Mcwherter Hits Haslam On TN Subsidies

NASHVILLE, Tenn. - Democratic gubernatorial candidate Mike McWherter says Republican hopeful Bill Haslam shouldn't oppose his plan to create tax breaks for small business when Haslam's family business has received more than $500,000 in state grants and subsidies since 2007.

"What's good for Pilot Oil should be good for small businesses throughout Tennessee," McWherter said in a statement Monday.

Before his election as mayor of Knoxville in 2003, Haslam was president at Pilot Corp., a family owned chain of truck stops with annual revenues of $16 billion.

Haslam campaign spokesman David Smith said the mayor opposes McWherter's plan because of the state's budget crunch.

"Mayor Haslam would love to support new credits but right now is a difficult time to be promising new credit when you're $1 billion-plus in the hole," Smith said. "Mr. McWherter has made a reckless promise without offering any ideas on how to pay for it."

A state website listing payments to vendors is the source of McWherter's data that shows about $537,000 was directed to Pilot between July 2007 and November 2009. The site does not provide detailed descriptions beyond that the money was spent in "Grants and Subsidies" or "Land" categories.

Smith said the money was part of a state initiative to expand the availability of ethanol fuel.

"Pilot accepted the grant at the specific request of Gov. Phil Bredesen," Smith said

Bredesen, a Democrat, can't run again because of term limits.

Haslam, who has been the dominant fundraiser among all gubernatorial candidates so far, is opposed in the Republican primary by state Senate Speaker Ron Ramsey of Blountville and U.S. Rep. Zach Wamp of Chattanooga.

McWherter, the lone Democrat in the race and a regular critic of Haslam's bid, runs a Jackson beer distributorship and is the son of former Gov. Ned McWherter.

"It's bad enough that Haslam opposes tax breaks for small business owners," McWherter said. "Now we find out that his big oil company has received over half a million dollars in state subsidies in a little over two years."

Haslam has been criticized by rivals for refusing to release his annual earnings from Pilot and over the potential conflict of interest presented by his ongoing part-ownership of the company.

Haslam's campaign has said releasing his Pilot earnings would reveal personal information about the income of family members not running for office and proprietary information about the closely held company.

The Wamp campaign in a release Tuesday said voters are "left in the dark" over Haslam's stake in the state-regulated company that engages a lobbyist to represent Pilot's interests with the state government.

"Those efforts, apparently, have paid off," spokesman Sam Edelen said in the release. "Pilot Oil received more than a half-million dollars in state taxpayer money ... to upgrade the company's gas stations and increase its profits."

Also Tuesday, the Wamp campaign raised questions about Haslam and his family's $5.5 million stake in the development of a publicly funded movie theater in downtown Knoxville.

"Mixing of personal investment funds with the taxpayer money you oversee for your own gain or profit represents a serious breach of ethics," Edelen said.

Smith, the Haslam spokesman, said the mayor and his family only became involved in the project as a "buyer of last resort," because no one else would buy the bonds in a public bid.

Smith said Wamp is either "trying to mislead voters or hasn't done his homework -- neither are good characteristics for a governor."