W.Va. Faces Questions About its Own Rich Politician
Some of the conflict-of-interest issues swirling around President-elect Donald Trump in Washington are playing out on a smaller scale in West Virginia, where the richest man in the state — an Appalachian coal baron with real estate, resort and farm holdings, too — is about to be sworn in as governor.
Democratic Gov.-elect Jim Justice, like Trump, has refused to shed his holdings, giving assurances he can be trusted to act honorably. Like Trump, he has put his business empire in the hands of family members, though he said as recently as last month that he would put his holdings in a blind trust.
So far, his arm's-length management approach, like Trump's, has fallen short of what some ethics watchdogs would prefer to see.
"It sounds like he's taking a page out of President-elect Trump's book, which may try to remove the conflict of interest, but in actuality, it does not," said Scott Amey, general counsel for the nonprofit watchdog group Project on Government Oversight. "As long as he has an ownership interest in any of his business, he will always be conflicted and subject to controversy and litigation."
One difference in West Virginia, though, is that Justice, like some other governors around the country, is subject to more stringent conflict-of-interest rules than even the president of the United States, who is exempt from the provisions that apply to Cabinet members and other government employees.
West Virginia ethics law prohibits public officials, the governor included, from knowingly using their offices for their own private gain or that of someone else. State regulations also bar public officials from profiting from state contracts over which they may have control.
A number of states have seen similar controversies because so many have elected rich people as governor. Florida Republican Rick Scott, elected in 2010, put his assets in a blind trust and sold off a chain of urgent care clinics amid criticism that he could benefit from state Medicaid policies and his proposals to force state workers and welfare recipients to take drug tests.
Justice has almost 100 businesses in his name, raising ethical questions about how state agencies that answer to him will regulate the safety of his coal mines, consider the tourism tax breaks at his resort, or pursue millions of dollars in past-due state taxes owed by some of his entities. (He says he will pay everything back.)
"My businesses are wide-reaching," Justice, who is worth an estimated $1.6 billion, told reporters in December. "I'm going to try to remove myself completely. In fact, I'm going to remove myself completely from the daily decisions, the decisions that they make."
A few months ago, his daughter, Jill Justice, was named president of the Greenbrier Resort, which her father bought out of bankruptcy in 2009. His son, Jay Justice, handles his coal and agriculture operations.
"But I want you to realize just this: What is the alternative?" Justice asked. "I mean, is it best to just close the businesses that I have? They generate tens and tens and tens of millions of dollars to our state. It would be frivolous to do that. It'd be absolutely the stupidest thing in the world to do."
He added: "I don't want a thing — and absolutely I want to underline that — you can't bring me anything to my business that's going to be beneficial to me in any way."
(Justice, in another echo of Trump, has refused the Charleston Gazette-Mail newspaper's request to release his tax returns.)
Justice said in mid-December that he would put his assets in a blind trust, as former Govs. Jay Rockefeller and Gaston Caperton did, an arrangement in which the investor is kept in the dark about his own holdings. But as of Thursday, the state Ethics Commission said it had not received a request to approve a blind trust for Justice.
The financial disclosure form he filed last January as a candidate in his first run for statewide office listed holdings in 50 investments, including Google and U.S. Steel.
Justice listed 22 state contracts with his Greenbrier and Glade Springs resorts and his charity, which operates a pro golf tournament at The Greenbrier. In May, Justice requested that the golf tournament no longer receive a $1.75 million state sponsorship.
On Wednesday, a lawyer with the Trump Organization said Trump's businesses will keep pursuing deals in the U.S., but not abroad. Trump plans to put his business empire in a trust and turn control over to his two adult sons and a longtime business executive.
That's still short of selling his assets and putting his cash in a blind trust overseen by independent managers, as many recent presidents have done.
In Tennessee, Republican Gov. Bill Haslam, with a fortune estimated by Forbes magazine at $2 billion, has announced he will create a blind trust for his private investments — except for his undisclosed shares in a real estate holding outside Tennessee and his family-owned Pilot Flying J, the nation's largest diesel retailer.
Haslam was heavily criticized by rivals during his 2010 bid for refusing to release tax returns or disclose his earnings from Pilot. He argued that releasing his Pilot earnings would reveal personal information about family members not running for office as well as proprietary information about the privately held company.
On the day he was sworn into office, Haslam signed an executive order scuttling requirements for the governor and top aides to disclose how much they earn in outside income.