Southwest Virginia Population decline 2010-2018.

Terry Kilgore and the Tobacco Commission.

More on Phil Puckett and the Virginia Tobacco Commission Scandal

introduction by Lewis Loflin

While it's clear the Tobacco Commission is corruption 101 under Republican control let's not forget an incident between Gov. McAuliffe, Democrat Phil Puckett, and Bristol Virginia Republicans.

Bristol Republicans went to Phil Puckett to get him to prod Gov. McAuliffe to help them to rewrite Virginia tax laws to pilfer $100 million in sales tax collections to bail out the Falls retail development in Bristol Virginia. They simply couldn't borrow any more money (already $55 million in the red) without a state guarantee of a reliable income stream.

This is at a time when the State is running a $2.4 billion shortfall due to declining Federal spending.

After the changes passed Bristol borrowed another $35 million in November 2014 and Cabela's (the anchor store for the development) pocketed a $17.5 million payoff.

While it's unclear what went on in these closed door meetings McAuliffe needed Puckett to expand Medicaid so the good Governor pushed the de-facto wealth transfer through the state legislature.

But it seems Republicans were determined to quash Medicaid expansion so when Puckett resigned for the Tobacco Commission job the good Governor got burned. That I believe was the real reason for Gov. McAuliffe and fellow Democrats were so determined to nail Puckett, McDonald (whose dirty dealings also involved the Tobacco Commission), and in particular the Kilgores.

That's my theory.

This corruption goes on every day in Virginia - our ethics laws are a joke that nobody will enforce. Why would they convict Gov. McDonald for what the Tobacco Commission, VCEDA, LENOWISCO, etc. do every day?

Economic development in Southside and Southwest Virginia consists mainly of crony capitalism and corporate welfare. Virtually nothing is spent on human capital the really big problem in the region.

The article below from Mr. McLaughlin stands as further testimony - it's time to break up the Tobacco Commission.

Job abuse (at the Virginia Tobacco Commission)

Tom McLaughlin July 02, 2014

In light of its persistent failure to achieve the task entrusted to it - revive the economies of Southside and Southwest Virginia - I've wondered from time to time whether the Virginia Tobacco Commission shouldn't just resort to old-style '70s-era jobs programs, with the promise of a paycheck for anyone who is willing to put in the time and effort to earn one. Make-work jobs are hardly optimal for creating employment, but it beats the heck out of throwing money at various forms of corporate welfare that wind up providing little or no return.

Then I remembered: Things can't possibly work this way, because the Tobacco Commission is focused like a laser beam on the demands of the real-world market economy.

Unless members decide to invent a make-work job for one of their very own.

Now that's a different story.

News flash: the Tobacco Commission is beset by scandal - again. This time, its chairman, Scott County Delegate Terry Kilgore, is accused of a scheme to jimmy up a position for former Democratic state senator Phillip Puckett, whose retirement last month tipped the balance of power in Richmond at a time when Democrats and Republicans were deadlocked over the state budget.

Puckett said he resigned for personal reasons and to clear the way for his daughter to receive a judgeship back home in southwest Virginia - her appointment had been held up by an anti-nepotism rule in the State Senate - but inconveniently for Puckett's story, he also had an offer on the table for a cushy job with the Tobacco Commission, on which he previously served as a member.

In the immediate aftermath of the resignation, both Kilgore and Puckett said the Tobacco Commission offer did not factor into the senator's departure from Richmond. But e-mails uncovered last week by The Washington Post and Richmond Times-Dispatch show plainly that a deal had been in works for weeks prior to the June 9 retirement announcement.

Once word started to leak out, the upshot was immediately clear to the Tobacco Commission's interim director, Tim Phohl, who urged Kilgore to "decouple" news of the Puckett retirement and the job offer "for the sake of [avoiding] the appearance of the Commission manipulating the Senate balance of power and starting WW3 w/the Governor's administration."

No mincing of words there; to someone casually reading through the e-mails (retrieved under the Freedom of Information Act), Phohl may come across as something as a co-conspirator ("I mention all this so you know what's being planned on our end to give this the most defensible appearance of due process," he wrote to Puckett), yet as anyone who follows the commission knows, the staff is the least of the Tobacco Commission's problems.


The mind reels at the thought of how many times legislators on the Commission would have screwed up without the professionals on hand to reign in their worst impulses. Unfortunately, it's the politicos who run the joint, not Phohl and deputy director Ned Stephenson, who also features prominently in the e-mail exchanges reported by The Post and T-D.)

Bribery plainly factors into this tale at some level, although it remains to be seen whether Kilgore's and Puckett's actions fall into the garden-variety job-fixing category - all perfectly legal in the rarified world of politics - or if something more insidious is going on, enough to trigger a potential prosecution. (The FBI is investigating.)

We'll leave the legal analysis to the armchair lawyers who proliferate in the media and on the Internet. A question instead: has anyone stopped to read the "job description" that Puckett was invited to write up on his own behalf? If waste, fraud and abuse were actually the crimes that Republicans who run the commission contend, everyone involved would be rotting in prison by now.

To wit: For the modest cost of a state vehicle, cell phone and presumably a fat salary - sum to be determined - Puckett had in mind the following: "Seek and develop partnerships with all communities and their related organizations" in order to "maximize their access to and efficient use of Commission resources"; "Active participation with all Commission constituents in the design and presentation of economic development opportunities"; "Monitor proposed legislation that affects the Commission and advise legislators of its potential impact ... ." (Ah yes, lobbying. Always the lobbying. And let's be sure to give creativity points to Puckett for offering legislative insights to Commission legislators. The sad part is, they probably need the help.)

Aside from serving as the Tobacco Commission's designated code-whisperer, there isn't a task that Puckett spelled out in his "job description" that isn't already performed in triplicate by the various economic development directors, deputy directors, assistants, secretaries and janitors who work for county-level economic development offices. Tip: These folks know where the money is. They don't need Phillip Puckett's "active participation" to "maximize their access" to jack squat. So tell us, what's the point again?

Just this: even if no crime was committed in the wooing of Phil Puckett from the Senate to a state of permanent disgrace, this latest incident reveals a larger truth about the Tobacco Commission: It's become a corrupt organization. There. I said it. If Gov. Terry McAuliffe wants to get the public's attention with his promised push to stiffen Virginia's pathetic ethics laws, he could do a lot worse than to propose kicking off the legislative members of the 31-member Tobacco Commission board. Not one of 'em would be missed.

Kilgore's blithe use of the Tobacco Commission budget as a political honey pot is hardly the first indication that the organization is rotten at the core. Remember how Bob McDonnell proposed to get the money to please his Star Scientific sugar daddy, Jonnie Williams? He was going to siphon off research funding for the diet pill company from the Tobacco Commission. Does anyone seriously believe Terry Kilgore was going to stand in the way, in his role as the last honest cop on the beat?

(Unfortunately for McDonnell, the request had to be vetted by university researchers, who wanted no part of the scam.) Ever so often, the utter credulousness and Sgt. Schultz-level of institutional rigor trips up the Commission - notably in 2010 when former member John Forbes, the state finance secretary under Gov. James Gilmore, stole $4 million from under the noses of his former fellow wise men. Commission members, reacting to the Forbes scandal, vowed to tighten the rules of operation. How's that working out?

There is another option to consider with the Tobacco Commission: Disband it altogether. The latest sleaze eruption aside, there's a good argument to be made that the Commission has outlived its usefulness, such as it ever existed. To be sure, the leaf panel has done some good things: its bet on regional fiber optic broadband has paid solid dividends, and the investments in education and job training have been a blessing to communities in great need of educational access.

Unfortunately, spending on so-called human capital has been something of an afterthought for the Commission, ranking well behind its big-dollar sops to well-heeled corporations and misguided, self-styled ventures in arenas where innocents have no business playing - "energy centers" topping the list. (Not a whole lot has resulted from the millions and millions spent.)

The Commission generally follows a top-down approach to economic development; investments in people are relatively rare, unless it's an individual who's in need of a cushy landing after a long and fairly non-remunerative career in the Virginia State Senate.

Add to the case for disbanding the Tobacco Commission the fact that the money is running out: sad, but true. (From a starting point of more than $1 billion, the Commission is now down to having about a quarter of that sum in the endowment.)

At this point, it might be best to start the process of unwinding the commission's less-wise financial commitments and roll the money into local block grants, ideally to education and community development foundations that have a surer sense of how to spend the money for the benefit of citizens, rather than corporations. Yet the most important reforms would be anything that addresses the Commission's root problem: its existence as a plaything for politicians who will never appear next to the words "impressive group."

In developing a job description for himself, ex-Senator Puckett suggested one other potential role: "on-site evaluation of Commission-funded projects and development of a reporting routine to the Commission or its appropriate sub-committee." Presumably underneath all this jargon, a call was sounded for accountability with Commission funding: funny how that one works.

Terry Kilgore was briefly displaced in the news this week by our very own State Senator Frank Ruff, vice-chairman of the Tobacco Commission, who was the go-to source for a Danville Register & Bee story in Sunday's edition on how Danville may be required to pay back tobacco grants after local industries that received funding have gone out of business. (Localities serve as the go-between between the public funding source and the private fundee.)

In the midst of his usual blather, Ruff offered a hilariously lunk-headed explanation for how the Tobacco Commission can lose track of underperforming companies: ""We really don't have the resources for a whole lot of that." Well, who has money to hire a monitor when the Commission's leadership is lavishing so much love on one of its own?

Between Terry Kilgore's patent sleaziness and Frank Ruff's me-too cluelessness, you've got a pretty solid case for breaking up the Tobacco Commission - not that anyone would ever confuse this crowd with the 1927 Yankees. The Black Sox perhaps? Apologies to Chicago's infamous baseball team; whatever the appropriate comparison, it's time our local guys got the hook. They've forfeited something more meaningful than a baseball game.

Copyright 2014 by The News & Record, South Boston, VA.

To quote an internal audit of the Virginia Tobacco Commission in 2008:

Given the existing state of the Southside and Southwest economies, it is fair to ask whether the expenditure of over $400 million by the TICR since the year 2000 on "regional transformation" projects has had the desired transformative effect on the regions...Despite this spending, population in the region continues to decline, wage rates still lag behind the rest of the state, there is persistent high unemployment and poor educational attainment is still endemic.

Return History, Causes of Poverty in Southwest Virginia

Congressman Rick Boucher and President Obama

To quote Lenowisco Broadband Study Warned against Call Centers (PDF file):

"The region has been replacing traditional (better paying) manufacturing jobs with (low paying subsidized) call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries."
No US Job Creation 1999-2009

Lenowisco Broadband Study Warned against Call Centers (PDF file)

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