April 9, 2019, Dominion Post
You may find some elements of this story that remind you of another at the national level. The billionaire governor of West Virginia, James C. Justice II, is the wealthiest person in the state. He and his family own companies in agriculture and coal. The family owes millions in mining violations, and Justice, who has been governor since 2017, has not placed his companies in a blind trust. A federal subpoena has now been issued to the West Virginia Department of Commerce for records regarding the historic landmark and resort, The Greenbrier, that Justice bought out from under a bankruptcy nine years ago. The subpoena also includes the Greenbrier Classic PGA golf tournament (now called A Military Tribute at The Greenbrier) and the related 501c3 with the not-so-subtle name of Old White Charities, after the golf course at the hotel.
Some readers may recall that this is not the first time NPQ has questioned the philanthropy of Jim Justice. These issues occurred when he was not yet governor. After covering Justice’s refusal to pay fines levied on him for safety violations in his mining operations, we wrote in 2016:
Justice has brought his deadbeat tendencies to his philanthropy, too. In 2011, and to a lot of fanfare, Justice pledged to contribute $10 million to Cleveland Clinic Innovations. But a Cleveland Clinic spokesperson, Janice Guhl, told NPR that “no money was received from Mr. Justice.” Similarly, Justice has paid only $5 million on a $25 million pledge that was intended to create the James C. Justice National Scout Camp in West Virginia.
In this case, the governor is specifically named in the subpoena, along with his son, James (Jay) C. Justice III, and his daughter, Jillean (Jill) Justice. The WV Department of Commerce is asking for any communications between January 1, 2014 and March 6, 2019, with those who were acting on behalf of the charity, as well as The Greenbrier and the golf tournament. The governor’s daughter has been managing the resort, and Habibi Mamone was subpoenaed as the charity manager. The subpoena is a public document because it was issued from the federal government to a state agency, the WV Department of Commerce. There is a reference within the subpoena that opens the door to a prospect of appearing before a Grand Jury.
It should be noted again that the timeline of the investigation covers a period before Justice became governor.
“It obviously exists. The documents that have been requested we believe pre-date the governor’s time in office,” Brian Abraham, general counsel for the governor’s office, said in a telephone interview. “From 2016 on, which would have been the year he was running for governor, no monies from the state of West Virginia were paid to the golf tournament or the charity or The Greenbrier. We’ve had in place since the governor took office a moratorium on any agencies or their officials even being able to stay at The Greenbrier.”
Abraham stated that he believed it was the only subpoena the state government has received.
The governor provided a letter at the start of his term to state employees explaining that the process to form a blind trust has been slowed by the size of his business portfolio, although he placed The Greenbrier under his daughter’s leadership and his son is running the coal organization. Justice stated in his letter that he wanted to avoid the appearance of conflict of interest.
I didn’t run for governor for me; I ran to help the people of West Virginia. I don’t want a thing from this office. The last thing I want is a conflict of interest between my family’s businesses and state government. Even the slightest whiff of a conflict won’t fly with me.
There have been fiscal problems with all the entities. The Greenbrier has filed a federal lawsuit against insurance companies, claiming they did not adequately cover damages from considerable flooding in 2016. Meanwhile, for lack of $10.4 million for the 2017 title sponsorship, the golf tournament was moved from the July 4th weekend to September. To retain the event, Greenbrier had to negotiate a long-term deal, paying in installments from 2018 through 2021 to guarantee PGA title sponsorships for each of those years.
And then there is the unfortunately named Old White Charities, also included in the subpoena, which should be meticulously examined. A look at the eight 990 tax filings since inception displays an odd mix of salary but no employees, coal company assets, and consistent operating deficits. The nonprofit provided four percent of its total spending on charitable causes from 2010 to 2015. According to the mission statement, the charity will operate the golf tournament and distribute the proceeds to nonprofits, which only works if the tournament brings in revenue.
In 2015, the organization’s 990 filing listed zero employees but almost half a million in “Salaries, other compensation, [and] employee benefits.” Part II of Schedule J lists James C. Justice II as president with compensation of $198,127 in 2016 and Jillean J. Justice as Director, with compensation of $167,820. Part VII of the 990 lists that the compensation is from a related organization. Among the assets of the public charity are various arms of the for-profit business that Justice owns, Intercompany, which includes $6 million of Intercompany Southern Coal. It is not apparent what that asset does for the nonprofit.
Relative to expenses, it doesn’t bring in much; according to the West Virginia MetroNews network, in 2017, “The nonprofit reported $4,948,472 in revenue, which, aside from the prior year, was the smallest amount since 2010. Expenses for 2017 were listed at $8,650,217. That put Old White in the hole by $3.7 million just for the year.” Just $83,000 found its way to other nonprofit organizations and the clients they serve. Through 2016 it had net liabilities of over $11 million on its balance sheet.
Governor Justice has described his role in founding OWC as an effort to support economic development and maintain. According to MetroNews, “Governor Justice drew no distinction between himself and the organization.”
I mean, let’s just be real, I am the charity. I have been the charity…The Greenbrier, when we took over The Greenbrier was bankrupt, we were about to lose 2,000 people. We brought it back to life. We suffered through the derecho and the flood. And along the way, I brought the golf tournament, and I brought the NFL and I brought the NBA to The Greenbrier. In doing so, I have personally funded in excess of $50 million for us to have the golf tournament, for us to have the golf tournament.
The interlinking of Governor Justice’s public, for-profit, and nonprofit interests illustrates the importance of maintaining the capability of nonprofit leadership to fulfill their commitment to the public interest. It is important that its board can assess its operations independently and evaluate whether they are fulfilling their purpose. If serving the needs of veterans is their goal, then they have reason to strongly question if they are on the right path. If they are in the business of economic development, then they need to be clearer with the public when they ask for their support. And, whatever charitable purposes they center on, they must be able to demonstrate that their decision-making isn’t being driven by the personal interests of their leadership. Every nonprofit organization owes that to the public interest they are chartered to serve.—Marian Conway and Marty Levine