From Jody Pickens, District Attorney General, 26th Judicial District RE: Report of the Tennessee Comptroller of the Treasury –

A report released today by the Tennessee Comptroller of the Treasury details an investigation into the business relationship between the City of Jackson and Jackson Baseball Club, L.P., better known as the Jackson Generals, a AA minor league baseball team. The report focused on the 2011 lease agreement between the City of Jackson and Jackson Baseball Club, L.P., specifically Article III (B) and Article IV (C) of said agreement that dealt with which entity was responsible for “stadium services.” The investigation reviewed the interplay between the two provisions, the manner in which a change in Article IV (C) was presented to the Jackson City Council, and payments that were ultimately made to Jackson Baseball Club, L.P. by the City of Jackson per the terms of the lease agreement.

The same report also detailed the results of their investigation into the 2016 contract between the City of Jackson and Waste Management, Inc. of Tennessee, specifically the provision of the contract that dealt with which entity was responsible for the collection of bulky waste in Jackson. The investigation focused on the practice of the City of Jackson of supplementing the collection of bulky waste by employing personnel and purchasing equipment for that purpose even though the terms of the contract made the collection of bulky waste the sole responsibility of Waste Management Inc. of Tennessee.

The comptroller’s report found that with respect to the implementation of the 2011 lease agreement, there were questionable management decisions, a lack of transparency, questionable budgeting and accounting, lack of oversight, and a lack of due diligence on behalf of the City of Jackson. With respect to the 2016 contract with Waste Management, Inc. and the City of Jackson, the investigators’ report found weaknesses on the part of the City of Jackson in the preparation of the bid documents, evaluation of bidders, voting process, and finalization of the solid waste contract. In sum, a review of the investigative report of the Tennessee Comptroller’s Office revealed questionable stewardship of taxpayers’ money within legal means but no evidence of criminal activity.

In considering whether a criminal statute was violated, the Office of the District Attorney General considered two offenses. Tennessee Code Annotated section 39-16-402, Official Misconduct, provides, in pertinent part:

(a) A public servant commits an offense who, with intent to obtain a benefit or to harm another, intentionally or knowingly:

(1) Commits an act relating to the public servant’s office or employment that constitutes an unauthorized exercise of official power;

(2) Commits an act under color of office or employment that exceeds the public servant’s official power;

or

(5) Receives any benefit not otherwise authorized by law.

The District Attorney General also considered Tennessee Code Annotated section 39-14-103, Theft, which provides, in pertinent part:

(a) A person commits theft of property if, with intent to deprive the owner of property, the person knowingly obtains or exercises control over the property without the owner’s effective consent.

In applying the findings in the report of the Tennessee Comptroller of the Treasury to the two statutes referenced above, the District Attorney General is charged with resolving the question whether anyone had committed “an act relating to the public servant’s office or employment that constitutes an unauthorized exercise of official power” or had committed “an act under color of office or employment that exceeds the public servant’s official power.” To answer this question, the District Attorney General reviewed the powers granted to the mayor in the charter of the City Jackson. The relevant provisions of the charter included the following:

Powers and Duties of the Mayor (Section 10)

• “The mayor of the City of Jackson shall be the full-time chief executive officer of the City of Jackson and all executive and administrative powers and responsibilities of the City of Jackson shall be vested in the mayor.”

• “The mayor shall sign all contracts on behalf of the city unless otherwise provided by law or ordinance or resolution of the council . . .”

• “The mayor shall have supervision and control of all property, improvements, facilities and employees comprising the recreational department of the City of Jackson and shall actively prosecute the development of a comprehensive recreational program within the City of Jackson.”

Authority of Council Acting for the City (Section 20)

• “It shall make or authorize the making of all contracts, and no contract shall bind or be obligatory upon the city unless either made by ordinance or resolution adopted by the council, or reduced to writing and approved by the council, or expressly authorized by

ordinance or resolution adopted by the council. All contracts and all ordinances, and resolutions making contracts, shall be drawn by the city attorney . . .”

Approval and Payment of Claims Against City (Section 35)

• “Routine payments for claims anticipated in the annual budget adopted by the council, or for claims resulting from a contract ratified by the council, or for remittances involving the investments or debt service payments of the city, need not be approved by the council but shall be allowed by the recorder administratively. Other payments in excess of ten thousand dollars ($10,000.00) must be approved by the council in open meeting.”

Thus, with respect to the inquiry into the relationship between the City of Jackson and the Jackson Baseball Club, L.P., according to the terms of the charter, the city council had the authority and responsibility to review and possibly approve the 2011 lease agreement that obligated the city to reimburse the Jackson Baseball Club, L.P. for certain expenses pursuant to Article III (B) and Article IV (C) of the lease. In addition, the former mayor had the authority to sign the lease, and the former city recorder had the authority to pay claims made on the City of Jackson based upon the term of that lease agreement.

Pertaining to the 2016 Waste Management contract with the City of Jackson, the report of the Tennessee Comptroller’s Office indicates the proposal made by Red River in its pursuit of a contract with the City of Jackson was less expensive than the proposal of Waste Management. The report also provides that during the bidding process, it was known by the City of Jackson that historically the collection of bulky waste had been supplemented by the city. Yet, ultimately the contract that was signed provided that the company that received the contract (in this case Waste Management) would be solely responsible for the collection of bulky waste. The preparation of the bid documents, evaluation of bidders, voting process, and finalization of the solid waste contract process therefore lacked transparency. Nevertheless, a lack of transparency does not rise to the level of a criminal violation.

If all bulky waste was not being collected by Waste Management as required by the contract, the City of Jackson potentially had several remedies at its disposal including demanding specific performance of the contract. The City of Jackson apparently chose instead to continue to supplement the collection of bulky waste as had been historically done. The additional supplementation cost the taxpayers of the City of Jackson $5,237,631.93, between August 2016 (the inception of the contract) through October 2019 (the beginning of the investigation).

Looking to the authority of the former mayor and the city council to contract with outside entities, a reading of Section 20 of the charter revealed that irrespective of the fact that the proposal and contract with Waste Management was more costly, the former city council had the authority to approve the contract, and the former mayor had the authority to sign the contract on behalf of the City of Jackson. The practice of supplementing the collection of bulky waste was arguably within the authority of the former mayor when viewed in light of section 10, paragraph 15 of the charter, which provides the following:

· “The mayor shall have responsibility for the enforcement of the laws, ordinances and orders relating to the public health and sanitation of the said city and all health officers and employees of the city connected with and under this department.”

Looking at the decisions that were made on behalf of the City of Jackson, after reviewing the expansive authority afforded the office of the mayor and the authority afforded the city council by the charter for the City of Jackson, the report of the Tennessee Comptroller’s Office, and the statute which defines Official Misconduct, it is the considered opinion of the District Attorney General that neither entity committed “an act relating to the public servant’s office or employment that constitutes an unauthorized exercise of official power” or committed “an act under color of office or employment that exceeds the public servant’s official power.” Thus, there can be no violation of the law regarding the criminal offense of Official Misconduct based upon the findings in the report.

Finally, the investigators with the Tennessee Comptroller’s Office attempted to determine if any illicit payments were made to anyone involved. Their research did not uncover any evidence of such. Thus, there is no indication from the report that there were any violations of Tennessee Code Annotated section 39-14-103, Theft.

Notwithstanding the findings in the report, in the interest of transparency, on February 1, 2021, a presentment was made to the Madison County Grand Jury for their review, and after due consideration of that presentment, the grand jury elected to take no action with respect to either investigation.

This summary attempts to answer the question of whether a criminal statute was violated based upon the report of the Tennessee Comptroller’s Office. It should not be taken as commentary on or approval/disapproval of the decisions made with respect to whether either contract in question was ultimately in the best interests of the taxpayers. The Office of the District Attorney General has no further comments on these matters beyond the content of this release.