State hires firm with Bredesen contributor

Nashville City Paper
By John Rodgers
December 14, 2005

In an attempt to fix political cronyism within the state’s Department of Safety, Gov. Phil Bredesen’s administration has selected a consulting firm that employs one of Bredesen’s political supporters and a large campaign contributor.

The state selected Kroll Inc., a New York-based consulting company to recommend changes to the embattled Department of Safety and the Tennessee Highway Patrol.

But a large Bredesen campaign contributor, Nashville’s Michael Shmerling, works as a senior advisor to Kroll Background America, a Kroll subsidiary based in Nashville.

And since 2000, Shmerling has contributed at least $7,500 to Gov. Phil Bredesen’s campaigns for governor.

State officials rushed to defend the contract with Kroll. Officials with the state’s Department of Finance and Administration, which negotiates state contracts, said they were not aware of Shmerling or his involvement with Kroll.

“We have no knowledge of any political donations by anyone,” said spokeswoman Lola Potter.

In addition, an official with Kroll defended the consulting contract. Jodie Rosenbloom, a spokeswoman for Kroll, said the subsidiary that Shmerling advises, Kroll Background America, did not have a role in the negotiations with the state.

The contract indicates a separate subsidiary, Kroll Government Services, negotiated the deal with the state’s finance department.

The move to hire Kroll comes after a tumultuous time last week when both the commissioner of the Department of Safety and the top law enforcement officer at the Tennessee Highway Patrol resigned amid allegations of ethical misconduct.

State Finance Commissioner Dave Goetz said he estimates it will cost the state between $100,000 and $200,000 for the study, depending on the amount of experts Kroll brings in.

“But don’t hold me to that,” Goetz said in response to the Senate Transportation Committee’s questioning Tuesday about Kroll’s estimated cost.

Senators on the panel were concerned that the Bredesen administration settled on Kroll without allowing other companies to bid for the job.

“I get real skittish about no-bid contracts,” said Sen. Jerry Cooper (D-Morrison) to a group of state officials, including Goetz and acting Safety Commissioner Gerald Nicely, who were testifying to the panel.

Goetz said the state did talk to the International Association of Chiefs of Police, but the agency was not interested in the job.

Other companies contacted were North Highland Co. in Nashville and the Police Executive Research Forum, Potter said.

State officials defended not filing a standard request for bids because they said that would take too long, specifically because Nicely will only be in his job for 60 days.

“The normal (bidding) process would take more than 60 days,” Nicely said.