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EXCLUSIVE: Haslam Administration Linked $300M Offer To VW-UAW Process

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EXCLUSIVE: Haslam Administration Linked $300M Offer To VW-UAW Process

By Phil Williams. CREATED Mar 31, 2014

NASHVILLE, Tenn. -- Were hundreds of millions of your tax dollars offered to Volkswagen -- and then pulled back -- to try to keep the United Auto Workers out of Chattanooga?

For months, Tennessee Gov. Bill Haslam has denied any connection.

But documents leaked to NewsChannel 5 Investigates offer conclusive proof that the Haslam administration wanted a say in the automaker's deal with organized labor -- in exchange for $300 million in economic incentives to help VW expand its Chattanooga operations.

Volkswagen opened the Hamilton County facility in May 2011 with great fanfare.

Initially producing the midsize Passat, there were hints of more to come. It was located on a 1,400-acre site with plenty of room for expansion.

Last year, when Volkswagen began talking about adding a midsize SUV to its product line, the Haslam administration began discussing financial incentives to convince the company to build it in Chattanooga.

At the same time, VW began talks with the UAW about creating a workers council to help run the plant.

Yet, the governor had emphatically denied rumors heard by Democratic lawmakers that state incentives were tied to Volkswagen rejecting the UAW.

"This is exactly what we was looking for," said House Democratic Caucus Chair Mike Turner when we showed him the evidence.

But while the state refused to give the documents to the Nashville Democrat, NewsChannel 5 Investigates obtained a summary from last August for what the Haslam administration called "Project Trinity."

Marked confidential, it offers Volkswagen incentives of some $300 million -- in exchange for 1,350 full-time jobs at a new SUV facility.

The catch?

"The incentives … are subject to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee."

Read the incentive summary, other related documents

Turner's response: "Looks like to me they put a gun to their head and said, 'Look, this is what we are going to give you if you do it our way and we are going to jerk it away if you don't.'"

"Do you feel like the governor lied?" we asked.

"I'm reluctant to call anybody a liar without talking to them," he answered, "but the proof's in the pudding."

Department of Economic and Community Development spokesperson Clint Brewer said in an email statement that the administration was concerned about the process, claiming that "the offer did not preclude the creation of a works council or union representation as a condition of the incentives."

But as workers prepared to vote back in February on whether to join the UAW, the governor sent a letter to Volkswagen, accusing it of "favoring the UAW."

Republican lawmakers also held news conferences, threatening to kill any incentives if the UAW won the election.

In fact, the Haslam administration now concedes that it had formally notified Volkswagen in January, as its talks with the UAW progressed, that it was withdrawing that confidential $300 million incentive offer.

That withdrawal, they said, came before the vote was formally announced.

"Due to the importance of the Volkswagen project, the state kept its incentive offer on the table for almost two months longer than the standard 90 days," Brewer's statement continued. "The administration has been consistent in saying that the state has a vested interest in the VW plant in Chattanooga."

However, the incentive offer obtained by NewsChannel 5 Investigates contains no reference to any sort of 90-day deadline.

In fact, during an interview with Fox News in February, U.S. Senator Bob Corker had also hinted that he knew those incentives had become a subject of concern for the Haslam administration.

"I know you know the state has concerns about any kind of incentives in the event the company -- and I'm not part of that. That's a separate government, as you know. But they have concerns about the UAW," Corker said.

NewsChannel 5 Investigates recently asked Corker, "Did you know that the Haslam administration had taken incentives off the table while the vote was pending?"

"I was aware," the senator replied, "that there were some concerns about incentives being on the table while the vote was taking place."

Corker also made headlines when he announced in February that he had learned that the SUV deal would go through within two weeks if workers voted down the UAW.

That would appear to conflict with the Haslam administration's admission that it had withdrawn the incentive offer that would have made the deal possible.

After seeing the confidential documents, UAW organizer Gary Casteel argued that they show the Haslam administration was part of a coordinated anti-union campaign doing exactly what they had denied -- using hundreds of millions of dollars from taxpayers as leverage.

"I think since this document is public, and I appreciate you bringing it forward, that it's obvious that the state was threatening or at least intimidating Volkswagen [that], to get the incentives, they had to change their business model," he said.

NewsChannel 5 Investigates asked Casteel, "Is this incentive document a game changer?"

"To me," he answered, "it puts pressure on the state to do what they should have done in the first place -- and that's give the incentives with no strings attached, just like they would any other company, union or non-union."

The Haslam administration declined to provide anyone to go on camera to answer questions about the documents.

But we also obtained emails that show that Senator Corker's chief of staff was in direct contact with anti-union organizers who were brought in to fight the UAW. He then shared those emails with people in the Haslam administration who were in charge of the incentives.

The union has asked the National Labor Relations Board to order new elections, citing interference by Tennessee political leaders.

Back to NC5 Investigates: Tennessee's Secret Deals
NewsChannel 5 Investigates

Phil Williams

Phil Williams

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Phil Williams is chief investigative reporter for NewsChannel 5's nationally award-winning investigative team. His investigations have earned him journalism's highest honors.