The Scandal in this Non-Scandal Is that It Appeared on the Front Page

Lamont Bagby

Fact one: Del. Lamont Bagby, D-Henrico, signed on as a co-sponsor of a bill, written with help from Dominion Energy Virginia lawyers, to end the electricity rate freeze and alter how electric utilities are regulated.

Fact two: In his day job, Bagby is director of Operations for the Peter Paul Development Center, a nonprofit that provides after-school programs and summer programs for poor children in Richmond’s East End.

Fact three: Thomas Farrell, CEO of Dominion, agreed in June 2016 to make a $100,000 donation to a Peter Paul capital campaign in addition to his annual $5,000 donation.

Fact four: Bagby says he was unaware that Farrell had made the commitment, and Farrell says he was unaware that Bagby was employed by the charity.

Question: Is this front page news? Someone at the Richmond Times-Dispatch decided it was, for it ran on the front page of the newspaper this morning. While the article never explicitly suggests that there was a quid pro quo involving Farrell, Dominion, Bagby and the Peter Paul Development Center, the T-D‘s decision to post a detailed article on the front page of the newspaper implicitly raises the possibility — otherwise why headline the front-page story, “Dominion, its CEO donated to Henrico delegate’s charity”?

Remarkably, the newspaper offers no evidence that a deal was cut, and it doesn’t even quote anyone willing to suggest that something improper might have occurred. Indeed, deep in the story, writer Patrick Wilson provides a perfectly innocent explanation. Farrell has been donating to the charity for several years, former Dominion executive Mary Doswell serves on the board, Dominion has a practice of donating to charities where employees serve as board members, and the Dominion Energy Charitable Foundation has donated between $500 and $5,000 a year since 2014.

The article comes at a time when Dominion is under fire for spreading around campaign contributions to members of the General Assembly and exercising considerable behind-the-scenes influence in fashioning legislation. Dominion is, in fact, the largest corporate contributor to Virginia political campaigns, donating almost $8 million since 2005 (not including personal contributions by Dominion executives). And it does, in fact, field a large team of lobbyists — nine directly employed by the company and ten retained from law firms this year, according to the Virginia Public Access Project.

The Dominion Energy Charitable Foundation also plays a large role in the community, awarding about $20 million to charitable causes in Virginia and other states each year. The unstated implication of the T-D article is that Dominion might use charity to exercise back-door influence with legislators. If the implication is true, that’s a legitimate news story and the practice is fair game for public scrutiny. If it isn’t true, the story casts unjust suspicion upon Dominion and its CEO.

In fairness to T-D writer Wilson, his reporting did include facts that undermine any suggestion that anything sleazy occurred.

The article does not state when Bagby commenced employment with the charity, and the information in Bagby’s biography does not include that information. However, we know that he was elected in July 2015 to succeed former Del. Joe Morrissey. Before then, he was just an ordinary guy working in a managerial capacity for a small, nonprofit company.

Farrell, one of the Richmond area’s more prominent philanthropists, has personally given $5,000 donations to the charity since as far back as 2012, the T-D reports, so it is clear that his interest in the cause pre-dates Bagby’s elevation to political prominence. The Dominion Energy Charitable Foundation began its donations in 2014, also before Bagby’s election. Doswell, the Dominion executive, joined the board in July 2015. That happened to be the same month that Bagby won a special election to replace Morrissey, a coincidence that might delight conspiracy theorists. But I would suggest, subject to confirmation, that Doswell’s name was placed in nomination and discussed before Bagby’s electoral victory, and that her decision to join the board was entirely unrelated to the event.

Farrell did agree in June 2016 to up his commitment to Peter Paul through a two-year, $100,000 donation, after Bagby had been elected. But that donation took place long before Dominion had any thought of needing to end the rate freeze and re-write Virginia’s regulatory statutes.

Bagby says that he was unaware of the donations from Farrell and Dominion. Says the T-D: “He said his job is focused on how the money is spent, not who gives it.” His account is confirmed by the Peter Paul “leadership team” web page, which indicates that Danielle Ripperton is the charity’s director of development.

We can infer from a statement by Dominion spokesman Ryan Frazier that Bagby did not attend the July 2016 meeting in which Farrell agreed to donate the $100,000. That meeting included Executive Director Damon Jiggetts, “a second Peter Paul staff member” (probably Ripperton), and board member Justin Moore III, a lawyer and son of a former Dominion chairman.

Every piece of evidence indicates that Farrell and Dominion’s generosity to Peter Paul was entirely altruistic. Any insinuation otherwise, on the basis of the evidence presented, is insulting to Farrell, Bagby, and Dominion.

There are many issues where it is legitimate to raise questions about Dominion’s policies and practices — coal ash, the Atlantic Coast Pipeline, nuclear power, solar power, the rate freeze, Dominion’s influence in the legislature, just to name a few. We need a vibrant press to, in the immortal words of Henry Howell, keep the big boys honest. But a $100,000 donation to an East End charity is not one of those issues.

Update: It may be worth nothing that Dominion has contributed $4,000 to Bagby, making it his third largest contributor behind the Virginia Association of Realtors and the Virginia Legislative Black Caucus, according to the Virginia Public Access Project.

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13 responses to “The Scandal in this Non-Scandal Is that It Appeared on the Front Page

  1. Farrell may not have known, Bagby may not have known, but you can be sure it was known. These activities are carefully calculated by Dominion’s well oiled machine. To ordinary citizens, this kind if thing adds to mistrust of corporations and government. Times are changing. People are tired of being run over by big corporations.

  2. Sorry, not buying it. I’ve been in a leadership role for several non-profits and can state quite unequivocally that donations of that size do not go unnoticed and in fact are loudly celebrated by all. No amount of Dominion deodorant will take the stink off of this. All Bagby had to do was admit to some knowledge. I guess that is too much to ask of one of our swamp rats.

    • I have to admit, while Bagby may not have been involved in soliciting the donation, it defies belief that he would have been ignorant of a $100,000 contribution to a $1.5 million organization. Surely, every employee in the enterprise would have known about it.

      Perhaps he meant that he did not know about the donation at the time that it was made.

      • Given these quotes, that is a thin to non-existent possiblity:

        Bagby said he was not aware of the donations from Farrell and Dominion to his charity. He said his job is focused on how money is spent, not who gives it.

        “I didn’t even know that. I should have known that, but I didn’t get involved in that,” Bagby said Monday in an interview in his General Assembly office. “… It frustrates me now because I should have looked at that prior to signing on, but I think (the bill) is the right thing for my constituents.”

  3. I somewhat disagree. We need to know these things. Frankly, Dominion should be checking this out. We have no idea if Dominion did a back door deal. I’ve seen a number of things that look sketchy. I’d rather know and make the judgement than not, but given Dominions’ history, they should really be checking this all out FIRST.

  4. Anyone who works for a Non Profit, usually knows the finances… as it’s directly connected with their mission and how much they can do or not.

    I think the best you’re gonna get out of this is that it looks bad, and smells bad …but there is a fig leaf of plausible deniability… and given Dominion’s propensity for money in politics… it’s a mighty small fig leaf and Bagby has not exactly covered himself in glory either. Swamp critters…

  5. Fact: You don’t report, until your 10th paragraph, that Bagby was elected in 2015, only weeks or months preceding Farrell deciding to increase his donation to Bagby’s charity by a factor of 20.

    Why bury the lede, Jim?

  6. OK this post gives me a chance to talk about how a wealthy person can actually *make money* giving a donation in Virginia.

    Our GA has created a donation program called the Neighborhood Assistance Program. So assuming Peter Paul Development Center is on the list of preferred organizations (which it apparently is) and assuming the donation is made under that program, the the donor gets 60-65% tax credit from Virginia, not to mention let’s say 35% tax bracket deduction from Uncle Sam. At this point you are just about breaking even. But it gets better, if the donation is in the form of appreciated stock, the donor can make more money making the donation than selling stock (which would incur taxes).

    So as soon as I saw Jim’s blog it immediately struck me that Peter Paul Development Center was in the program, as southern Virginia organizations seem to predominate.

    Here’s the Forbes article about this:
    https://www.forbes.com/sites/davidmarotta/2013/06/09/how-to-make-money-paying-virginia-income-tax/#5277465f25ac

  7. Thanks for the link TBILL The article points out the difference between a tax deduction and a tax credit. The credit is worth much more. As far as I know the Feds do not allow tax credits for donations – only tax deductions.

    Virginia, on the other hand, through this neighborhood assistance Program allows the donor to first reduce their income by the amount of the donation, i.e. their adjusted gross then they allow that same deduction at the Federal level to be used as a CREDIT on the Va taxes which in some cases actually NETS the donor money back! Read the Forbes article.

    I’d be curious to know more about the Virginia tax credits program(s) in terms of who are using them and how much and what the various types of organizations the credits are provided.

  8. here’s ALL the Virginia Tax Credits:

    https://www.tax.virginia.gov/tax-credits

    significantly – there is one that allows up to 5 million dollars for R&D

    if you GOOGLE the following phrase… you’ll get a link to follow:

    Major Research and Development Expenses Tax Credit Guidelines. During the 2016 Session, the Virginia General Assembly enacted House Bill 884

    • I was not aware of that tax provision. Incredibly generous. Such generosity makes it subject to abuse. I wonder if anyone has scrutinized this program.

      • Apparently a few other states have the program, but the highest state tax credit is 50% …which is already too high…then you have Virginia coming in at 65% tax credit.

        The program will become more popular now because state tax + property tax is not deductible past $10000, but there is no limit on contributions. So this “loophole” gives a way to redefine your non-deductible state tax payment into a lucrative tax credit + contribution.

  9. You’d think the Virginia 5 million dollar tax credit would be a significant draw for tech companies including new start ups… especially around Universities.

    I would think getting a loan that would be essentially paid back with the tax credit – a way for entrepreneurs with virtually no money to form a company.

    Now I’d like to see how many companies have signed up to take that credit.

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