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CHARLESTON -- Mitch Carmichael, the cabinet secretary for the West Virginia Department of Economic Development, was quietly removed as chairman and designee of Gov. Jim Justice on the state Economic Development Authority, though officials believe the change will clear up potential conflicts.
According to an appointment letter dated Sept. 7 and filed with the West Virginia Secretary of State's Office, Justice appointed Senior Advisor Larry Pack as the new EDA chairman and designee of the Governor. Pack is also a Republican candidate for state treasurer in 2024.
Carmichael's name no longer appears on the webpage listing members of the EDA Board of Directors, which includes Justice, State Tax Commissioner Matthew Irby, State Treasurer Riley Moore, and seven other voting members. State Sen. Eric Nelson, R-Kanawha, and Del. Clay Riley, R-Harrison, also serves as non-voting members representing the West Virginia Legislature.
The EDA was formed in 1962 to provide loans, direct financing, leases, and financial assistance for major economic development projects and existing businesses in the forms of money, credit, and credit enhancements. Loans from the EDA are often secured through property deeds, promissory notes, equipment, and other forms of collateral to ensure the public receives a return on these economic development investments.
According to State Code, the Governor serves as the chief executive officer of the EDA, appointing its treasurer and secretary. But the chairman of the EDA serves as the Governor's representative and proxy on the EDA. Carmichael was unavailable for comment.
Brian Abraham, Chief of Staff to Justice, said the change at EDA is meant to provide a firewall between the Department of Economic Development, which requests the loans on behalf of businesses, and the EDA Board of Directors that vote on the loan requests.
"We just wanted to provide a better separation between the asker and the askee," Abraham said by phone Monday afternoon. "We didn't think it was a good idea to have the head of the department seeking the grants and loans also be the chairman of the board that approves those loans and grants."
Abraham also said that Justice has been getting more involved with EDA decisions, and that having someone within the Governor's Office chair the EDA would help keep the Governor in the loop in vetting potential economic development projects.
Carmichael, as cabinet secretary for the Department of Economic Development, has been front and center for many of the economic development announcements that have received loans from the EDA. He was appointed to the new department on May 27, 2021.
House Bill 2019 took the Division of Tourism and the West Virginia Development Office, both formerly within the Department of Commerce, and elevated them to two new cabinet departments - the Department of Economic Development and the Department of Tourism.
Carmichael became executive director of the West Virginia Development Office in February 2021 after losing re-election to the state Senate in 2020 after representing Jackson, Mason, and Putnam counties beginning in 2013. He was defeated by current state Sen. Amy Grady, R-Mason.
Carmichael served as president of the West Virginia Senate beginning in 2017 after former president Bill Cole lost a 2016 election for governor. Carmichael previously served in the House of Delegates representing Jackson County from 2001 to 2013.
Carmichael's removal as EDA chairman came just days after he represented the Department of Economic Development at the West Virginia Chamber of Commerce Annual Meeting and Business Summit at Justice's Greenbrier Resort in White Sulphur Springs, where he moderated a panel and introduced Justice for economic development projects announced during the summit.
The last regular meeting of the EDA chaired by Carmichael was Aug. 17, when the EDA approved up to $62.5 million in forgivable loans for Mountaineer GigaSystem, a project by Houston-based Fidelis New Energy. The project, located in northern Point Pleasant, would provide hydrogen power to chemical manufacturers, transportation companies, other electric utilities and data centers.
The project will produce hydrogen using natural gas in a process called blue hydrogen. Fidelis would then take the greenhouse gas emissions and pump the carbon dioxide underground in nearby state-owned pore spaces, making it a near net-zero emissions facility. The project would also involve a biomass power plant.
According to the memorandum of understanding between the EDA and Fidelis, the Mountaineer GigaSystem facility would create 125 permanent jobs, though the company also estimates the project will involve more than 5,500 construction jobs. The project represents a $2 billion investment in the state and $105 million in annual tax revenue through personal income tax income, severance tax income, public property lease income, and royalties to the state.
The EDA approved two tranches of loans for the project at the Aug. 17 meeting with only State Treasurer Moore voting nay. The meeting also brought out public comment from environmental advocates opposed to the project.
The first $25 million requires Fidelis to obtain permits, drill its sequestration wells and have air permits in hand within two years to have the loan forgiven, and receive its class VI sequestration permit and all remaining air permits by year three of the project. The second $37.5 million loan would be forgivable once Mountaineer GigaSystem meets its employment and investment commitments.