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Former finance secretary charged with defrauding tobacco commission

By Rosalind S. Helderman
Rosalind S. Helderman

Del. Terry Kilgore (R-Scott), chairman of the Virginia Tobacco Commission, said Thursday that he was "very disappointed" to hear that John W. Forbes II, who served as Virginia's secretary of finance under former governor Jim Gilmore (R), has pleaded guilty to charges connected to defrauding the commission of $4 million.

Forbes entered a guilty plea in August and will be sentenced Monday. According to
court documents, Forbes convinced the commission to award a $5 million grant to the Literary Foundation of Virginia, a charitable group that he founded.

Authorities allege that the foundation was not a real group. Instead, Forbes diverted the tobacco commission money to salaries for himself and his then-wife and created a series of shell businesses that he used to divert the funds to his own use.

The criminal charges against Forbes -- who served as Virginia's top budgeting officer from May 31, 2001, to the end of Gilmore's term Jan. 14, 2002 -- were first reported by the Richmond Times-Dispatch.

In court documents, attorneys for Forbes write that his criminal activity was a result of a downward spiral in his life precipitated by his teenage son's struggle with leukemia. Forbes's son ultimately died of the disease; lawyers write that he was drinking heavily during the time when his criminal activity took place and have asked federal Judge Henry E. Hudson to show leniency at sentencing.

Authorities have asked Hudson to sentence Forbes to between 78 and 97 months in prison; his attorneys have asked that he receive a prison sentence of no more than 37 months.

The Tobacco Indemnification and Community Revitalization Commission distributes money Virginia receives as a result of the federal government's legal settlement with tobacco companies. The group makes grants to organizations that are supposed to spur the economy of Southwest and Southside Virginia, which have been hit hard by the decline of tobacco farming.

Frank Ferguson, the commission's general counsel, said commission staff became aware of the federal investigation into Forbes in the spring. He said the commission has cooperated with authorities, who have interviewed some staff members and collected documents from the group.

Ferguson said commission rules did not bar the group from awarding the grant to the group, even though Forbes served simultaneously on the commission and on the group's board because at the time, he indicated that he was a volunteer who would receive no financial benefit from the grant. He later became a paid executive director of the group.

Ferguson said commission rules changed five years ago to require that groups approved for grants receive money as reimbursements for their activities, rather than in advance of their work. He said the change might well have prevented Forbes's activities.

By Rosalind S. Helderman  | November 11, 2010; 12:25 PM ET
Categories:  James Gilmore III, Rosalind Helderman  
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Corruption = Republican.

Posted by: mikefromArlington | November 11, 2010 2:11 PM | Report abuse

Where is Kookie? Probably blaming the Democrat Party smokers for giving this bozo the money in the first place.

I blame O'Bama; it's McAuburn Lite

Posted by: RogerRamjet2 | November 12, 2010 9:58 AM | Report abuse

hey mikefromArlington,


are you that simple?

Posted by: fighterDC | November 12, 2010 10:25 AM | Report abuse

I just love it when the high and mighty,"moral high ground" right wing nuts get caught with their hands in the cookie jar! Stealing is not a family value!!

Posted by: 10bestfan | November 12, 2010 12:07 PM | Report abuse

fibberDC: No, the joke is in your hands. You momma don't wanna see your beef jerky, neither.

Posted by: RogerRamjet2 | November 12, 2010 12:23 PM | Report abuse

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