As Gov. Sonny Perdue wrapped up his second and final term, the state quietly funneled millions of taxpayer dollars into two heavily criticized projects in Perdue’s home county, a new state audit shows.
The $4.37 million was originally approved to help pay for a reservoir in west Georgia but later was diverted.
The audit says $4 million went toward the purchase of Oaky Woods — a giant forested tract adjacent to property that Perdue owns in Houston County. Another $375,000 paid to finish the Go Fish Education Center just down the road from Perdue’s hometown, Bonaire.
This was not the only instance of the state’s borrowing money for one purpose and then spending it on something else. In the past 10 years, the audit found, state officials diverted about $185 million in bond money to other projects.
Ordinarily such diversions would be submitted to the Legislature for approval. But the two Houston County projects weren’t, and top lawmakers say they knew nothing about them. Instead, the spending was carried out by state agencies, including the governor’s budget office.
Such diversions are legal, but some lawmakers want to change that.
“You have to question why it was done in that manner,” said Rep. Ben Harbin, R-Evans, who was House Appropriations chairman at the time. Normally the appropriations chair would have known about an expenditure like the $4 million for Oaky Woods. Harbin says he didn’t, and he plans to introduce a bill to prohibit such transactions.
“There should be a process to redirect bond [money], but that process should include the Legislature,” he said. “To bypass the Legislature, and thereby bypass the taxpayers of Georgia, should be illegal.”
In the Oaky Woods deal, approved one month before the governor’s term ended in 2011, the state paid $2,874 per acre to a group of Houston County developers who had bought the land in 2004 for $1,600 an acre. Many legislators, including leaders in Perdue’s own party, argued that the price was inflated, given plummeting land values. Perdue’s $30 million Go Fish initiative, meanwhile, was widely derided as a waste of money during a recession. “Sonny’s fishing while Georgia burns,” said Peach Pundit, a website that reports and comments on state politics.
The former governor’s longtime spokesman, Bert Brantley, said Perdue went out of his way to avoid being directly involved in the negotiations for Oaky Woods. But Perdue also served as chairman of the State Properties Commission, which ultimately voted to buy Oaky Woods.
Efforts to reach Perdue for comment for this article were unsuccessful.
Pet projects
The audit of the state’s use of bond money showed the long and ironic journey of the cash used to buy Oaky Woods: The money was first intended to pay for the pet project of one powerful politician but wound up, many years later, paying for the pet projects of a different powerful politician in a different political party.
The saga begins with a proposal in the 1990s to sell about $50 million in bonds to finance a reservoir in Bremen, the west Georgia hometown of House Speaker Tom Murphy. But the legendary Democrat, who ruled the state House for 28 years and was among the most influential politicians in Georgia history, lost his seat to a Republican in 2002. The reservoir project collapsed soon after — state officials said they weren’t able to get the necessary permits — although the bonds had already been sold.
In 2004, with the cash on hand and no reservoir to spend it on, legislative leaders from both parties decided to divvy up the money, voting to shift it to other Department of Natural Resources projects, including a dam in the district of one legislative budget-writer and golf course renovations in the district of another.
By 2010, however, the last year of Perdue’s tenure, there was still $7 million left over.
That year, lawmakers approved a new Perdue bond proposal to borrow $25 million for land conservation. Although Perdue’s administration would not confirm it, lawmakers speculated that the money would go to buy Oaky Woods, and this would later prove to be the case.
While environmentalists and DNR officials had long wanted to preserve Oaky Woods, the property had a controversial history.
In 2003, in Perdue’s first year in office, he bought land adjacent to the woods. The next year, the state had a chance to buy the 20,000-acre wildlife preserve from timber giant Weyerhaeuser Corp. for about $30 million. But officials said the budget was tight and the government couldn’t afford it.
So in 2004, Oaky Woods was sold to developers from Houston County, who made plans to build up to 35,000 homes on it. They paid $1,600 an acre. The value of Perdue’s nearby land more than doubled.
Six years later, the month before Perdue left office, the DNR board voted to buy slightly more than 10,000 acres of Oaky Woods. The price: about $29 million, or $2,874 per acre. The state paid about the same for half the property as the developers did for the entire woods six years earlier, despite the downturn in land values across the nation.
The state used the $25 million in bond money approved that year by lawmakers and about $4 million left over from West Georgia reservoir. Lawmakers say they weren’t told about the use of the extra $4 million for Oaky Woods.
The Go Fish center was part of Perdue’s efforts to promote fishing tourism and tournaments in the state. Lawmakers griped about the program but approved funding for boat ramps across the state and the education center in 2007. Just after Christmas that year, Perdue announced that the education center would be built in Perry, not far from his hometown of Bonaire. The center opened in late 2010.
Taxpayers will be paying about $1 million annually for another 17 years on the bonds sold to help pay for the project.
In April 2010, DNR officials asked for and the governor’s Office of Planning and Budget approved the use of $375,000 in leftover money from the West Georgia reservoir project to complete an outdoor exhibit at the center. As with the money for Oaky Woods, lawmakers were not asked to vote on the expenditure.
Todd Holbrook, deputy commissioner of the DNR, said the Go Fish center was underfunded and the extra money was needed to complete it.
Of the Oaky Woods purchase, he said, “I think everyone was aware that this was a premium piece of property and it wasn’t going to be cheap, but how much you needed you are not going to know until you get to the negotiations.”
Holbrook added, “Basically, these were priority projects for the department and we looked around everywhere, turned over all the rocks we could find to find out what money was out there.”
The audit
The details of the $4.37 million used for Perdue’s pet projects are buried in a state audit that says about $185 million borrowed for specific construction projects during the past decade wound up being spent on something else. That’s about 1.7 percent of all money the state borrowed — for projects expressly approved by the Legislature — during that time.
Lawmakers said they were surprised to learn bond money had been redirected to Perdue’s projects, but auditors said the movement of money was legal as long as it was approved by the governor’s budget office.
Each year, the governor recommends and the General Assembly approves borrowing money for a list of construction and other projects. That list is usually in the range of $600 million to $1 billion a year worth of projects.
The state then sells bonds to raise the money.
Occasionally projects are never built and get canceled. Sometimes there is leftover money, such as when construction doesn’t cost as much as expected. Some of the money gets redirected — spent on something other than the original purpose for borrowing the money.
Sometimes lawmakers approve the new use of the money. Sometimes a department and its board ask for approval from officials from the state financing agency and the governor’s office of planning and budget.
Both happened in the case of the money borrowed for the West Georgia reservoir.
DNR officials said they haven’t heard complaints from lawmakers about redirecting money to other projects in the past, and the agency isn’t the only one that engages in the practice.
The University System redirected money several times and approved using money to pay for renovations of an Armstrong Atlantic State University fine arts hall despite the fact that Perdue had previously vetoed funds for the project. The DOT shifted $16 million in bond money to pay for the high-occupancy toll, or HOT, lanes in Gwinnett County.
Rep. Alan Powell, R-Hartwell, a member of the House Appropriations, said what happened on Oaky Woods and Go Fish “may be legal, but it’s still circumventing the process, which to me is damaging to the political system.”
Powell said he doubts lawmakers would have approved using the extra bond money on Oaky Woods or Go Fish.
“There was so much animosity from the governor’s own party toward some of his fiscal policies that if they had known, they would have stood up” and opposed it, he said.
Current House Appropriations Chairman Terry England, R-Auburn, said, “We don’t have any problem with what they have been doing.” But he said state leaders are considering changing rules so that the Georgia Sate Financing and Investment Commission, which includes Lt. Gov. Casey Cagle and House Speaker David Ralston, R-Blue Ridge, have more say when agencies ask to change how bond money is spent.
“This would make it more transparent,” England said.
But that doesn’t go far enough for some lawmakers. Harbin plans to file legislation that would give lawmakers the chance to vote on how all bond money is spent.
“There should always be some oversight from the Legislature, and by extension, from the taxpayers,” he said.
Redirecting state money
According to a new state audit, here are some of the projects funded with bonds that were originally sold to pay for something else. The dollar figure reflects the sum that was redirected:
• High-occupancy toll (HOT) lanes: $16 million
• Culvert replacement, Atlanta Regional Hospital: $108,000
• Oaky Woods purchase: $4 million
• Rehab train line of the Chattooga and Chickamauga Railway from Rossville to Lyerly: $3 million
• Renovations to three buildings at Armstrong Atlantic State University: $11 million
• Chattahoochee Bend state park project: $484,400
• Lake Seminole Group Lodge project: $625,000
• Go Fish Education Center: $375,000
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