- The Washington Times - Sunday, August 8, 2004

HURLEY, Va. — The temperamental creek that once swallowed most of this town has shrunk back to the trickle that lured settlers here generations ago.

The mountain community of Hurley is reborn, its broken homes replaced using $5 million in government grants Buchanan County received after a 2002 flood. Residents say life would almost be back to normal again, if it weren’t for the gnawing realization that everyone has been swindled.

Federal investigators say cleanup companies wrangled artificially high contracts by bribing county officials with NASCAR tickets, TV sets, clothing, cash and, most notably, coon dogs.

One of the main beneficiaries, prosecutors say, was Stuart Ray Blankenship, the one-time Board of Supervisors chairman who loved the hunting dogs so much that he purportedly was bribed with $40,000 worth of hounds and kennel supplies. Other county leaders are accused of accepting more than $500,000 worth of gifts and cash.

The prosecution expects Mr. Blankenship, 52, and county businessmen Terry Allen Keene and Donald Ray Matney to plead guilty to federal racketeering and money-laundering charges on Friday.

Prosecutor Tom Bondurant said they already have paid back a combined $1.125 million to the government. Mr. Blankenship, however, still has some of the dogs.

“I do feel some remorse for what happened,” Mr. Blankenship said in an interview with the Associated Press. “During the flood and stuff, I was going through a rough time. My son died right after the flood. He had some health problems. It was just a rough time. I guess things just got out of hand.”

For 14 months, Mr. Blankenship said he has been aiding authorities in an investigation they nicknamed Operation Big Coon Dog. A judge, however, confined him to his home three weeks ago after he was caught talking to another man indicted in the case.

Meanwhile, Mr. Blankenship’s neighbors along Knox Creek shake their heads when they are asked about him. If it’s true that cleanup bids were artificially high, many of them wonder how much more the county could have done.

“It was so hard to see people’s homes, their whole lives, splattered up against a tree,” said Cathy Hall, head teller at the Hurley branch of Grundy National Bank. “There was so much money that could have been used to help these people.”

The flood came quietly, almost unexpectedly, on May 2, 2002. The storm seemed to have passed and the sun was out.

But like many residents of this Appalachian coal community, Rebecca Justus had learned to keep a wary eye on Knox Creek. It was beginning to rise.

By the time Mrs. Justus warned her husband and got her son to higher ground, the creek had jumped its banks. Trees were snapping all around, and as she looked on, Mrs. Justus saw her double-wide trailer yanked off its foundation and torn apart in a torrent of swirling mud.

Around the corner in the center of the unincorporated town, Knox Creek submerged the bank and other buildings. It was the worst flood in the town’s history.

By the time Gov. Mark Warner called in the National Guard, two men were dead, all the bridges were out and $30 million of property damage was done.

Mrs. Hall spent the night standing guard outside the bank to make sure nobody tried to get into the vault. She still tears up when she thinks of all the work that the town still needs.

The Federal Emergency Management Agency initially gave a New Orleans company the responsibility to rebuild Hurley. But after the county complained about outsourcing, federal officials put the county Board of Supervisors in charge.

Almost immediately, prosecutors contend, officials started working secretly with several associates to fix the contracts at a high price.

Mr. Blankenship, who was board chairman, accepted vehicles, clothing, food, vacations and a firearm, prosecutors said. Supervisor Pete Stiltner, who is now board chairman, is accused of taking money, clothing and a big-screen television.

Prosecutors also charged Gary Moore, a FEMA regional officer; county road inspector Ricky Allen Adkins; county road engineer Kenneth Morris Hale; county Emergency Services Coordinator David Mathias Thompson; and county Supervisor Calvin Leo Ward. Altogether, the men are accused of taking bribes worth about $545,000.

Federal officials say they have never seen so many leaders of one town charged in the same scheme.

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