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Commerce and RISE WV staff spent $21K at Stonewall retreat

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Before RISE West Virginia went AWOL on the flood victims it was created to help, its administrators spent $21,000 on a retreat at a AAA Four Diamond-rated resort, at least 50 percent of which was covered with federal disaster relief funds.

The findings gathered by the state auditor’s office, presented Thursday to the Joint Legislative Committee on Flooding, show the Department of Commerce used funds granted by the U.S. Department of Housing and Urban Development for a trip to the Stonewall Resort, in Roanoke.

The mid-September 2017 excursion happened four months after HUD granted the state its $150 million in Community Development Block Grant Disaster Recovery funds, the first time the state has received such an allocation.

Of the $21,000, at least $10,500 was covered with CDBG-DR funds, $5,300 is noted as covered by standard CDBG funds and the rest came from Commerce accounts. However, the documentation lists both the CDBG funds and the CDBG-DR funds under the same fund and unit number, suggesting a co-mingling of funds, as Marty Wright, general counsel for the state auditor, noted during the hearing.

A letter of agreement between the state and the resort shows the trip included a cocktail reception and a “dinner plated-banquet.”

Billing documents show the RISE team attended the event. The program has been mired in controversy in the past two months following revelations it has completed building just seven homes in the two years since the deadly June 2016 flood. It received the HUD grant in May 2017.

According to the presentation, RISE has only spent $1.4 million to date. That includes about $570,000 in administrative costs (including the retreat), $784,000 in payments to construction vendors and $43,500 in payments to individuals for assistance.

Attendees included Commerce’s former general counsel and deputy secretary Josh Jarrell, program specialist Andrew Mihallik, deputy director of the development office Russell Tarry, and senior official Mary Jo Thompson.

A spread of those who went on the trip have resigned amid or just before the scandal.

Thompson and Tarry resigned in late June. Jarrell was fired in May, though he disputes that he was fired and says he left of his own accord. Kris Hopkins, former development office executive director, left in early May.

Justice ousted Former Commerce Secretary Woody Thrasher in June as the controversy wore on. The documents do not indicate Thrasher stayed at the resort, although posts on social media show Thrasher was present.

Postings from the Department of Commerce’s Twitter account state the event — the West Virginia Community Advancement and Development Impact Summit — was for its Regional Planning and Development Centers to “discuss the aligning of operations.”

According to Samantha Smith, a spokeswoman from the Department of Commerce, the focus of events for the 2017 Impact Summit for Thursday, Sept. 14, included a RISE WV program and CDBG update. The focus of events for the 2017 Impact Summit for Friday, Sept. 15, was broadband.

“Meetings such as the 2017 Impact Summit are included in the West Virginia CDBG-DR action plan,” she said.

The Stonewall payments were all approved on or after Feb. 20, when HUD authorized the state to begin spending on RISE.

Additionally, some payments were approved after Gov. Jim Justice ordered an operational pause on the program as his administration investigated a series of contract procurement issues.

Along with the $119 room charge and $15 resort fee, Jarrell also spent nearly $160 of state funds at TJ Muskies Bar and Grill on the first night of the trip.

In a text message, he said he believed a sponsor covered those costs, not the state.

“I would not knowingly use program funds to pay for those charges,” he said. “If that occurred, I would voluntarily reimburse those costs.”

The law firms of Steptoe and Johnson, Spilman Thomas and Battle and Jackson Kelly sponsored the event, contributing $2,500 each, on top of the $21,000.

Reach Jake Zuckerman at jake.zuckerman@wvgazettemail.com, 304-348-4814 or follow @jake_zuckerman on Twitter.

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