A group opposing US Nitrogen's plans to utilize the Nolichucky River is raising questions about bribery and the real estate dealings of a member of the Industrial Development Board and former president of the Old Knoxville Highway Utility District Board.
But 3rd Judicial District Attorney General Dan Armstrong said this week he sees no evidence of bribery.
Save the Nolichucky Inc. issued a news release Sept. 5 saying representatives from the group met with "government authorities" regarding a contract J.W. Douthat and US Nitrogen Plant Manager Justin Freeark signed on Sept. 11, 2013, giving the company the option for an easement on a Fish Hatchery Road property owned by Douthat.
At the time the easement option was signed, Douthat was president of the Old Knox board of directors, though he left his position with Old Knox in April 2014, according to board minutes. Douthat was then and is now a member of the Industrial Development Board of Greeneville and Greene County.
The Save the Nolichucky release also quotes several passages of Tennessee law that address bribery of public officials.
Tennessee Code Annotated Chapter 39 says anyone commits bribery who "offers, confers, or agrees to confer any pecuniary benefit upon a public servant with the intent to influence the public servant's vote, opinion, judgment, exercise of discretion or other action in the public servant's official capacity."
It also says a public servant commits bribery when that person "solicits, accepts, or agrees to accept any pecuniary benefit upon an agreement or understanding that the public servant's vote, opinion, judgment, exercise of discretion or other action as a public servant will thereby be influenced."
Committing bribery is a class B felony in Tennessee.
Through the company Douthat Properties LLC, Douthat eventually sold the Fish Hatchery Road property in two parcels to US Nitrogen for nearly $1 million. On Oct. 9, 2014, he sold a 13-acre parcel to US Nitrogen for $148,740.62. On Oct. 24, Douthat sold a 78-acre parcel to US Nitrogen for $851,251.38.
J.W. Douthat is listed as a "chairperson of the management committee" for Douthat Properties on the warranty deeds transferring the properties.
"We believe that many Old Knox ratepayers and other citizens of Greene County will have an interest in reading these documents and making their own decision as to how the following Tennessee law applies to this situation," the Save the Nolichucky release says.
In separate interviews with The Greeneville Sun this week, Save the Nolichucky President Donahue Bible and the group's attorney, Scott Hurley, refused to say which government officials they had spoken with.
"I don't want to go into that at this point," Bible said. "I don't want to tip our hand."
"We have hoped all along that someone would pursue this thing," Bible said later in the interview.
When asked if his clients were making a specific accusation of bribery, Hurley responded, "I'm not aware of an accusation. I believe there are certain public documents that have been referenced in the press release."
Douthat denied any kind of wrongdoing in his capacity as president of the Old Knox board or as a member of the IDB.
"There's no conflict of interest to me," Douthat said Wednesday. "It was a family farm."
Douthat, 84, said he resigned from the Old Knox board in April 2014 following the death of his son, Mark, in order to attend to family affairs and help care for his wife, who has Alzheimers.
He said all decisions he made regarding US Nitrogen were because he thinks it's an industry and jobs-producer Greene County needs.
Douthat said no bribery accusation would stand up in court.
"They can do whatever they want," he said. "I'm ready."
In an emailed statement Thursday, US Nitrogen officials said the easement option they signed with Douthat in 2013 was never exercised.
"US Nitrogen vehemently denies any improper relationship between Douthat and US Nitrogen," the statement said.
District Attorney Dan Armstrong said Thursday afternoon he has met with Save the Nolichucky officials, but he can't comment on any specific investigation on the matter.
But he's not pursuing a bribery a charge against anyone at this time.
"There is nothing that I have seen in regard to the issue that gives any indication that bribery is a viable criminal charge," he said. "There's just no evidence to support that."
Douthat sat on the Old Knox board for six months after signing the initial option agreement with US Nitrogen. The company's liquid ammonium nitrate manufacturing facility was a frequent topic of discussion at Old Knox board meetings during that period, minutes of Old Knox board meetings indicate.
At the time, Old Knox and US Nitrogen were negotiating terms for how much water the Pottertown Road facility would need to purchase for its manufacturing processes. The plant is set to come online later this year.
Old Knox General Manager Jonathan Stepp and board member Randy Lawson both said Douthat never notified the board of the September 2013 option agreement. They say they learned about it in May 2014 via an email from Bible.
"If [then-board member Butch Shaw] or myself had learned what was going on, yes, it would have been presented [to the board]," Lawson said.
But Lawson said he thinks the legal wrangling between Old Knox, US Nitrogen and the IDB that has persisted for a year -- and which ended with a settlement agreement now approved by all parties -- would likely have happened if the board had known about Douthat's option contract.
"I don't see a big change in how the outcome would have been," he said.
When announcing its plans to come to Greene County in 2011, a US Nitrogen official said the company would purchase the water needed for its manufacturing processes from Old Knox.
But in late 2013, company officials said they didn't think Old Knox, which gets its water from the Greeneville Water Department, could guarantee it could supply all the water US Nitrogen would need each day.
Officials at Old Knox and the Greeneville Water Department insisted they could supply all the water US Nitrogen needed. Old Knox and US Nitrogen reinitiated talks again in the summer of 2014 -- after Douthat left the Old Knox board -- but those talks later broke down.
US Nitrogen has since completed construction on a controversial, IDB-owned pipeline system that will take as much as 1.9 million gallons of water per day from the Nolichucky River, filter it for use in its manufacturing process, then will discharge about 500,000 gallons of water per day back into the river.
The water intake/discharge site on the Nolichucky is near the intersection of Briar Thicket and Fish Hatchery roads, right at the property Douthat sold to US Nitrogen.
Portions of the pipelines are buried under the parcels Douthat sold.
US Nitrogen officials said in a statement emailed by public relations firm Moxley Carmichael that Douthat's property was their fourth choice for a place to connect the pipelines to the river intake/discharge pumps.
"During inspections of the various properties and investigation of the river, numerous properties were ruled out as options because endangered mussels, mussel habitat and archaeological resources were identified," the company said in the statement. "The property owned by Douthat Properties LLC was at least the fourth property considered, and not the most desirable route, given its distance from the US Nitrogen facility.
US Nitrogen began discussions with Douthat in late summer 2013, they said.
"The Douthat property on Fish Hatchery Road eventually turned out to be the best option to the river, because there were no endangered mussels, and archaeological resources could be avoided," the company statement said.
Construction of the pipelines was completed earlier this year, but not before several lawsuits challenged its legality, including a lawsuit filed by Old Knox in September 2014.
But Old Knox, US Nitrogen and the IDB have agreed to settle the suit out of court. Douthat voted in favor of approving the settlement agreement at an IDB meeting Wednesday.
At a July 2014 meeting of the IDB, Douthat also voted to re-submit an application to the Tennessee Department of Transportation to bury the pipelines on state rights of way.
When IDB attorney Jerry Laughlin called Douthat's name, he immediately asked if Douthat would be abstaining, perhaps recalling that he had abstained from the vote to submit the first application related to the pipeline in March 2014.
"No, I'm voting yes," Douthat said at the July 2014 meeting in response to Laughlin's question.