The federal investigation of deposed Tennssee Governor Ray Blanton and some of his associates has spread beyond allegations of parole-selling to determine whether kickbacks were paid by businessmen to get state contracts and licenses, reliable sources said yesterday.
A Memphis grand jury has started examining charges that state highway and real estate contracts and liquor licenses were bought from Blanton administration officials, the sources said.
Blanton was ousted from the statehouse in Nashville Wednesday after federal authorities expressed concern that he might free more state prisoners who are targets of the parole-selling investigation.
The outgoing governor touched off a furor Monday night when he pardoned or commuted the sentences of 52 prisoners, including 24 convicted murderers, in the midst of a scandal in which three of his aides already had been arrested and Blanton himself named as a target. Blanton cited a judge's order about overcrowded prisons as a reason for his action.
Lamar Alexander was sworn into office Wednesday, three days early, because he said the U.S. attorney in Nashville told state law enforcement officials that he had "substantial reason to believe that [Blanton] was planning to release one or more persons from prison who are targets of an investigation of payoffs for release from prison."
Specifics about the expanded investigation of the Blanton administration could not be learned yesterday, though one source said prosecutors are paying close attention to the activities of Blanton's brother Gene, who runs an asphalt and construction company in the west Tennessee town of Adamsville.
Neither Blanton could be reached for comment yesterday.
Aubrey B. Harwell Jr., one of the Nashville attorneys representing the former governor, said yesterday, "I have heard probably more rumors in the last 24 hours that you can believe. Emotionalism is running high. But so far I haven't heard anything from any reliable, official source [about the investigation being expanded]."
The controversy over Blanton's string of prisoner releases earlier this week was aggravated because it came only a month after three of his aides were arrested by FBI agents, allegedly with marked $100 bills in their pockets.
FBI affidavits in that case said that an informant had led one of the trio through a series of discussions of prisoner releases, in motel rooms monitored by FBI agents with videotape recorders.
None of the three has been indicted, and the term of the grand jury hearing evidence against them recently was extended for two months, in an apparent attempt to continue using the grand jury as an investigative tool.
Many Tennesseeans were surprised by the arrests of T. Edward Sisk, Blanton's legal counsel; Charles Benson, an extradition officer, and Charles Frederick Taylor, a state trooped assigned to the governor's office, because the parole-selling investigation had been in public view for more than two years.
Sisk's records had been seized by federal agents back in October 1976. Democrat Blanton screamed politics because a Republican U.S. attorney was handling the case and complaind to U.S. Attorney General Griffin B. Bell when the Carter administration took office in 1977.
FBI agents and prosecutors feuded early last year over the lack of indictments. But the break in the case came last summer when the informant met Taylor.
Blanton's office was sealed by authorities as soon as Alexander was sworn in Wednesday. The 48-year old Blanton said he was "saddened and hurt that this clandestine action has taken place... I thought they would have the courtesy to tell me."