Former Sundquist administration employee indicted
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The charges allege Joanna L. Ediger lied when she said a company owned by Sundquist’s friend was the only one qualified to win a $1.9 million contract awarded in 1999. Ediger, 35, is charged with mail fraud, wire fraud, bribery and lying to investigators about her dealings with a Chattanooga company, Workforce Strategists, in 1999 and 2000.
The company, owned by Sundquist’s friend, Monteagle businessman John Stamps, provided counseling and placement services for unemployed workers. It got the state deal in late 1999 as a “sole-source” contractor, meaning officials believed it was the only company qualified to do the job properly.
The indictment says Ediger improperly used her authority to help the company get the contract “in exchange for and in consideration of anticipated personal and pecuniary benefits” from Workforce Strategists and its owner.
The indictment refers to the owner of Workforce Strategists only as “Individual A.”
When state finance officials were looking into her assessment of Workforce Strategists, Ediger wrote a fraudulent memo that said she spoke with another company that couldn’t meet the state’s timeline and had submitted a bid three times higher, the indictment said.
The same day, July 15, 1999, Ediger submitted her resignation from state government and left the following month.
In August, federal prosecutors said, Ediger became a paid consultant for Workforce Strategists and helped finalize the contract, which was originally for $644,000. The contract, which was funded with a federal grant, was extended twice for a total value of $1.9 million.
Ediger later became a part-owner and partner in the company, according to the indictment. She was paid $137,401 between 1999 and 2001, including a $10,000 check for services from October 1999 through January 2000.
Prosecutors declined further comment on the indictment but said the investigation is continuing.
A grand jury is believed to be looking into other contracts awarded during the Sundquist administration. E-mails sent to or by Ediger, Sundquist and more than two dozen current or former state officials were subpoenaed in 2003.
If convicted on all four counts, Ediger faces up to 30 years imprisonment and a fine up to $1 million.
“She has not been arrested, but we anticipate she will self-surrender,” said Zach Fardon, first assistant U.S. attorney. Fardon did not know when Ediger might turn herself in.
Ediger did not return a call seeking comment, and Stamps declined to discuss the indictment.
His relationship with Sundquist dates back decades to their participation in the Young Republicans group. In 1975, they were among the co-founders of a bank in Germantown, near Memphis.
In October 2002, federal and state investigators seized documents from Workforce Strategists’ Chattanooga offices. The company is now out of business.
Sundquist left office in January 2003, and he could not immediately be reached Thursday. He has previously declared he knew of no wrongdoing in any state contracts during his administration.
His successor, Gov. Phil Bredesen, declined comment.
Labor Department spokesman Jeff Hentschel said “we’re aware of the investigation and are cooperating with federal investigators. It is unfortunate this happened with the previous administration.”