By Peter Galuszka

Virginia’s infamous tobacco commission appears to be finally getting needed reforms 15 years after it went into existence.

Gov. Terry McAuliffe announced today that he was appointing a new executive director, Lynchburg native Evan Feinman, ordering a slimmed down board of directors and requiring a dollar-for-dollar match on grants the commission doles out to support community development in Virginia’s old tobacco belt.

In another break with the past, McAuliffe is renaming the old Virginia Tobacco Indemnification and Community Revitalization Commission as the Virginia Tobacco Region Revitalization Commission.

That might sound cosmetic, but any change is welcome given the commission’s history.

Since its formation after the 1998 Master Settlement Agreement between 46 states and four large cigarette makers, the commission has been spending millions of dollars won from the tobacco firms supposedly to help tobacco growers in a region roughly following the North Carolina border wean themselves off of the golden leaf toward economic projects that are far healthier.

Instead, the commission has been racked by scandal after scandal, including the conviction of a former director, John W. Forbes II, for embezzling $4 million in public money. He is now serving a 10-year jail sentence.

The commission also figured in the corruption trial of former Gov. Robert F. McDonnell since it was suggested my McDonnell as a possible source of funding for businessman Jonnie R. Williams Sr. during McDonnell’s trial for corruption. Williams, who was the star prosecution witness against McDonnell, got help from McDonnell in promoting one of his vitamin supplement products. McDonnell was convicted of 11 felonies and is now appealing.

The old commission also has been criticized by a major state audit for funding dubious projects and not keeping track of whether the money it has doled out has done much good. It had been criticized for acting as a slush fund for projects favored by Southside and southwestern Virginia politicians.

McAuliffe’s reforms include reducing the commission’s board from 31 to 28 members and requiring that 13 of them have experience in business, finance or education.

Feinman has been deputy secretary of natural resources and worked with McAuliffe’s post-election team.

It’s too soon, of course, to know if these changes will bring results, but anything that moves the commission away from its past and the grasp of mossback Tobacco Road politicians is welcome.

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  1. larryg Avatar

    Peter’s usually excellent insight. thanks.

    the thing that is maddening is the original intent of the tobacco settlement – to help people impacted – to include both farmers and health care and yet in those very areas that never had good health care facilities to start with – and have had to rely on outside charity organizations help -rather than Virginia taking care of it’s own – Virginia not only ignored them – they diverted the money intended to help them and then to add insult to injury – turned down the MedicAid Expansion.

    The Governance in Virginia reeks of malfeasance, neglect and irresponsibility with regard to providing for it’s own citizens with resources
    they have received for that purpose.

    Instead of health care clinics – we get vaginal ultra-sounds and sleazy looting of the tobacco fund for totally dubious purposes.

    and the rural victims ? they continue to vote Red. Go figure.

  2. TooManyTaxes Avatar

    Other people’s money made available breeds corruption.

  3. Steve Haner Avatar
    Steve Haner

    I will never forget participating in the electronic transfer of the first settlement payment to Virginia and having a frightening sum of money under my control for about two minutes before signing it over to the state treasury. The payment flowed through the Attorney General’s office account. Had we had an OAG office jet, a flight plan to a non-extradition country might have been tempting. For some reason our finance director insisted that we could not even take a finder’s fee off the top of the transaction! He pointed to the line and I signed.

    Kidding, of course, but large sums of money do inspire thoughts of mischief in otherwise stable minds.

    My boss then, Mark Earley, had a great deal to with the idea to take some of those funds and use them to redirect the Southside Virginia economy away from its reliance on tobacco. I still think that’s a valid use for the money and hope that Feinman succeeds in that mission. His Lynchburg roots indicate an attachment to the region, which is encouraging, but a heavier business orientation on the board is a better omen for better results. I think the focus needs to be almost entirely on education and workforce skills training.

    But remember that the settlement funds are ultimately paid not by the Southside farmers or tobacco executives but by the misguided souls still buying coffin nails. The settlement was brilliant tactics on the part of the industry, which now has government just as addicted to the money as its customers are addicted to the drug. The last thing any government wants to do now is put them out of business.

  4. Peter Galuszka Avatar
    Peter Galuszka

    Can you send me your social security number… Privately you know. Txs peter galuszka

  5. I am hopeful that the tobacco commission can avoid any more scandals. But the scandals, though unforgivable, aren’t the reason for the commission’s failure to meet expectations. The deeper problem is that the local politicos used the money (a) to spread the money around to every jurisdiction, spreading the peanut butter really thin, so to speak, and (b) to fund Business-As-Usual projects geared to supporting industrial parks and workforce development in support of light manufacturing. That’s not entirely fair — the commission also spent millions to advance the pipe dream that Danville could be made a high-tech center. We know how that turned out.

    One thing that the Commission should have done, but didn’t, was to set up an intelligence-gathering capability to track and study how other rural areas around the country were pursuing economic development, which practices seemed successful, and which successful practices could be replicated in Southside/Southwestern Virginia.

    There’s no “silver bullet” for a place like Southside/Southwest Virginia but there may be, to borrow a phrase I heard recently, “silver buckshot” — a lot of small, inexpensive initiatives that could add up to something.

    How has the mountain region of North Carolina so successfully developed as a retirement destination? Could Virginia replicate that success?

    What’s the potential to develop a thriving crafts economy, especially wood-based crafts that utilize the abundance of Appalachian hard woods? Would it make sense for the commission to support a local trade association that organized and boosted the local crafts economy?

    Can the region reinvent its agricultural base by getting more into specialty and craft foods as, say, the northern Virginia Piedmont has done? Would it make sense for the commission to support a group that make it its job to forge ties to the burgeoning locally grown food economy in nearby metropolitan areas?

    That’s just off the top of my head. I haven’t kept close tabs on the commission’s recent activities, but I haven’t seen any sign that it has been thinking in those terms.

    1. Cville Resident Avatar
      Cville Resident

      My question has always been: Why does this pot of money exist? The entire premise of the settlement was that tobacco products increased the health costs for each state (which is probably true).

      Some may not know this: but the farmers did receive payments for not growing crops any longer.

      So, outside of recompensing tobacco farmers (who may have had a significant piece of their livelihood wrapped up in an enterprise that was going away), why did any of the money go to this pot of filthy lucre of farcical “economic development”? Makes zero sense. Should have gone to public health……I’d be interested to know just how big a dent we could have made in Medicaid expenditures had we used the money for the Medicaid budget rather than this cess pool of corruption???

      What if the GOP and Dems ended the Tobacco Commission and pledged its funds to Medicaid instead?

  6. Peter Galuszka Avatar
    Peter Galuszka

    Right on bubba bacon

  7. larryg Avatar

    using tobacco money for economic development without an ROI requirement is worse than asking Johnnie Williams if you can use his Ferrari!

    why not use it for scholarships for kids to Community College or Occupation training with an emphasis on medical fields like nursing, physician assistants, etc? why not use it for pre-school, Title 1 ,etc?

    how about funding mobile health clinics to go with the charity ones?

    Economic development for folks who have minimal education and work skills is accomplished how – if not through training and education?

    I like Bacon’s idea except that you need significant investment money for agriculture these days and I’m not a supporter of giving money to the govt to run a business that employs people and giving it to someone else to do it – invites conflicts.

    Taking the MedicAid money and combining it with Tobacco money to create a network of rural Primary Care clinics would provide health care jobs as well as detect and treat disease before it gets advanced and drives up Medicaid costs. I would also keep the working poor – working and not going on disability and getting more entitlements.

    One of the few industries with robust growth these days – is health care – why not capitalize on it? A doctor or nurse or medical technologist is better than a craft worker in my view

  8. TooManyTaxes Avatar

    Has anyone thought about what types of businesses would work successfully in the parts of Virginia where tobacco has been grown successfully? Any business venture that obtains access to tobacco funds should be majority owned and controlled by a local business owner(s). The business schools in Virginia should set up a board of advisors to vet plans (and prohibit any participant in the vetting from investing in the venture).

    It’s quite possible that success businesses might be a gas station, auto repair business, grocery store. SW Virginia is not going to turn into Silicon Valley, but local and regional businesses can still succeed and provide residents with a good quality of life.

  9. Darrell Avatar

    You know the bad thing about education? It’s a liquid that doesn’t stay where you think it should.

    Maybe medical plants might be a good fit.

    Not just MJ but the whole host of hill country plants that might be of medicinal value.

  10. TooManyTaxes Avatar

    The problem with the medical industry is that its not self-supporting and there are no research universities in the SW part of the state. Expansion into health care make sense in areas where there are other vibrant industries as a strong economy provides income for health care, which, in turn, employs people at good paying jobs.

    In an area of relative economic nothingness, the establishment of significant health care facilities will certainly create jobs and economic growth, but will still depend on outside tax dollars to operate. There needs to be basic economic growth to sustain service businesses. SW Virginia needs basic economic growth.

  11. larryg Avatar

    I know I’m the resident liberal but let me ask a simple question here.

    If entrepreneurs can’t find a profitable venture – why would anyone think the govt could or should?

    I don’t think the govt should be doing “business” … if they want some kind of a program that is like a modern form of WPA then go at it that way or if it is something to train people and give them skills then make it a Community College program or a non-profit running off of grants that run out each year and have to be renewed … after review of performance …

    and I still ask – why you can’t take the tobacco fund and turn it over to Community Colleges and Local Health clinics and let them use it to provide programs that benefit PEOPLE .

    Set up a nurse and physicians assistant training program – provide FREE education in return for community service for some number years after graduation. offer that program to any kid in Southside/SW Va that has an exemplary scholarship AND lives in or near poverty.

    do good things with the money – that has a lasting impact … that delivers dividends over and over -year after year.

    1. TooManyTaxes Avatar

      I generally agree that the public should not invest in business. But this is different. These are not tax dollars, but lawsuit settlement dollars intended to help transition tobacco growing areas into new industries. Money should go to help establish new or expanded businesses. Putting money into government programs is a misuse of the settlement money, IMO.

  12. Darrell Avatar

    I think they already have medical education payback programs.

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