Lawmakers, business leaders say West Virginia needs a permanent commerce secretary
WHITE SULPHER SPRINGS — At the 82nd West Virginia Chamber of Commerce Annual Meeting and Business Summit, held at Gov. Jim Justice’s Greenbrier Resort every year, one would expect the leader of the state government’s economic arm — even the interim leader — to be in attendance.
But no one had seen Clayton Burch, the acting secretary of the West Virginia Department of Commerce. In fact, many of the attendees polled Thursday morning had never had a phone conversation with Burch, let alone had met the man.
Only Steve Roberts, the longtime president of the chamber, had met with Burch. The two had a meeting shortly after Burch was named the acting secretary for a department that had just seen two scandals and saw its senior leadership jump ship.
“I met with Clayton his first week on the job, and have been in contact with him since,” Roberts said. “In fact, I invited him to come to this meeting here. If he is here, I haven’t seen him.”
It’s not just business leaders who have had little interaction with the interim secretary. Legislative leaders whose committees deal with the divisions the Commerce Department oversees have also not spoken with Burch.
State Sen. Ed Gaunch, a Republican from Kanawha County and the chairman of the Senate Government Organization Committee, says he hasn’t heard from Burch.
“No sir, the truth is I haven’t met him,” Gaunch said. “I understand he is filling an interim role, but I’m hopeful we can get some permanent leadership in that department soon. I think it’s hurting us economic development-wise.”
Del. Gary Howell, a Republican from Mineral County and chair of the House Government Organization Committee, was also asked if he had spoken to Burch.
“I have not,” Howell said. “When (former Commerce Secretary Woody) Thrasher left I had several projects that were in the works and they all just came apart after that.”
CLAYTON BURCH: AN EDUCATION
W. Clayton Burch is no stranger to being an interim head of a department. He was appointed the acting secretary of the state Department of Education and the Arts after Gayle Manchin — former first lady and wife of U.S. Sen. Joe Manchin — was fired by Justice in March.
Burch served in that role as the department transitioned into the Department of Arts, Culture and History after Justice signed legislation dismantling and reorganizing the department. Education has been a key part of Burch’s background.
On May 31, 2017, Burch was named associate superintendent of schools for the Department of Education. On the department’s organization chart updated in August, the only position higher than Burch’s is that of Steve Paine, the state superintendent of school.
Before that, Burch was head of the department’s Division of Teaching and Learning. He was in charge of early learning, secondary learning, special programs, and assessment and research. Some of his projects over 15 years included implementing universal pre-kindergarten, working on increasing reading achievements for third grade students, helping create the state’s college and career readiness standards, and increasing high school graduation rates.
The Department of Education is one of the largest state agencies. Being appointed to temporarily oversee an agency whose mission still included historical and cultural education with a smaller bureaucracy was likely an easy challenge for Burch. Jumping from the Department of Arts, Culture and History to the Department of Commerce, however, presented some new challenges.
On June 14, Justice requested the resignation of Commerce Secretary Woody Thrasher. The longtime businessman who six months earlier had been the toast of the state after orchestrating an $84 billion economic deal with Chinese officials was now being shown the door after a botched flood reconstruction effort.
Commerce came under scrutiny due to millions of dollars in improper contracts on behalf of RISE West Virginia. The program, created to help families rebuild after the June 2016 floods, was put under commerce control and awarded nearly $150 million in Community Development Block Grant monies from U.S. Housing and Urban Development.
According to the State Auditor’s Office, RISE entered into six illegal contracts totaling more than $18 million with Horne LLP between May 2017 and February 2018 to help manage the grant funds and ensure compliance with federal rules, policy development, training, and support. Commerce also entered into seven questionable contracts with four construction companies totaling more than $71 million before HUD approval was granted.
The governor’s office asked for an operational pause on the RISE program starting Feb. 28 while it reviewed the contracts with Horne. That pause wasn’t lifted until June 4, when Justice put James Hoyer, adjutant general of the West Virginia National Guard, in charge of RISE.
“A realignment at the West Virginia Department of Commerce is now underway, there will be terminations,” Justice said in a statement that same day.
Kris Hopkins, the executive director of the Development Office, and Josh Jarrell, deputy secretary of the Department of Commerce and the agency’s chief legal counsel, left in May. Mary Jo Thompson, director of community development in the Department of Commerce, and Russell Tarry, director of the West Virginia Office of Economic Opportunity, both resigned June 22. It is unclear if any other reorganization at the department has occurred. The Governor’s Office did not return a request for comment.
Thrasher resigned June 14 and was replaced the next day with the appointment by Justice of Burch as acting secretary.
“Clayton has done a fantastic job as Acting Secretary of the Department of Education and the Arts, as we transitioned to the new agency structure, and I know he will do a great job as the Interim Secretary of Commerce too,” Justice said.
One of the projects hanging in limbo could mean billions in economic development for West Virginia, but it appears that Burch is not involved.
In November 2017, Justice announced the state had entered into an agreement with China Energy Investment Corp. The investment, valued at $83.7 billion, involved China Energy making numerous investments in marcellus shale natural gas production and downstream industries, such as chemical manufacturing interests.
The deal was part of a $250 billion trade deal negotiated between China and the U.S. Department of Commerce. Thrasher traveled to China twice to secure the $83.7 billion memorandum of understanding with China Energy officials.
China Energy canceled a trip to West Virginia scheduled the weekend of June 15. Rep. David McKinley, R-W.Va., said Thursday that conversations are still underway with China Energy, with another visit scheduled for Sept. 27. But Burch wasn’t a part of the conversations being had.
“No, my conversations have always been with Jim Justice or China Energy,” McKinley said. “We just met with (China Energy) two weeks ago in Clarksburg and I’ve met with them in Washington.”
McKinley has taken a keen interest in the China Energy deal, which could result in billions on investment in the 1st Congressional District, where the heart of the marcellus shale play is. McKinley said Justice and his staff are directly involved with China Energy discussions.
“I appreciate very much that Woody (Thrasher) was involved with this,” McKinley said. “Now that it’s running, it’s going to be the governor’s call and it’s going to be some other issues in Washington to make this thing happen. In the real world, the point person is the governor. It’s not the commerce secretary. On something that is as important as that is, it’s going to come down to the governor.”
WANTED: NEW LEADERSHIP
With nearly 80 days without a permanent leader at the Department of Commerce, lawmakers and business leaders said a new, permanent commerce secretary is needed to restore confidence.
“I think it’s very important, because if you’re an outside investor or someone looking to come to West Virginia to spend money and invest dollars, you want some permanence,” Gaunch said. “Without that, I think we’re going to lose opportunities and — I would hate to say it — perhaps lose some things we already have underway. I think it’s imperative we get that position filled.”
Howell said Mineral County, part of the growing Eastern Panhandle, is seeing interest from businesses wanting to set up manufacturing there. Having a permanent commerce secretary would help assure counties they have a partner and resources for recruiting those businesses.
“They’re the ones that can go out there and pull state resources,” Howell said. “It’s much beyond what your county can do. If you have a functioning Commerce Department, you have the resources. That’s why I think it’s important to have commerce functioning and have a head. Someone has to make the decision of where we put our efforts. Someone has to be empowered to make those decisions.”
Roberts, standing in the middle of a conference room filled with business leaders of companies great and small, said filling the position of commerce secretary is of utmost importance.
“We believe that is a very important position within our state,” Roberts said. “I can understand why the governor and his staff are taking some time to figure out who the best person would be in that role. We’re eager to see that occur and eager to see that happen as soon as possible.”
While the Department of Commerce offered other officials to speak to, multiple requests to interview Burch were ignored after Aug. 17.