Both face charges ranging from money laundering to bribery and were arrested Tuesday morning, according to a Justice Department spokesman. Prosecutors allege the pair ran a shadowy political consulting firm led by Cothren, which operated under the false identity of Matthew Phoenix, to solicit the General Assembly and siphon off kickbacks for personal gain. The charges are linked to former Rep. Robin Smith, who resigned and quickly pleaded guilty to a single count of fraud last spring as part of a cooperation agreement with federal prosecutors. Casada, who did not seek re-election this year, is the first current or former speaker of the Tennessee House to be indicted in state history. The charges mark a new low in a stunning fall for Casada, once one of the most powerful Republicans in the General Assembly. He resigned from his short-lived speech in 2019 amid a texting scandal over sexist and racist conversations with his former boss, Cothren. Both men are expected in court for initial appearances on Tuesday. A grand jury indicted the couple on Monday, according to the Justice Department, on charges that could carry up to 20 years in prison. Both men are accused of:
theft from programs receiving federal funds; bribery and kickbacks related to programs receiving federal funds; honest wire fraud services; money laundering conspiracy; using a fictitious name to commit fraud; eight counts of money laundering;
The indictment followed a series of subpoenas sent in March to lawmakers and legislative staff, the latest development in the federal investigation that became public in January 2021, when the FBI raided legislative offices and Casada’s home, among others. Among those who testified before a grand jury earlier this year was House Speaker Cameron Sexton, R-Crossville. Sexton said in a statement Tuesday that he would continue to assist authorities and testify at any trial “as needed.” “In Tennessee, we will not tolerate public corruption, defrauding our state or bribery at any level,” Sexton said. “Together, our legislature has stood strong over the past two years to take important steps during this investigation, passing laws to strengthen campaign finance regulations and new ethics laws for elected officials and staff. “Today is a good day for Tennesseans because we didn’t turn a blind eye to these criminal activities.” Who is Cade Cothren?: Once one of the state’s most powerful political aides faces charges More: FBI raids Tennessee lawmakers’ offices and homes: What you need to know about the investigation
Phoenix Solutions’ claims
In early March, federal prosecutors charged Smith with wire fraud, prompting a swift resignation and plea agreement. Several lawmakers, including Sexton, were called to testify in a grand jury on March 28. More: Former state Rep. Robin Smith pleads guilty to federal fraud charge More: Ghost employees and kickbacks: What you need to know about TN’s latest campaign finance scandal The charges: Former Tennessee House Speaker Glen Casada, Cade Cothren’s indictment carries heavy penalties Prosecutors alleged that Casada, Cothren and Smith worked to create a shadow company known as Phoenix Solutions, hiding its operator as Cothren engineered legislative kickback payments to Smith and Casada. In November 2019, Cothren allegedly texted Casada with a link to the company’s new website, according to text messages obtained by prosecutors. “But remember you have no connection to this and you don’t even know much other than they have done work for you and they are very nice,” Cothren wrote, according to court documents. “I like the message,” Casada replied. Originally founded to offer services to lawmakers facing primary challenges, Phoenix Solutions later expanded to serve as a vendor for the General Assembly’s mail services program. The company earned taxpayer funds through the program, which gives lawmakers annual stipends for campaign contributions. Prosecutors allege this amounted to theft from programs that receive federal funds. Smith marketed the company to her colleagues in the State, lying about her connection to the company and telling colleagues a false story about Matthew Phoenix, according to court documents. Cothren later signed IRS forms as Matthew Phoenix so that Phoenix Solutions would be approved as a certified salesperson for the state, prosecutors allege. All three conspired to hide Cothren’s involvement in the venture, prosecutors allege, because Cothren understood the company would not be approved as a vendor under his name after he resigned from the General Assembly staff under a cloud of scandal. The federal indictment unsealed Tuesday reveals communications between Casada and Cothren discussing strategy, profits and communicating with Smith, who acted as a front person for the business with the General Assembly staff. “I think this is off to a good start, I’m pleased!” Casada texted Cothren in December 2019, according to court documents. Cothren reportedly agreed, but said, “we just have to make sure no one knows I’m involved.” Meanwhile, the Tennessee Registry of Election Finance has also investigated Casada and Cothren for their connections to the Faith Family Freedom Fund PAC. The PAC’s treasurer testified in January that she opened the PAC for Cothren, who was her boyfriend at the time, but said she had no further involvement in its operations. Get the latest on Tennessee politics: Subscribe to Grand Divisions Group Policy Group Text More: Voter registrar refers Casada, Cothren probe to Williamson County prosecutors An unnamed female friend of Cothren’s was also involved with Phoenix Solutions, according to Smith’s charging documents. Person 3, listed as Cothren’s girlfriend, pretended to be a fictitious Phoenix employee, fabricating an email exchange with Cothren.
The Rise and Fall of Casada in Republican Politics
Casada’s political career began on the Williamson County Commission in 1994. He would serve on the commission until he was elected Franklin’s state representative in a special election in 2001. He won the seat of Williamson by pledging to fight the state’s income tax, a highly controversial issue at the time. While in Parliament, Casada rose to the leadership of the party. In 2004 he was elected as a Republican. Then in 2007, he was elected chairman of the parliamentary group, a position he would hold until 2010 and from 2013 to 2016. Casada challenged then-Representative Beth Harwell for the speech in 2011, but lost. He was elected as the party’s majority leader in 2017. When Harwell chose to run for governor in 2018, the door was opened again for Casada to become speaker in 2019. During his tenure as speaker, Casada’s most notable accomplishment was promoting Governor Bill Lee’s school voucher plan. More: GOP chairman regrets voting for voucher bill, says program won’t be implemented in 2020 The bill passed only after Casada made a deal with a House member to remove his county from the legislation. The move broke a deadlock that would have seen the bill fail. More: After 3 months of scandal, Glen Casada is no longer speaker of the Tennessee House Casada claimed the distinction of being the shortest speaker ever in Tennessee when he resigned in August 2019 in a separate scandal involving Cothren. After announcing he would retire from the General Assembly at the end of 2022, Casada launched an unsuccessful bid for Williamson County clerk, losing the Republican primary by a wide margin. This is a developing story. Want to read more stories like this? A subscription to one of our Tennessee editions gives you unlimited access to all the latest political news, as well as newsletters, a personalized mobile experience and the ability to leverage stories, photos and videos from all daily USA TODAY Network sites .
