State Treasurer candidate spurs rift among GOP lawmakers

On January 9, 2009, in News 2009, by Mark Norris

By Theo Emery • THE TENNESSEAN • January 9, 2009 What started as an experiment in opening up the nomination process of state constitutional officers by GOP state lawmakers has turned into a stew of intrigue, generating confusion and an apparent rift among House and Senate member over at least one of the positions. The […]

By Theo Emery • THE TENNESSEAN
January 9, 2009

What started as an experiment in opening up the nomination process of state constitutional officers by GOP state lawmakers has turned into a stew of intrigue, generating confusion and an apparent rift among House and Senate member over at least one of the positions.

The biggest source of discord appears to be the treasurer’s position, for which investor Ira Brody is a top contender. Senate Republicans have increasingly become uncomfortable with Brody, while House Republicans — who have benefited from tens of thousands of dollars in campaign contributions — support him.

The 40-year-old Brody had established his GOP credentials long before moving to Tennessee. He was deputy director of New York Gov. George Pataki’s transition committee and Pataki’s assistant secretary, a special assistant to former Sen. Alfonse D’Amato of New York, and an advisor to Texas Sen. Phil Gramm, according to his resume.

The concerns over Brody have centered in part on whether he has been completely forthcoming about his role in a controversial practice known as viatical settlements, a transaction in which life insurance policies are bought and sold.

Specifically, Brody and his wife gave campaign contributions in North Dakota that critics there charge resulted in legislation more favorable to viatical settlement companies.

Brody insists that he did not influence legislation in North Dakota, and said his investment company, InsCap, is not involved with viatical settlements. Moreover, he said, he has resigned from his position as partner and chief financial officer of InsCap.

Brody was named in two election-related legal actions in New York, and InsCap is also named as a defendant in a complaint filed in a Tennessee bankruptcy case, none of which he disclosed on his application.

Brody said he did not think the election complaints were relevant, and that he was not personally named in the bankruptcy complaint.

In addition, Brody’s wrote on his application that there were no liens against him or members of his household. According to a spokeswoman for the New York Department of State’s office, a former company of Brody’s, Ira Lawrence Brody LLC, owes the New York State Department of Taxation and Finance $1,481 in delinquent corporate taxes.

Brody insists that he knows nothing about the New York warrant, and said he would have paid it had he known about. He said he’s not sure that the lien is even his, and may not have heard about the delinquent taxes because the notification was sent to a wrong address.

He provided an up-to-date copy of his credit report, showing that he has a strong credit rating and no debts in default, and a letter from the state of New York saying the company, which is dormant, was in good standing.

“I would have paid this if I’d known it, and had it been mine. This is not like I’m trying to duck anything,” he said.

Acknowledging that rumors have been flying about him, Brody said “I’m not going to get in the gutter with these people.”

“I have a record of accomplishment, and that’s what I’m running on,” he said. “I have a record of public service and a successful private sector career, and that’s what I’m running on. If people want to try to smear me, that’s the politics of destruction, which I do not support.”

Some of the comments about Brody have become pointed. On Thursday, Speaker Jimmy Naifeh, who is likely to lose the speakership next week when the General Assembly reconvenes, described Brody as a “political hack” to reporters.

Brody responded with a pointed comment of his own, saying that “I can understand Representative Naifeh’s natural frustration with no longer being in the majority.”

“I’m proud of our accomplishments and will pledge to never engage in the personal politics of destruction of any Tennessee lawmaker while I serve our great state as Treasurer,” he wrote in a statement.

Process more difficult than anticipated

Most parties in the process, including candidates, have been sworn to secrecy over the discussions for the constitutional positions, and refuse to comment publicly. But privately, lawmakers acknowledge that the process has proven more difficult than expected.

Sen. Mark Norris, the architect of the recommendation process, which was supposed to promote a new level of transparency in nominating state constitutional officers, disagreed with the characterization that it has gotten bogged down. But he said the new process may have unintentionally stirred confusion.

“Because it is a new process, we are in uncharted waters, so to speak. It’s never been done before,” he said.

He acknowledged that differences between House and Senate Republicans have arisen, although he wouldn’t comment on which candidates were the source of disagreement.

“I won’t say controversy, but there are differences of opinion between the Senate and the House over what level of experience one should have for some of the more technical positions. It hasn’t gotten any worse than that yet, but it’s a fair question,” he said.