Federal prosecutors in Tennessee have brought two obstruction of justice charges against the head of an internet services company that caters to K-12 schools.
Albert Ganier III, founder of Education Networks of America (ENA), appeared in a federal courthouse Jan. 4 after prosecutors allegedly uncovered evidence that he deleted eight documents from his desktop computer and four from his laptop.
Investigators sought the documents–which reportedly concern contracts worth nearly $200 million to provide internet service to Tennessee schools–as part of a federal probe into how those contracts were awarded.
A federal grand jury indicted Ganier in November, alleging he deleted company eMail messages after discovering that investigators were seeking them. Ganier also was charged with deleting 11 contract-related documents from his secretary’s computer.
Investigators have subpoenaed company eMail messages related to contracts and grants won by ENA during the administration of former Tennessee Gov. Don Sundquist, a Republican who reportedly is a longtime friend of Ganier. The contracts named ENA as the main provider of internet connectivity and technical training to Tennessee public schools through ConnecTen, a statewide education network that once was publicly owned and operated but now is privately owned by ENA.
Ganier’s lawyer, Aubrey Harwell, contends that when Ganier put the files in his computer’s recycling bin he wasn’t really deleting them.
“The government says that Mr. Ganier–a businessman who is very computer literate–has somehow violated the law because he’s put [the documents] in a recycle bin. I’m hard pressed to understand the theory of their case,” Harwell reportedly told a local television reporter. “Someone as literate as [Ganier] understands one can go to a recycle bin and bring documents back.”
Ganier has pleaded not guilty to the obstruction charges, and his trial is set for March 29. But prosecutors have indicated in a memo they say was accidentally made public that they have uncovered “evidence of illegal and otherwise inappropriate activity” in the awarding of the ENA contract and are pursuing other charges, too.
If convicted on both obstruction counts, Ganier could receive up to 20 years in prison and a fine of $250,000.
Ganier did not return an eSchool News reporter’s telephone calls before press time.
ENA President David Pierce said it was inappropriate for him to comment on a pending court case. He added that Ganier, who had served as the company’s chief executive officer, “basically stepped down in late December to concentrate on his defense,” though ENA has not formally announced Ganier’s resignation. Ganier was still listed on the company’s web site as its CEO on Jan. 19, although the listing has since been removed.
The indictment stems from a far-reaching Justice Department investigation that began in 2002. At that time, federal and state agencies began investigating charges that contracts won during Sundquist’s administration were awarded unfairly.
In 1998, the state of Tennessee, which then owned ConnecTEN, sold the network to ENA and now pays the company for upgraded internet access to its 1,600 schools. The sale made it possible to bypass a Federal Communications Commission (FCC) rule stating that the building or upgrading of a state-owned wide area network can’t be done with eRate funds.
Government contracts and grants followed. ENA won two long-term contracts from the state reportedly worth approximately $180 million during Sundquist’s final term in office. On two occasions, contracts awarded to ENA were contested–once with the FCC, and once with the Tennessee State Comptrollers office. On both occasions, rulings were made in favor of ENA. During that time, ENA also won a federal Appalachian Regional Commission grant to provide online training services to Tennessee teachers.
In December 2002, Ganier reportedly tried to change ENA policy so that company eMail messages would be deleted automatically from ENA computers after six months. By then, Ganier was allegedly aware that a federal investigation of Sundquist-era contracts was under way.
Former Tennessee Labor Department official Joanna Ediger was convicted in May 2004 on wire- and mail-fraud charges. The court found that Ediger illegally helped another friend of the governor–a business owner and former lobbyist for ENA, John Stamps–win a no-bid contract for his company, Workforce Strategists. Ediger was cleared on charges of bribery and lying to federal officials.
Stamps is currently under federal investigation for his own connections to the governor while working as a lobbyist for ENA when it received contracts and grants from the state. Stamps is identified by federal officials as an unindicted coconspirator in the Ediger case and also was an investor in Ganier’s ENA.
The federal government has withheld eRate funding from ENA for two and a half years as its investigation has proceeded. Through an agreement that allows eRate payments to be made to some ENA subsidiaries and, according to ENA President Pierce, an agreement reached with large telephone contractors to suspend their payment demands for the time being, ENA has continued to provide complete internet service to Tennessee schools.
Pierce contends that the company itself is innocent of any wrongdoing. He argues that charges the contract was improperly given are “absolutely false,” pointing to the FCC and Tennessee comptroller rulings. The current governor of Tennessee, Phil Bredesen, a Democrat, also maintains the contracts were won fairly.
ENA currently has no other K-12 business agreements with any state government other than Tennessee. But Pierce said the company is “pursuing [such agreements] aggressively in multiple places.” Pierce also noted that 100 percent of the Tennessee school districts responding to a customer satisfaction survey carried out by ENA said they were “highly satisfied [with service provided by the company] and would recommend ENA to others.”
Tennessee school districts contacted by eSchool News supported Pierce’s statement.
Linda Bales, technology coordinator for the Huntingdon School District, said ENA does anything her district asks it to do. “They keep us up and going all the time,” she said. “The turnaround time if we have a problem is very short. They are right on it, fixing it right away.” Bales said she did not know of anyone working in the Tennessee school system who is dissatisfied with ENA’s service.
“I think they do a great job,” agreed Robert Haviland, technology coordinator for the Hickman County Schools. “Often, when I have a problem, they’ll call me before I call them. I can get help with my local network [and], if I need quick advice, they’ll be glad to tell me what to do.”
But Haviland said he is worried about the situation that could arise if ENA lost the contract. “ENA owns everything outside the building from the wires up to and including the router inside the building. We own everything inside the building except that router,” Haviland said. “ENA would have to come in and remove all its equipment, and the new vendor would have to install all their equipment.” He added: “I dread it if ENA loses the contract, because of what the kids would have to go through. We would have to go without internet access for a very long time.”
Material from the Associated Press was used in this report.
Education Networks of America
Federal Communications Commission
Tennessee Comptroller’s Office