After millions of taxpayer dollars wasted, lawmakers call for change within VEDP

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APPOMATTOX COUNTY, Va. (WRIC) — Lawmakers are calling for change within the Virginia Economic Development Partnership Authority (VEDP). An 8News investigation uncovered millions of taxpayer dollars have been wasted, given to companies to create jobs that never came.

833d2a18e9614d75bd8e76e1b7280cdf“We’ll probably be withholding some funding until we can see some changes,” said Delegate Chris Jones who chairs the House Appropriations Committee

Jones, along with other legislators, say the recent report by the Joint Legislative Audit & Review Commission (JLARC) shows the state is vulnerable to fraud since the VEDP has failed to set sound policies for awarding and monitoring grant money.

Earlier this year, 8News exposed the agency for falling short of its vetting responsibilities after we learned that $1.4 million was given to a Chinese-based company to create hundreds of Jobs in Appomattox County.

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“I still don’t understand, it just all fell through,” Appomattox resident Ethel Franklin said.

As it turns out, the company known as Lindenburg was just an elaborate scam; no jobs created and the money gone. Residents we spoke with at the time were heartbroken that all the jobs fell through.“It’s not good, they need big business to come back, people are looking for jobs and they need big business to come back,” said Matthew Grayson, a resident of Appomattox.

“It’s not good, they need big business to come back, people are looking for jobs and they need big business to come back,” said another Appomattox resident Matthew Grayson.Now through a Freedom of Information Act request 8News has learned other companies, received grant money from VEDP through the Commonwealth Opportunity

Now, through a Freedom of Information Act request, 8News has learned other companies received grant money from VEDP through the Commonwealth Opportunity Fund and failed to produce the promised results.

Virginia Casting, also known as Grede in Radford, received $600,000 to create 300 new jobs. Grede did create jobs, but then the company went out of business. VEDP says Grede did not meet the job requirement, so it can’t keep the grant money. VEDP says owners have not agreed to repay the money.

The JLARC study says many other companies, some which are still in business, have also fallen short.

We found that Evatran was given $150,000 to create jobs in Wythe County. The company, which develops wireless electric vehicle charging systems, created more jobs than promises, but only made capital investments of a million dollars which was $500,000 less than they had agreed to.

Evatran blames this on the decision to relocate to Richmond and Raleigh. VEDP says Evatran is a “great little company and we expect big things out of them in the future.”

a6c47482446f44cf9a06d7dce7416bb9Evatran says it has begun the process to repay the money.

“It really calls into question how economic development is being done, and I have to say, particularly in this administration, the ribbon cutting has been their big thing and obviously we have a very disjointed economic development strategy,” Rebublican Delegate Kirk Cox told 8News.

The Governor’s office released the following statement to 8News:

“I want thank Chairman Orrock, Vice-chairman Norment, and JLARC members and staff for their diligent work in reviewing and assessing the structure and performance of the Virginia Economic Development Partnership (VEDP).  As the report makes clear, we have a responsibility to strengthen the management and accountability structure at VEDP so that it can meet its full potential as a driver for economic growth.

“Growing and diversifying Virginia’s economy is my top priority as governor. Since I took office, I have seen both the positive impact VEDP has on Virginia’s economy and the unfulfilled potential within the organization that could be realized with improved management and strategic thinking. I am aware that the VEDP Board of Directors, which is responsible for the management and vision of the organization has taken several steps to increase oversight and accountability leading up to this final report. The VEDP board is also in the process of hiring a new Chief Executive Officer, who I hope will bring a new culture of accountability and strategic oversight to the organization. These are good first steps; however, it is clear that much more needs to be done.

“To that end, it is my hope that we can work collaboratively with members of the General Assembly and other stakeholders to reform VEDP to ensure better management of taxpayer dollars and more accountability throughout the organization. I have instructed Secretary of Commerce and Trade Todd Haymore and other members of my administration to review the JLARC report and identify opportunities, either through legislative or executive action, to maximize the impact of Virginia’s economic development efforts.

“Again, I thank JLARC for this thorough report and I look forward to working with the General Assembly to implement recommendations and ensure that VEDP is the high performing and well-run economic driver for the Commonwealth that we all know it can be.”

In a separate statement, the VEDP said:

“VEDP and its Board of Directors accept the conclusions of the Joint Legislative Audit and Review Commission (JLARC) and view the report as validation of many of the organizational changes and management improvements that VEDP and its Board of Directors have implemented since March 2016. VEDP and its Board of Directors are committed to using JLARC’s recommendations as a blueprint for VEDP’s continued path forward.”

“VEDP’s Board of Directors recognized major shortcomings and the need for marked change and improvement and took significant action in March 2016 to replace the President and CEO. VEDP’s recent reorganization addresses many of the issues identified in the JLARC report, including new structure, new management and new operational procedures.”

“VEDP’s Board of Directors and management team are committed to fulfilling its critical mission. VEDP and its Board of Directors are committed to positive change and operating at peak efficiency. VEDP and its Board of Directors are committed to its economic development partners across the Commonwealth. VEDP and its Board of Directors are committed to taking the steps necessary to ensure that the new VEDP operates the most effective economic development organization for the Citizens of the Commonwealth of Virginia.”

The JLARD report found that 46 percent of the projects that received grants from the Commonwealth Opportunity Fund did not meet all three performance requirements. This was out of 133 completed projects in the past 9 years.

This is a developing story. Stay with 8News online and on air for the latest updates.

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