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Justice says he guides $1.25 billion in federal relief, but W.Va. lawmakers want more oversight

Gov. Jim Justice says he has full discretion about how to use $1.25 billion in federal relief for the coronavirus pandemic.

“From the standpoint of, the fed dollars being appropriated, you know, the Congress gave I guess the governors the ability to distribute those dollars,” Justice said. “So in an emergency situation, that’s what happened and that’s what the governors are able to do.”

West Virginia legislators, who have the power of the purse, beg to differ. They want to be involved in oversight of the $1.25 billion in federal relief.

But so far it’s unclear how.

Amy Summers

“All the members of the Legislature I’ve spoken to would like a say in how $1.25 billion is appropriated but we haven’t been afforded that opportunity yet,” said House Majority Leader Amy Summers, R-Taylor.

“If we did come in, what exactly is our role in the appropriation?”

Craig Blair

Senate Finance Chairman Craig Blair, R-Berkeley, agreed that the governor’s emergency powers offer significant latitude.

“With that said, it’s never been $1.25 billion. And it’s never come in where it’s been sitting in an account like it is right now,” Blair said in a telephone interview.

Blair said he is not in favor of a special session, but has signed off on a letter asking the governor to set up a steering committee that would involve legislative leadership from both parties.

“Right now, if the governor and the House and the Senate put together an oversight council for that, I think that’s advantageous to the governor as well as the people,” Blair said. “Ultimately, these are taxpayer dollars.”

$1.25 billion on hand

Gov. Jim Justice

Justice confirmed a little more than two months ago that West Virginia had received $1.25 billion in federal relief related to the coronavirus pandemic.

That money was made available through the Coronavirus Aid, Relief and Economic Security Act passed by Congress.

“The sooner we have the flexibility to use this money in the ways we need it most, the better we will be,” Justice said at the time.

“This pandemic has done damage in ways that can’t always be seen. It’s thousands of business owners who have laid off their employees. It’s all the cities, municipalities, and counties who are seeing their revenues dry up.”

But so far it has not been clear how the money will be spent.

Justice has described participating in daily meetings with his administration’s revenue officials, as well as the guidance of consultants, including the Bailey & Glasser law firm from Charleston, which has also represented Justice personally in a now-inactive criminal defense case and Justice’s campaign in legal matters surrounding his re-election bid.

Justice has also specifically mentioned consulting help “whether it be BDO,” which is Binder Dijker Otte, an international accounting and tax advisory network, “or whomever it may be.”

The governor has described the consultants as helpful in understanding what can be reimbursed under CARES Act funding, but Justice acknowledged on Friday that there was no competitive bid process to select the consultants.

The governor, asked about whether there was open bidding for consulting services, at first said “as far as I know, from the standpoint of the competitive bid, yes.”

But then he said, “Let me back up. I may have spoken too fast there. I don’t think that’s the case. So I was just wrong in what I said there. But I think that what we are able to do here is select help and select people to be able to help us through this process and everything. And I think in that regard, that’s what we’ve done.”

So, meetings, advice and actions about the money have occurred behind closed doors.

The only action the governor has described publicly is an application process for local governments to be reimbursed for expenses. Otherwise, Justice has expressed frustration over the complicated nature of the rules surrounding how the federal money may be used.

“Congress, not the state of West Virginia, wrote the rules,” Justice said June 12. “They’re the ones who came right out the get-go and said as clear as mud what you’re exactly supposed to do. We have a fleet of lawyers a mile long and everybody in the world working on this to try to pump out this money as fast as we possibly can to everywhere.”

The U.S. Department of Treasury in April interpreted the money is meant for expenses directly related to responding to the pandemic, as well as “second-order effects” such as providing relief for those suffering from unemployment or business interruptions.

What other states are doing

Other states have started to spend the federal stimulus money, with the guidance of their legislatures or task forces.

North Carolina Gov. Roy Cooper signed a $1.57 billion relief package last week after lawmakers developed and passed the bill the prior week.

The North Carolina bill includes $125 million to provide grants to organizations for emergency loans to small businesses affected by the pandemic.

The relief bill also includes $300 million for the North Carolina Department of Transportation, although the funds can’t be used unless the guidelines for the CARES Act are modified.

Other states have also taken action involving their legislatures.

Alabama lawmakers, for example, passed an amendment giving the governor the authority to spend up to $200 million of CARES Act funds for the most immediate COVID-19-related expenses. Legislators would return in a special session and appropriate the remainder of the state’s $1.8 billion allocation.

In Arkansas, Governor Asa Hutchinson created a steering committee to make recommendations for the best use of CARES Act funding.

Arkansas’ General Assembly authorized CARES Act appropriation spending authority. To use the money, the executive branch must request approval by the General Assembly.

In Rhode Island, a 12-member group of lawmakers is studying the state’s spending of $1.2 billion in federal relief. Gov. Gina Raimondo has the last word on spending priorities, but the legislative task force is meant to provide oversight and transparency.

West Virginia has none of that so far.

West Virginia Legislature

Lawmakers in West Virginia would like to be involved with how CARES Act funding is allocated, but a big question is how.

Some recent calls among members of the House of Delegates have included the possibility of lawmakers calling themselves into session, which would require a supermajority. A big complication is, such a call would be open, meaning that any matter — related or unrelated — could be on the table.

If the regular legislative process is used — including the Finance committees — would that add layers of bureaucracy when relief from an economic crisis is needed as soon as possible?

“What is the best method forward? We’ve never had such a huge amount of money that needs to go to people in such a quick fashion,” Summers said. “Would calling us in create more bureaucracy or less? I do feel it’s our role to appropriate the funds.”

One possibility is establishing a fund for the Justice administration to use at its discretion, but Summers isn’t convinced such a broad action would equate to the proper legislative oversight.

“Because just putting money in a fund and then the executive branch gets to appropriate out of that doesn’t really give input,” she said.

Even if legislators are called in, it would help to have a financial proposal as a starting point, rather than starting from scratch.

Eric Householder

“If we did call ourselves in, what would we do?” asked House Finance Chairman Eric Householder, R-Berkeley.

Householder acknowledged one idea under discussion was giving legislative authority for the governor to spend several hundred million and let the rest be authorized by the Legislature.

But Householder said more federal action is needed to allow more flexible use of the money.

“I know everybody is chomping at the bit to get in there and start sending this money out,” Householder said. “Until the feds decide to loosen up some of the requirements I don’t see much of the money being spent.”

Vernon Criss

Delegate Vernon Criss, vice chairman of the House Finance Committee, said allocations and appropriations need to go through the legislative process.

“I know that for some reason the Governor’s Office doesn’t totally agree with that, so we’ll see. We’ll just have to wait and see,” Criss said.

But the Justice administration should prepare a proposal for lawmakers to assess, Criss said.

“He has got to come up with a plan how he would allocate it, as he does with the state budget, and then we can get together and decide if we like it or would change it and what the scope would be within that,” said Criss, R-Wood. “We’ll be anxious to see how he handles this.”

Mick Bates

Delegate Mick Bates, the lead Democrat on the House Finance Committee, did not mince words.

“It’s not the governor’s honey pot,” said Bates, D-Raleigh.

“It’s our job to appropriate. Clearly the executive has a big role in that. But to give him carte blanche authority to expend those funds as he wishes certainly exceeds what I think is appropriate.”

Bates said a cautionary tale is the $150 million West Virginia obtained from the federal government for a program called RISE to provide homes to people hurt by devastating floods of 2016. West Virginia continues to be labeled a “slow spender,” a formal designation that reflects the pace of using the money.

The most recent reports showed West Virginia with $124 million still on hand and 187 homes complete with 225 still to go.

“I’m not looking for RISE 2.0,” Bates said.

But Bates said the Legislature needs a framework, rather than just gathering without a plan.

“It’s not a good idea without a plan,” he said. “The executive needs to come forward with one and right now it doesn’t exist. Just trust.”

Pat McGeehan

Delegate Pat McGeehan, R-Hancock, said the Legislature’s power of the purse is a basic and vital concept.

“For the executive to claim the authority to spend over one billion dollars in new tax money from the public treasury — in whatever manner he sees fit and without any legislative authorization — is a foreign notion to the fundamentals of American government,” McGeehan said.

The executive branch already has too much power, McGeehan said.

“What’s more, the arbitrary nature of this growing power — from these perpetual declarations of emergency to the rule by executive order and decree — should be a real concern, for it stands directly opposed to the long-standing American tradition, steeped within the objective rule of law.”

Justice said he’s got this covered.

The governor said legislative involvement has been adequate so far. He elaborated on that view while answering a question during a Friday news briefing.

“I would say this to our Legislature, I would say this to anybody and everybody. Surely it’s difficult to argue what we have done thus far. We have done with all in us to involve our Legislature, involve anybody and everybody. Keep everybody up to date as much as we can. You can’t just run nonstop keeping everybody updated,” the governor said.

“Now with all that, you know, here’s the thing we don’t want to get into: We don’t want to get into everybody in the world grandstanding and say ‘We ought to be doing this, we ought to be doing that’ and before you know it, we’ll just have a complete mess on our hands.”

So he did not describe formal involvement of lawmakers, either through a special session or even a steering committee, just the promise of open communication.

“We are constantly talking with all of our legislators and absolutely we welcome from any of their comments and everything, and we’re going to continue to talk to them,” he said.