More bad news for Mayor Ragsdale's office

Tue

Aug 7 2007

01:02 am

By: R. Neal

The KNS reports that Knox County is funding another local non-profit "linked" to Cynthia Finch:

Knox County is funneling hundreds of thousands of dollars in taxpayer money to a church-affiliated development corporation that’s linked to Mayor Mike Ragsdale’s community services director and is delinquent on its own taxes.

According to the article, the link to Finch is that the development corporation made a $33,000 grant to TennCorp, the other non-profit in the news that was founded by Finch and has offices in a building she owns and is run by her sister.

There was previous controversy regarding the health clinic, the lease, and even directions to the location. Somebody's going to have to start maintaining a flow chart to keep all these interconnected controversies straight.

Meanwhile, the KNS has Cynthia Finch in their sights and the County Mayor's office continues to circle the wagons. When will scandal fatigue set in?

Topics:

R. Neal's blog
Login or register to post comments

Has anyone noticed how quiet

Submitted by KnoxCitizen on Tue, 2007/08/07 - 6:00am.

Has anyone noticed how quiet Herb Moncier has been in all this? When Hutchison farts, Moncier files a lawsuit. Yet with all that's been happening, Herb hasn't found a thing to litigate about with regard to the Mayor's office. Could this have anything to do with the reason the Mayor's office willingly gave Moncier the Sheriff's financial records?

Are they working together perhaps?

Anybody remember the

Submitted by Bbeanster on Tue, 2007/08/07 - 8:53am.

Anybody remember the Briansblog team's great investigative work on this story?
(link...)

I'm not sure from whence

Submitted by Bbeanster on Tue, 2007/08/07 - 5:16pm.

I'm not sure from whence flows the sympathy for Finch, but IMO it is sadly misplaced. I've watched this woman demagogue for years, and am not the least bit surprised to hear that we've been subsidizing her sorority outings and her relatives' lifestyles. I first ran into her back in 1993 when I was contracted to write a booklet on racism in Knoxville for Project Change, and I thought it was a bit weird that the Project Change office was located in a building that she and her husband Kelsey owned (Kelsey, who at that time held the job that Tank Strickland has now, chaired the Project Change board of directors). This would be the same building that her sister runs her non-profit out of today.

I heard about the Hardy Clinic story last fall from sources at the health department who were chafing under Finch's supervision. Go back and read the email to Mark Jones (if you can decipher the grammar and spelling) and note its tone. This will get an idea of why she is so detested by employees there.

Here is the short version of what's happened: Knox County owned -- free and clear -- a nice building on Asheville Highway that housed the east side health department office and the Burlington Library. Ragsdale decides to move the library a block east to an old Walgreens owned by developer John Murphy, one of Ragsdale's golfing buddies. Murphy was losing money on the building, which he'd bought some years before.
Next, it is decided that the health department would move out, too, and take up residence in the old Hardy Clinic, a then-ramshackle old building on MLK. Owned by this church-run development company run by Mark Brown's cousing, David Walker, it needed considerable upgrading -- which was no problem at all, since the county footed the bill for the remodeling.
Meanwhile, the empty building on Asheville Highway was no problem, as per Dwight VandeVate, because it was to be sold for $1 million to somebody who'd be paying property and business taxes.
When auction day came, however, the building fetched $400,000 and the buyer was a church. So much for getting a million bucks for it. So much for generating tax revenue.

I'll leave the calculation of the cost of the whole series of transactions (including the lease agreement to Walker's operation) to those who like calculations more than I do -- but the bottom line is pretty damned ugly.

Following up

Submitted by Tamara Shepherd on Wed, 2007/08/08 - 10:59am.

(Didn't mean to appear to ditch this conversation or ignore your comments, Betty. I had a picnic at the middle school and a PTA meeting at the high school last night.)

I think you're probably right that a little scrutiny of the previous costs incurred and income recognized, prior to and at the time of the Asheville Highway site's auction, is warranted. After all, that's essentially the "other half" of this transaction, and it impacts the net financial viability of the relocation decision.

As to Finch personally, I've never met her, but even if I had, I'd be content to leave personality traits, including possible demagoguery, out of my analysis of this decision's financial and societal benefits. Same goes for any unrelated transactions Finch and others may have been involved in 10 or 15 years ago. I'm having enough difficulty collecting the facts on a one-current-scandal-at-a-time basis...

As to your observations about Finch's "sorority outings and her relatives'lifestyles," I continue to lament too little concrete information. Right now, my thought is that if Finch "put in her eight hours," so to speak, and if her working some kind of personal interest into her travel didn't impose unwarranted costs on the county, I'm OK with it. Of course, we still need to know whether her trips were warranted to undertake the county's business, too. Similarly, we still need to know how that $59K salary expense (I think it was) is being distributed among TennCorp employees (though I don't know if that info will be forthcoming in the course of conducting an audit of the mayor's office).

I *don't care to* toss Finch's personality traits into this stew, then, and I *can't* (due to a lack of information) consider her business ethic in these other issues. I do think, though, that our consideration of all these other historical and/or unrelated personal issues will only convolute our analysis of whether the health department's move carried adequate financial and societal benefit.

Anyway, I *did* make some calls this morn in an attempt to collect specifics on the health department's former site at Asheville Highway (square footage, rent cost, appraised value, etc). I'll share details here as I get them.

Tamara, I continue to be

Submitted by Bbeanster on Wed, 2007/08/08 - 1:03pm.

Tamara, I continue to be puzzled at your strange approach to this issue.

Why would you ask about rent on the former library/health department location, for example.

To whom and why would the county pay rent on a building that it had owned for at least 15 years?

You appear to be straining to find ways to make this series of transactions and anything Finch does seem aboveboard and kosher. Speaking for myself alone, your posts give me a headache.

Wheat and chaff

Submitted by Tamara Shepherd on Wed, 2007/08/08 - 2:27pm.

I haven't yet confirmed whether the county owned the Asheville Highway site outright, as you suggest. If it didn't, it's entirely possible that the Health Department paid rent to the county, to off-set any debt service the county might have been carrying. The school system pays the county for space in the AJ building, which the county owns.

But more to the point, I'm trying to analyze this transaction like a transaction because it is one, so costs at the Health Department's former location need to be compared against costs at the new one.

And I'm straining, all right--to separate the wheat from the chaff in all this "news" coverage, and in a lot of the discourse here, too.

Too many people seem content to reduce their analyses of all these issues into just who is more "likeable," or more "trustworthy."

Instead, I think our analyses should focus on how the processes, the practices, and the financial and societal outcomes inherent in these issues need repair.

Take two asprin and call me in the morning.

Call you? No thanks. I don't

Submitted by Bbeanster on Wed, 2007/08/08 - 4:53pm.

Call you?
No thanks. I don't propose swap a headache for a full blown migraine.

Sandra and I did stories about the Asheville Highway building, and besides having numerous conversations with VandeVate about what the county was going to do with the building, we were present when Robbie Franklin of Furrow Auctions sold it to Chilhowee Hills Baptist Church for Knox County (Sandra did a story on the auction, too -- but I suppose you consider that part of the "inflammatory media" and choose not to believe it).
Numerous Knox County employees were present at said auction, which was in March of April, iirc. And you don't have to pester anybody to tell you who owned it, unless pestering folks who have jobs to do is what flips your switch -- you can satisfy your curiosity by looking it up for yourself on KGIS.

I could be all wrong, but...

Submitted by Tamara Shepherd on Wed, 2007/08/08 - 6:26pm.

Now, I don't claim to know beans about municipal finance, but are you assuming the county carried no debt service on that property just because they were able to sell it at auction? Can't the county sell an "encumbered" property and use the sale proceeds to settle any related debt, just like I could sell my home and settle its existing mortgage in the process?

I *know* that the school system is paying rent on the AJ, and that the related debt on the property was recently refinanced (per Werner, maybe two months ago, when he explained to me why rent there decreased), yet the county is talking about selling *that* property.

Looking up a property on KGIS cannot reveal anything to us about its related financing. This is why I make phone calls. For some reason, these folks are calling me back.

Ragsdale's resorted to

Submitted by edens on Tue, 2007/08/07 - 10:10am.

Ragsdale's resorted to playing the race card?

Guess that's all he's got left.

Margie Loyd

Submitted by Sandra Clark on Tue, 2007/08/07 - 10:13am.

Matt: Perhaps he'll just say that Ms. Loyd was a "troubled young administrative assistant."

Amazing how these flawed folk flock to Ragsdale like flies to honey. -- s.

Korda column

Submitted by Catfish on Tue, 2007/08/07 - 12:57pm.

Along the same lines, since George Korda's given his opinion that Ragsdale's political future is done, I wonder if George is now considered "troubled."

(link...)

Additional context for this story

Submitted by Tamara Shepherd on Tue, 2007/08/07 - 1:19pm.

The KNS headline for this news story belies the fact that, of the “hundreds of thousands in taxpayer money” that went into renovations of the property on MLK Avenue, the bulk of that was federal money. The operative word in KNS reporter Ansley Haman’s first sentence is “funneling” (which should read “funneled,” since renovations realized through the federal grants are now complete).

Haman confirms that federal grants funding the building’s renovations totaled $350,000 over the last two years. In 2005, $300,000 was made available through HUD’s Community Development Block Grants, followed in 2006 by another $50,000 in federal grant monies.

Knox County’s investment of county grant monies was confined to just one $49,288 community grant, she says, which will be combined with a one-time “occupancy charge” of $10,800, to be paid by the Health Department through its lease, for the purpose of paying off the owner’s loan with Home Fed.

Now that renovations are complete, the Knox County Property Assessor’s Office reports that it is carrying the property on its tax rolls at an appraised value of $399,900 for 2007. The building is classified as a commercial property, which means it will be assessed at 40% of appraised value. County taxes are current.

The rent charged by TN Conference of the AME Zion Church Community Development Corporation to the Health Department, $3,800 monthly for the first five years (followed by $4,000 monthly for the next five years), applies to a ground-level space measuring 2,404 square feet, also per the Property Assessor’s Office. Because the building is two stories, however, the Health Department has access to a total 4,808 square feet in their part of the building.

The annual rent of $45,600 ($3,800 x 12) translates into an annual cost per square foot of $9.48 ($45,600 / 4,808 sq. ft.), before consideration of the one-time “occupancy charge.” Per Bryon Berry with the MPC, the rent charged the Health Department lies within the range of average rents paid in this, the “Central East-South,” submarket. Commercial rents in this submarket range from $6 to $21 per square foot annually, he says. MPC collected 88 surveys from commercial property owners in the area to arrive at this range of rents.

Consideration of the one-time “occupancy charge” the Health Department will pay through its lease would still leave the rent for this property within the low end of the applicable range.

But... but... you forgot

Submitted by R. Neal on Tue, 2007/08/07 - 1:23pm.

But... but... you forgot that Finch belongs to the same denomination as the TN Conference of the AME Zion Church.

Can't say

Submitted by Tamara Shepherd on Tue, 2007/08/07 - 1:48pm.

I was unable to confirm whether Ms. Finch attended church last Sunday, as she is not taking many telephone calls.

I canceled my News-Sentinel

Submitted by KO on Tue, 2007/08/07 - 12:56pm.

I canceled my News-Sentinel subscription some time ago because of what I perceived to be virtually non-existent local investigative reporting. I figured I could read the AP Wire online. I have to say that I am a rather impressed with the recent reportage regarding both Mayor Ragsdale and County Commission. I hate to say it but kudos to the News-Sentinel. I'm glad to see somebody doing a little digging.

www.herstonlaw.com

Finch's family business also

Submitted by CBT on Tue, 2007/08/07 - 1:48pm.

Finch's family business also gets about $33,000 from this same AME Development Corporation.

Is this AME Development Corporation taxed at the same rate as other businesses, for property tax purposes?

And, of course, the AME Development Corporation now owns a building worth $400,000 as opposed to $60,000, thanks to taxpayers. So, the owner gets market rate rent from Knox County plus the $450,000 in federal grants to improve the building. Sounds like a sweet deal for the owner. I mean, if the building was valuable and the owner had a signed lease from the county surely if it's a fair deal a private lender would finance the improvements and take the property and lease as collateral (maybe with some tax relief from the city/county considering the improvements). But, then it wouldn't be such a sweet deal because the owner would actually have to pay the money back to the lender and not get it for free.

Property records show the AME Development Corporation got the property by Quit Claim Deed for no money on Sept. 29, 2004. It was immediately re-transferred on Sept. 30, 2004 to what appears to be the same owner for $71,000. I confess the online records I looked at might not be accurate. But if so, was the money paid for the second transfer from the bank loan (which the county ultimately paid off)? Did the AME Development Corporation originally get the property as a gift?

I would like to know who requested the federal grant and who administers it. Who put this deal together?

Chad

Submitted by Tamara Shepherd on Tue, 2007/08/07 - 3:04pm.

"Finch's family business also gets about $33,000 from this same AME Development Corporation."

The only "family business" I'm aware of Finch owning thus far is B&F Properties, which did not get $33,000 from TN Conference of the AME Zion Community Development Corporation.

TennCorp received that amount (and yes, Finch's sister is director there and several of her relatives are either employees or board memebers there). I, too, wish the N-S would follow up to explain whether any impropieties have arisen from that circumstance.

"Is this AME Development Corporation taxed at the same rate as other businesses, for property tax purposes?"

Both the county property assessor's office and the city property tax office confirm that they assess this property at the commercial rate of 40% of appraised value and charge this property the full tax rates we pay.

"And, of course, the AME Development Corporation now owns a building worth $400,000 as opposed to $60,000, thanks to taxpayers. So, the owner gets market rate rent from Knox County plus the $450,000 in federal grants to improve the building. Sounds like a sweet deal for the owner."

I assume property owners would also benefit from such projects. Perhaps any Market Square property owners here would be willing to share with us their experience WRT past revitalization efforts on Market Square?

Of course, Market Square property owners were essentially "end benefactors" in those revitalization efforts. This developement corporation, in contrast, actually exists for the explicit purpose of spurring further revitalization in its community, ideally using those dollars to exponential effect.

"...was the money paid for the second transfer from the bank loan (which the county ultimately paid off)? Did the AME Development Corporation originally get the property as a gift?"

I assume these are questions only Rev. David Walker can answer. I left a message for him this morning, but he hasn't yet returned my call.

"I would like to know who requested the federal grant and who administers it. Who put this deal together?"

I also assume that it was Finch or her staff who requested and oversaw the federal grants, working with Rev. Walker.

Tidbit

Submitted by Tamara Shepherd on Tue, 2007/08/07 - 3:08pm.

Also, I learned in speaking with N-S reporter Ansley Haman this morning that the Knox County Commission's Finance Committee used to follow a practice of meeting *over a three day period* to review grant applications requiring their approval. That practice was discontinued sometime in the late 1990's, she said.

Randy, I think the story

Submitted by CBT on Tue, 2007/08/07 - 1:52pm.

Randy, I think the story said Finch is a member at Greater Warner Tabernacle AME Zion Church. I believe a different AME Zion church organized this AME Development Corporation. Same denomination as Finch's church, but a different church. If I'm wrong on this, someone tell me.

I was referring to the

Submitted by R. Neal on Tue, 2007/08/07 - 2:01pm.

I was referring to the denomination, and I was making a weak joke about the "links" to Finch put forth in the article, one of which was her membership in an unrelated AME Zion Church.

lets be careful

Submitted by bill young on Tue, 2007/08/07 - 2:50pm.

Dont see the point of calling Ms.Finch & asking if she went to church last sunday.Nor going down the path of which church Ms.Finch is a member.

I do believe the $33,000 that went to the non proffit that a family member is associated with should be looked into.

BBeanster

Submitted by Brian Hornback on Tue, 2007/08/07 - 3:25pm.

Thanks for reading and saving the Brian's Blog post. What a compliment! I am sure Brian's Blog has helped you in covering other news items, as well.

I had some great pictures on the blog, which the Shopper did not have.

Thanks again.

Correction

Submitted by Tamara Shepherd on Tue, 2007/08/07 - 3:52pm.

I said: "Of course, Market Square property owners were essentially "end benefactors" in those revitalization efforts. This development corporation, in contrast, actually exists for the explicit purpose of spurring further revitalization in its community, ideally using those dollars to exponential effect."

I meant to say "end beneficiaries," of course.

BHornbackster

Submitted by Bizzy on Tue, 2007/08/07 - 3:47pm.

What is your obsession with Sandra and Betty? Does your wife know?

Let me guess, Mark

Submitted by edens on Tue, 2007/08/07 - 6:12pm.

Let me guess, Mark Deathridge did the contracting?

Heckofa job, Brownie's cuz!

Submitted by Factchecker on Tue, 2007/08/07 - 6:53pm.

That's pretty damning and easier to follow for J Q Sixcheese.

"Making government better

Submitted by Anarchist on Tue, 2007/08/07 - 7:02pm.

"Making government better everyday." Better for whom? I think we know the answer to that!!!! How do we recall this IDIOT!

We Had Our Chance

Submitted by Bizzy on Tue, 2007/08/07 - 7:19pm.

This information was out there two years ago.

The citizens of Knox County ignored it and re-elected Ragsdale. They blew it.

After my earlier comment re

Submitted by KO on Tue, 2007/08/07 - 8:08pm.

After my earlier comment re the News-Sentinel, tonight I arrive home to a copy of the latest Halls Shopper. Larry Van Guilder has been on a tear lately. Work like his is exactly what has been missing in local reporting. Sandra Clark and Betty Bean have great sources and get a lot of inside scoop but Larry evidently spends his time at the City-County Building poring over records. Put it all together and you've got some great reporting. It seems like work like his is starting to wake people up (good morning, News-Sentinel, rise and shine). Larry, please keep up the good work with the County Mayor's office and don't forget to swing by the Sheriff's Dept. and County Commission while you're down there. You're doing great work.

www.herstonlaw.com

Faith Based Initiative

Submitted by Sarge on Tue, 2007/08/07 - 8:32pm.

This issue in Knoxville is just the tip of the iceberg of faith based initiatives nation wide.

"This issue in Knoxville is

Submitted by Bbeanster on Tue, 2007/08/07 - 8:38pm.

"This issue in Knoxville is just the tip of the iceberg of faith based initiatives nation wide.'

You know, I think you are right.
We're going to hear a lot more about this kind of stuff -- here, there and everywhere.

KO

Submitted by knoxvegas99 on Tue, 2007/08/07 - 8:38pm.

Thanks for the kind words. We've had a lot to work with recently.

Larry Van Guilder

I second KO's opinion of

Submitted by Bbeanster on Tue, 2007/08/07 - 9:03pm.

I second KO's opinion of Larry KnoxVegas. He's been superb, and is one of the best I've ever seen at digging for those hidden gems.

FInch et al

Submitted by spratt on Tue, 2007/08/07 - 8:54pm.

I have to agree with Beanster on her statement of misplaced sympathy for Finch. Actually, the language in the email exchange is far more dignified than what you actually hear coming from her much of the time. Very self centered, aggressive, quick to accept accolades but equally quick to deflect any blame for anything bad that might happen to someone else (Bone, for instance) or to bring up the race card. Not pretty at any rate. And it is indeed no wonder that she is despised by those who work for her.

But back to the Hardy Clinic. It is very sad that after all of the obvious dirty deals that led to the clinic's move from its old Asheville Highway location that use of the clinic has fallen by such a large percentage. Seems that Finch and some of her associates may be the only ones who have benefited from this whole deal.

It's a shame to see the ones who have been thrown under the bus while Finch remains on staff and diligently looking after her own interests.

Funny

Submitted by Sandra Clark on Tue, 2007/08/07 - 9:50pm.

... Very self centered, aggressive, quick to accept accolades but equally quick to deflect any blame for anything bad that might happen to someone else (Bone, for instance) or to bring up the race card. Not pretty at any rate. And it is indeed no wonder that she is despised by those who work for her.

Funny that spratt's description of Finch also fits so snugly to Ragsdale.

Bean you're...

Submitted by knoxvegas99 on Tue, 2007/08/07 - 10:35pm.

...making me blush. (You back from the Golden Gate yet?)

Larry Van Guilder

Yep

Submitted by spratt on Wed, 2007/08/08 - 6:03am.

Funny that spratt's description of Finch also fits so snugly to Ragsdale.

Sadder than it is funny, but an apt description.

Gentle people

Submitted by Factchecker on Wed, 2007/08/08 - 7:35am.

... Very self centered, aggressive, quick to accept accolades but equally quick to deflect any blame for anything bad that might happen to someone else ... or to bring up the [terror] card.

I give you Emperor George and his sycophants.

Speaking of John Werner

Submitted by Joe Taylor on Wed, 2007/08/08 - 2:26pm.

If John Werner has not showed back up to work since his "vacation resignation" how much personal time, vacation time and sick leave could he have built up to not return to work for over 60+ days since he resigned and still be collecting a county "tax payer" pay check?

BBeanster said

Submitted by Brian Hornback on Wed, 2007/08/08 - 5:58pm.

"March of April, iirc" What did that mean? I digress.

If you and Sandra were present for the auction. Did the E.W. Scripps publication bid on the building? That would have been a great International headquarters for the E.W. Scripps weakly, I mean weekly.

By doing so you and Sandra could have kept that Church from buying it and you could have paid the $1.0 million dollars that it was worth. You did report it was worth a mil. Didn't you?

Dwight VandeVate said it was

Submitted by Bbeanster on Wed, 2007/08/08 - 8:16pm.

Dwight VandeVate said it was worth $1 million, Brian, so your staff can take it up with him. It's scary to think that someone with your poor reading/writing skills ever served on the school board.

That's a "mute" point,

Submitted by KO on Wed, 2007/08/08 - 8:51pm.

That's a "mute" point, Betty. :)

www.herstonlaw.com

Tamara, here's WVLT's

Submitted by CL on Wed, 2007/08/08 - 6:28pm.

Tamara, here's WVLT's article on the sale.

(link...)

I recall, CL

Submitted by Tamara Shepherd on Wed, 2007/08/08 - 7:21pm.

Thanks, CL--but what I was trying to explain is that although I remember the story, I didn't ask any questions at that time about whether the property was "encumbered" in any way, whether the Health Department had previously paid rent, or how (if at all) the sale of the property affected the county's debt. That's the kind of information I've been imagining is needed to compare total costs at these two locations. This story doesn't answer those questions, either.

I realize, of course, that the county doesn't issue bonds for amounts this small. I just lack an understanding of these "municipal machinations."

I note that WVLT reports that the new owner is not a church, but a property tax-paying corporation. I think Betty had said that it did not pay PT?

And I also note...

Submitted by Tamara Shepherd on Wed, 2007/08/08 - 8:03pm.

...that the new owner assumes the building will appraise at $1,875,000 (to arrive at the new three quarter million assessment indicated in the story). Given that he bought it for $420,000, he apparently plans to invest $1,455,000 in those renovations.

"The New Bible College will be on the tax rolls. A private corporation actually will own the building. It'll pay based on a re-assessment after renovations. Assuming it'd assess at three quarter million, that works out to more than $16,000 in city/county property taxes combined."

So, for the sale of the Asheville Highway building which may or may not have been "encumbered," and for which the county may or may not have charged rent, we net sale proceeds of $420,000, we net the "free" $1.4 mill in renovations from the new owner, we pick up $350,000 in "free" federal grant money to renovate the Hardy Clinic, but we need to subtract the cost of the $50,000 county grant to AME Zion and the rent charged to the Health Department?

Is that such a lousy deal for the county, to pick up a half-mill in cash, to add to its tax rolls *two* renovated buildings, increased in value by nearly $1.9 mill in renovations, to add one of those buildings not previously taxed to the PT tax rolls (or maybe both are just now added)and to recognize some measure of revitalization at each location?

I dunno if these assumptions are correct, but don't joust with me, think with me--and ask some questions, too.

The County

Submitted by Brian Hornback on Wed, 2007/08/08 - 8:15pm.

was asked and invested 3.0 million in the Tennessee Theater renovation and that renovation sparked todays downtown Knoxville re-development.

So for the county to invest a few more dollars into Five Points with the Hardy Clinic could generate the re-development of Five Points.

The NS and Scripps will not print stories against the Tennessee Theater renovation and county tax dollars being used there because some of their employees were the ones asking for the money from the County .

Just some additional points to ponder in this re-development debate.

Having worked in the 500

Submitted by CBT on Wed, 2007/08/08 - 9:15pm.

Having worked in the 500 Block of Gay Street for the past 15 years, I can tell you that the resurgence of downtown has little to do with the renovation of the Tennessee Theater (as nice an addition as that is). The change in downtown is due primarily due to hundreds of people now living downtown. The redevelopment of Market Square was also a big boost. Those investments have paid off. And, the Hardy Clinic? Less patients, lots of free taxpayer money and no private investment.

From Wbir!

Submitted by Sam on Wed, 2007/08/08 - 9:37pm.

(link...)

Cynthia Finch Again

Submitted by Joe Taylor on Wed, 2007/08/08 - 9:54pm.

From WBIR Website

"Finally, Cynthia Finch's sorority, Alpha Kappa Alpha (AKA), hosted a Conference at Knoxville's Convention Center, but it didn't have to any pay sales tax on its $144,000 bill.

Although the convention had been scheduled years in advance, TennCorp Community Services partnered with the sorority just three months before the event in 2005.

The non-profit group is run by Finch's sister and funded by Knox County and state tax dollars. TennCorp made it possible for AKA to be covered under TennCorp's tax exemption status in all purchases and contractual agreements."

Does this sound the slightest bit like tax fraud to anyone else???

BBeanster said

Submitted by Brian Hornback on Wed, 2007/08/08 - 10:16pm.

It's scary to think that someone with your poor reading/writing skills ever served on the school board.

Again, when you fail to have the ability to debate a/the subject, you resort to this. We have all come to expect this as your MO over the years. Your MO is something for Hartman, Clark and E.W. Scripps to be proud of, I am sure.

You and CBT are the ones that kept putting "shout-outs" to get me back on KnoxViews, so I am here.

Brian, I don't recall anyone

Submitted by CBT on Wed, 2007/08/08 - 11:39pm.

Brian,

I don't recall anyone 'shouting out' for you to post on KnoxViews. You were accused by a number of people of posting anonymously as KnoxInsider007. I think that's either you or someone posting for you, maybe a "Brian's Blog Team Member" or member of the "Truth Squad". Do you realize how goofy that sounds?

We disagree on some issues, but I'm glad you're here. Just don't whine because you get treated like everyone else. And, the constant complaints about Bean, Sandra and the Shopper are getting old.

Back to Ragsdale's latest

Submitted by CBT on Wed, 2007/08/08 - 11:54pm.

Back to Ragsdale's latest scandal...

Does this sound the slightest bit like tax fraud to anyone else???

So, the Mayor says it was a great investment for Finch to attend these sorority meetings and charge the county because we got a great convention out of it TWO YEARS AGO. Finch's trips were more recent, right?

And, now we learn that Finch's family business helped this same convention cheat our local government out of tax dollars by running the sorority convention through TennCorp, aka the Finch Family Business. So, what did TennCorp get out of the convention? That is, how did AKA and the convention fit the non-profit mission of TennCorp? Did the conference have anything to do with helping pregnant teens? Or was it just a sham to avoid paying taxes? I know Tamara will say we don't have enough information, but I'm guessing it was the latter.

It just gets worse. Do Arms and Finch know how to play "Nearer My God To Thee"?

taxes

Submitted by FtnCity HAPPY on Thu, 2007/08/09 - 12:12am.

“Finally, Cynthia Finch's sorority, Alpha Kappa Alpha (AKA), hosted a Conference at Knoxville's Convention Center, but it didn't have to any pay sales tax on its $144,000 bill.”

I wonder is the 144k includes hotel charges? Hotel taxes??

It begs the question...Did

Submitted by CBT on Thu, 2007/08/09 - 12:16am.

It begs the question...Did TennCorp make other 'arrangements' related to the convention which resulted in the sorority not paying taxes.

Illegal

Submitted by Tamara Shepherd on Thu, 2007/08/09 - 12:35am.

"I know Tamara will say we don't have enough information, but I'm guessing it was the latter."

Sorry, Chad. I'm told I'm a "cumulative" thinker...

In this instance, I know for certain that using another organization's state tax ID number is blatantly illegal.

I just spoke with a friend off-list, though, to ask whether the sorority wouldn't be tax exempt in its own right. Maybe they mislaid their relevant paperwork from the state?

I *think* the sorority shouldn't have paid any taxes, had they had their paperwork on hand, but Finch's action to assure they wouldn't was definitely illegal.

A clarification (maybe)

Submitted by Tamara Shepherd on Thu, 2007/08/09 - 1:17am.

Because Chad teases about (or is rankled by) my sluggishness to draw conclusions, and because the friend I just referenced wrote me off-list to suggest that I'm looking for a "silver lining" in this mess beyond the time I should have stopped, I'm wondering if I need to share some of my response here, with all of you:

...I can't support Finch's misuse of her position. I certainly question why someone at her salary level can't pay her property taxes in a timely manner, and if the problem is that she is "over-extended" in terms of her business ownership interests, I have to question whether she possesses the business acumen to serve in her position, too. I guarantee you haven't heard any "defenses" from me on those scores!

I *have* wondered, though, if her passion for positive change in her community has caused her to justify some of these poor decisions (like employing relatives at TennCorp) in terms of the ends justifying the means.

I've also wondered if maybe so many of these "players" in the African-American community are related, through blood or close friendships (Finch, her family members, her ex-husband, Mark Brown, his cousin Rev. Walker), simply because the community is small statistically, and because so few leaders exist there proportionately, even in that smaller context.

It seems to me that when crushing poverty leaves a population unable to participate in any efforts beyond its own day-to-day existence, we aren't reasonable to expect too many leaders to emerge from such an environment. It's easy to conclude, then, that these few close leaders aren't "cronies" so much as they are "team members."

In any event, if all you say is true (and I have no reason to doubt you), I am very disappointed to think that Finch is profiting personally from others' misfortune, and I find that doubly despicable.

But I have altogether avoided questions and comments specific to Finch, I hope you've noticed, because Finch can save her own hide--or not. I'm not defending Finch when I ask why Ragsdale has seemingly approved her every request, rather than exercise the oversight that is his prerogative and his duty. I'm not defending Finch, either, when I ask why commission's Finance Committee has ceased that three-day review of grant apps they used to schedule, when it is their prerogative and duty.

For the sake of Knox County, and irrespective of Finche's motives, it seems to me that we should still assess each of the programs resulting from the lax practices to determine whether they are financially and socially defensible. They're assessments we need to make independent of our opinions about Finch personally. And THAT is the high road some folks around this blog seem incapable of taking.

I'm asking these questions because I think I have a moral and intellectual obligation to ask them--to "separate the wheat from the chaff," as I said. I'm afraid that some have recently spent their credibility on hyperbole and a strong tendency to reduce *every* issue to one of just personalities. I think the diplomatic Bill Lyons was trying to offer us that same counsel in his posts this afternoon...

Anyway, please don't confuse my hesitance with amorality. It's been a very long day. Good night.

CBT

Submitted by Brian Hornback on Thu, 2007/08/09 - 6:40am.

Yes I agree with you that it sounds goofy for you and Bean to assume that I was posting under any name other than my own.

Have a Nice day.

Finch could be her own worst enemy

Submitted by Carole Borges on Thu, 2007/08/09 - 7:14am.

In the beginning, I felt like you do Tamara. I also try to follow the path you are taking--innocent until proven guilty. When this scandal broke I felt there was too little evidence to come to any conclusion about Finch. I was aghast at what seemed like a rush to judgement by the bloggers here, especially the ones I respect so much.

I think the reason that so many people have concluded she is guilty (and are very enthusiastic about proving it) comes from insider information. I feel Beanster knows a lot more about this than she can report. I don't think she's trying to railroad Finch.

Once I started calling around, I couldn't keep defending Finch. Speaking to members of the sorority, I learned for instance that all her expenses concerning her trip to the convention were almost certainly (they said "absolutely for sure") paid for by the sorority. If the city also paid for any of her expenses then she would be guilty of what they called "double dipping".

AKA is not a fly-by-night organization. (link...) It is a historic sorority that prides itself on its professionalism and hard work. One soror I spoke with was very upset that the organization was being linked to possible scandals here in Knoxville.

I do agree with you that the evidence presented publicly is a mish-mash of confusion. It is not all in yet, and personally I find it noble that you are waiting until all the facts are presented.

I imagine this will as usual turn out to be a mixed bag. Finch will have done some things wrong and some thing she has been accused of will turn out to be only smoke and mirrors.

The tax issue may be nothing considering Tenncorp is a non-profit and therefore tax exempt organization.

I think Finch herself has caused much of the hubub. As one person I spoke to said "What goes around comes around". She has treated people badly and alienated a whole lot of them, so there are many folks feeling quite thrilled that she has apparently fallen from grace.

Carol Borges said

Submitted by Brian Hornback on Thu, 2007/08/09 - 7:23am.

"If the city also paid for any of her expenses then she would be guilty of what they called "double dipping"."

When did the City get involved? How could a City re-imbursement be double-dipping when Finch doesn't work for the City?

I point this out to help you, Carol. I don't want the Beanster accusing you of having poor writing/reading skills. Beanster has accused people of that before.

Oh, that was an error I meant the county of course!

Submitted by Carole Borges on Thu, 2007/08/09 - 10:13am.

Thanks for pointing that out.

I think it's healthy to be

Submitted by R. Neal on Thu, 2007/08/09 - 7:22am.

I think it's healthy to be critical and skeptical of the media and to do your own fact-checking, especially when they sensationalize stories to sell papers and use loaded words and trumped up allegations in their reporting.

At the end of the day, though, they usually do a pretty good job and are pretty careful about their work (once you cut through all the color and get to the meat of it).

But one role of bloggers is to fact check them, and nobody should let up or get discouraged if it turns out the media is occasionally right, whatever their motives. In fact, it's a good thing to confirm they are doing their job, and I think most of them appreciate it if they aren't and someone points it out.

R. Neal said

Submitted by Brian Hornback on Thu, 2007/08/09 - 7:25am.

"if it turns out the media is occasionally right"

Are you speaking of the Shopper? Being occasionally right?

I am just trying to help. I don't want Beanster to accuse you of having poor writing/reading skills.

Thanks for the tip, Brian.

Submitted by R. Neal on Thu, 2007/08/09 - 7:28am.

Thanks for the tip, Brian. I'll be on the lookout for such attacks, but I can usually handle it myself. Thanks and have a Great day!

The tax issue may be nothing

Submitted by Stan G on Thu, 2007/08/09 - 8:19am.

The tax issue may be nothing considering Tenncorp is a non-profit and therefore tax exempt organization.

Not to be critical of Carole, but to use her comment as an example of a common misconception. The IRS defines many categories of exempt organization that are exempt from certain federal taxes. The State of Tennessee exempts a very limited subset of federal exempt organizations from state sales tax. Only the Tennessee Department of Revenue can exempt an individual organization from the sales and use tax.

Considering the total dollars involved it would appear an audit by the sales tax folks would be in order in addition to any other audit of state grant monies.

Tax Fraud

Submitted by Joe Taylor on Thu, 2007/08/09 - 8:25am.

I am glad we are getting back on point... a local tax attorney advised (with a dsiclaimer not knowing all the facts in play) that using the tax exempt status of one firm to avoid paying taxes by another firm is illegal...

state v. federal tax exemptions

Submitted by mbradley on Thu, 2007/08/09 - 9:17am.

A non-profit receives its state sales tax exemption by submitting its IRS tax exemption determination letter to the state. Once approved, the state sends the non-profit a form that is then used to provide local merchants with proof. I actually maintain two non-profits that are federal and state tax exempt so I'm a bit familiar with the process as I'm sure many of you may be as well...

So here's my guess... (which I know is risky at KnoxViews but I'll give it a go anyway) Remember, the following is only offered as a theory but the sprinkling of evidence would seen to support...

The sorority is most certainly exempt from federal income tax and we know that TennCorp is as well. TennCorp is a local federal tax exempt non-profit organization and we know that they are state sales tax exempt as well. The sorority isn't local (State of Tennesse being consider local for this theory) so probably hasn't gone though the process of obtaining state sales tax exemption. The sorority was looking to "avoid" state sales tax so it wanted to "borrow" a form from TennCorp since the merchant must maintain a copy of the state form for auditing purposes.

Now, IF this is the case, I think it is wrong. Whether or not it is illegal is for others to decide. I just know that I guard my little state forms very closely and would never release them to a second organization for use - even if it was a family member...

mbradley, would it matter if

Submitted by Catfish on Thu, 2007/08/09 - 9:36am.

mbradley, would it matter if the sorority gave a contribution to Tenncorp in exchange for the sorority using Tenncorp's tax exempt status and not paying taxes?

(let's be clear: I'm just wondering if this happened, I have no idea if that happened or not, but it'd be interesting if the sorority did make a contribution to Tenncorp)

Out-of-state exemption?

Submitted by Tamara Shepherd on Thu, 2007/08/09 - 9:45am.

"The sorority isn't local (State of Tennesse being consider local for this theory) so probably hasn't gone though the process of obtaining state sales tax exemption."

Your thought here raises yet another question in my mind, mbradley. Because AKA is out-of-state, would they not already be exempt from sales tax on that basis? But if so, why would Finch have gone to these lengths to assure an exemption through Tenncorp?

Not suggesting, not defending, just asking...

Because AKA is out-of-state,

Submitted by R. Neal on Thu, 2007/08/09 - 9:53am.

Because AKA is out-of-state, would they not already be exempt from sales tax on that basis?

A company selling anything in Tennessee (or any other state they did business in outside their own) would still be liable for collecting applicable Tennessee sales tax. They would have to register and get a tax certificate. Some states have temporary certificats for things like trade shows and exhibits. Not sure if Tennessee does or not, and not sure if this would apply to non-profits.

A company selling anything

Submitted by Rachel on Thu, 2007/08/09 - 11:44am.

A non-profit in Tennessee is exempt from charging sales tax during two one-month periods per year. If it sells ANYTHING outside those two months, it must collect sales tax on EVERYTHING, including sales during the two months. (This is known as the "Girl Scout Cookie Law.")

But with AKA, we're talking about paying tax, not collecting it.

with AKA, we're talking

Submitted by R. Neal on Thu, 2007/08/09 - 11:49am.

with AKA, we're talking about paying tax, not collecting it.

Oh, yeah. I forgot. Good point.

This is known as the "Girl Scout Cookie Law."

Haha. I like it. I like the cookies, too.

would it matter if the

Submitted by mbradley on Thu, 2007/08/09 - 10:04am.

would it matter if the sorority gave a contribution to Tenncorp in exchange for the sorority using Tenncorp's tax exempt status and not paying taxes?

That would surely muddy the water. Maybe a bigger question would be what name was used on the invoice to bill these services? I would think the merchant would want to make sure the names matched up on the invoice and the tax exempt certificate. So, maybe TennCorp was an “official sponsor” of this event?

That would be my story and I’d be stickin' to it…

To repeat, this is all just conjecture…

Not suggesting, not defending, just speculating...

Dave Keim & the Big Dog

Submitted by Sandra Clark on Thu, 2007/08/09 - 10:16am.

Over the years, David Keim has made me nuts with his plodding. David developed the KNS Wade Gilley coverage. Drip, drip, drip. But Keim (now the KNS assistant managing editor and coordinator of this Ragsdale/Jan. 31 coverage)will stick with it until every last rock has been flipped.

The KNS newsroom has its share of lazy reporters who specialize in press release re-writes and spin from the p.r. guys, but Keim is not one of them.

Bean wrote first of the county's misguided ventures on Asheville Highway. She and I attended the auction -- because we suspected Van de Vate's $1 million valuation of the old library/health department property was way off. (It was.)

Bean wrote the first word, but Keim and his team will write the last.

Somewhere in the middle, someone will write about Ragsdale's golfing buddy John Murphy -- owner of the old Walgreens that was renovated for the Burlington library.

Where will this end? Now that the Big Dog has been stirred, Ragsdale will meet the fate of Gilley and John Shumaker. He won't serve out this term. -- s.

Where will this end? Now

Submitted by R. Neal on Thu, 2007/08/09 - 10:21am.

Where will this end? Now that the Big Dog has been stirred, Ragsdale will meet the fate of Gilley and John Shumaker. He won't serve out this term. -- s.

That's a bold prediction.

I think there's a fundamental difference, though. Gilley and Shumaker were subject to pressure from UT and the board of trustees, etc., and somewhat from the Governor, who has authority in those cases.

Where's the authority to pressure Ragsdale? Nobody can fire him outright, and I don't see him resigning.

So what would happen, short of a criminal indictement and conviction (which I also don't see happening)?

P.S. Remember this guy? He's still mayor as far as I know, and he was accused of some pretty bad stuff.

Resign question for the group

Submitted by Joe Taylor on Thu, 2007/08/09 - 10:26am.

Since the office of County Executive (the correct term as now allowed by TN State Law) is a constitutional position... can the recall/ouster petition allowed under state law not apply to the County Executive?

Yeah, but that's the

Submitted by R. Neal on Thu, 2007/08/09 - 10:34am.

Yeah, but that's the difference I'm talking about. A petition is a bunch of people, voters, not a centralized body or individual with authority, and will take a pretty big effort.

we did it before

Submitted by Joe Taylor on Thu, 2007/08/09 - 10:43am.

We did in before with regard to putting the wheel tax to a vote of the public...

Of course Ragsdale lied to the public and threaten a property tax increase to get the wheel tax to pass...

It was done once before why could it not be done now??!!??

Yeah, and then Ragsdale got

Submitted by R. Neal on Thu, 2007/08/09 - 10:50am.

And then Ragsdale got re-elected with 100% of the vote after that, right?

Anyway, I'm not sure how it works, but in an ouster, first you have to get a petition (how many signatures does it have to have?), then I think you have to take it to the DA who then has to prosecute it in a court and get a ruling from a judge?

Lots of hoops to jump through.

That's a lot different that the Governor calling up and telling you to pack your bags.

"Anyway, I'm not sure how it

Submitted by JaHu on Thu, 2007/08/09 - 3:28pm.

"Anyway, I'm not sure how it works, but in an ouster, first you have to get a petition (how many signatures does it have to have?)"

Wasn't one of the accusations Harber made of Ragsdale was that he passed out false petitions and then chucked them in the garbage?

Adrift in the Sea of Humility

"Disappearing" petition pages

Submitted by Tamara Shepherd on Thu, 2007/08/09 - 4:08pm.

Harber indicated to Bean in her "County Confidential" series that he helped plant "operatives" within the anti-wheel tax petition group, who in turn caused pages containing 2,000 to 3,000 signatures (of the 18,000 needed) to "disappear."

Arms subsequently revealed in a KNS story that the mayor's office had a "good idea" of how many signatures had been collected--before the Election Commission had confirmed the signature count.

(The ouster petition Leslie found on-line, though, requires only 10 signatures.)

We did it before

Submitted by Greg Mackay on Thu, 2007/08/09 - 2:05pm.

We did in (sic) before with regard to putting the wheel tax to a vote of the public...

TCA 5-8-102(c)(2)(A)spells it out and requires an election on a wheel tax if the petition criteria is met.

TCA 8-47-101

Submitted by bill young on Thu, 2007/08/09 - 11:35am.

TCA on reasons for ouster

1."Knowingly or willfully commit misconduct."
2."Knowingly or willfully neglect to perform any duty enjoined upon such office."

Read TCA as to who(DA et al) can bring an ouster suit.

However,I believe 10 Knox County voters can bring a Petition for Removal from Office to Chancery court.Correct me if I'm wrong.

There is,to best of my knowledge,no recall provision for Knox County government.That is why TCA 8-47-101 is on the books.So there is a method for ouster if need be.

Regarding TCA reasons for

Submitted by jbr on Thu, 2007/08/09 - 4:04pm.

Regarding TCA reasons for ouster, I assume that also is applicable to county
commission positions? It seems those transgressions are in the same ethics category as Ragsdale, and stealing $10 of gas.

Metro Pulse - Editorial

Submitted by Joe Taylor on Thu, 2007/08/09 - 11:47am.

(link...)

Did you read this???

Upon further review...

Submitted by mbradley on Thu, 2007/08/09 - 12:05pm.

I went back to the WBIR story again... Here's a cut...

Finally, Cynthia Finch's sorority, Alpha Kappa Alpha (AKA), hosted a Conference at Knoxville's Convention Center, but it didn't have to any pay sales tax on its $144,000 bill.

Although the convention had been scheduled years in advance, TennCorp Community Services partnered with the sorority just three months before the event in 2005.

The non-profit group is run by Finch's sister and funded by Knox County and state tax dollars. TennCorp made it possible for AKA to be covered under TennCorp's tax exemption status in all purchases and contractual agreements.

In a letter from TennCorp Executive Director Jacqueline Collins, Collins notifies her sister, Cynthia Finch, that the certification of exemption is enclosed.

Finch was then serving as AKA's Southeast Regional Director.

Mayor Ragsdale has said bringing her sorority's business to the Knoxville Convention Center justifies the amount of travel Finch charged to her county credit card.

My original speculation stands. It appears AKA brought in TennCorp as a sponsoring partner of the event to use its sales tax exemption.

There is a provision in the

Submitted by Publius on Thu, 2007/08/09 - 12:42pm.

There is a provision in the county code stating that either the DA or the county law director can bring an ouster suit against a county officeholder. Judging from the law director's meeting with the state comptroller's office and the former's letter to that office thanking the state for investigating the mayor's office (see today's knoxnews.com) perhaps the law director is setting the stage for a possible ouster suit. Note that the law director's opponent in the next election is a partner with Ragsdale's personal attorney.

It certainly seems that way.

Submitted by Defiant on Thu, 2007/08/09 - 2:28pm.

It certainly seems that way. It also wouldn't hurt Mr. Owings political standing to be the man that 'brought down the crooked mayor.'

excedrin headache number 5,062

Submitted by bill young on Thu, 2007/08/09 - 1:44pm.

ouster of county commission
N-S sunshine suit.

I understand the remedy if commissioners are found guilty of sunshine violations is to convene the commission as it was prior to the jan 31 vote.Then redo appointments.It could be all of the appointments or none.Up to the court.

I would think per TCA 8-47-101 an ouster suit could be brought against those commissioners found in violation of sunshine law.Again it could be all of the commissioners or none.Up to the court.

I would get me a posse of 10 voters per commission district,which would be 90.Then be ready to belly up the bucks to file 19 ouster suits with the court per violation of the sunshine act in accordance with TCA 8-47-101.Again up to the court on how many commissioners are in violation of the sunshine act.Could be all..could be none.

Franklin TN is removing alderman

Submitted by Catfish on Thu, 2007/08/09 - 4:17pm.

(link...)

Ragsdale Calls for HUD Investigation

Submitted by Joe Taylor on Thu, 2007/08/09 - 5:32pm.

Please see the attached

(link...)

forgot to mention

Submitted by Joe Taylor on Thu, 2007/08/09 - 5:35pm.

Looks like Cynthia is under the bus now....

Not sure

Submitted by Sandra Clark on Thu, 2007/08/09 - 5:39pm.

Now Ragsdale can decline comment during the investigation. -- s.

Discussing:

Are Chat bots a waste of time? (1 reply)
Smith & Wesson noise problem (1 reply)
Musicians dropping out of President's Freedom Concert Series (1 reply)
It's time for new blood in Congress, Barnett in - Burchett out (1 reply)
Burning Down The House... (2 replies)
Behind Lege Lies (1 reply)
Peace (1 reply)
Speak your truth, fight and believe. (1 reply)
Large banks have too much AI data center debt? (1 reply)
GOP misleading on federal health care funding (1 reply)
Feds indict civil rights group (3 replies)
Georgia issues burn ban, first time in state history (2 replies)

TN Progressive

TN Politics

Knox TN Today

Local TV News

News Sentinel

State News

Wire Reports

Local Media

Lost Medicaid Funding

To date, the failure to expand Medicaid/TennCare has cost the State of Tennessee ? in lost federal funding. (Source)

Comment viewing options

Discussing:

TN Progressive

TN Politics

Knox TN Today

Local TV News

News Sentinel

State News

Wire Reports

Local Media

Lost Medicaid Funding

Search and Archives

TN Progressive

Nearby:

Beyond:

At large:

Government

About