Virginia puts state funding for nonprofits under greater scrutiny

Late last year, I asked Del. John O’Bannon to request an advisory opinion from Ken Cuccinelli’s office on the constitutionality of state grants to private nonprofit organizations. At the end of January, Cuccinelli’s office issued its opinion, saying that such grants weren’t allowed under existing law.

There was one section in the opinion, though, that dealt with grants made through state agencies. It said:

The Virginia Constitution does not prohibit categorically all payments to charities from the State. The General Assembly can establish a program to provide services to its residents, and make appropriations to state agencies that, in tum, result in payments to charitable entities for goods purchased or services provided.

That section would seem to allow state agencies to still contract with private nonprofits that provide assistance to select populations.  But now, it looks like the McDonnell administration is going beyond the wording of the Cuccinelli opinion to scrutinize grants across state agencies and departments:

On the day Cuccinelli’s opinion was published, McDonnell’s chief of staff, Martin Kent, e-mailed every state agency head, asking that each department submit for constitutional review a list of all charitable groups slated for funding in the state budget.

“It is likely that some of those appropriations fall outside of the scope of the issue, but it is important for us to make that determination first before further disbursements are made,” Kent wrote.

No harm in checking, I suppose. But here’s what happened:

Jasen Eige, the governor’s counselor, said that when it became clear that at least 100 not-for-profit groups could be affected, agencies were asked to work with the attorney general’s office to determine whether funding could be released.

Eige said that with so many individual decisions to be made, the governor’s office has not been directly involved. “This is being handled on a case-by-case basis, at the agency level,” he said. “We don’t want to run afoul of the constitution, and we’re working with the attorney general’s office to try to figure out a solution to this.”

So…is this merely evidence of an abundance of caution? Perhaps, and that would be admirable. Better to be in compliance with the law than flout it, as Virginia pols have done for decades on the matter of grants to private charities.

Could it be a fishing expedition for further budget cuts? Possibly. But that would be freighted with political risks. McDonnell has taken some chances during his term (notably on ABC privatization).  But this doesn’t fit a pattern, or show any logical political pay-off.

Could it also be over-compensating for past sins? Ah…no way to know for sure, but I will note again that the question of whether grants to private nonprofits has been asked of Virginia attorneys general in the past, but no opinions have ever been issued. Given the rather plain language in the constitution barring such grants, it’s not hard to divine what conclusion those opinions would have reached.

And to my knowledge, the last AG to be asked to look into the question was…Bob McDonnell, who told me his office was looking into the matter back in 2007.

Is there a political downside to over compensating? Not necessarily. Rooting-out spending that is potentially unconstitutional is always a good thing. Is it a scandal? No, but some may try to paint it that way.

Still, this issue, which seemed to be settled in January, continues to simmer, and could become something much, much bigger than I, Del. O’Bannon, and possibly Mr. Cuccinelli initially believed.

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