Tennessee Waltz, Main Street Sweeper, and MLGW investigations, this is no time for don’t ask/don’t tell. Hooper, who ran for sheriff in 2002 and the Shelby County Commission in 1994, is no virgin. The City Council, which is rewriting its ethics code, well …

The IRS assessed Hooper for $109,958 in taxes, interest, and penalties for 1998, $99,755 for 1999, $73,138 for 2000, and $113,112 for 2001. The assessments were in 2004 and 2005. The notice of a federal tax lien reads as follows:

“We have made a demand for payment of this liability, but it remains unpaid. Therefore, there is a lien in favor of the United States on all property and rights to property belonging to this taxpayer for the amount of these taxes.”

In an interview Tuesday, Hooper said the civil dispute involves a business trust and deductions which the IRS did not allow. He said he has hired an attorney and taken the case to tax court in Cincinnati. He said the investigation began when the IRS looked into an illegal offshore trust in which he was not involved, but the same people who set up that trust also set up his trust. He is hopeful of a settlement.

“Our trust was not illegal, but they were not going to let us deduct everything we wanted to,” he said.

He said he wasn’t trying to hide anything from the City Council.

“I was not under any legal obligation to go into a personal tax matter,” he said. “There has never been any question of my integrity at any time in my life. Now it becomes a question because somebody is trying to discredit me.”

He said the tax lien is “totally different from” Ford’s overdue utility bills because his tax issue is in court and there are no charges of favoritism.

On the resume Hooper submitted to the council, he lists his federal employment including the Secret Service for 24 years, six years with the Green Berets, and 22 years as an insurance agent and businessman. That was enough for council members. Jack Sammons said he learned of the tax lien after Hooper was chosen, but “it wouldn’t have bothered me” because it is not unusual for businesses to have IRS disputes that drag on for several years. “It’s sort of refreshing to be dealing with someone who has enough business to have a tax challenge,” he said.

Councilman Carol Chumney, however, said the tax lien should have been disclosed and “would have influenced my vote.”

The Secret Service, until 2003, was, like the IRS, a division of the U.S. Treasury. Hooper said he worked with IRS agents during his career.

Memphis politics is a forgiving business. Once you’re in the club, it’s a new day. It wasn’t only the voters in his district and his colleagues who embraced and forgave Peete. He was chairman of the board of the Center City Commission for five years and also served on the board of the Riverfront Development Corporation.

After pleading guilty last week, Peete stopped to shake hands and make a brief statement in front of the news cameras. Then he grinned and waved and climbed into an SUV. If you weren’t listening, it was hard to tell if he won or lost.

That was Rickey Peete. Henry Hooper is no Rickey Peete. He should take pains to make that clear.