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Virginia Politics
Posted at 02:14 PM ET, 05/16/2011

State officials say charity review just beginning

Virginia Secretary of Finance Ric Brown told the House Appropriations Committee on Monday that contracts have been signed and state funding is once again flowing to 25 of the 26 charitable groups that work with the Virginia Health Department, from which state payments had been withheld while a review of the constitutionality of the payments was conducted.
Virginia Attorney General Ken Cuccinelli (Steve Helber)

But Brown said there are other charities that are funded through different state agencies that are still undergoing constitutional review.

He said the state is only just now beginning to grapple with the issue of how and when to give state dollars to charities in light of an opinion by Attorney Gen. Ken Cuccinelli (R) in January that state grants provided to nonprofits violate the state Constitution.

Stephen McCullough, senior appellate counsel for Cuccinelli, told the committee Monday that the attorney general’s office is working closely with aides to Gov. Bob McDonnell (R) with a goal of providing funding to groups designated for tax dollars by the General Assembly.

But he defended the legal opinion that has resulted in a months-long review of funding for hundreds of organizations as based on the plain language of the Constitution.

Virginia’s constitution bars “any appropriation of public funds ... to any charitable institution which is not owned or controlled by the Commonwealth.”

Despite the constitutional provision, lawmakers have for years included money in the budget for nonprofit groups. Some has gone to museums and historical sites, classified as “cultural” groups instead of charities.

Other funds have gone to free clinics, community health organizations, AIDs clinics and other groups thought by the legislature to be serving the public.

“It doesn’t give us any joy — but the Constitution is the Constitution,” McCullough told the committee, noting that Cuccinelli’s opinion came in response to a request for advice from a lawmaker. “These are very worthwhile things. But we’re duty-bound in our advice to follow the Constitution and precedent.”

He said groups that receive funding through a contract with the state to provide a particular service should pass constitutional muster. Those that receive direct grants do not.

Brown told committee members that his office is compiling a list of organizations that have been affected by the ongoing discussions across 11 agencies. A spokesman for the governor said the document should be available for release this week.

Brown told the committee that 56 groups slated in the state budget for funding through the health department were originally flagged for review. Of those, 26 were found to be problematic. But he said contracts restructuring 26 of the group’s relationships with the state have been signed.

We had previously reported that at least a dozen Health Department organizations slated to receive $12.5 million had been impacted.

He said payments that were frozen to the groups while the legal review was conducted are being delivered.

Only the Bedford Hospice House, which was slated to receive $76,500 to help construct a new facility, remains on the problem list, he said.

By  |  02:14 PM ET, 05/16/2011

 
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