Bacon's Rebellion

Democracy Thrives in Sunlight

The Tobacco Commission, GiftGate and Sleaze

—

by

Peter Galuszka
in , , , , , , , , , , , , , , , , , , ,

TOBACCO_LEAF_ONE-226x187By Peter Galuszka

The latest turn in the McDonnell GiftGate scandal goes back to a familiar entity, the Virginia Tobacco Indemnification and Community Revitalization Commission which has acted as a large slush fund for favored projects in Virginia’s tobacco land for more than a decade.

No surprise there. The tobacco fund is swimming with money from a 1998 settlement from the four major tobacco companies and offers a cornucopia of funds for projects favored by the commission staff and board.

The settlement was a whopping $206 billion over 25 years to 46 states and the District of Columbia. States could distribute funds according to vague and broad guidelines but the gist was they were supposed to support help for people suffering from tobacco-related diseases and keep young people from smoking.

Virginia, of course, took that a step further and went for economic development in the state’s bright and burley leaf tobacco belt that stretches from Southside regions around Interstate 95 all the way west to the coal fields. The Virginia commission has a checkered history. Its former head, John W. Forbes II, was sentenced to 10 years in prison for wire fraud in 2010 for wire fraud involving skimming from the commission.

And when the commission got underway, its first act was not to stop teenagers from smoking, it was to send checks of up to $12,000 to people who held tobacco “quotas” in a now-defunct federal program to grow the leaf under government control and keep prices artificially high.

An article I wrote for Virginia Business a decade ago found that 28 percent of the checks didn’t even go to people who lived in Virginia but in places like Brooklyn, the Gold Coast of Chicago and Las Vegas. They happened to have inherited “quotas” and the Tobacco Commission felt they needed to be made whole since the tobacco industry was taking hits.

Now, The Washington Post reports, federal prosecutors are examining emails about whether Star Scientific boss Jonnie R. Williams Sr. was pushing Governor and Mrs. Robert McDonnell to help him get research funds from the Tobacco Commission so Virginia Commonwealth University and the University of Virginia could start investigating “anatabrine,” a substance derived from tobacco that Williams believes has miracle properties. He now uses it in his over-the-counter vitamin supplement product “Anatabloc.”

This is where it all starts getting squirmy. Lawyers for the McDonnells say that they did not intercede to help Williams get tobacco money despite the $150,000 or more they got from Williams in gifts and loans. The Tobacco Commission itself apparently did not give any money specifically for Star research.

But a slew of emails show that researchers from VCU and UVA had evidence that the McDonnells were influencing the tobacco commission to help Williams. “The governor would like to sponsor these trials as evidence of Virginia’s commitment to research and entrepreneurship,” wrote VCU diabetes researcher John Clore.

More evidence connects the McDonnells to the Tobacco Commission blitz. Mary Shea Sutherland, chief of staff for First Lady Maureen McDonnell, was on a private plane to attend a July 2011 conference in Maryland hosted by financially troubled Star whose very existence depends on expanding sales of Anatabloc, according to securities documents it has filed with the federal government.

According to the Post, under federal law, it can be illegal for elected officials to agree to take official actions in exchange for gifts and money even if they do not follow through on their promises or have the power to do so.

This is apparently the key question on which indictments could turn.

There’s a ton of coincidental or circumstantial material. The entire case crawls with bizarre connections. Here’s another one. Jerry Kilgore is a former attorney general who now represents Jonnie Williams. And guess who is the head of the Tobacco Commission? None other than Terry Kilgore, Jerry’s brother.

To sum it up, tobacco, Richmond power and lots of personal and family connections. It’s the Virginia Way!

Share this article

ADVERTISEMENT

(comments below)

ADVERTISEMENT

(comments below)

Comments

19 responses to “The Tobacco Commission, GiftGate and Sleaze”

  1. James A. Bacon Avatar
    James A. Bacon

    This may not be a “smoking gun” but it’s a gun… and it’s got fingerprints all over it.

  2. DJRippert Avatar
    DJRippert

    What a completely corrupt state! The tobacco settlement was supposed to help those who were hurt by tobacco. Instead, it was used to subsidize those who grew the stuff. Kind of like the DEA handing out bonus checks to meth lab operators. The Virginia head of the tobacco settlement commission was sent to prison. A former tobacco company turned dietary supplement concern tried to bribe the governor and attorney general to help them get a piece of the pie. And the most shocking part is that people seem genuinely shocked that those who give gifts to elected official want something in return.

    Virginia is the most broken state in the United States.

    It’s time for Dillon’s Rule to be dissolved and The Imperial Clown Show in Richmond to be neutered.

  3. larryg Avatar
    larryg

    I’m not sure what the “need” is for the perfunctory smoking gun at his point.

    Isn’t it pretty clear what style of governance, we’d get with this guy?

    The fact that he is almost defiant about his behavior – as a candidate –

    and I agree with DJ… Va – the GA and all the prior Govs put together/presided over an unaccountable commission to operate the indemnity fund as something that could be easily abused instead of safeguards and performance standards.

    JLARC has issued reports but they are a bit muted… but there is criticism:

    http://jlarc.virginia.gov/factsheets/Fct412.pdf

  4. TMT Avatar
    TMT

    Virginia’s state government has too much money. And the media thinks government having a lot of money is a good deal. Hence, we get no probative investigative reporting on a regular basis.

    Repealing the Dillon Rule would be of little value, as local government would do the same. Keep in mind that Fairfax County initially proposed taxpayers fund well more than 50% of the costs for the transportation facilities needed to enable the landowners to redevelop. It was only citizen advocacy that stopped this. Guess which county also had unannounced meetings with the Tysons landowners on financing. Fairfax, anyone? Citizen objection stopped this process. Which county approved the addition of a 4th subway station in Tysons at a cost of at least $50 million when the station was in front of the property of the employer of the chairman of the BoS? Fairfax. Gerry got his.

    Which county is proposing to pay the owner of the National Conference Center for the loss of surface parking in order to build a high school, with the damages covering the cost of building structured parking? How about Loudoun County? Loudoun County is paying for the land at market value and then adding money to allow the NCC to build a parking ramp. The old D-controlled BoS approved this and the current R-controlled BoS affirmed it.

    There remains an idea in Virginia that some are more equal than others and have a divine right to access to other people’s money.

    1. DJRippert Avatar
      DJRippert

      “Keep in mind that Fairfax County initially proposed taxpayers fund well more than 50% of the costs for the transportation facilities needed to enable the landowners to redevelop. It was only citizen advocacy that stopped this.”.

      Exactly the reason to repeal Dillon’s Rule. Local actions get local scrutiny. Bad decisions get overturned. Government is held accountable. You are making my point for me.

      Will the General Assembly take any serious action on ethics next year? want to bet? The unaccountable state legislature has nothing to fear based on gerrymandring, off year elections, impossible ballot requirements, etc.

      1. TMT Avatar
        TMT

        It’s much easier to raise issues and achieve change with VDOT, for example, than with Fairfax County. And Fairfax County is a model of openness when compared with Fairfax County Public Schools.

        It took more than four years to thwart the Tysons giveaway, but only about two months for VDOT to agree to, and establish, a citizens committee to help plan the widening of Route 7. VDOT also changed its public notification procedures for the HOT Lanes construction process within a month.

        The Dillon Rule protects citizens against rouge local government. I like it.

        1. larryg Avatar
          larryg

          Devils’ Advocate – is the requirement that Henrico must hold a referenda for the meals tax – a “good” or “bad” Dillon requirement?

          In other words, without Dillon, Henrico could just vote to do the meals tax.

          DO you consider that a good or better thing than Dillion?

          I wonder how Jim feels….

          1. TMT Avatar
            TMT

            Logically, I don’t see a good reason for a city and county to be treated differently for tax authority. But Henrico has the ability to impose the meals tax after a successful vote. I don’t see that as a bad result either.
            Fairfax County supervisors would like to take a second whack at the meals tax. The last time it lost in a referendum. The supervisors don’t want another vote unless all the stakeholders endorse beforehand or the General Assembly removes the referendum obligation. No candidates for Profiles in Courage there.
            One of the biggest problems in Fairfax County is that none of the stakeholders can agree about the uses. The Tysons landowners want the money to pay some of their infrastructure costs. Taxpayer groups want a corresponding cut in the real estate tax. The school people want the money for FCPS. So Fairfax County isn’t likely to get its cover soon.

        2. DJRippert Avatar
          DJRippert

          You’re killing me! How long has the Charlotesville bypass fiasco been going on? Yeah, VDOT is very receptive there. And the bi-county parkway? That’s a local effort being carefully analyzed by the state, right?

          VDOT doesn’t even attempt ROI calculations on the roads it builds.

          The only reason TMT likes the Dillon’s Rule is because he is a conservative in a liberal area. He hopes that Bob “vaginal wand” McDonnell and Ken “I hate gays” Cuccinelli will be able to foist their extreme dogma on people who have no interest in that dogma.

          It will be fascinating to watch what happens as Virginia continues on its progressive trajectory. We are less than a month away from all five statewide elected positions being Democratic. All those pro-Dillon conservatives in places like Henrico and Prince William Counties will suddenly demand an end to Dillon’s Rule. Boo hoo hoo they’ll cry – it isn’t fair for the centralized state government to make all the decisions.

  5. DJRippert Avatar
    DJRippert

    “Which county is proposing to pay the owner of the National Conference Center for the loss of surface parking in order to build a high school, with the damages covering the cost of building structured parking? How about Loudoun County? Loudoun County is paying for the land at market value and then adding money to allow the NCC to build a parking ramp. The old D-controlled BoS approved this and the current R-controlled BoS affirmed it.”.

    Didn’t Virginia just pass a constitutional amendment that forced localities to compensate businesses for business related losses in the case of eminent domain seizures? Who put that amendment on the ballot? The Imperial Clown Show in Richmond, over the objections of the municipalities which will be forced to pay more!

    1. TMT Avatar
      TMT

      No eminent domain was involved. The NCC asked Loudoun County to build the high school in a manner that would take some land from the NCC, which has been facing significant financial problems. The NCC sought and received a taxpayer subsidy that was artificially increased.

      The site for the new high school was far from a good one. The high school will be built in Landsdowne, which is built out, and away from where growth is occurring — near the Greenway. The new site also takes away parkland proffered for public use and will make traffic congestion in Landsdowne much worse as the site has only a single entrance/exit.

      1. DJRippert Avatar
        DJRippert

        That’s not the point. The state just pushed a constitutional amendment onto the ballot that will make eminent domain more expensive for localities. You complain that Loudoun is spending too much for a school but you support an amendment that will make all kinds of things more expensive. The US Constitution provides for fair payment in the event of government taking of private property. Why did the oligarchy in Richmond feel compelled to get involved in this?

        1. larryg Avatar
          larryg

          why? because a fair number of people feel that the state has the upper hand in negotiations and people are forced to settle for less than they think is fair rather than face a long expensive legal fight.

          I don’t favor or oppose it other than to point out that the state seems to have an unfair advantage in negotiations and if the choice is for taxpayers to pay more verses the property owner having to give up more than they should – then taxpayers should pay more.

          some of this involves the partial taking of properties leaving the remainder less valuable or what is known as ‘constructive” takings where things like access are damaged but not compensated.

          then there is the case where VDOT took a lady’s property then decided they did not need it but tried to sell it back to her at a higher price that they gave her when they took it. A judge took care of that one.

  6. larryg Avatar
    larryg

    Dillion reserves power to the state. Virtually every state in the union does this and it’s just by a matter of degree that it varies.

    even Home Rule localities do not trump the state on a wide variety of State level laws and taxes. It basically gives the locality SOME autonomy to take some local actions without approval by the state.

    but thinking about the tobacco commission and the counties that it applies to – southside and southwest Va and what is the thing that many chronically unemployed suffer from that the state taxpayers have to pay for?

    Health Care. Va could have used the tobacco settlement money to set up regional and community health care clinics… that would not only help people but relieve Va taxpayers of some of that burden.

    In Southside and Southwestern Va, as many as 20% don’t have health insurance and it would have seem natural to use the tobacco fund for that purpose.

    1. DJRippert Avatar
      DJRippert

      The tobacco settlement mis-management is a classic example of what’s wrong in Richmond. Start with the fact that the guy running the program has been sent to prison for theft. Well, that certainly sounds like the state government did a nice job of picking the leader. Then, money is being handed out to people who once grew tobacco – even of they are long gone from Virginia. Are you kidding me?

      Here was a better idea – divide the amount by the number of people in Virginia and give every locality their pro-rata share to spend on whatever they want. Get the Imperial Clown Show in Richmond out of the mix altogether.

      Meanwhile, the recently released e-mails from Jonny Williams show just how corrupt TMT’s beloved state government really is. Williams absolutely believed that he was buying favors from McDonnell and (we have to assume) Cuccinelli. Why else would anybody start handing out millions and millions of dollars? C’mon – the state government is morally bankrupt and should be in charge of anything. It certainly shouldn’t have dictatorial power over the localities.

      1. TMT Avatar
        TMT

        Fairfax County has reasonable local government since Gerry Connolly took the developers’ money and got elected to Congress. Sharon Bulova is, IMO, a pretty good elected official.

        But she and the rest of the supervisors (both Ds and Rs) voted to add $50 million plus largely to the backs of Dulles Toll Road users by adding a 4th Silver Line station that just happens to be right in front of Mr. Connolly’s then employer, SAIC. Connolly was VP for state and local government relations. The then County Attorney wrote an opinion this did not violate conflict of interest rules days before he left his position for private practice.

        This transfer of money from the public to private land owners through the actions of an individual who was both chairman of the Fairfax County BoS and an SAIC officer is as corrupt as anything the state has ever done. Ditto for the transfer of money from taxpayers to NCC. Ridding localities of the Dillon Rule won’t stop corruption. Giving any government entity more power provides greater opportunity for corruption. We need more checks and balances, not fewer.

        I’m not arguing in favor of state government, but rather, in favor of checking both state and local government powers in Virginia. As you all might recall, I’ve complained bitterly about Tim Kaine’s giveaway of the Dulles Toll Road to MWAA and the imposition of the bulk of the costs for constructing the Silver Line on the backs of DTR drivers. I’ve also written that I believe Virginia is just as corrupt as New Jersey, Chicago or Louisiana, only we are more sophisticated. The problem is well beyond improvement by weakening the Dillon Rule.

        1. larryg Avatar
          larryg

          TMT – you’re opposed to Fed, State and local govt?

          or maybe to put it more fairly – you think all three have more power than they should have?

          is there a better governance model out there that you prefer?

          1. TMT Avatar
            TMT

            Larry, I’m not opposed to government at any level. Without it, we’d live in total chaos. But I firmly believe in the American system of limited government with checks and balances. The federal government has certain enumerated powers set forth in the Constitution. The rest belong to the state or the people.

            States have certain sovereign powers, but are checked by federal authority set forth in the Constitution, such as the inability to regulate interstate commerce or to conduct foreign policy. There are also restrictions in most state constitutions. Local governments are not sovereign, but have whatever powers are granted by the state. These powers often vary from state to state. As you’ve stated, even home rule states have some restrictions on local power. A strong Dillon Rule state has more restrictions.

            Generally I like the restrictions imposed in the Dillon Rule because it is another check and balance. I would probably grant local government more freedom on ministerial tasks, but like the idea Fairfax County cannot do whatever it wants. We may not need those extra checks with Sharon Bulova as Chairman, but she won’t be Chairman forever.

            Having said this, local government in Virginia has more authority that it is often willing to use. Generally, it does not need to amend its Comp Plan to accommodate a landowner’s request or grant rezonings. Counties can seek voter approval to impose a meals tax. Counties can also receive permission to take over its local road with a cash stipend.

            I remain a strong believer in the American system of government.

  7. larryg Avatar
    larryg

    I like the idea of using the money to improving the lives of the folks in the counties who benefitted from tobacco which is more than just the growers.

    Many people in these poorer counties grew tobacco as a cash crop. It was their only cash that they would then use to buy things the could not grow themselves.

    Many of these folks lacked formal educations or any real way to make a living other than living off the land.

    I think we often forget just how poor rural Virginia was decades ago.

    My grandparents grew up in Bowling Green, Va – actually in a place called Sparta and they had nothing except the land they lived on.

    Why anyone in those circumstances would have 10 kids is beyond me but they did.

    All of their kids went to public school – because taxpayers provided that school.. otherwise none of those kids would have gotten an education.

    they had no electricity. Homework was done in late evening via oil lamps.

    and yes.. they walked about a mile to get to where the bus picked them up and no.. mom and dad.. did not sit there until the bus came.

    evenings and weekends there were always chores… feeding the critters, closing up the henhouse… getting water from the spring… emptying the prince william overnight cans… etc…

    without public schools – that life was going to be the only life for them.

    public schools gave them opportunities – vast opportunities to advance themselves… and they did.

    today – we’re screwed up. we don’t understand our own roots…

Leave a Reply

Read More