The last week has been a wild one with far reaching implications for Virginia politics.
The defeat of Representative Cantor was shocking; who would have thought that he was not conservative enough for Virginia?
More troubling are the circumstances surrounding the resignation of a sitting Virginia senator. It is baffling and has prompted many of us to ask many questions. What kind of deal was made? Was it an implicit offer? Explicit? Who was involved? Did it involve promise of a judgeship? Did it involve a prospective job?
We know that a judgeship was involved. We don’t know as much about the job but there is some evidence that it was discussed. And there was a “private session” of the Tobacco Commission scheduled that was canceled after the Senator said he would not take the job. Pretty odd, huh?
These circumstances require some clarification and an investigation of what went on, and who made promises to whom.
Beyond that, this sorted set of circumstances has raised new questions about the operations of the Tobacco Commission.
For those who don’t know – and many do not – the Virginia Tobacco Indemnification and Community Revitalization Commission (VTICRC) was established in 1999 from funds generated by the Tobacco Master Settlement Agreement. It was capitalized with over $1 billion. It has a 31 member board. Right now, of the elected officials, there are no Democrats on this Board.
It is charged with helping tobacco farmers and with revitalizing formerly tobacco-dependent communities.
Over the years, it funded wide variety of projects, but unlike our budget process or Governor Opportunity Fund process or economic development, it is not always clear why certain things get funded. Millions of dollars are given without transparency and accountability.
What do the studies’ of the Commission say?
1) A Blue Ribbon Commission did a review in 2008 and recommended the VTICRC use a more business oriented approach with measurable outcomes and goals, and requiring more local match monies before making grants.
2) A JLARC review in 2011 found that 89% of all awards were not paired with any outcome metrics – this was three years after the Blue Ribbon Commission recommended the VTICRC implement policies addressing this very issue. JLARC made 26 recommendations, to date, only 9 have been fully or partially implemented.
3) The Office of the Inspector General (OIG) looked at the VTICRC just this past January. Again, they cited concerns about the lack of economic analysis before granting awards. Six of the thirteen projects did not involve matching funds.
So let’s get specific – here are some examples that raise questions:
- From the OIG’s report, the VTICRC extended $545,989 for a proposed medical school (King School) in Southwest Virginia without a building ever being built; they paid $62,439 to the school’s CEO. OIG raised questions about propriety of that.
- VTICRC spent $20 million – yes, $20,000,000 – to create new Medical School at Liberty University. On fringes of tobacco-dependent community. Can you imagine happening if this went through our budget process – it might have been sent to the Joint Commission on Health, and House and Senate money committees. Instead, the request just does to the Commission and is granted. Do we really need new medical school? We do need residency slots.
- Did you know the VTICRC spent several hundred thousand dollars on a sewer line to serve a private prison in Farmville? A private prison run by “Immigration Centers of America” and houses over 500-1000 persons, largely undocumented workers scheduled for deportation. And it’s a private facility
- Finally, there were a series of grants to Virginia Intermont:
- October 2013 – $240,000 for “job retention”
- $169,000 for a Tourism Degree that did not pan out
- 2010 – $1.38 million for a science building
Since it is now closed, those investments didn’t work out so well.
There are other points to consider as well:
The VTICRC employs 11-14 persons with a personnel budget of $1.3 million. There are some good salaries being made. The Commission is also burning its endowment very fast. On July 1, 2008, it had $741,690,000 in the bank. As of June 1, 2014, they projected $313 million. The Commission is burning the endowment at over 10% per year for the last six years.
They have done some good things. Recently, the worked with VEDP to help fund Microsoft expansion in Mecklenburg County. They used projected rates of return to justify the investment, a good model. They need to do more projects like this.
All these facts, coupled with the circumstances, suggest that an independent inquiry be done not just of facts and circumstances of the Senator’s resignation.
We strive hard in our budget process for transparency. It’s time to bring a lot more to the Virginia Tobacco Indemnification and Community Revitalization Commission. Taxpayers expect nothing less.