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Lamar Alexander's Skeleton Closet

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Insider Get Rich Schemes-- Phony "Common Man" Image -- Lacks Principles, Changes Positions with the Polls --Phony Businessman Image -- -- Quotes -- Sources

Insider Get Rich Schemes

You've undoubtedly heard of Hillary Clinton's amazing $100,000 commodities trading profit, and Clinton's failed attempt to get rich in the Whitewater real estate development. Well, Lamar Alexander and his wife Honey put these measly efforts to shame with a string of at least 15 -- that's fifteen -- sweetheart deals from political supporters and businesses that lobby the government.

Just to give you one example, a newspaper chain sold Lamara stock option for $1. That's one US dollar and no cents. When the chain was sold, he made $620,000. For details on many of his scandals, click here. The quick summary; when Lamar was elected governor, his net worth was $151,000. By 1991, when Bush appointedhim secretary of Education, he had between $1.5 million and $3 million. (Candidates are only required to report generalranges of wealth.) Just since 1991, his net worth has grown to between $3 million and $6 million.Even worse, he often transferred these assets to his wife Honey, as if that made these deals any less sleazy.

Phony "Common Man" Image

Lamar wears plaid flannel "lumberjack" shirts as a symbol of being an "outsider" who can change Washington. It's a load of crap. Alexander began working in Washington at age 27 as a politically connected lawyer/lobbyist in Tennesee Senator Howard Baker's law firm. He still works for them - and received $421,871 in 1994, and $295,000 in 1995, even though he was running for President full time.

Since then he has worked in the Nixon White House, been governor of Tennessee and a U.S. Cabinet member. When he was Bush's Secretary of Education, Alexander wore yuppie clothing such as yellow power ties.) Lamar was also president of the University of Tennessee - appointed to that $150,000 job by many of the same trustees he appointed as governor. He also gets paid many thousands to sit on the Board of Directors of big corporations, such as Lockheed Martin (the resultof the merger of Martin Marietta and Lockheed Corporation.) In fact, he received a special $236,000 bonus when that merger went down -- one third of which was paid by taxpayers.

The idea that this lawyer-lobbyist is an outsider is ridiculous.

Phony Businessman Image

In his stump speech, Alexander likes to brag that he founded Corporate Child Care, Inc. (CCCI) with his wife in 1987, and that nowadays it has 1200 employees and has been on Inc. Magazine's list of fastest growing companies three years in a row. The success of CCCI is true enough, but Alexander's role is a bit less than founder. In fact, he was barely involved.

For one thing, the company was founded in 1986. Lamar invested $5,000 in 1987. Jack Massey, a founder of Kentucky Fried Chicken and the massively profitable Hospital Corporation of America, invested $2 million in venture capital. Massey is Lamar's biggest patron and is involved in several deals that profited him and Honey. (Captain Kangaroo -- Bob Keeshan -- was another investor.)

Lamar's connection to CCCI was Marguerite Sallee, who Lamar had appointed as State Commissioner of Human Services for Tennessee. (She had worked for a board Honey Alexander was on earlier.) Sallee quit her state job to help launch CCCI in 1986, and became CEO. (She is now a "senior adviser" to the Alexander campaign.)

Sallee says Lamar "was a founder in the classic sense of the word; he was instrumental in raising money." (Lamar's patron Massey invested $2 million, you recall.) Sallee insists that Lamar's involvement was "hands on" in 1987, even though he spent 6 months in Australia, wrote a book, and was paid $125,000 by Whittle Communications as a consultant on a magazine. But when pressed, she says "if you ask me, did he come to work and sit beside me at the desk, that's not literally true."

Far from being evidence of business acumen, as Alexander would have you believe, this experience is just another example of the sweet insider deals that he often receives. His $5,000 investment was worth $800,000 as of 1991, 4 years later.


Lack of Principles

Alexander has a number of bold positions this time (and we try to avoid political issues anyway), but his career in politics has been marked by changing positions to fit the current tide. His current claims to conservatism should be viewed in light of these quotes from those who know him:

"We've always been suspicious of Lamar. To hear him running around calling himself an "activist conservative" and mentioning Ronald Reagan's name every 30 seconds is just amazing! He never did anything for Reagan; in fact, those of us with Reagan were just about written out of the [Tennessee Republican] party. He was an anti-conservative who never supported a conservative in a Republican primary." -- Lloyd Daugherty, chairman of the Tennessee Conservative Union

"The portrait that emerges of this early Lamar looks an awful lot like that of his mentor Howard Baker -- centrist, non-ideological, and, as one Washington insider put it, 'quintessentially establishment.'" -- Lisa Schiffren

"He never did anything to encourage the growth of a responsible conservative voice in state government. He promoted a lot of nice looking people with no principles." -- unnamed Tennessee GOP activist quoted in the American Spectator

Details of Lamar's Inexplicable Enrichment

In Mexico, they have a crime called "inexplicable enrichment" for politicians who accumulate large sums of money that can't be traced. Luckily for us, diligent work by the Memphis newspaper and Edward Pound and Hilary Stout of the Wall Street Journal have explained many of Lamar's sources.

1. CCA company stock, $8,900 investment yields $142,000 after Governor Lamar helps the company get a $250 million state contract.
2. Corporate Child Care Inc. Jack Massey invested $2 million, and Lamar and Honey got a founder's stake for $5000. Their stake's value grew to $800,000 by 1991.
3. The Jack Massey School of Business paid Lamar $100,000 in 1988, and an undisclosed sum in 1987, to create a "leadership institute" there.
4. Jack Massey's venture capital firm paid Lamar and Honey $44,000 in directors and consulting fees in 1988.
5. Lamar and 6 other investors (including Howard Baker) got a stock option in a newspaper firm for $1 each. He sold his share for $620,000.
6. Whittle Communications, a private education firm, "sold" Alexander stock for $10,000 but didn't cash his check until years later, when they made a deal to sell part of the company for $185 million. Whittle then purchased the stock back from Honey for $330,000.
7. Lamar bought a house in Knoxville for $570,000 in 1990. He sold it a year later, right after being appointed U.S. Secretary of Education, for $977,500 -- to Gerald Hogan, a top executive at Whittle Communications. Pretty much everywhere else in America, housing prices went down in 1991.
8. Whittle communications paid Lamar $125,000 in consulting fees in 1987 for help with a magazine that ultimately failed. (Lamar had credentials - he workedon his high school newspaper.)
9. Howard Baker's law firm paid him nearly $400,000 in 1994, and $295,000 in 1995 for working "at counsel" (not directly for the firm): he was campaigning for President full time both years. The firm is a lobbying law firm that represents Martin Marietta, AT&T, US Tobacco, Federal Express and others.
10. Right after leaving the governorship, Lamar was appointed to the $150,000/year job of President of the University of Tennessee by the Board of Regents, many of whom he appointed while governor. Many employeessaid he didn't show up much, or show much interest in the job.
11. While he was UT President, the university spent $65,000 for entertainment at Blackberry Farms. Honey Alexander owned a third of the resort, which she bought for $10,000.
12. While governor, Lamar tried to get a highway built straight to the door of Blackberry Farms, across land that he and his cronies owned. After newspaper stories about the conflict of interest, the plan was dropped.
13. In 1987, (the year Whittle paid him $125K as a consultant, and that he supposedly worked at Corporate Child Care), Alexander and his family took 6 months off and went to Australia. He wrote a book, for which he received $52,500, and wrote off $128,308 in expenses on his taxes for the adventure.
14. His federal disclosure form indicates he got preferential treatment from a Tennessee bank - two loans and a $212,500 mortgage at prime rate on a Hilton Head, South Carolina condo.
15. Lockheed Martin Corporation (the result of the Lockheed -- Martin Marietta merger) paid him $93,000 in 1994 as a director. When the two companies merged, Lamar (who has no significant business experience) received a $236,000 bonus for his help. Meanwhile, 30,000 Lockheed employees are being laid off.


"Common Man Candidate", Wall Street Journal, May 12, 1995 pA1
"The Man From Tennessee", Lisa Schiffren, The American Spectator, September 1995 p33
"Tennessee Waltz", Time Magazine, March 13, 1995 p80
"The Rich Rise of Lamar Alexander", Doug Ireland, The Nation, April 17, 1995 p517
"Welfare Kings: Lamar Alexander's Bonus", William Hartung, The Nation, June 19, 1995 p873
"Play It Again, Lamar", Arthur Jones, Financial World, August 29, 1995 p63
"Lots of Cash and Effort, Little Result", New York Times, October 17, 1995 pA8


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