October 27, 2022 News & Press Releases

WHAT VIRGINIANS ARE READING: State Inspector General Opens Investigation into Governor Youngkin and His Administration

by Democratic Party of Virginia

Richmond, VA  Yesterday, State Inspector General Michael Westfall announced that the Office of the State Inspector General will open an investigation into how Governor Youngkin’s political advertising firm was awarded hundreds of thousands of taxpayer dollars outside of normal procurement protocols. 

The Richmond Times-Dispatch reports

The state inspector general said Wednesday that he'll investigate allegations regarding a state tourism contract for the political media firm that works with Gov. Glenn Youngkin.

The administrative investigation will include examining whether the Virginia Tourism Corporation used an appropriate procurement process for selecting Richmond-based Poolhouse to create the video, said Kate Hourin, a spokeswoman for Inspector General Michael Westfall.


The Washington Post: Inspector general probes $268K state contract with Youngkin’s ad-maker

The state’s inspector general is investigating how Gov. Glenn Youngkin’s political ad-maker landed a $268,000 state contract to make a tourism video featuring the Republican.

Poolhouse, a Richmond-based Republican media firm that made $1.5 million in campaign ads for Youngkin last year, was the only vendor to bid on the contract with the Virginia Tourism Corporation (VTC), a taxpayer-funded public authority.

Inspector General Michael C. Westfall, who oversees civil probes into government waste, fraud and abuse, is examining whether the VTC observed its own procurement rules when it awarded the contract, Westfall spokeswoman Kate Hourin told the Richmond Times-Dispatch. Hourin did not immediately respond to a request for comment from The Washington Post on Wednesday.

Democrats question $268,000 state contract for Youngkin’s political ad-maker

Youngkin spokeswoman Macaulay Porter said the administration had been notified that Westfall was investigating. She declined to comment further.

The VTC did not immediately respond to requests for comment.

House Minority Leader Don L. Scott Jr. (D-Portsmouth) and Senate Majority Leader Richard L. Saslaw (D-Fairfax) wrote to Westfall this month requesting an investigation. Westfall wrote back to acknowledge receiving the letter but, as of Wednesday evening, had not notified the legislators that he was investigating.

“I’m hoping the IG will get some folks under oath and really find out how this came about and there’ll be some accountability,” Scott said in an interview Wednesday.

Will Ritter, Poolhouse’s co-founder and chief executive, declined to comment about the investigation but directed a reporter to the written statement issued weeks ago, when the contract first drew controversy. It said the firm was “thrilled to partner with the Virginia Tourism Corporation to brag on the state we love and call home.”

Poolhouse has continued working with Youngkin as he explores a potential 2024 presidential bid.

Filings show Youngkin’s PAC raising, spending more than predecessors

Scott and Saslaw suggested in their letter that the video, running in a loop at state airports and rest stops, amounts to a campaign ad for Youngkin because he is prominently featured. The 60-second spot is narrated by Youngkin and shows him at a NASCAR track in Richmond.

Another still from the video shows Youngkin at the track. (Virginia Tourism Corporation)

The legislators also suggested the bid had been steered to Poolhouse, which appeared to have an inside track on the opportunity.The VTC initially offered the contract to Poolhouse without soliciting bids from other vendors, VTC President Rita McClenny said in an interview this month. The VTC later gave two competitors a chance to vie for the job, but under tight deadlines dictated by a desire to roll the video out by Labor Day, she said. In the end, only Poolhouse submitted a bid.

The VTC is exempt from state procurement rules, but the Poolhouse deal runs counter to the authority’s internal policies, which call for soliciting at least six bids for services worth more than $100,000, McClenny acknowledged in that interview. She said she has the authority to circumvent the policies.

The idea for the video grew out of a meeting between VTC staffers and Youngkin in March, when the governor and first lady Suzanne Youngkin offered to support their mission any way they could, McClenny has said. VTC staffers later came up with the idea of featuring the governor in a video that would pitch Virginia to the millions of travelers who pass through Dulles International and Reagan National airports.

McClenny has said it was her idea to approach Poolhouse about producing the video under a noncompete contract that prohibited the authority from inviting other firms to bid. Poolhouse had never done work for a state entity, but McClenny said she thought highly of the company’s work. She said the firm’s “familiarity” with Youngkin was a plus.

The VTC backed away from that no-bid approach after the governor’s office raised concerns about the appearance that would create, she said.

On May 5, the VTC invited Poolhouse and a second Richmond firm, the Martin Agency, to bid on the project. Poolhouse submitted its bid that day. The Martin Agency, which as the VTC’s agency of record, responded on May 9 that it could not meet the tight deadlines required for the video to launch by Labor Day, McClenny said.

The next day, the VTC invited Henninger Media Services to submit a bid by May 17. Henninger did not respond, McClenny said.

The Associated Press: Watchdog to probe tourism contract with Youngkin ad-maker

Virginia’s state government watchdog agency said Wednesday it will examine the awarding of a six-figure contract to Gov. Glenn Youngkin’s political ad-maker for the production of a state tourism video that featured the governor.

Kate Hourin, a spokesperson for the Office of the State Inspector General, told The Associated Press investigators will look into whether the appropriate procurement process was followed in the matter, which was the subject of news reports earlier this month.

Richmond-based Poolhouse received a $268,600 contract earlier this year to produce the “Governor’s Welcome Project” ad, which the state's tourism agency has said is being shown at welcome centers and in airports.

Poolhouse produces ads for Republican campaigns and political action committees, as well as companies and advocacy groups. It worked on Youngkin’s winning campaign last year and continues to work with his political action committee.

Democrats raised concerns about the award after it became public, and Senate Majority Leader Dick Saslaw and House Minority Leader Don Scott asked the inspector general to investigate in an Oct. 6 letter.

Hourin said the agency decided to grant the request from Democratic lawmakers after determining the matter falls within the agency’s jurisdiction, though she said not every question the lawmakers raised was in the agency's purview. The investigation would be focused on the procurement issue and “whether any waste of government funds was involved," she said.

Rita McClenny, president and CEO of Virginia Tourism, has previously defended the procurement process and the selection of Poolhouse, which she called a “local, talented, Virginia-based company that has done exceptional work for other corporate clients from Anheuser-Busch to Honda to GE.”

Public records obtained by the Richmond Times-Dispatch also show that aides to Youngkin raised concerns about using Poolhouse through a single-sourced contract and asked the agency to seek additional bids. One other firm didn’t respond and another said it couldn’t meet the scope of work, records show.

Representatives of the Virginia Tourism Corp. and the governor's office did not immediately respond to emailed requests for comment from AP Wednesday. Poolhouse has also previously defended its participation in the project.

The inspector general's office was established in 2012 to investigate waste and identify inefficiencies in state government. It conducts performance audits of state agencies and oversees a fraud, waste and abuse hotline.

VPM: State inspector general launches investigation of tourism ad featuring Youngkin

Virginia’s inspector general is looking into whether the state tourism office broke state procurement rules when it signed a $268,000 contract with an ad firm connected to Gov. Glenn Youngkin.

The ad starred Youngkin and was shot and produced by Poolhouse, an agency that produced more than $1.5 million worth of campaign ads for Youngkin last year. The “Welcome to Virginia” video launched in September and is playing in airports and welcome centers across the commonwealth. It prominently features Youngkin throughout the minute-long spot.

Poolhouse had never worked with the Virginia Tourism Corporation before VTC reached out in March. VTC’s president, Rita McClenny, previously told VPM the agency, which is best known for its work for GOP candidates, was chosen in part because of its “familiarity” with Youngkin.

Kate Hourin, a spokesperson for the Office of the State Inspector General, said in an email that the office would be examining whether VTC “followed the appropriate procurement laws and policies, and whether there was any waste of government funds.”

Hourin said there was no timeline on completing the investigation, which was formally requested by top Democrats in the General Assembly.

Youngkin’s spokesperson did not immediately respond to a request for comment. Representatives for VTC and Poolhouse declined to do so.

Asked earlier this month if his office had any role in recommending Poolhouse or had any conversations with VTC staff about the firm, Youngkin told reporters, “We just don’t.”

“It's part of the things that I understand as governor is — there's things I've got to pay attention to every day, and there's things that I allow great people to go run with,” Youngkin said. “And that was an area that they were of course able to run with because it's part of their mission.”

The investigation was first reported by the Richmond Times-Dispatch.

‘The governor is making this request personally’

Emails obtained by VPM News show state tourism officials initially signed a no-bid contract with Poolhouse in early April, ignoring an internal procurement policy that required them to solicit at least six bids. McClenny argued state law gave her the authority to take that action.

The emails show Poolhouse turned around the concept for the video on April 2, less than a week after the agency first met with VTC staff on March 28 — based on a creative brief put together by VTC a week before. Both documents put Youngkin front and center of the video, with VTC’s brief saying they wanted to “leverage the likeness of the Governor in a variety of scenes around Virginia.”

VTC only reached out to other bidders after the governor’s office directly intervened and asked them to contact the Martin Agency, the ad firm behind the tourism office’s flagship campaign, in addition to Poolhouse. On May 5, Secretary of Commerce and Trade Caren Merrick wrote two VTC officials that the request came from the top.

“The Governor is making this request personally and I am happy to make the requests myself,” Merrick said.

VTC staff scrambled to meet that demand, issuing a request to bid for the Martin Agency and Poolhouse the same day. But at least one VTC official — Terry Minor — suggested it was already clear that the Martin Agency couldn’t fulfill the work.

“If we know they are declining … do we still move forward with this?” Minor asked on May 5.

Ultimately, neither the Martin Agency or another vendor — Henninger Media Services — provided a bid. The Martin Agency said in their response they didn’t have the ability to meet the project’s tight timeline, which called for pre-production to begin roughly a week after the bid was due. Henninger’s CEO, Robert Henninger, told the Times-Dispatch that the bid request “didn’t really feel like a real opportunity.”

The emails show Poolhouse continued working on the project while it was out to bid.

On May 13 — four days before Henninger’s bid was due — Laura Parisi, director of brand at Poolhouse, emailed VTC staff laying out a proposed schedule for shooting the video in late May and early June. “Wanted to touch base with you all as pre-production is coming together,” she said.

Mike McMahon, vice president of operations and finance at VTC, defended what he said was a sincere effort to solicit other bids.

“I suspect the emails you reference were just some of the creative folks following up on earlier conversations without thinking of the bid process as they were not involved in it,” he wrote in an email earlier this month.

Poolhouse ultimately signed the contract on May 18.

The video includes several shots of the Virginia Museum of Fine Arts in Richmond. A spokesperson for the museum said they were not told the ad would feature the governor, despite the fact that the project was known internally at VTC as the “Governor’s Welcome Project.”

Alex Graf, who co-owns another shooting location — ZZQ Texas Craft Barbeque in Richmond — said she wasn’t told of Youngkin’s presence in the video until several days before the shoot.

Democrats press for investigation

Poolhouse has continued to work on Youngkin's political efforts, including an ad running pre-roll on Hulu and YouTube trumpeting tax cuts signed by the governor, as well as another on social media touting his energy plan.

The top Democratic lawmakers in Virginia’s General Assembly — state Sen. Dick Saslaw (D-Fairfax) and Del. Don Scott (D-Portsmouth) — wrote to Inspector General Michael Westfall requesting the investigation earlier this month. “This situation presents serious questions regarding the use of taxpayer dollars for political purposes,” they wrote.

Hourin, the Office of the State Inspector General spokesperson, noted that the investigation wouldn’t cover all of the questions posed by Saslaw and Scott, citing what she said was an issue of the office’s jurisdiction.

In a statement, Susan Swecker, chair of the Democratic Party of Virginia, urged the inspector general to “leave no stone unturned.”

“Virginians need to know how Glenn Youngkin’s political advertising firm was able to receive special treatment, avoid procurement laws, and end up being awarded hundreds of thousands of our taxpayer dollars to produce a campaign-style ad,” Swecker said.

Richmond Times-Dispatch: Va. inspector general starts investigation of tourism ad contract for Youngkin political firm

The state inspector general said Wednesday that he’ll investigate allegations regarding a state tourism contract for the political media firm that works with Gov. Glenn Youngkin.

The administrative investigation will include examining whether the Virginia Tourism Corporation used an appropriate procurement process for selecting Richmond-based Poolhouse to create the video, said Kate Hourin, a spokeswoman for Inspector General Michael Westfall.

Gov. Glenn Youngkin is shown in a state-funded Virginia tourism video made by the advertising firm he utilizes for political media.

The head of the Virginia Tourism agency bypassed standard guidelines for seeking bids on such a large project, which the law allows her to do. The state paid Poolhouse $268,600 to do the work this year in what was the company’s first tourism contract with Virginia.

Last year, Poolhouse helped Youngkin secure the GOP nomination for governor and a general election victory, and continues assisting him as he travels the country to campaign for Republican candidates and considers a presidential run in 2024.

The tourism ad prompted outrage from Democrats, who questioned whether taxpayer dollars were used for political purposes and asked for an investigation by the inspector general.

Public records obtained by the Richmond Times-Dispatch under the Virginia Freedom of Information Act showed that senior aides to Youngkin, when they learned of what happened, were concerned about the appearance of the state using Poolhouse to do the work, and the governor personally told the Virginia Tourism Corporation to seek more bids.

But on such a short deadline and with Poolhouse’s work already under way, two companies opted not to bid.

OSIG spokeswoman Hourin said the agency will investigate allegations that fall in its jurisdiction, and they won’t answer every question Democratic legislative leaders had in a letter to the inspector general.

Asked by email whether the governor’s office would fully cooperate with the OSIG investigation, Youngkin spokeswoman Macaulay Porter did not respond. A new law prohibits the governor or his aides from interfering in an OSIG investigation or trying to pressure OSIG investigators.