Cooper pleads not guilty to federal charges

CHATTANOOGA ? Federal charges against a Tennessee state senator in a politically laced borrowing scheme are not the end of the long-running investigation, a prosecutor said before the senator pleaded not guilty Tuesday.

Democratic state Sen. Jerry W. Cooper entered the plea one day after a Huntsville, Ala., businessman who previously pleaded guilty in the case reported to prison to begin a 34-month sentence.

U.S. Magistrate Bill Carter on Tuesday allowed Cooper, 58, to remain free on bond pending a Nov. 6 trial on charges of bank fraud, mail fraud and fraud conspiracy.

Cooper declined comment but his attorney, Jerry Summers of Chattanooga, said he was comfortable with having a jury decide if Cooper committed a crime. Summers said there is a ?thin line? between ethical mistakes and breaking the law.

Summers said he thought there were mistakes made in the deal, possibly by Cooper.

Cooper is the sixth current or former Tennessee legislator indicted in the past 18 months, including five in the FBI?s Tennessee Waltz bribery sting.

Cooper?s office on Monday released a statement saying he was resigning as chairman of the Senate Commerce, Labor and Agriculture Committee ?based on the current circumstances.?

An Aug. 22 indictment said Cooper was ?deep in debt and trying to avoid bankruptcy? when he used political influence to help secure bank financing for a sale of his lumber mill property in Warren County to Anthony Auyer of Huntsville, Ala.

A previous indictment that identified Cooper as an unindicted co-conspirator claimed he ?used his political contacts, connections and influence? to help the lumber mill buyers get a $1.77 million federally insured loan from BankTennessee and a $485,000 equipment loan from the state.

Bank records show Cooper contacted Lt. Gov. John Wilder, a part-owner of BankTennessee, about the loan and that Wilder’s involvement was key to the bank granting it.

Wilder, D-Mason, initially said he spoke with Cooper about the loan, but later said he was mistaken and never spoke to Cooper about it.

Assistant U.S. Attorney Gary Humble declined comment about the case Tuesday but said the ?investigation is continuing.?

A legislative subcommittee decided months ago that Cooper did not improperly use his influence as a senator to get state funds.

Auyer and his business manager wife, Teresa Auyer, pleaded guilty to several counts of fraud, conspiracy and money laundering on the eve of a scheduled April trial. Some of the charges stemmed from falsified invoices.

A jury acquitted real estate appraiser James Passons of McMinnville on charges that he inflated the value of Cooper’s lumber mill property.

Passons said Cooper had assured him the 1998 appraisal would only be used to show the projected value of the property with the spur built.

?You don’t know how many times I have kicked myself,? Passons testified at his trial.

The prosecutor said the appraisal showing the rail spur helped Cooper arrange the bank loan for Auyer to buy the lumber mill.

Cooper is in his sixth four-year term in Senate District 14, which includes Franklin, Bledsoe, Coffee, Grundy, Sequatchie, Van Buren and Warren counties. Summers said Cooper is ?embarrassed for himself, his family and the people he represents.?

Summers said he would ask for Cooper?s trial to be moved to Winchester. He also said he did not expect Wilder to be called to testify.