posted June 4, 2007
A witness at the federal trial of state Sen. Jerry Cooper said Monday that the veteran Warren County legislator used $95,000 in campaign funds for personal use after he got heavily in debt.
Scott Kennedy, an agent with the IRS, said Sen. Cooper did not report the funds on either his personal or corporate tax returns.
He is not charged with any campaign fund violation, but the Smartt, Tn., Democrat is facing bank fraud charges in a trial before Judge Curtis Collier in Chattanooga.
Prosecutor Gary Humble told the jury that Sen. Cooper got heavily in debt at his lumber mill, then he had a false appraisal prepared so he could arrange a $1.77 million loan for an Alabama man who wanted to buy the mill.
He also said the senator used his political influence through Lt. Gov. John Wilder and others to get the loan and to arrange for a grant to build a rail spur. The appraisal said the spur was already in place.
Defense attorney Jerry Summers said the case was about trying "to get" a leading state political figure. He said the bank was aware the rail spur was not there.
James Passons, a McMinnville appraiser and longtime Cooper friend, said he was asked by Cooper to prepare an appraisal for the buyer, Tony Auyer.
He said Cooper told him that the rail spur was "a done deal" so he agreed to include it in the appraisal at a value of $300,000-$400,000. He said Cooper promised that the appraisal would not be used until the spur was in place.
The witness, who was charged in the case and found not guilty after a trial, said of including the information on the rail spur, "I knew it wasn't the right thing to do."
He said Cooper told him the county executive and the industrial development board had approved the grant for the rail spur. He said he spoke to the county executive personally about it.
Passons said of doing the appraisal, "I didn't make a dime on it. I had to pay somebody to type it up, and it's cost me several thousand dollars since then."
He said he dealt with Cooper and his wife. He said, "I never talked to Tony Auyer. I never seen Tony Auyer until the deal went sour."
Attorney Summers asked Passons if prosecutors told him they were going after Cooper and Wilder. He said, "I heard something like that."
Prosecutor Humble said neither he nor the female case agent ever said anything like that to Passons.
Linda Hillis, former bookkeeper at Cooper Manufacturing, said the firm struggled financially for five years, then things got worse. She said she volunteered to go off the payroll after she was involved in a wreck.
She said the main problems started after Cooper began working with Joel Akers and opened a second plant at Murphy, N.C. "That's when the problems started," she said.
She said Akers ran the operation in Warren County and would use sub-standard lumber on orders. She said, "We would bid #1 grade, and use #2 or #3 grade, which is for pallets.
"We were shipping overseas, and at least two shiploads were rejected due to the quality of the wood."
She said the firm made pallets, moldings and parts for rocking chairs and recliners.
Ms. Hillis said Akers finally "took bankruptcy, but Jerry Cooper would not."
Agent Kennedy said bank records showed financial problems at the lumber mill.
He said there were $6,083 in insufficient funds charges, $2,917 in overdrawn charges and $415 in other bank charges relating to funds shortages.
Only one payment was ever made on the loan, which was insured 80 percent by the federal Department of Agriculture. It was made by Bank Tennessee of Collierville.
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