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Gov.-elect Lee to depart as chairman of Lee Company

By Published: January 09, 2019 5:13 PM CT

Gov.-elect Bill Lee announced Wednesday he will leave his post as chairman of Lee Company, one of the state’s biggest mechanical contractors, and put his company holdings into a blind trust.

“As I said I would do on the campaign trail, I have officially stepped away from my company and placed all of my company holdings into a blind trust to eliminate any potential conflicts of interest,” Lee said in a statement Wednesday. “I look forward to this new chapter of public service, and I leave knowing that Lee Company is in good hands with CEO Richard Perko and the board of directors.”

According to a statement from the governor-elect’s office, Lee resigned from Lee Company Dec. 21 after more than 35 years with the company, and the board of directors signed a resolution removing him as chairman. It was effective at the close of business on Wednesday, Jan. 9. In addition, Lee’s stock in the company was to enter a blind trust effective Wednesday.

Lee Company will fulfill obligations on state contracts, as the company previously said, but it will no longer pursue state contracts. And, with his holdings in a blind trust, Lee no longer will communicate with the company about contracts or business decisions, according to the statement.

The family-owned Lee Company, which has facilities and home services in Middle Tennessee, North Alabama and Southern Kentucky, employs more than 1,200 people and has annual revenue of more than $220 million.

Local contracts questioned

A Lee Company spokeswoman said Wednesday, however, the company will “continue its partnerships with local customers.”

The family-owned Lee Company, which has facilities and home services in Middle Tennessee, North Alabama and Southern Kentucky, employs more than 1,200 people and has annual revenue of more than $220 million.

Lee Company, which has done ample work for the state of Tennessee, including HVAC work on the Capitol renovation, no longer has state contracts in effect, according to the Department of General Services in December.

But it holds eight contracts with Metro Nashville worth a total of $17.5 million that are effective through November 2019 to July 2022. They deal mainly with building and maintaining HVAC systems and repairing appliances, and Metro has paid Lee Company more than $12.5 million on those contracts, according to Metro Nashville records.

Lee Company is also a contractor for Williamson County Schools under its HVAC maintenance and repair contract, making $346,000 during fiscal 2018-19 for work with the system.

Since the five-year contract started in fiscal 2013-14, the school system has paid Lee Company $850,000, according to information provided by the system.

Democratic gubernatorial candidate Karl Dean criticized Lee during the 2018 campaign for not publicly disclosing his government contracts, considering he called himself a governor “outsider.”

Lee has declined to make his tax records open for inspection, saying it is proprietary information, and his spokeswoman Laine Arnold confirmed Wednesday he will not release that information.

State Rep. John Ray Clemmons contends Lee still has a conflict of interest as long as Lee Company has any state or local government contracts.

Clemmons, a Nashville Democrat, also contends he can’t set up a “straw party” to run the company while he’s governor, then come back after leaving office in four to eight years and resume control and benefit from government contracts.

Lee would need to sell his interest or relinquish it entirely under the law, according to Clemmons, a Nashville attorney.

“Just simply removing yourself from the equation as an officer of the company does not eliminate the conflict the interest under the law in Tennessee because there’s still a monetary and financial interest in that company and how it does during that eight years regardless of whether he’s an officer,” Clemmons said.

An attorney general’s opinion issued in 1981 backs up state law prohibiting the governor from holding connections with government contracts of any type.

Lee has declined to make his tax records open for inspection, saying it is proprietary information, and spokeswoman Laine Arnold confirmed Wednesday he will not make that information public.



Topics

Bill Lee Karl Dean
Sam Stockard

Sam Stockard

Sam Stockard is a Nashville-based reporter with more than 30 years of journalism experience as a writer, editor and columnist covering the state Legislature and Tennessee politics for The Daily Memphian.


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