CHARLESTON, W.Va. — The Justice administration unveiled a new scandal Friday, amid revelations that a member of the state’s trade delegation acted to enhance his own company’s profile during negotiations over an $80 billion deal with China.
Gov. Jim Justice and attorney Brian Abraham, about an hour into a press conference about problems with long-term flood relief, described the broader investigation involving the state Department of Commerce.
This one involved a private company that, Abraham said, “probably shouldn’t be involved in the negotiations.”
No one from the Governor’s Office specifically named the company, but they came pretty close considering the small state that West Virginia is.
MetroNews reached out to Steve Hedrick, the CEO of Appalachia Development Group LLC. and CEO of the Mid-Atlantic Technology, Research and Innovation Center, known as MATRIC.
MATRIC replied that Hedrick was happy “to support the Commerce Department’s mission to attract business to the state.”
But along the way surfaced an ethical dilemma for West Virginia negotiators.
“There were state monies spent unlawfully,” Abraham said, adding that Justice “directed that we ask those individuals with those companies to pay that money back.”
Some $23,000 reportedly was reimbursed. “That’s been paid back to the state of West Virginia, every dime,” Abraham said.
“The U.S. Attorney’s office was notified, Justice said, “because something didn’t look right about the China situation. … We brought everybody on board immediately because we didn’t like what we saw.
“The people abusing the state airplane, everybody just running here and there and doing their thing, things that we didn’t think were right. People that were there in China, maybe representing their own interest.”
Abraham said recent scrutiny of a contract governing federal flood dollars actually was an offshoot of an investigation of relationships that had developed over the China deal.
“We found many ethical issues at Commerce because of the way the programs were being run through a program called Excel, where individuals were allowed to come into the program that had inherent conflicts of interest,” Abraham said.
Investigators including former U.S. Attorney Mike Carey looked at six months of data and 10,000 emails. Abraham, a former county prosecutor, was not ready to judge whether any criminal activity occurred. “Perhaps those things weren’t criminal,” he said. “They were certainly improper.”
Abraham said the findings contributed to this week’s forced departure of Commerce Secretary Woody Thrasher, as well as to the earlier departure of Deputy Commerce Secretary Josh Jarrell.
The private company that has been most involved with a potential aspect of the China investment, an Appalachian Storage Hub, is Mid-Atlantic Technology, Research & Innovation Center, also known as Matric.
Abraham said suspicions arose after a press release about the storage hub, describing a loan guarantee.
“The individual associated with that is an outside party that had also been working with Commerce,” Abraham said. “We heard some information within that that didn’t make sense. One thing leads to another, leads to another, leads to another.
“Then that caused us to go ‘Why is this person behind the curtain at Commerce if they’re an individual on the outside. That created an ethical dilemma.”
Abraham said investigators concluded that Commerce had given China Energy’s investment strategy to someone who didn’t work at Commerce.
Matric’s response to MetroNews included:
“MATRIC can confirm that President and CEO Steven B. Hedrick was grateful to respond to the request of the State of West Virginia to support the Commerce Department’s mission to attract business to the state.
“Such business development missions included the use of both State transportation vehicles and commercial conveyances. MATRIC promptly paid any expenses invoiced by the State. Mr. Hedrick is not privileged to any outcomes of the investigation. Please direct any additional questions about the investigation to the Governor’s office.”
Logs from the State of West Virginia Aviation Division show that Hedrick was on several flights on state aircraft over the past months, including a $4,228.17 trip to Chicago where he was the only listed passenger.