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Ethics panel calls for DA to investigate sheriff, staff members; seeks permission to hire attorney

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MURFREESBORO - The Rutherford County Ethics Committee is asking the District Attorney General's Office to launch an investigation into potential conflicts of interest and misconduct by Sheriff Robert Arnold involving questionable contracts, purchases and vendor services at the county jail linked to him, his family and top administrator.

The five-member committee chaired by County Trustee Teb Batey called for the DA Thursday to look into the sheriff's dealings with JailCigs, JailSnacks, a Keefe Commissary subsidiary's $15,000 purchase of stun guns, a contract with Telmate for inmate computer tablets and any other contracts not authorized through the county's purchasing process.

Committee members also asked the DA to determine possible conflicts of interest regarding Chief Deputy Administrator Joe Russell, a co-owner of JailCigs and JailSnacks, and Detective Maj. Bill Sharp, who has been running a private training and consulting business out of the sheriff's office.

In addition, the panel voted unanimously to seek the County Commission's permission to hire an outside counsel to assist it with handling the ethics complaint lodged against the sheriff by a Murfreesboro group. The next commission meeting is set for May 14 at 6 p.m. at the County Courthouse.

Committee members said they want to make sure they gather the information necessary to make a decision, other than news reports, and have an attorney provide them with legal advice if necessary regarding potential ethical violations or criminal violations of state statutes as set out in the panel's guidelines.

County Commissioner Rhonda Allen, who serves on the committee, also raised questions about the Arnold's responsibility to uphold his duties as sheriff and pointed out if he previously didn't know Russell was a co-owner of JailCigs and JailSnacks, he does now and hasn't taken any action to suspend the chief deputy or relieve him during the investigation.

"I think it's incredibly serious. When you lose the confidence and trust of the citizens, you can't function effectively, and that goes beyond just his office to all of us. It just puts a black eye on the whole county," Allen said afterward, noting the committee needs to be "beyond reproach" and "thorough" in handling the matter. "I don't want to hang anybody out to dry. I don't celebrate anybody's troubles, ever. I'm sorry for him and for his family that this is going on, but we have an obligation to get to the truth."

Arnold did not attend the meeting but had his attorney, Tom Dundon, a white-collar criminal defense lawyer with Neal & Harwell in Nashville, represent him. Dundon told the committee he could not respond to any complaint until investigations by the TBI and state Comptroller's Office into Arnold's administration are complete.

"It was an investigation already and they are referring it to the appropriate authorities for the same investigation," Dundon said afterward. "I don't think it's duplicating. I think it makes sense. They're actually not duplicating. They're just making sure the DA knows their wishes, and that's entirely proper."

Asked about questions involving Sharp and Russell, Dundon said he is representing Arnold only.

The complaint was lodged by Murfreesboro residents Steve Lane, Jacob Bogle and Joe Liggett, who also are planning to file an ouster suit, possibly in the next few days, in an effort to remove Arnold from office until a judge makes a decision on the legal effort.

"I really thought they were going to back up and punt today," Lane said afterward, "but it's clear from not just the length of the meeting but the questions they were asking, the things they were requesting, these county officials want to act and they intend to act."

Committee member Robert Peay asked specifically if any revenue from JailCigs or JailSnacks sales came into the county's general fund.

Finance Director Lisa Nolen confirmed four contracts were initiated at the sheriff's office without going through the county's purchasing process. In four instances, items were purchased on the county's account but were not paid for by county funds, she said.

Nolen explained the Finance Department receives money earmarked as Commissary from the sheriff's office, but a listing of receipts did not show any for JailCigs or JailSnacks.

Peay noted the sheriff would have to forfeit all pay and compensation if the vendor contracts are profiting him and said he felt the committee had grounds to ask for an inquiry by the DA.

County Commissioner Brad Turner, another committee members, pointed out the sheriff's office handbook prohibits conflicts of interest and explicitly prohibits using office equipment to benefit. Both Sharp and Russell used county computers to run JailCigs and Sharp Training and Consulting, dozens of emails obtained by The Post show.

The TBI and state Comptroller's Office are investigating Arnold's connection to JailCigs, which was selling e-cigarettes to inmates at $12.95 each without a County Commission-approved contract.

Arnold, a Republican who won election to a second term last August, lists JailCigs as an investment and source of income on a financial disclosure form filed with the Tennessee Ethics Commission in January. He also lists his wife, Megan, as holding investments in JailCigs on the document, the signing of which was witnessed by Chief Deputy Randy Garrett, second in command at the office.

JailCigs, which has since been suspended from the county jail, is owned by Arnold's uncle and aunt, John and Judy Vanderveer, and Russell, who is Arnold's next-door neighbor, campaign chairman and financial chief at the sheriff's office, Georgia state documents show. They also own JailSnacks, a vendor for prisons and jails, records show.

The sheriff, who has declined comment for the most part during the investigation, also signed and amended other contracts without commission approval or the knowledge of top county officials, a violation of the county's purchasing process and a possible misdemeanor.

He inked a contract with Telmate, LLC, a Delaware limited liability company based in San Francisco, for an inmate computer tablet use and services agreement in December 2014, according to documents obtained by The Post. The tablets enable inmates to communicate with family and friends, paying a fee to use them.

Records obtained by The Post also show the sheriff made a contract amendment between Keefe Commissary Network and the county jail in December 2012 under which Keefe would be the "sole provider" for inmates to order products through family and friends. Keefe would put 25 percent of adjusted gross sales into a "technology fund" starting Jan. 1, 2013 for the jail to buy computer and other electronic equipment.

Arnold also approved a deal with one of the Keefe's subsidiaries to purchase tasers, lasers and holsters for $15,000, bypassing the county's purchasing procedures and without the knowledge of top county officials, records show.

In the latest questionable deal to come to light, John Vanderveer, co-owner of JailCigs and JailSnacks, ordered 1,000 prison bags for inmate clothing at $7.99 each, a total of $7,990, according to a document obtained by The Post through an open records request with the Rutherford County Finance Department.

The order from jail supply vendor Bob Barker Co. in Fuquay-Varina, N.C., is to be delivered June 22 to Rutherford County Sheriff's Office, according to the purchase order. The purchase was made with Vanderveer's credit card, according to county officials.

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Ethics committee, Jail Cigs, JailCigs, Robert Arnold, Sheriff's Office
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