Where is Dean's due diligence on appointments?

You would think with the recent IQT debacle, the Mayor's Office would be pausing to revise its commitments (or lack thereof) to due diligence of its executive decisions. Despite claims by uncritical supporters that Karl Dean exercised due diligence in the case of IQT, it is not clear that due diligence or process mattered.

I heard from a Nashville leader who had been corresponding with IQT that the company refused to supply Metro with "standard due diligence" items that could have allowed background and financial checks. According to that insider the city did not spend "a ton of time" on the IQT deal. Metro saw the prospect of new jobs, "got excited" and made it easy for IQT to move without the due diligence items.

That leader's perspective is consistent with a July 22 Nashville Business Journal report that the "unraveling" the IQT deal revealed "no consistent, coordinated effort ... for vetting companies that seek tax money in Tennessee."

Weeks later we are approaching what should be a strictly Metro Council appointment to replace David Torrence at Criminal Court Clerk. Yet, Karl Dean has already usurped control and anointed former Vice Mayor Howard Gentry, who is generally above reproach, but he has few credentials for a job in Criminal Court and he might not even qualify for a short list of candidates to the position. This anointing sends a clear signal to the rubber-stamping Dean-wing CMs how to cast their votes during next Tuesday's council meeting; for the lazy, voting with Dean means CMs not having to be responsible for due diligence.

So, of course, Mr. Gentry will sail through next week without any objective procedure determining his selection. But this is not the first time Mayor Dean has picked people for departments, boards, and commissions because he knows them and not because they were objectively judged to be the best candidate for the position. The litany of cronyism:

• Ana Escobar, Metro Clerk (was with Dean at Public Defenders’ Office. No one else interviewed.)
• Rita Roberts Turner, Human Resources Director (was with Dean at the Public Defenders’ Office. Proved not to be a good fit as Dean's Chief of Staff. At job opening, Dean moved her, with no one else interviewed.)
• Keith Durbin, Metro I.T. Director (moved up from Metro Council. No one else interviewed.)
• Stephen Anderson, Metro Police Chief (promoted, with no national search conducted.)
• Billy Fields, Mayor’s Office of Neighborhoods (no one else interviewed.)

While those appointments were Dean's to make, the Mayor's selection of Dawn Deaner to Public Defender (she was also with Dean when he was at that office), was the council's, but according to one source I spoke with, Dean cued the rubber stamps on his support of her appointment.

Compare Dean's record to that of Dean's predecessor, who had a thorough vetting procedure that included nationwide searches, pro recruiting firms based on competitive bids and finally, local selection committees. I found out that the selection process produced brochures describing relevant departments, positions, qualifications and duties. The firm and committee typically submitted a "short list" of candidates to the relevant Board or Commission, which then shortened the list further to finalists to present to then-Mayor Bill Purcell. Consequently, the appointments came from all over the country and went to highly qualified candidates:

• Ronal Serpas, Metro Police Chief (recruited from Washington State)
• Scott Potter, Metro Water Services (locally grown, but demonstrated qualifications)
• Rick Bernhardt, Metro Planning Department (again, qualified and local)
• Dr. Bill Paul, Metro Health Department (recruited from Chicago)
• Roy Wilson, Metro Parks Director (recruited from Houston)
• Rick Connor, Public Works Director (recruited from Texas)

If the Mayor is going to usurp what little power the Metro Council has, common sense would dictate that he should only do so to assure due diligence and procedure in selecting candidates for office rather than simply doing so to advance his own interest in surrounding himself with unquestioning loyalists. The lack of process sends a terrible message to the departments, boards and commissions that they do not have to exercise due diligence themselves. The appointment of Jennifer Cole, wife of Dean supporter, CM Erik Cole, to the Metro Arts Commission may have been mimicry of dubious diligence since Ms. Cole had no arts experience before her appointment. Not only does a lack of process expand cronyism, but it also increases the chances that leaders across the system will rush to IQT-like washouts again.

By the way have you noticed that the media is deafeningly silent on these hiring ethical dilemmas? I've heard that we may see stories raising questions about the lack of searches after Howard Gentry's appointment, but not until then. What are the journos afraid of?

Canadian legal blogger observes Nashville-IQT deal was news to them, role of social media in Mayor's about-face

According to Canada's online legal magazine:

According to news coverage that developed after the shutdown, it was revealed that the City of Nashville, Tennessee, had granted IQT a US$1.6-million incentive to build a new 60,000-square-foot call centre and headquarters there to employ 900 locally. One of the conditions of receiving the grant was for IQT to explain to Nashville officials its business strategy in Canada. I guess instead of explaining their strategy to ensure the award of the grant they just decided to get rid of the “obstacle”. In addition to the abrupt shutdown of their Canadian operations, IQT Canada said they filed bankruptcy papers. However, a records search by government officials revealed no official filing of bankruptcy.

Due to the media coverage and social media attention on Facebook and Twitter, the City of Nashville has chosen to withdraw its $1.6 million promise to fund IQT Solutions’ new operation in Tennessee.

The images of IQT, the regressive company Governor Haslam and Mayor Dean gushed about, are getting clearer and more unflattering

It is difficult to reconcile the image of IQT in "Bob's Interview" below with the company that Bill Haslam declared on faith as "good-paying" and "high-quality". Notice in the report that the company put bankruptcy signs up on their doors the day they laid off workers even though bankruptcy has never been filed.

Ronnie Steine says that Mayor Dean should not be criticized for vetting failures in the IQT debacle

CM Ronnie Steine once threw a kanipshin fit in council when a bill shepherding one of the Mayor's real estate deals was pulled on first reading for discussion (bills on first reading are usually passed together without discussion on a consent agenda). How did Steine get his comeuppance? He moved to pull every other bill on first reading to prove a point.

The point I took from his stunt was that raising questions about policy is wrong in the beginning and that discussion on legislation should be limited and tightly controlled by committees that many of us who work for a living don't have time to attend. In other words, Steine's point was to discourage any probing, far-reaching or no-holds-barred discussion on an important economic development policy favored by the Davidson County executive who otherwise does what he wills, remotely detached from the citizens affected by the policy.

The reason behind the Mayor's precipitous concern about Ontario's laid off IQT workers?

Mayor Karl Dean received a letter from Ontario's Minister of Labour that we have not heard anything about here in Nashville:

To his credit Labour Minister Charles Sousa is tackling the problem from a couple of angles. The ministry is investigating IQT’s shutdown as a priority and it is helping hundreds of workers file claims with the ministry for unpaid wages.

At the same time, Sousa has kicked up a fuss in Nashville, Tennessee, where the company had planned to collect $1.6 million in city incentives to open a call centre there. “It is important for all governments to send a clear and strong message to companies . . . that we expect compliance with legal obligations,” he wrote in a letter to Nashville’s mayor. He specifically mentioned unpaid wages, severance and other issues.

Sousa also told Mayor Dean that he intends to make sure that the rights of workers unpaid for their labor are protected. At least somebody has kicked up a fuss with the Mayor's Office. It has generally been no fuss, no muss for Karl Dean's first term.

Dude. Sousa is member of the Canadian Chamber of Commerce. I cannot even imagine a member of the U.S. Chamber of Commerce advocating compliance and worker rights. I bet it threw Hizzoner off his game.

Why did Mayor Karl Dean wait until after the agreement was reached to vet IQT?

From today's Nashville Business Journal:

The city’s decision today to abruptly cancel talks with IQT Inc. came one day after Nashville’s top economic development official said the city should have further investigated the company and its founders.

The announcement came after inquiries from the Nashville Business Journal regarding IQT co-founder David A. Mortman’s previous venture that unraveled amid allegations of securities fraud and disputes with investors in the late 1990s ....

Mortman — who co-founded IQT with his son, Alex — was president and chief operating officer of Global Intellicom, a $51 million, New York-based telecommunications firm that was involved in a number of lawsuits filed between 1997 and 1999.

The Mayor's Office told the Journal that they would have raised questions if they had known of David Mortman's involvement earlier. Was it not common knowledge that the company was co-founded by David and Alex? Does the Dean Team not look before it leaps into agreements?

They also told the reporter that they did not know about the Global Intellicom history. And is that supposed to instill public confidence that Karl Dean properly vets the businesses he lures to relocate in Nashville?

Canadians send emails of thanks to Metro Council for end of IQT plan

From Ontario:

Your support for the IQT workers in Canada is overwhelming. Though I am not personally affected, I am appreciative nonetheless.

I can only reciprocate in kind by visiting as a tourist and will make a point of doing so.

Thank you again!

From Nova Scotia:

I read today in a Canadian paper that Nashville has canceled their grant of 1.6 million to IQT Solutions to create 900 jobs, and that this was in response to leaving 1000-1400 Canadian workers without their pay, vacation pay (required by law) and notice or severance pay. (also required by law). Bravo for worrying about the protection of your workers, and putting people first.

I am not personally affected, I live in Nova Scotia (we hang out here in the north Atlantic but it is BEAUTIFUL here and you are never more than 50 miles from the ocean), far from the locations where the workers are. . . but wanted you to know that this made me want to put Nashville in my travel plans. I will be avoiding Arizona and Wisconsin and visiting Nashville!

I can tell you that people noticed - thanks a lot for standing up for the "people", for the workers, and supporting each other - I am sure that this behavior demonstrated the type of company that IQT is, and made you think twice about doing business with them - but it still feels good to have the support. You could have just taken the jobs and said -- too bad to Canadian Workers.

So I just thought that I would send this little note of support to the City Nashville - thanks a lot.

News media in Canada confirms IQT CEO email stating that Nashville relocation "will not materialize"?

During their report on today's protests by former IQT employees Channel 12 news quotes the same email posted in the comments section on this blog yesterday indicating that IQT's CEO believes the Nashville relocation is dead:

Screenshot of today's ChexTV broadcast

UPDATE: The Deanessean is confirming that the Mayor's Office is pronouncing the Nashville deal with IQT as off, so now it must be official and true. Right?

Karl Dean and Bill Haslam offered IQT government subsidies and 1,000 working class Canadians lost their paychecks

Video footage of today's protests by former IQT workers in Canada:





It has been about a month since co-CEO Alex Mortman stood alongside Tennessee Governor Bill Haslam, Mayor Karl Dean, Nashville Chamber of Commerce big shots and economic development managers while wooing Nashville in search of "savvy" workers. A month later he has jilted Canadian workers while cheating them on what IQT owes them.

And Haslam and Dean provided Mortman the money to burn his former employees. Here is what Haslam said of IQT in June:

Most of us are unfamiliar with the company’s name, but it’s highly likely many of our sales, service and technical support questions for technology companies have been handled by the people at IQT .... I’m pleased these technically-focused, good paying jobs are being created in Tennessee. IQT is helping us make Tennessee the No. 1 location in the Southeast for high-quality jobs.

That is quite a bit of exaggeration, given that IQT paid its Canadian employees $11 per hour and then took their last paychecks and did not meet severance and vacation obligations. That does not sound like a future win for Tennessee workers, Governor Haslam.

And Mayor Karl Dean was absolutely glowing:

IQT is a vibrant, technology-focused company that has found a perfect home in Nashville, a vibrant, technology-focused community .... I couldn’t be more pleased to welcome 900 new jobs for Nashvillians and another development boost for SoBro, a fast-growing downtown neighborhood.

Apparently, IQT is not as vibrant as Mayor Dean believed them to be. There are reports of bankruptcy proceedings. Did someone in the Mayor's Office fail to properly vet this company or were they aware of the negative impact for Canadian workers all along and did not care until the story spun beyond the usual spin cycle?

The Mayor in Nashville speaks on IQT, Oshawa Mayor says he'll give Dean a call

Karl Dean is in a difficult place. News reports out of Canada say that IQT is both in bankruptcy and heading to its new home in Nashville with the payroll, severance and vacation cash it owes hundreds of Canadians it laid off. Mayor Dean has repeated economic development so much since 2007 that it is now hackneyed, but he's got to find a way to explain during his re-election campaign what to do with plans to subsidize a IQT in order to provide 900 jobs when the company just shed 1,200 jobs in Canada, where they reportedly received government subsidies too.

So, late this afternoon Hizzoner dispatched the usual talking points adjusted for the awkward situation at hand:

We were surprised and concerned to hear about the developments in Canada, and I was dismayed by the way the company treated its employees there. Rest assured, Metro taxpayers are protected. Metro’s agreements with IQT have not been finalized, and no incentive funds have been paid to the company. Consistent with my philosophy on economic development, the incentives offered to IQT are based on the company’s ability to bring jobs to Nashville. If they don’t create jobs here, they don’t get incentives. We are not moving forward on this deal unless we get answers from IQT that satisfy my concerns.

Meanwhile, back in the Great White North, the Mayor of the town IQT abandoned, angry that his constituents may not be able to pay their bills or feed their kids in the near future, intends to phone Nashville:

IQT paid its Oshawa employees $11 an hour but received incentives from the Tennessee government to move.

“How much lower can you go in terms of wages?” Ryan wondered.

Oshawa Mayor John Henry says he is going to phone the mayor of Nashville and the city’s chamber of commerce to tell them what kind of company IQT is.

“This is tragic for the community,” Henry said. “It is the direct jobs at IQT but also all the suppliers. All those people who had a working relationship with this company. Now (IQT workers) are going through the turmoil of trying to recover their money.”

It is probably difficult for even the best PR firm to market hundreds of new jobs a Mayor is going to create when news gets out that they torpedoed even more jobs and pinched wages-already-earned in someone else's community.

Mayor's Office email: Nashville IQT agreement put on hold in wake of Canada closure and lay-offs

In an email addressed to the Metro Council's lawyer, the Mayor's Office proclaims a stoppage of the agreement with IQT, which Dean administration officials touted as bringing 900 jobs to Nashville in exchange for Metro subsidies:

Jon [Cooper], In regard to the announcement on Friday that IQT, Inc. had closed three operations centers in Canada, please be advised that the agreements between IQT, the State of Tennessee and Metro Government have not been executed. As you know this is a performance based agreement and we will not move further toward finalizing these documents until we receive further clarity on this situation. Matt Wiltshire has communicated our concerns to IQT’s Chief Executive Officer. Our office will keep the Council informed as we receive more information.

Marty Szeigis
Office of the Mayor
(615) 880-3344

News is still floating out of Canada that IQT is in bankruptcy proceedings. A commenter in a previous Enclave post said that co-CEO Alex Mortman told her over the weekend that the deal with Nashville would probably not materialize.


UPDATE: Local Canadian newscast, first 2 minutes of which are coverage of the IQT lay-offs with interviews of former employees: