7 things you should know about VA’s mysterious tobacco commission

By Kaitlyn Speer | Watchdog.org, Virginia Bureau

ALEXANDRIA, Va. — The little talked about Virginia Tobacco Indemnification and Community Revitalization Commission made headlines earlier this month when former state senator Phillip Puckett resigned and prepared to take a job with the group.

The results of a five-month-old state inspector general report suggests a closer inspection of the commission might be warranted.

The 31-member body, created by the 1999 General Assembly, uses the proceeds of the national tobacco settlement in the “promotion of economic growth and development in tobacco-dependent communities.”

To date, the commission has awarded 1,764 grants totaling more than $1 billion across the tobacco region of Virginia.

In light of the federal investigation and grand jury inquiry into Puckett’s resignation and previous hopes of joining the commission, here are seven things reported by the state inspector general you might want to know about the commission:

1. In 2011, the state inspector general recommended action to “strategically revise” the number of people in the commission and the qualifications needed for its leadership.

The commission’s response? Do nothing.

2. In the January 2014 report, the state inspector general reported a number of issues found with the commission. The report said the commission had a “lack of a grant documentation central storage area and incomplete grant documentation.”

That’s right, the commission that gives out millions of taxpayer dollars in grants is having trouble keeping track of its records.

Some of the missing grant documentation include:

• Grant forms
• Documentation supporting $500,000 in grant funds that were not returned. However, one storage area showed the receipt.
• Documentation showing a grantee’s request to modify a project. The only documentation found was a sticky note that stated the commission staff considered this to be acceptable.

3. The state inspector general also noticed a lack of written policies and procedures for the commission — something you think the commission would need to guide its decision-making.

4. There also appeared to be two appearances of conflicts of interest in grant approvals. Commission members did not excuse themselves or abstain from voting even when there was an undeniable connection with the project:

• The commission chairman voted on a matter presented by the executive director of Scott County’s Economic Development Authority, who happened to be his brother.
• The commission vice-chairman is also the director of a nonprofit that applied for a grant. He voted to award the grant in the commission meeting on Sept. 20, 2011.

5. One award granted by the commission exceeded its calculated estimate by nearly $4 million. Commission staff calculated it would cost them $6.5 million, but the amount was not explicitly discussed at an executive meeting in 2012.

Instead, the $10 million requested by the applicant was granted to build a natural gas-based power plant, as well as a possible $10 million addition for each of the following two years.

6. There were also four instances of reimbursements given out for ineligible project spending — $56,293 to one recipient alone.

7. The commission expended $545,989 for a proposed medical school in southwest Virginia under a grant initially established in 2009 without any building being built. Of that amount:

• $62,439 was spent on the medical school’s chief executive officer.
• $9,165 was spent on the expenses for the CEO and other individuals affiliated with the medical school. This included travel expenses, expenses at high-end coffee shops for coffee consumed during meetings, cell phone bills, mileage reimbursements and lunch.

Kaitlyn Speer is an intern for Watchdog.org, Virginia Bureau. She can be reached at kspeer@watchdog.org or on twitter at @KSpeer11.