- Associated Press - Friday, January 23, 2015

RICHMOND, Va. (AP) - Democratic Gov. Terry McAuliffe and a powerful Republican lawmaker are teaming up to propose tighter grant-making rules for the embattled Virginia tobacco commission.

The commission’s chairman, GOP Del. Terry Kilgore, introduced legislation Friday that would require greater scrutiny and transparency over how the commission spends its funds. It would also reduce the number of commission members from 31 to 25, create a revolving loan fund and require grant seekers to put up matching funds.

The legislation is backed by McAuliffe, who has been skeptical of the commission’s past spending. He praised Kilgore and Sen. Frank Ruff, the commission’s vice chair who is carrying the legislation in the Senate, for proposing changes McAuliffe said would make the commission more sustainable.

“This bipartisan legislation enhances the capacity of the commission to make strategic investments in pursuit of its revitalization goals,” McAuliffe said in a statement.

Created 16 years ago to spend Virginia’s portion of the national tobacco settlement, the Tobacco Indemnification and Community Revitalization Commission has doled out more than $1 billion on a wide range of projects in an effort to spur economic development in southwest and Southside Virginia. The commission has come under fire previously for what critics say is an opaque, haphazard system of awarding grants often based on political considerations.

A 2011 study by the General Assembly’s Joint Legislative Audit and Review Commission was critical of several grants the tobacco commission made, saying they did little to boost local economies.

The commission has also drawn scrutiny of federal investigators. A former commissioner stole $4 million from the commission and is serving a 10-year prison sentence, and the FBI investigated last year whether a state senator was lured into resigning - and flipping control of the state Senate -with the promise of a lucrative commission job. Prosecutors said in December that the case was closed and did not file any criminal charges.

The Associated Press reported last year that the commission had approved grants that helped organizations with ties to Kilgore’s family members, and the commission may have approved millions of dollars more than was necessary to help build a natural gas pipeline intended to benefit Dominion Resources, Inc.

But Kilgore has steadfastly defended the commission’s spending and said the new legislation should not be viewed as an admission that the commission had done anything improper.

“I think 90, 95 percent of our projects have been great projects. Some of them didn’t work out, but that’s just how economic development investment works,” Kilgore said. “Folks are wanting more information about the tobacco commission -about how we spend the money - and I think this bill is going to address that.”

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