Bacon's Rebellion

Democracy Thrives in Sunlight

Mayberry on Acid

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by

Peter Galuszka
in ,

By Peter Galuszka

In a bizarre case for a small Virginia locality, 14 former and current local leaders of Warren County and Front Royal — including the entire Board of Supervisors — have been charged with misdemeanors relating to a major embezzlement case that involves the local economic development authority.

The Sept. 24 charges by the State Police follow the indictment in May of Jennifer McDonald, the former head of the local EDA, on 28 felony charges related to embezzling funds in a deal involving a promised new data center and office park.

Although he was not charged, Sheriff Daniel T. McEathron killed himself with a self-inflicted gunshot wound a few days after McDonald was indicted. He had been involved with an $8 million scheme to build a regional law enforcement training center at the project.

This could be the largest-ever public fund embezzlement scheme involving a single locality in Virginia’s history. To be sure, the state recently has had its share of schemes and scams. They include a $1.4 million state grant to a bogus Chinese company in Lynchburg. The executive director of the Virginia Tobacco Region Revitalization Commission was caught siphoning away public funds some years ago.

By far the biggest recent scandal was the conviction of former Gov. Robert F. McDonnell and his wife for accepting gifts. Their convictions were later overturned by the U.S. Supreme Court but the case garnered global news coverage, giving Virginia a big black eye.

Although it doesn’t seem to be involved with the Warren County affair, the Virginia Economic Development Partnership had seemed to be cleaning up its act after the Joint Legislative Audit and Review Commission issued a damning report about the lack of controls over dispensing grants. VEDP has new leadership, but indirectly, the Warren County doesn’t help the state’s image.

The Warren County project involves a 30-acre tract of land that had been used for years by Avtex Fibers, which shut down in the 1980s, leaving a glop of toxic waste and job layoffs.

EDA chief McDonald had been working with Washington investor Truc “Curt” Tran about using the Avtex tract for a data center. Even though the EDA board approved funds, it turned out that Tran did not have the money to continue with the project, according to The Washington Post.

He apparently intended to raise money from foreign investors through the EB-5 visa program, which offers a pathway to U.S. citizenship in exchange for investment. He apparently is trying to pay back a $10 million loan from the EDA, the Post reports.

McDonald and several others, including family members, were accused of using the public funds to pay off credit car bills and gambling debts and invest in real estate.

The 14 officials later charged include just about all of top leadership of Warren Count and Front Royal. They were charged with misfeasance and nonfeasance for failing to review public expenditures properly.

One tragedy in the matter is McEathron’s suicide. He had been a popular local figure. As the Washington Post reports: “The broad-shouldered sheriff was a morning fixture at a vinyl booth diner on Main Street. He launched a summer camp and amused his deputies by playing faux saxophone as they lip-synched to “Love Shack” by the B-52s.”

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23 responses to “Mayberry on Acid”

  1. James A. Bacon Avatar
    James A. Bacon

    What’s the big take-away here? I’m afraid that it’s that local elected officials and administrators of rural counties often don’t have the skills and resources to conduct due diligence on economic development deals. It’s not like Warren County has been the only entity to get snookered by a fast talker purporting to be backed by big Chinese money, but the odds increase when local economic developers and government officials are unsophisticated.

  2. Peter Galuszka Avatar
    Peter Galuszka

    Jim, this sounds more like an inside job

    1. LarrytheG Avatar
      LarrytheG

      Yup.

  3. Javier A. Avatar
    Javier A.

    Ahh, well this is my town. Yes, they are unsophisticated indeed. All these guys were either benefiting or just turning a blind eye to what was happening. One thing that I am surprised is not being followed up is Representative Bob Goodlatte’s involvement on the IT Federal deal. There’s something there and no one is really touching it…

    1. LarrytheG Avatar
      LarrytheG

      yeah, I don’t think they were unsophisticated.. they were hard on the task!

      no one was really snookered.. they were in it up to their proverbial necks!

  4. djrippert Avatar
    djrippert

    “McDonald and several others, including family members, were accused of using the public funds to pay off credit car bills and gambling debts and invest in real estate.”

    Big mistake. They should have run for the General Assembly and financed their personal fun through campaign donations after promising EDA money to the donors’ pet projects. That’s Chapter 1 from The Virginia General Assembly play book.

    1. LarrytheG Avatar
      LarrytheG

      an awful thought DJ – but totally correct!

  5. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Towns are like people. Healthy towns thrive. Unhealthy towns die, some die fast, others wither. Drive through a town slowly, look carefully around, doing your drive through. It is easy to see which way the town is going, up or down, or sideways.

    Front Royal has been dying since at least the 1990s. It has been plainly obvious to see since at least then, especially in relation to how the town was thriving in the early 1960s.

    Meanwhile, Winchester, just up the road has had totally different feel, look, and spirit, versus Front Royal, since the early 1990s, at least.

    Why the startling difference between the two equally blessed towns so close together? And why do you see this all over Virginia, this startling difference between towns, typically for no apparent good reason – the failing one, versus the other one either holding its own, or thriving.

    In my view, most always the long term answer is local leadership, as sometimes, but not always, aided by effective state programs.

    Incompetent local leadership killed Front Royal. That is how it looked driving through. The place looked sad, sullen, and insular. Likely too, looking at the place, that incompetent local leadership began feeding on the town’s carcass, after some point, perhaps for decades. That is how it looked. And that was what the Post article implies. When you see a sick town, likely you really don’t have to look deep, and first then look for the rotten wood pile, then for the snakes within the rotten pile, the places where the public / private snakes can grow and fester to strangle the town, its people, its kids, and its future.

    This public scandal is the best thing that has happened to the town in decades. Now the rot can be burned out of the town’s corrupt institutions. Soon Front Royal will have a whole new future. Take off like a rocket ship.

    Every one in Virginia need look more closely at their particular town? Then act if need be.

    1. djrippert Avatar
      djrippert

      I haven’t been to Front Royal for a while, probably not since the late 90s. It seemed like a nice place to me. But … they have had population gains in every census sine 1970. Recently, they have been growing in population faster than the US. Isn’t Randolph Macon College there?

      Statistically speaking, it doesn’t look like a dying city.

      What’s going on?

      1. LarrytheG Avatar
        LarrytheG

        what’s going on is people who work in the DC region are moving to Front Royal for their homes and commuting…

        All around METRO Washington, folks are moving to the exurbs and commuting to their jobs in the METRO Area. You can see the effects of this every morning and evening at rush hour on all the major roads into and out of METRO Washington.

      2. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Don asked “Statistically speaking, it doesn’t look like a dying city.

        What’s going on?”

        Since the 1980’s, Front Royal has been the next stop down the road Haymarket, thus from the decades long fantastic boom in Northern Virginia. From the early 199o’s, Front Royal has been perfectly positioned to take great advantage of this N. Va. boom, and so expand the town the right way, honoring its past, while using that its past and blessed location to built a vibrant and long lasting future, one that has surely been handed to the town on a silver platter several times in the past, but never yet realized.

        But that future is still there waiting for Front Royal to grab. The town still has it all, save a well function local government, for that great future – it is historic, it enjoys a great location, it is a town easily made attractive, its bones are well build and well apportioned as a town with abundant amenities of all types and kinds, superb local, state, and Interstate road and rail transportation network and access, along with fine open, flat and rolling underdeveloped lands adjoining that access in place and or easily achieved, as well as world class National Park, and gateway in several different directions, whether to the Virginia Piedmont, to Northern Virginia, to the Shenandoah River, and then Shenandoah Valley, the latter an incrediable resource also is also on the cusp of a Renaissance of mixed use development stretching north south from one end of the state another, from Blacksburg to Winchester, into Maryland, West Virginia, Pennsylvania, and North Carolina .

        Earlier I said the Front Royal had not developed due to corruption and incompetence. I was not suggesting criminal acts as has recently been reported and alleged in Washington Post, nor am I suggesting it now. But only a dysfunctional local government (both corrupt and incompetent), could build so poorly and neglect so badly the wonderful future that has been staring Front Royal in the face for at least the last twenty years.

  6. Peter Galuszka Avatar
    Peter Galuszka

    Reed. Great comment. I felt that way about a little North Carolina town where I first start the news biz.

    1. LarrytheG Avatar
      LarrytheG

      towns are people. Some are good and some are not… ipso facto.

  7. Javier A. Avatar
    Javier A.

    Reed, your comment is spot on! I remember when I moved here from NOVA, being unwelcomed with comments at the grocery store such us “its you northern virginia folk that will ruin our town”. Sad that instead of welcoming new tax payers, the first reaction was of fear.
    And meanwhile, while the Sheriff, EDA and county BOS (the town council will get their turn) were downright stealing from us, they let a horrible drug problem grow in the town/county. It’s maddening…

  8. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    “they let a horrible drug problem grow in the town/county. It’s maddening…”

    Yes, I have heard that comment over and over again by residents of small towns, from both long time residents, and new arrivals, that the local leaders, including sheriffs, often not only refuse to deal with the drug problems in their town, but actually in effect encourage it, by turning a blind eye toward the needle drug trade flourishing in their towns.

    And it seems to be happening in many of America’s failing, and once thriving, towns including historic county seats.

    I had a discussion not so long ago with a landlord who had to effectively abandon his rental properties in Federalsburg, Md.. Town officials there simply ignored his repeated requests to stop the drug carnage going on in his properties.

    Why?

    It’d suggest there is a woodpile in Federalsburg, Md. No one seems to care, or refuse to confront the snakes. Many law abiding citizens have been abandoned by their local governments in many small towns in America.

    Why?

    1. Acbar Avatar
      Acbar

      Blame it on an unchecked generational divide. Young people growing up in a town like Front Royal are not idiots. The young folks I know with ambition and smarts seem to gravitate to, if not the urban areas in Virginia, certain attractive towns — Winchester in your example — and leave others, with similar size and similar heritage and perhaps similar economic opportunities once upon a time, now faced with an elderly population, in-grown, depressed, some destitute, little to attract tourists and other outsiders, with good-old-boy local politics ready to latch uncritically even desperately onto pie-in-the-sky economic development schemes. And if things start to look a little shabby, a little shady, why rock the boat, there are so many bigger problems. Except in this case, it was very big.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Acbar –

        I totally disagree with your analysis, which I believe to be largely myth in many cases. Front Royal is a prefect example of that myth. Likely Javier A. on his personal experience can fill you in better than I on Front Royal. If he does not, I will on the basis of my own experience.

        Regarding Federalsburg, that town too was ruined horrid government action first on the state level then on the local level. On the state level Democratic Governor and later presidential candidate Martin O’Malley jacked the State sales taxes sky high with the result that all Maryland towns near the Delaware Border were emptied out of retail and most commercial businesses. Most fled a few miles over the Delaware border where whole new towns of strip commerce now happily thrive selling their goods tax free to hordes of Maryland citizens. At the same time O’Malley dramatically increased state income tax, which lead to an exodus of wealth, and high income earners out of the state, the very people that Federalburg could not afford to lose, both politically and economically. He also increased fees, tolls, and regulations dramatically. He was a disaster four ways to Sunday. Hence the first Republican Maryland governor since Spiro Agnew.

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          Actually, the Md. Governor who first instigated these destructive taxing policies that did so harm to Federalsburg, Md. was Gov. Parris Glendening (Gov. from Jan. 1995 to Jan. 2003). It was his performance that resulted in the 1st Republican Governor since Spiro Agnew.

          Parris Glendening was a remarkable fellow. Among many, many, many other things, he claimed to have invented Smart Growth.

          Policy wise, Martin O’Malley followed Glendening’s lead after Bob Ehrlich’s term from 2003 – 2007.

  9. Peter Galuszka Avatar
    Peter Galuszka

    Ripper. Randolph macon academy is there, not the college. It was a big rayon producer in ww11. Population has been up, probably from nova/dc refugees

  10. LarrytheG Avatar
    LarrytheG

    Important to understand what Front Royal was BEFORE it became a “dying town” – it was, in fact, a very prosperous town but had some problems that eventually led to its downfall:

    ” The Avtex Fibers Superfund site was a rayon-manufacturing complex covering 440 acres on the Shenandoah River in Front Royal. The fibers were used for parachutes in World War II and later to insulate the nozzles of rocket engines, including the solid rocket boosters that lifted the Space Shuttle into orbit. The facility was a major local employer operated by American Viscose between 1940-1963, FMC Corp. from 1963-1977, and finally by Avtex Fibers from 1977-89.

    As part of the fiber production process, carbon disulfide, polychlorinated biphenyls (PCB’s), arsenic, and other wastes were deposited into unlined basins, landfills, and open piles. Effluent was discharged into the South Fork of the Shenandoah River under a National Pollutant Discharge Elimination System (NPDES) permit, while groundwater was contaminated as much as 400 feet deep and hydrogen sulphide releases created a “rotten egg” smell in the area.

    In the last five years of operations, the company fulfilled orders from Federal military and space agencies for viscose used to create a special version of rayon used in rocket engines, and ignored 2,000 State Water Control Board and court orders to reduce pollution or close.1

    EPA designated Avtex as a National Priorities List site in 1986. Avtex briefly closed in 1988, re-opened after getting a new contract from the National Aeronautics and Space Administration, but eventually shut down the facility the day after the State Water Control Board revoked its water discharge permit in 1989.2

    The company declared bankruptcy and quickly abandoned the site. It failed to protect its stockpile of carbon disulfide from conversion into a dangerous gas, and left $2 million worth of platinum and rhodium contained in rayon spinning jets.”

    more at: http://www.virginiaplaces.org/waste/avtex.html

    1. TBill Avatar
      TBill

      Yes I definitely remember the pollution issue was rather obvious you could smell the emissions driving thru. I do not recall how many years back that was, but I guess the 1980’s.

  11. Peter Galuszka Avatar
    Peter Galuszka

    Reed, the wapo is not alleging corruption. The commonwealth’s attorney is.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      That is true. Wapo only reporting it. Thanks.

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