The governor’s chief of staff doesn’t think it’s a great idea for senators to ask the inspector general for U.S. Treasury if it was OK to transfer millions of federal covid relief dollars first to a fund controlled by the Governor’s Office and then toward construction of Marshall University’s new baseball field.
“It’s really unfair, and quite frankly it’s a little bit dangerous,” said Brian Abraham, chief of staff to the governor. “Saying ‘We’re going to call the OIG at Treasury and report this, does nothing to harm us. But it does potentially have the impact that you be even further scrutinized in future grants to where it may slow down the money coming to West Virginia.”
He added, “If we get into where we’re writing letters and saying ‘We want this looked into,’ I mean that’s like calling the IRS and saying ‘I need an opinion on my taxes.’ It’s not necessary.”
Senators in recent days have asked about the transfer’s reasoning and validity, particularly during a Senate Finance hearing on Friday.
That meeting ended with senators agreeing to kick the question up a notch.
“Is there will of this committee to send — or maybe recommend to the full body — to send a letter to OIG with the Department of Treasury to have a look at this covid transfer?” Senate Finance Chairman Eric Tarr, R-Putnam, asked at the conclusion of the budget hearing. “I see a lot of heads nodding. All right, we’ll proceed with that.”
The situation unfolded late last year.
Berkeley Bentley, general counsel for the Governor’s Office, told senators in that meeting that the state faced a deadline last fall to spend the remaining $28 million from federal Coronavirus Aid, Relief, and Economic Security Act funds.
The state incurred that amount in costs for pandemic-related expenses for corrections and homeland security, Bentley said.
Then the state reimbursed its own expenses by using the federal covid money. At that point, following the reimbursement, officials considered the amount to be state dollars rather than federal dollars — allowing more flexibility.
Facing the deadline, Bentley told senators, the administration found it simplest to transfer the reimbursed money into the Governor’s Office Gifts, Grants and Donations Fund.
Among that fund’s distributions following the transfer to the governor’s fund was $10 million to Marshall University to support construction of a new baseball stadium. Another $3.8 million for the baseball project came from the state water development fund.
“This has been a long time coming, and I am so proud to play a small part in getting this project across the finish line” Gov. Jim Justice said at the Sept. 29 baseball announcement.
At the meeting last week, senators clarified that they like baseball too. But they wanted to know if the flow of funds is appropriate.
“You’re telling me that you can reimburse, related to any expense the state would have with covid, that the governor can move that money anywhere it wants and say it’s covid-related?” Tarr asked that day.
Senators several times asked why if the expense came from corrections then why wasn’t the money reimbursed to corrections.
“We didn’t prioritize this over those things. If you’ll go look in our current budget supplements in the surplus section of the budget, you’ll see an almost-like amount of money to corrections to do maintenance and repairs” Abraham said today on “MetroNews’ “Talkline.”
“We’re projecting a $1.7 billion surplus this year. There’s more than enough money in the state right now to take care of these needs. The governor chose what buckets he wanted to take it from. The discretionary money was available to him.”
Abraham said the flow of money was appropriate.
“We’re extremely confident that the actions we took were supported by law and by the opinions that we were given,” he said.
Questions continue to rise about the state's spending towards the new Marshall University baseball stadium. Brian Abraham, Governor Justice's Chief of Staff, discusses his defense with @HoppyKercheval. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/y3HRAhgUCf
— MetroNews (@WVMetroNews) February 7, 2023
Staff in the Governor’s Office referred to advice from lawyers with Bailey & Glasser and from accountants at the national BDO firm.
As the governor’s office was making the transfer last September, it exchanged several emails with representatives from the state auditor’s staff. Those emails cited the advice from the consultants.
“Once an expense is considered charged to the CRF,” wrote the consultants from BDO, referring to the Coronavirus Relief Fund, “the State is able to reimburse itself for the original funding source used for that expense.
“As the federal dollars are associated with the specific expenses claimed against them, the money reimbursed to the State is able to be used as deemed necessary by the State following any of its normal spending processes and is no longer restricted by Treasury or other requirements.”
Abraham referred to those conclusions while defending how the state handled the funds.
“We are absolutely confident,” Abraham said. “We’ve taken great care to make sure we spent that money appropriately. We don’t want to be an administration that misspends, that has some clawback for a future legislature, a future administration. So that’s why we engaged these experts.”