Citizens Take on Crony Capitalism in VA Beach

cavalierby James A. Bacon

Arlington County had its $1 million bus stop scandal. The City of Richmond had its mayoral cronyism scandal. Now Virginia Beach has its Cavalier Hotel redevelopment scandal. The FBI has undertaken a criminal investigation of a vote by Councilman John Uhrin in favor of providing $18 million in city funds to subsidize redevelopment of the landmark Cavalier Hotel. Days later, his wife Catherine Sassone was hired to sell luxury properties associated with the project. Uhrin has said he did not know when he voted that his wife would be hired.

I have no idea if Uhrin is guilty of anything — I have not followed the controversy closely enough to have an informed opinion — but I do admire how Virginia Beach residents residents are responding to the revelations. A group of about 25 citizens who believe “the taxpayers of Virginia Beach have been pushed aside for too long” have banded together to dredge up public records, publish them online and expose the crony capitalism at the heart of Virginia Beach government. The result is The Document Project:

When City Councilor John Uhrin arrived at City Hall on July 2, 2013, he did much more than just vote to give Cavalier Associates, LLC, the largest upfront taxpayer incentive in the city’s history. Uhrin’s vote unintentionally opened a window into the inner workings, backroom negotiations and financial wrangling that for a decade has become the shameful signature of Virginia Beach government.

And it’s all published here, for the first time. Courtesy of a federal subpoena, the FBI and Virginia’s weak, but still sufficient, public records laws.

Among the accusations:

  • Mayor Will Sessoms and former City Manager Jim Spore scheduled Cavalier meetings at the developer’s headquarters even after the mayor recused himself from voting because he had a conflict of interest.
  • A firm run by a member of the Cavalier Task Force, an independent body formed to protect the city’s interests, was working for the Cavalier developers without telling the public of his dual roles.
  • A city engineer describing a 968-foot roadway to be built with $2.5 million in public funds said the cost was so inflated that the developer could use “gold-leaf pavers” and still build the road for less.
  • During negotiations on city incentives, the city’s point man for the project, Barry Frankenfield, asked the developer if he might entertain a “pitch” from his son’s firm. Two months later Frankenfield wrote e-mails stating that the city could “edit out” and “tone down” critical comments made by its own engineers that questioned safety and financial aspects of the development.
  • The Cavalier’s developers applied for a tax break under the state’s GAP financing program. State regulations require all financing to be in place before approval. The developers did not have the financing in place when they applied, and in fact didn’t receive its $77 million loan from TowneBank until February 2016.

I have not examined the substance of the allegations. What I find encouraging, though, is the way citizens have taken matters in their own hands and done the hard work of sifting through a large body of public records to expose questionable ways of doing business.

Why is Hampton Roads among the worst for economic growth in the entire state of Virginia, when we have so much more to offer? Because we’ve long ago traded capitalism for cronyism. …

This website is here because the taxpayers of Virginia Beach have been pushed aside for too long as the same few developers and our elected officials make deals behind closed doors while saying, “trust us.”

Well, those days are over. And with Light Rail, the 15th Street Pier, the 27th Street boondoggle and so many more projects on the horizon, we’re just getting started.

Bravo. Virginia is sliding into a cesspool of corruption. The media is a largely defanged watchdog lacking the resources to conduct the investigative journalism that once was its hallmark. Citizens must take matters into their own hands.

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31 responses to “Citizens Take on Crony Capitalism in VA Beach

  1. the most important thing that can be done for transparency in Va is to stop the GA from weakening the FOIA laws, often at the behest of localities.

    the second most important thing is to require full and complete and immediate disclosure of ANY money coming FROM the private sector to govt no matter the stated reason. Violators would face jail time.

    • I agree; except, the requirement for disclosure of the flow of money and favors must apply in BOTH directions. Like, disclosure of tax breaks and other inducements offered by the Governor’s Opportunity Fund as well as what they were exchanged for. Or, government meetings set up in exchange for loans to family members.

  2. I’m not opposed to the other flow – AFTER the deal is made – the ones that are legal of course OR make illegal the ones you don’t want.

    but govt does need the ability to negotiate the specifics of those legal deals..without everyone and their dog “following along”.

    transparency while the deal is being made will destroy most of them and will be used by partisans against whoever they oppose.

    again – I say – for those who say they want transparency – I want to see those same folks fighting to protect the FOIA laws and for disclosure of money like we see Dominion giving to DEQ and who knows what else…

    in other words – is one truly interested in the core issue or just looking for political weapons to use arbitrarily with double standards for who they support and who they oppose?

    • Re your last paragraph — of course! Have to remember to quote that in future.

    • disagree entirely about government needing the ability to negotiate specifics behind closed doors. if everyone does it, everyone will “follow along”, so the point is m00t, but more importantly, government is not a business and should not be run like one. everyone should be able to follow along, its our business, our lives, our tax money, and will ultimately affect us, at a higher percentage than it will affect those doing business behind closed doors. the midtown/downtown tolls are a prime example of this: contract would never have been pushed had its details been public knowledge.

      as for what you want to see from those who say they want transparency…that is happening, you just need to look around. i’m involved in a few groups that fight for all of this on state/local level. and in other groups focusing on one topic.

      if you want to see it, you should be it. transparency, sunshine laws, foia, open government, and accountability are not partisan issues.

      motivation behind transparency, foia, etc., is irrelevant: foia is your right, and the government should be as transparent as possible in all things.

      in other words, people will abuse anything if giving the opportunity.

      • Thank you Jalbertbowden for speaking the truth.

        Politicians should not be in the business of handing out public money to private businesses without total transparently, open decision making, proven justification, and full accountability.

        Absent such strict controls, the inherent Conflicts of Interest that always arise when politicians hand out money overwhelm the process. It never fails to breed corruption of the worse sort, begetting corruptions that quickly spread though society, sickening and corrupting all it touches.

        Take for example the nearly $trillion dollar stimulus. Like Rahm Emanuel said: “Never let a crisis go to waste.”

        So nearly a trillion dollars of public money was given away to shovel ready jobs that did not exist. The vast majority of this money belonging to other people was handed out by a few politicians for the primary purpose of enhancing their own political power by doing favors for their political supporters and expanding their political base of crony friends. This created more supplicants for those then in power who used taxpayer monies to armed themselves with a huge influx of IOUs to enhance the power of a few then in power, and to corrupt the system for everyone else, including unborn generations.

        This is the kind of corruption the infects everyone involved, and it damages every citizen in the nation, both long and short term, and indeed future generations of citizens yet unborn, leaving them hobbled with the debt along with a dysfunctional government and society of entrenched special interests that are nearly intractable to solution.

        The massive flaws, pervasive negative consequences, and intractability of LBJ’s Great Society has now metastasized to the point that it threatens to overwhelm us all. It corrupted our government, destroyed many of those it was intended to help, and its system of give away bribes for votes and political power now threatens our private capitalist system, our systems of higher education, our systems of scientific research, our private charitable giving and good works, our religious traditions, and our health care, to name only a few.

        The idea of allowing politicians to do this under the cover and behind closed doors without accountability, proof, and explanation is sheer madness. And gross irresponsibility on our part.

  3. Jim’s article above quotes the 25 Virginia Beach citizens within The Document Project as stating:

    “This website is here because the taxpayers of Virginia Beach have been pushed aside for too long as the same few developers and our elected officials make deals behind closed doors while saying, “trust us.”

    “Why is Hampton Roads among the worst for economic growth in the entire state of Virginia, when we have so much more to offer? Because we’ve long ago traded capitalism for cronyism. …

    Well, those days are over. And with Light Rail, the 15th Street Pier, the 27th Street boondoggle and so many more projects on the horizon, we’re just getting started.”

    Then Jim opines:

    “Bravo. Virginia is sliding into a cesspool of corruption. The media is a largely defanged watchdog lacking the resources to conduct the investigative journalism that once was its hallmark. Citizens must take matters into their own hands.”

    I add my applause but ask where is everyone else? Where are they ads the state “is sliding into a cesspool of corruption? The corruption is everywhere, plain the see. The professional press is oblivious to the point of being co-conspirators.

    For example:

    There is now substantial evidence to suggest that the driving forces behind the false Rolling Stones Rape allegations against a fraternity at UVA included players and actions taken within: The White House, the Fed. Department of Education, UVA President’s office and other UVA Administrative offices, and perhaps within a task force appointed by and working for the Governor.

    So what happened to the O’melveny and Meyers law firm report? What happened to all the promises that this report would get to the bottom of this sordid affair and then be made public. Where is it? What happened to it?

    Here on BR we have talked at length about the INOVA / George Mason Personalized Health Venture, its use of the Exxon site on one of America’s most congested intersections at two of America’s most congested interstates. It related imposition of dynamic tolls on the public to force open that intersection and those interstates. And the Governors payment of $16 million in public monies to “facilitate” a deal based on vague statements and over the top hype as to what is going on. (A payment he earlier said he should not pay). Earlier here questions have been asked about the viability of these transactions. Jim’s later article A Big Bet on Roanoke’s Biotect Cluster suggested some partial answers. Compare the clarity and completeness of public statements on the Roanoke Deal in contrast to the Fairfax County Deal. What do they tell you? Does anyone care?

    Then too we have recent enlightening evidence about how the Federal Government goes about getting the results it wants on Global Warming research. An odor suggests that our Federal Government is buying and/or intimidating its way to insure “research results” that confirm its political agenda. Like it cooked up the Rampant College Campus Rape Epidemic to create wedge issues between our youth for political gain.

    Yes, these 25 souls in Virginia Beach are heroes. Lets hope some more of us stand up alongside them.

    • How does Jim’s article found at http://www.baconsrebellion.com/2016/03/the-big-bet-on-roanokes-biotech-cluster.html touch upon, inform and help to answer the following series of questions posed on the INOVA George Mason U, personalized medicine Exxon site deal?

      “That probably means supplementing private dollars and university dollars with public dollars (to fund venture) . . . .” What’s wrong with that?”

      The answer depends on:

      What can go wrong with venture? What are the chances of the Venture’s failure? What are the chances of the Ventures success? What is being done to maximize the chances of its success? And to minimizes the chance of its failure? What are the consequences of success, good and bad? And what are the consequences, good or bad, of its failure?

      These questions and their answers are critical because most speculative ventures (and this personalized Medicine venture is highly speculative) fail. And too often when using public monies, the sponsors of Ventures rig and structure the Ventures so that the sponsors will benefit greatly and take little or no risk themselves irrespective of whether the Venture succeeds or fails. Thus such sponsors gain great benefit from a Venture’s failure and the public’s loss of public monies. Thus too the Venture sponsors structure a public funded Venture so that its success will return little or no benefit to the public, and/or indeed harm the public, if such a structure will help to achieve a maximum benefit for the sponsors who take little or no risk at all.

      So today’s game played with public monies is too often two fold, namely:

      1/ to put as little private Sponsor money at risk as possible, and

      2/ to use as much public money as possible in lieu of sponsor money.

      The intent here is to leverage as high as possible the return and profit made by the Venture sponsors off public monies. The corollary is to shift a disproportional share of Venture’s risk onto the public and its money, so as to remove all or as much risk and responsibility as possible off the backs of private sponsors and their money.

      Thus “Home Run” for the private sponsor is when the public’s money takes all the risk, and the private sponsor’s money and/or profit takes no risk, while the sponsor get a disproportionate share the Profit, plus a guaranteed share of profits or fees for services of all sorts, both real and imaginary. And if third party friends invest in the neighborhood or related products, they too might get benefits off the spending of public monies. So there can be lot to spread around. This leverages profits and favors exchanged on future deals for everyone facilitating the current deal, including the public officials handing out the public’s money to private venture sponsors.

      So today in these sorry times we live in, these sorts of things are rampant.

      For example, this is how we end up spending a Million Dollars for one bus stop. And agree to spend some $20 million more for another 23 stops. And how we end up spending $5 Billion to double the size of Dulles Airport to serve an additional 23 million passengers who never show up, not even 16 years later. And why, in Northern Virginia, traffic gridlock is never fixed but only gets worse, like on I-66, and Dulles Toll Road and at Merrifield.

      How to protect the public against these chronic problems? Some ideas:

      Never take promises at face value. Demand the Truth. Demand Transparency. Demand a full assessment of all the risks. Demand an honest accounting of where all the money (public and private) is coming from. Get lists of everyone who is putting money in. Get a list of who is not putting money in, but is getting benefit. Get lists of who is taking risk, and who not but will gain great benefit directly and indirectly. Demand a full accounting of who will (or is well situated to) make money or avoid losses from this public money spent. When and how they will make it, and what they have to lose (monies now at risk, or profits lost) if the public money is not spent.

  4. re: ” Bravo. Virginia is sliding into a cesspool of corruption. The media is a largely defanged watchdog lacking the resources to conduct the investigative journalism that once was its hallmark. Citizens must take matters into their own hands.”

    The BEST OPPORTUNITY that citizens DO HAVE to directly influence govt -IS at the local level and this actually does represent what the Founding Fathers DID have in mind and you’ll find this guy wildly supportive of any and all of it.

    but a couple of caveats – the Founding Fathers ALSO set up a system where majority does rule – minority rights ARE to be protected so that we don’t have an inequitable system, however – if a MAJORITY of folks support something and a minority are opposed to it – then we settle those things via elections.

    So IF there actually is, in the minds of voters of a given locality -the belief that there actually is “Crony Capitalism” – there IS a remedy. It’s called elections.

    And if you lose to a majority – you DO LOSE! You’re still entitled to your opinion of course

    and a couple of add ons –

    the concept of FOIA – and how it applies to the localities and why the State has to do it

    Va DOES LACK something that citizens should demand and that is the right to initiate referenda INCLUDING recall elections

    finally – the very folks who have spent the last few years attacking the “lame stream media”… the “liberal media” are NOW complaining that investigating journalism has “failed”. well.. HOLY BAT CRAP! you hammer the media over and over and now that the criticism has “worked” .. MORE COMPLAINTS! danged in you do, danged if you don’t.

    don’t ask me where the Conservative media is in all of this… you know in occupying that investigative media “void”.. liberals did it badly and Conservatives just don’t do it or they do it but it’s so biased and stinky that not even Conservatives believe or trust it?

    Oh woe is me.

    It’s the “liberals” fault that investigative journalism has died.

    right.. let’s mark that one down and get on to the rest of the “points” being made these days… cough cough.

    • The Pilot indicates that it broke the Uhrin story, not “The Document Project”:

      http://pilotonline.com/news/government/local/state-prosecutors-not-enough-evidence-to-charge-va-beach-councilman/article_db6907e0-9174-5982-bfd7-6a1e7f533a1a.html

      “The Document Project” is the usual junta of right-wing fanatics who wake up and walk under the clouds of a sunny day. They are a minority and they can’t stand it. These people exist in almost every area of the country. The Government could resurrect Christ and restore the Garden of Eden for all and these people would form a “committee” to complain about what a “waste” those expenditures were…No need to listen to these people any longer. We’re in 21st century America, not an agricultural society of a few million people in the 1780s.

      • the pilot is on a short leash; its masters are the very people the document project is set out to expose.
        the pilot also broke the sessoms story in part 1 of a supposedly ongoing series….still waiting for part 2 to come out.
        i fully support any group of citizens looking into what their local leaders are, right, left, christian, muslim, white, black, or purple: i could careless, as long as they are keeping the establishment in check.
        pro-tip: va beach is a very conservative city, so “right-wing fanatics” are not the “minority”.

  5. re: ” The Government could resurrect Christ and restore the Garden of Eden for all and these people would form a “committee” to complain about what a “waste” those expenditures were…”

    AMEN!

    • I said it tongue in cheek, but honestly, I do believe that there is a contingent in America that make it their life’s mission to complain about government. There are way too many positive developments occurring every day in all of our lives (if we are inclined to look for them) to simply reduce one’s life to: get up, log on and go to the blogs or comments section in newspapers and spend your entire day nitpicking every decision that any government entity makes. That really seems to be a “lifestyle choice” for many of my fellow Americans.

      • i just made a similar comment to a response to this. so apologies for out of order.
        you are entitled to your beliefs, as are those that want to complain about the government from dawn to dusk.
        people are optimists and pessimists, telling one to be the other is not only a waste of time, it seeks a reality that benefits a few over the many. a world where we all agreed or acted the same is an echo chamber devoid of competition, and where there is no competition there is no life.
        on a personal level, i’m highly critical of the government, on all levels, in all things. their actions affect every aspect of our lives, with real winners and losers to certain outcomes. most losers are unintentional, but they still exist. or rather: i know what we are capable of, i want to see us thrive and prosper, and we are much, much, much better than the realities that exist today, so i strive for them.

      • To Everything There is a Season

        To every thing there is a season, and a time to every purpose under the heaven:

        A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;

        A time to kill, and a time to heal; a time to break down, and a time to build up;

        A time to weep, and a time to laugh; a time to mourn, and a time to dance;

        A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing;

        A time to get, and a time to lose; a time to keep, and a time to cast away;

        A time to rend, and a time to sew; a time to keep silence, and a time to speak;

        A time to love, and a time to hate; a time of war, and a time of peace.

        – King James Version –

  6. geeze TMT, you’re QUOTING the Lame Stream media that is calling itself the “establishment”

    very confusing!

    😉

    • Larry, I did think McClatchy’s article was a bit ironic in and of itself. However, it also may be a sign that Big Media might take a hard look at itself from time to time.

      I also believe we need restrictions on former members of Congress and higher level staff moving to a lobbying position. Congress should prohibit former members from any lobbying activities for five years and higher level staff for three years.

  7. @TMT – We’re totally on board with getting money and unsavory relationships out of politics all together…

    however that’s a different deal than all this “establishment” stuff going on – and the idea that the “media” is the defender of such…

    • Larry, the Post has defended so much crony capitalism over the years. So long as the average person, especially those living in Virginia, pay higher taxes, the Rag doesn’t care which multi-millionaire gets the benefits.

    • I’m with C’ville here; there are too many who “spend [their] entire day nitpicking every decision that any government entity makes . . . a “lifestyle choice”!

      “McClatchy’s article was a bit ironic”? Hell yes! “‘The establishment is anybody with big money who can get to the Congressmen and lobbyists,’ said Judy Surak, a nurse from Clemson, South Carolina.” The mood is so anti-Establishment that we are hell-bent to nominate Donald Trump to run against Hillary Clinton so that one of them will curb the political appetite for big money??!! As for “getting money and unsavory relationships out of politics all together,” can’t look to the Clintons for that; let’s just agree to elect The Donald and he’ll isolate us from the problems of the rest of the world and Make America Great again.

      • a response to a “lifestyle choice” is: there are too many people who complain about people that complain about the government and brand it as a “lifestyle choice”.
        point is: that is their right to complain about the government. at the minimal level, who cares? tune it out. at the maximal level, at least they care about something civic oriented as opposed to most facets of americana that are simply just (imho) garbage and trash.

  8. After spending several hours reviewing the TDP’s lengthy content, if I were John Uhrin I’d be urin in my jeans…

  9. re: ” motivation behind transparency, foia, etc., is irrelevant: foia is your right, and the government should be as transparent as possible in all things.”

    well no, FOIA is NOT your right and it’s being slowly but surely damaged by the GA in Richmond.. go look.

    “in other words, people will abuse anything if giving the opportunity.”

    no sure who you are referring to here.

    but here’s the deal with me –

    if you don’t want local govt negotiating in Secret – then you DO need to look at the state law which DOES allow it.

    and you need to vote out of office those that “abuse” it.

    having said that – I’m a guy who believes the vote of the people is more important than my own philosophy – which readers here know that I often hold strongly but if people are opposed to something I’m in favor of or vice versa – so be it – the majority decides it no matter how I dislike it.

    I offer than same advice to others.

    Having said that – YOU DO need the VOTES to sustain your view. It’s not good enough that you believe it if you can’t convince a majority to go along with you. We govern by the vote. I abide by it and so should you – and Bacon and Reed.

  10. foia most certainly is your right. read the definition of foia on foia.gov.
    va ga is most certainly leading a coordinated attack on foia from all angles, as well as an onslaught of ignorance at the local level, and also being chipped at by judicial and executive state level officials simply refusing to do their job.
    the above mentioned, combined with the death of local media sets the stage we are in now: very grim outlook regarding foia in virginia.

    “people will abuse anything” was made in reference to a comment about people abusing foia to go on witch hunts. gov has broad latitude in how they respond to foia, which can and is used in response to ridiculous requests. but my point is, abuse of the system by citizens is not a valid foia complaint. every system is abused, foia is not special, and its much more important to have it in place than to alter it to cater to one groups desires.

    i am extremely aware of state laws regarding closed-door negotiations and am actively involved in having them changed.
    that said, and a point i’ve already made: local governments continually abuse the system in these regards. maybe sometimes its unintentional, but i only accept that because i don’t accept extremes of black and white. the number of local govs actions that violate foia, transparency, sunshine laws, and the like is shocking. systematic ignorance at the least, abuse at the most. considering gov employees are trained prior to taking positions regarding foia, again there is no excuse.
    my point is, being aware of the law and even doing things about has simply proved to be not enough. Petersburg, Hopewell, Chesapeake, Fort Monroe Authority, Virginia Beach, Hampton, Norfolk, and Portsmouth all immediately come to mind regarding blatant abuses around foia in the past year. those are off the top of my head, there are many, many, more. again, local journalism’s death affects show up here: we don’t have people reporting about this stuff regularly, and we also don’t have media outfits with budgets to sustain investigations, foia costs, etc.
    Portsmouth is by far my favorite example, as the city council has gagged all employees about around talking to the media, including creating a fine for doing so. That fine is going to be challenged in a court, and will lose, but it makes my points: the powers that be are actively abusing sunshine laws that guarantee us transparency, as well as passing (illegal) laws chipping away at said guarantee.

    in theory you are correct around voting in and out of office, but in reality that is not possible for most cases. look at the last election with all of the incumbents winning, most uncontested. the same applies on the local level, at least in hampton roads, where i’ve watched the same schills get reelected for the past 20+ years.

    again, you’re right, but its also not as clear as the path you draw: the entrenched political machines are not going to cede any power without a fight. look @ the joke of an ethics commission we have in the ga. and they’re already trying to repeal the pathetic restrictions set in place from the year before.

    a better way to see this is the broad view: the entire system is entrenched with this mentality, is actively working together, against it.
    you want to see some bipartisan action? get politicians in a room to discuss limiting foia.
    they all benefit from dark money, campaign war chests being passed down/around from incumbents who are never challenged, insider tips from the business connections they maintain via lobbyists…the list goes on and on.

    so again, you are correct, but the picture is much more detailed.

  11. re: ” in theory you are correct around voting in and out of office, ”

    basically it’s your primary method of changing what you don’t like – and if you cannot or will not accomplish that at the local level – what alternatives do you really have?

    I don’t think getting involved as an “activist” does any good if it does not actually lead to actual changes in leadership that then leads to actual changes in policy.

    “abuse” of FOIA from citizens or from elected is NOT the same as actions taken by the GA to unilaterally EXEMPT certain categories of data.

    and I still do not think citizens should have unfettered access to negotiations if, in the end, opportunities are lost. However, on that issue, I’ll abide by a vote of the majority and my bet is that a majority would see it the way I do – that some latitude is required for ANY transaction – public (or private, in fact) for open, frank and wide ranging enough discussion to come up with an agreement.

    After that is done – the whole agreement does need to be made public – and if the public does not like it – and it’s a pattern of behavior they don’t like then get your butt out to vote and stop blaming the media for our own lack of action.

    no excuses if you don’t like it – vote otherwise . end of story.

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