State has already given $2.45 million to Oklahoma Youth Expo, records show
BY WAYNE GREENE World Senior Writer
Sunday, July 22, 2012
7/22/12 at 7:10 AM
The Oklahoma Youth Expo - beneficiary of a planned $2 million state Agriculture Department donation that has brought controversy - has previously received $2.45 million from the department since 2002, state records show.
But tax forms filed by the charity earlier this year show expenses for the Oklahoma Youth Exposition Inc. were $693,866 higher than revenues in the year that ended May 31, 2011.
It was the second time in three years that expenses substantially outpaced revenue for the event, billed as the largest junior livestock show in the world, according to the expo's reports to the IRS.
The Legislature's general appropriation bill - the $6.8 billion spending measure that makes up the vast majority of the state budget for the year that began July 1 - included a $2 million increase for the Agriculture Department.
While the bill didn't specify how the increased funding would be used, legislative leaders and a spokesman for Gov. Mary Fallin have said there was an informal agreement that the money would go to the expo.
"The governor was presented with a budget deal that included funding for the Youth Expo which she agreed to, along with legislative leaders," said Alex Weintz, spokesman for Fallin. "She supported that funding at the time and continues to support it."
But legislators who were part of the negotiations in the tripartite talks among the governor's office, the House and the Senate, suggest it was Fallin's people who were advocating funding for the youth expo.
When asked if any legislators were pushing for the money in the talks, Sen. Clark Jolley, R-Edmond, chairman of the Senate Appropriations Committee, said, "No, not really."
"It was not a request that originated in the Senate," Jolley said.
Rep. Earl Sears, R-Bartlesville, chairman of the House Appropriations and Budget Committee, said he didn't know where the initial push for the $2 million came from. He thinks some House Agriculture Committee members were aware of the request and supported it, but during the budget negotiations, there was no question about who was championing the spending.
"There is no question in my mind that this request was coming from the governor's side of the table," Sears said.
Rep. Mike Reynolds, R-Oklahoma City, has argued that the funding amounts to a donation of state money to a private group and is unconstitutional. Last week, he called on Agriculture Commissioner Jim Reese to block the spending, but Reese, listed as a member of the expo's board of directors, said the expenditure will be part of a legal contract between the department and the expo, and he plans to move ahead with it.
Reynolds has suggested that the political influence of the expo's backers has played a role in the funding.
Expo Chairman of the Board Bob Funk contributed approximately $180,700 to candidate and noncandidate committees between 2006 and July 11, Oklahoma Ethics Commission data show. Most of the money was for Republican candidates and causes.
Funk contributed $5,000 to Mary Fallin For Governor 2010 on June 30, 2009. Fallin's campaign made a $1,000 contribution to the Oklahoma Youth Expo.
Funk has said it is "asinine" to suggest that his influence had anything to do with the funding being approved.
Funk, Reese and other state leaders have said the expo is an important program that teaches important values to future state leaders.
Reynolds said he is sure the expo does many important things, but he wants the state constitution's requirements followed strictly.
"Since when does the governor, the head of the Department of Agriculture and the so-called legislative leaders get to reach an 'understanding?' " he asked.
The spending doesn't pass the smell test for transparency, he said.
If state legislative leaders wanted transparent government, they would have specified in the general appropriation bill how the money was to be spent.
"They would never dream of doing that because they knew the public would riot over it," Reynolds said.
Jolley, chairman of the Senate Budget Committee, said he has concerns about how to make legislative spending bills more specific.
"I actually had this conversation with our fiscal staff the other day ... how are we going to do this stuff in the future because I don't like how we are doing it currently," Jolley said. "I don't think we're putting nearly enough legislative direction as to where these monies will be spent."
But legislative specificity in spending bills can be tricky business, he said.
Some years the Legislature has limited how money can be spent and other years it has not. Both methods have their potential problems, he said. If the Legislature specifies spending, the state constitution gives the governor the opportunity to veto the line item. That means the agency gets the money but not any direction on how to spend it, he said.
Meanwhile, the state Agriculture Department corrected statements from last week about how much money the youth expo has gotten from its budget in past years.
Last week, an Agriculture Department official said the department's budget has included $125,000 a year for the expo since 2002.
In fact, the agency's payments to the expo have never been $125,000, according to records released by the department. Between 2002 and 2005, the amount varied from $50,000 to $55,000. In 2006, the amount was $100,000. From 2006 to 2010, the amount was $200,000 with an additional $1 million in 2008 for an endowment in memory of the expo's executive director, who died in a plane crash.
In 2011, the amount went down to $167,000, and in 2012, it was $175,000.
For the 11-year period, the total was $2.45 million, including the endowment money.
All of the money, including the planned $2 million spending this year, came from the state's general revenue fund, several officials said.
Last week, Reynolds said the money was coming from fees paid to the Secretary of State's Office, which he said further clouded the legality of the spending.
Sears recalled that during budget talks he said there wasn't enough money in the state budget for the expo funding. At that point, representatives of the governor volunteered $1 million from the secretary of state's funds and another $1 million from the state's unclaimed property fund.
The money went into the general fund, and Sears emphasized that the money could have been used for any of the spending in the state budget. Reynolds said he still questions the connection of the expo spending and the secretary of state's funds.
IRS forms filed by the expo suggest it has struggled at times financially.
Expo expenditures exceeded revenues by $693,866, the charity's 2010 IRS reports show.
In 2009, revenues totaled more than $2.1 million and were $453,021 over reported total expenses, reports for that year show.
In 2008, reported expenses were more than $600,000 over total revenue.
The Tulsa World put several financial questions drawn from the IRS reports to expo Executive Director Tyler Norvell.
In response to several of the questions - including inquiries of what has happened to the 2008 endowment money from the state - Norvell said, "We are in the process of completing an audit, which I expect will be completed in the next 30 to 60 days. I am still in the assessment phase of all operations and will have a better grasp of prior year financial reportings once the audit is completed."
Norvell was able to clarify $961,931 in "unsecured notes and loans payable to unrelated third parties" reported on the most recent IRS form. The liability represents scholarships accrual for future scholarships to youths, he said.
The most recent IRS form shows that Norvell receives no compensation from the expo but receives $100,000 in reportable compensation from related organizations.
The form - covering the period June 1, 2010, to May 31, 2011 - also says no paid staff or volunteers attempted to influence state legislation.
Barbara Hoberock and Casey Smith contributed to this report.
Original Print Headline: Millions given to Youth Expo
Wayne Greene 918-581-8308
Attending a youth livestock show in March 2002 are Ron Norick (left), then-Gov. Frank Keating, Cathy Keating, Youth Expo supporter Bob Funk and then-Lt. Gov. Mary Fallin. Oklahoman file
Bob Funk: He has said it is "asinine" to suggest his influence had anything to do with the funding being approved for the youth expo.