Sen. Joe Manchin (D-W.Va.) isn’t the only Manchin in government mixing politics and business.

The corporate Democrat spent the past year grabbing headlines for obstructing his party’s agenda, in particular gutting and ultimately blocking climate legislation that would impact the fossil fuel industry in which he and his family made their fortune. Last week, for example, he vowed to block progressive nominee Sarah Bloom Raskin from the Federal Reserve due to her willingness to factor climate science into the Fed’s monetary policy.

Far less attention has been afforded to the senator’s wife, Gayle Manchin, a former West Virginia secretary of education, who in March 2021 was appointed by President Joe Biden to co-chair a commission that distributes federal infrastructure grants across 13 states, including West Virginia.

But now an investigation suggests Manchin might have financial ties to a recipient of funding from that commission, an economic development partnership agency called the Appalachian Regional Commission (ARC).

Late last summer, ARC, awarded a $1.5 million grant to the Appalachian Investors Alliance (AIA), a non-profit foundation that works to deliver investment to small Appalachian businesses. The nonprofit’s director, Mike Green, is a prominent West Virginia venture capital manager who also serves as the officer and organizer of West Virginia Growth Investment LLC — a company in which Gayle Manchin has invested, according to federal financial disclosures.

Virginia Canter, the chief ethics counselor of the nonprofit Citizens for Responsibility and Ethics in Washington (CREW), said that Manchin’s financial ties to Green may have posed a conflict of interest. Canter, who served as an ethics counselor to former presidents Bill Clinton and Barack Obama, recommended that the Manchin family divest their West Virginia business interests to avoid any potential issues.

“Since ARC investments support hundreds of economic development projects across the Appalachian Region, to avoid any potential conflict of interest, Ms. Manchin should commit to divest her and her spouse’s investments in businesses located in that region that could benefit from ARC projects and funding,” she said.

Overlapping Financial Ties

Despite making the news in 2016 for her role lobbying for schools to stock epinephrine autoinjectors, leading to a near-monopoly for EpiPens manufactured by her daughter’s former employer Mylan, Manchin’s tenure in the Biden administration has largely flown under the radar.

So ARC’s announcement last September that it had awarded $1.5 million to the AIA received little attention. The grant, part of ARC’s Partnerships for Opportunity and Workforce and Economic Revitalization (POWER) Initiative, was characterized as a “special regional project” that would “create new access to capital by creating and supporting angel and micro-venture funds in small and growing Appalachian businesses.” According to the Ironton Tribune, the POWER initiative “targets federal resources to help revitalize the economy in fossil-fuel impacted communities.”

ARC first awarded funds to the AIA in 2019, before Manchin’s tenure, in order to create four new angel funds in the Appalachian region to be capitalized with private funding. But ethics experts said the 2021 grant raised serious questions, given the financial ties between Manchin, ARC’s new co-chair, and Green, the alliance’s director.

Financial records show Manchin owned a stake in West Virginia Growth Investment LLC worth between $15,000 and $50,000 in 2020. Green is listed as the LLC’s organizer and officer in West Virginia business records.

Green and Manchin have also worked closely in the past: Manchin previously served as president of the West Virginia Board of Education while Green was the board’s vice president.

Green doesn’t just serve as the AIA’s director. The nonprofit’s website also lists Green’s venture capital firm, Mountain State Capital, as one its angel investors. Among the case studies on the alliance’s website is Conservation Labs, a water monitoring startup that received seed funding in November 2019 from Green’s Mountain State Capital and other funds. The alliance’s website states that “Mountain State Capital identified Conservation Labs, Inc. as a company that stood this test of diligence,” and that many of the funds affiliated with AIA joined in funding Conservation Labs after a diligence process led by Green's VC firm.

According to her financial disclosure documents, Manchin’s investment in Green’s West Virginia Growth Investment LLC includes stakes in Valtari and Peca Labs, two companies that Green has funded through his VC firm.

Green sits on the board of Valtari, a stroke diagnostic startup incubated at West Virginia University with the help of Mountain State co-founder Matt Harbaugh. Peca Labs, a medical device technology company, is also part of the Mountain State Capital investment portfolio.

“Safeguards In Place”

When she joined the Biden administration, Gayle Manchin signed an ethics agreement that stated, “I will not participate personally and substantially in any particular matter… in which I know that a person whose interests are imputed to me has a financial interest directly and predictably affected by the particular matter, unless I first obtain a written waiver.”

Canter, the chief ethics counselor at CREW, said Manchin’s investments may have posed a conflict of interest.

“Under the criminal conflict of interest statute, 18 USC 208, Ms. Manchin is required to recuse from any particular matter that would have a direct and predictable effect on her financial interests,” she said. “For example, she would be barred from participating in the Appalachian Investors Alliance award, if it would affect her financial interest in West Virginia Growth Investment LLC or any of its underlying investments.”

According to Canter, in the case of the ARC grant awards, “If her co-investor was representing the grantee, she would arguably have a recusal requirement based on her outside business relationship with him since it would cause a reasonable person to question her impartiality.”

A spokesperson for the Appalachian Regional Commission said that “ARC has safeguards in place to protect the integrity of our work.”

The spokesperson added: “Federal co-chair Gayle Manchin does not have any financial relationships with organizations that have received ARC funding. If ARC were to receive a grant application from an entity with which she has financial ties, the federal co-chair would recuse herself from involvement, per federal government ethics requirements.”

The ARC spokesperson and its inspector general did not respond to questions about whether Manchin recused herself from discussions involving the AIA grant or sought an ethics waiver on the matter.

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