Published May 11, 2019 in the Maryville Daily Times
Note: This was my last story for the newspaper before I left for graduate school. Several months later, the sheriff’s department selected City Tele Coin for the open contract.
Blount County Sheriff James Berrong says he got a call last year.
On the line was City Tele Coin, a private firm with a contract at the Blount County jail. The company was calling because Berrong’s daughter had applied for a job there without his knowledge, the sheriff said, and the firm wanted to know if it could interview her for a position as a sales representative.
“You can, but once she goes to work, she will not get one penny from Blount County government,” Berrong recalled saying, explaining to The Daily Times how his daughter became a sales representative for a vendor holding one of his office’s most lucrative private contracts.
Now in the midst of a high-stakes bidding process for a new, expanded contract, City Tele Coin has the potential to lose the Blount County Sheriff’s Office as a business partner — or make their relationship more profitable than ever.
Since at least last summer, Blount County jail officials have expressed a desire to phase out in-person visitation of inmates in favor of remote video-screen visitations following a nationwide trend toward the practice, which is supposed to be safer and present less of a risk for contraband smuggling.
Since the early 2000s, City Tele Coin — a small, family-owned company based in Bossier City, Louisiana — has held the exclusive right to provide phone services to Blount County jail inmates. The arrangement has been profitable for both parties, as a negotiated cut of all phone bills allows the county to pocket hundreds of thousands of dollars every year.
It’s also been beneficial to the sheriff.
City Tele Coin’s president and owner, a former Louisiana bingo hall owner named Jerry Juneau, has made $3,000 in personal contributions to Berrong’s political campaigns over the past two election cycles.
Berrong sees nothing wrong with the connections.
“You do business with people for a long time, you get to know them,” he said.
As for the ongoing bidding process — which will decide which company will be able to provide video visitation services, as well as the phone calls currently provided by City Tele Coin — Berrong says he is “not a choosing factor.” That point is echoed by Blount County Attorney Craig Garrett and by the county’s purchasing department.
City Tele Coin in the running
Prospective contractors arrived at the Blount County jail at 10 a.m. April 24 to learn more about the jail’s open contract for video visitation services. It would be the only opportunity for bidders to see the jail.
Among the companies represented included Securus, which provides the services at Knox County’s jail, as well as GTL, which contracts with Davidson (Nashville) and Shelby (Memphis) counties. City Tele Coin, a relatively small competitor to these larger firms, had no representative present. But they are in the running, the sheriff’s department confirmed.
In December, when asked about the status of implementing video visitation services, Deputy Chief Chris Cantrell, the jail’s warden, said, “We’re looking at moving toward using our phone provider’s video visitation,” referring to City Tele Coin. Using City Tele Coin, he said, would cut down on confusion for the families of inmates, who would be able to put money in a single account for both phone and video calls.
Cantrell later clarified that jail officials were considering other video visitation providers as well, such as Vendengine, which provides the equipment and services used by the jail’s commissary.
Blount County’s contract with City Tele Coin grants it a guaranteed monopoly over inmate phone services and automatically is renewed on an annual basis, though sometimes it is renegotiated to adjust the county’s cut of the proceeds.
The latest negotiation of City Tele Coin’s contract, signed by Deputy Chief Jarrod Millsaps in 2017, gives the county a 60% share of all billable phone revenue. The commission garnered $271,732 for the county last year.
That contract is up for negotiation again, and was included in the open bid for video visitation services. Bidding for the contract closed Thursday.
The official document announcing the bid process, called a Request for Proposals, follows state law that stipulates no officer of Blount County shall participate in the “administration of a contract if a conflict of interest, real or apparent, would be involved.”
“If there would be a conflict of interest, that interest hasn’t arose at this point,” Blount County Purchasing Agent Katie Kerr said, emphasizing that Berrong is not on the selection committee and has not been involved in the process.
If other counties are an example, there may exist other avenues for the sheriff’s influence, however.
Virgil Gammon, former deputy chief of the Rutherford County’s Sheriff’s Office in Murfreesboro, Tennessee, said county purchasing committees typically ask the sheriff or a representative of his office which bidder he or she prefers.
Part of Gammon’s responsibilities included reviewing bids for open jail contracts. When City Tele Coin’s bid arrived at his desk, it “didn’t pass the smell test,” he said, because it promised returns that did not seem plausible. And, in a world where some contractors try to influence the process by taking officials to dinner and fly fishing trips — or, in past times, by setting up what are basically private department funds — avoiding questionable relationships with vendors was paramount, Gammon said.
But despite Gammon’s attempts, the Rutherford County Sheriff’s Office decided to contract with City Tele Coin anyway. Juneau, City Tele Coin’s president, donated in 2013 $1,500 to Rutherford County’s sheriff, Robert Arnold. Juneau did not respond to multiple requests for an interview.
Gammon’s suspicions grew stronger when he says the company offered pre-paid calling cards to the sheriff’s office as a “kind of bonus.”
Later, at a fundraiser for the sheriff’s reelection campaign, Gammon realized City Tele Coin had provided shrimp and other food for the event. He asked the sheriff’s finance director, “Can they do this?”
“Oh yeah, everything’s cool,” he says the finance director responded.
Gammon says he lost his job in September 2015 after reporting to authorities that his boss, Sheriff Arnold, was involved in illegal profiting from the jail commissary through a vendor called JailCigs.
Arnold pleaded guilty in January 2017 to wire fraud, honest services fraud and extortion.
The world of jail contractors is small. City Tele Coin’s sales representative assigned to the county, Greg Borchers, was married to the sales representative for JailCigs.
City Tele Coin gave the sheriff’s daughter a job
Sheriff Berrong’s daughter, Caroline Berrong, began working for City Tele Coin as a regional sales representative in July 2018.
The 26-year-old Blount County native previously assisted with her family’s business at Lambert Acres Golf Course. She earned her bachelor’s degree in business administration in 2016 from King University’s Knoxville campus. Soon after graduating, she was hired as an affiliate broker at a Maryville real estate office.
Now, as a sales representative for City Tele Coin, she pitches the company’s services to Tennessee sheriffs across East and Middle Tennessee.
“People know she’s my daughter,” Berrong said, adding, however, that he does not facilitate sales meetings. “She’s a girl and she does her own job. I don’t sell phones.”
Caroline Berrong did not return two recent phone calls and a voicemail left by the newspaper.
At the time that City Tele Coin hired her, Sheriff Berrong says he made it clear up front that she could not engage with Blount County as a part of her job, or receive any direct compensation from the county.
“If she were to get a penny, vendors would be changed,” Berrong said, adding that he possessed a copy of the contract. It was provided to the newspaper alongside a statement from Blount County’s attorney, Garrett.
Garrett, who first was made aware of the relationship late last month, wrote that under state law the relationship between Berrong and the company does not constitute a conflict of interest. While state law prohibits officials from being involved in contracts in which they have a direct or indirect interest — extending the notion of interest to include both the spouse of the official or any children living in their household — Berrong’s daughter “is a married adult who does not live in Sheriff Berrong’s house.”
Garrett continued, “In discussing the matter with Sheriff Berrong, it was obvious to both of us that neither Sheriff Berrong or Blount County is receiving any type of gratuity or benefit based on the fact that they have chosen to reach out to Caroline Berrong and offer her a job. The benefit being received in this relationship is by City Tele Coin Company, Inc., in securing an employee whose father has a long-standing career in law enforcement and enjoys a statewide reputation for professionalism and integrity with his peers in the law enforcement community.”
Kerr, Blount County’s purchasing agent, said Berrong had an informal conversation with the purchasing department about his daughter’s employment at the time she was hired. Department personnel did not consider it a conflict of interest, she said.
Berrong is acutely aware of the long shadow that can be cast by even the hint of unethical relationships with private jail partners.
A federal jury in 1990 convicted his predecessor, former Blount County Sheriff Avery Mills, of 18 criminal counts after he accepted $23,200 over the years in extortion payments from two bail bonding companies. The payments — $3,700 from the owner of Blount County Bonding Co. and $19,500 from the owner of East Tennessee Bonding Co. — were considered campaign contributions by the sheriff, his defense attorney argued, according to reporting at the time from The Tennessean in Nashville.
“You can look under every rock. I’m not going to jeopardize a career and a reputation for anything,” Berrong said in an interview. “It could be peanuts. I just don’t do that.”
Juneau’s contributions scrutinized
The campaign contributions that Juneau, president and owner of City Tele Coin, made to Berrong are part of a larger pattern. Over the years, Juneau has donated tens of thousands of dollars to dozens of political campaigns for Southeast incumbent sheriffs who contract with his company.
His political involvements have been scrutinized in the past.
In 2011, Juneau resigned from his seat on the Louisiana Gaming Control Board amid questions over his decision to help host a fundraiser for a political law enforcement candidate; that was against gaming board ethics rules.
Juneau’s financial disclosure forms for the board from 2010, the last year available, show City Tele Coin being worth $18 million. Juneau’s personal income from the City Tele Coin totaled more than $1.9 million that year.
The donations continued, including $10,000 in 2015 to the campaign of Sheriff Doug Anderson in Ayoyelles Parish — a rural parish with a population of 41,000.
In Blount County, the Louisiana businessman personally has donated $3,000 to Berrong’s election campaigns, according to campaign financial reports going back to 2006. The first $1,500 contribution was made in September 2013, roughly eight months before the primary election. The second was made in April 2017, a year before the 2018 primary, in which Berrong faced one of his deputies, Patrick England.
Although $1,500 represents a small amount of Berrong’s campaign coffers, it was exceeded in the last election by only local businessman Randy Massey and the Blount Lifestyle PAC, a political fund for Blount incumbents.
Blount County Attorney Garrett wrote to the newspaper that the contributions do not fall under the county’s code of ethics, which prohibit a government official from accepting any money, gratuity or other consideration intended to influence the official’s judgment or action.
“Obviously, Jerry Juneau is not the party with whom Blount County contracts and he is not a contractor within the meaning of the County’s Code or Ethics or the conflict of interest provision of the Request for Proposals,” he wrote. Given that all bids are handled through the Blount County Purchasing Department, he wrote, “neither (Berrong) or I feel that this is an ethical violation as described in our Code of Ethics.”
But cultivating the good favor of sheriffs doesn’t hurt in a competitive industry driven by personal recommendations.
“He wines and dines with the sheriffs, so he’s got the business,” says Foster Campbell, an elected Democrat on the Louisiana Public Service Commission. “I’m not saying it’s illegal, but it stinks. It’s immoral.”
The commission, which regulates public utilities in the state, found in 2013 that City Tele Coin and other inmate-calling services were collecting millions of dollars in surcharge fees from inmate accounts even though those fees had not been approved by the Federal Communications Commission. The charges included an “administrative cost” of up to $10 when opening a direct-pay account; a “processing cost” on direct-pay refunds of $5; a “transfer fee” of up to $2.50 to move balances on direct-pay accounts to a different phone number; and a monthly “inactivity fee” of up to $10 for accounts with no activity in a six-month period.
While the commission’s investigation was ongoing, Juneau hosted a fundraiser for the commission’s chairman, Eric Skrmetta, at City Tele Coin’s office. Additionally, Juneau and his wife gave Skremetta’s campaign $10,000.
City Tele Coin then offered $5,000 to settle the commission’s case, and Skrmetta made a motion to discuss the matter in a closed session. Campbell says had a conflict of interest.
The investigation of City Tele Coin ultimately was dismissed.
A sheriff with a different view
Juneau has contracted with Blount County in some form or another since the early 2000s, when he bought the company previously providing phone services at the Blount County jail, Berrong says.
“When he bought it, he did an audit,” the sheriff said. “And Jerry Juneau found in the audit that the company had shorted the Blount County government $140,000.” Shortly after, he says Juneau flew to Blount County and worked out a deal to pay the money back.
“That showed me how honest he was,” Berrong says.
Newspaper archives paint a picture of Juneau as a shrewd, veteran businessman who knows how to use politics to push profits. As a convenience store owner in the 1970s, Juneau pushed to approve liquor sales on Sunday. As a gambling hall owner in the ’90s, he pushed for the controversial approval of new “video bingo” machines, which critics said would shortchange charities that are intertwined with the industry there.
Juneau’s entry into phone services for jail and prison inmates came in the early 2000s as a side venture for City Tele Coin, which by 2004 was still largely a pay phone provider.
Sheriff Victor Jones of Natchitoches Parish in Louisiana says he has called Juneau a “crook.” City Tele Coin provided phone services for his local jail beginning in 2002, after it was subcontracted by another firm. After several years, Jones became suspicious.
“I can’t recall exactly what triggered it,” Jones said, “but it felt like something wasn’t right.” He says he wondered if the company was overcharging the families of inmates.
Jones’ department chose not to renew its contract with the parent company after several years, but before it ended, they requested financial and call records from City Tele Coin.
As detailed in the judgment rendered in a resulting lawsuit, City Tele Coin spent the better part of two years dodging the request — at one point supplying some records, but declining to say why they could not provide all.
“Juneau lied on the stand, and so did his son,” Jones said. “It was obvious, and it was bad.”
The sheriff’s department filed a motion for contempt. At a hearing on the motion, City Tele Coin asserted “for the first time,” the judgment states, that all call detail records are deleted or overwritten after 30 days.
“Nobody around here believed it,” Jones said. “No one destroys their records every 30 days.”
The court ordered City Tele Coin to pay attorney fees and costs to the department in the amount of $34,285.