Smith, who pleaded guilty to honest services fraud in 2022 and is cooperating with federal prosecutors in the kickback case against Casada and Cothren, described the state’s postage and printing program for lawmakers as “low-hanging fruit” because it would be an instant way to make money. House members receive $3,000 in state funds to send out surveys and informational mailers, both of which must receive approval from the Speaker’s office and the director of legislative administration.
Cothren formed Phoenix Solutions in early November 2019 through the New Mexico Secretary of State’s office and created a registered agent, a method that would enable them to “mask identities” of Casada and Cothren, just months after they resigned their posts because of the texting scandal that broke open in the spring of 2019.
Smith explained that politicians are “acutely aware and sensitive” about their associates and want to maintain the “halo effect.” Thus, they had to keep Casada’s and Cothren’s connections to Phoenix Solutions secret to do business with Tennessee lawmakers.
“It was understood that I would be the least suspicious of the three to approach lawmakers,” Smith said of the business arrangement. “I was the only one that didn’t have a radioactive halo around me.”
She added that Casada “did not understand the toxicity of the scandal.”
Smith said the arrangement called for her and Casada to receive a portion of the money lawmakers spent with Phoenix Solutions based on the number of clients they brought to the company. Ultimately, lawmakers spent about $52,000 with the company from the postage and printing accounts.
A former chairman of the Tennessee Republican Party, Smith played a role in Republicans taking the majority from Democrats and then winning a supermajority. Smith described herself as a “den mother” and said she came up with the name “Phoenix” from reading the Bible and Greek mythology and felt Casada and Cothren had gone through “public scrutiny” and, similarly to the mythical bird, would be rising “from the ashes.”
Smith testified after Nick Crawford, a lobbyist with Capitol & 5th Public Strategies who initially handled work done by Phoenix Solutions and its bogus agent, Matthew Phoenix, while he worked as a House Republican Caucus adviser for Chairman Jeremy Faison.
Crawford, the first person to receive a phony W-9 form signed by Matthew Phoenix, said he thought it might have been signed by a computer. He also said he was never able to speak with Matthew Phoenix by telephone or text message, only by email.
Smith pleads guilty to wire fraud connected to shadowy campaign vendor
Smith approached Crawford about directing business to Phoenix Solutions, and he recommended the company to Republican Rep. Jay Reedy of Erin and Republican Rep. Tim Rudd of Murfreesboro because he trusted Smith, who had been a key player in state politics for several years, Crawford said.
In an email, Smith said to Crawford and Cothren, “be introduced.”
Crawford, who was aware of the sexist and racist texting scandal, testified he wouldn’t have recommended Phoenix Solutions if he had known who was running it.
Smith was running a political consulting firm called River’s Edge Alliance when she won election to the House in 2018. After Casada left the speakership following a no-confidence vote by the Republican Caucus, he started Right Way Consulting.
Casada continued to serve in the House, and Smith had been named a committee chairman when the FBI raided them in January 2021. She resigned from the chairmanship, then decided to cooperate with federal authorities instead of misleading them.
Smith told the jury she repented to her pastor and family, then talked to federal agents, and added her goal is to “tell the truth” in hopes of receiving a “favorable sentence.”
Holly McCall contributed to this story.
