CHARLESTON, W.Va. -- Last fall, state Treasurer John Perdue's designee to the West Virginia Housing Development Fund voted to approve the rules, selection criteria and scoring system ultimately used by the state agency's staff to award a $3.67 million federal stimulus grant to a Charleston developer with ties to Perdue, records show.
Three months later, Perdue and his wife sold an 11-acre property to the developer, Douglas E. Pauley, for $215,000, according to Mason County property records. Pauley, a longtime friend and Perdue campaign donor, is building a 32-unit apartment complex on the Perdues' former farmland property.
The U.S. Attorney's Office and FBI are investigating the land deal. Pauley is cooperating with federal authorities.
Perdue, who sits on the state Housing Development Fund's board, said Wednesday that federal investigators have asked him to provide "documentation" about the land he and his wife, Robin, sold to Pauley last December.
"I am confident all documents on record clearly show we followed all legal procedures during the land transaction," Perdue said in a prepared statement. "As a member of the West Virginia Housing Development Fund board of directors, I plan to fully cooperate with federal authorities when I'm asked to do so."
Housing Development Fund officials have previously said Perdue's designee to the board recused himself from a vote on Pauley's project, but they didn't disclose that the designee -- state Assistant Treasurer Danny Ellis -- took part in the discussion and voted on the "competitive selection criteria" used by agency staff to choose projects and distribute $18.3 million in federal stimulus funds last year.
At a Sept. 28, 2010, meeting, Housing Development Fund board members first voted to award a $256,000 loan to Pauley for his Mason County project, called Milton Place, meeting minutes show. Ellis stepped out of the room during the discussion and did not vote on the loan.
Minutes later, Ellis voted with board members to approve the selection criteria and scoring system for projects eligible for stimulus funding through a federal "tax-credit exchange program."
Under the stimulus package, the U.S. Treasury provided the state Housing Development Fund with $25 million in grant money.
State Housing Development Fund board members never voted to approve the projects that received stimulus funds, the meeting minutes show.
The housing fund's scoring system gave the most weight -- 300 out of 830 total points -- to projects whose developers already had purchased land or were in the process of buying property.
Other factors used in the selection included whether projects were "shovel-ready" -- with construction contracts and regulatory approvals.
Milton Place's scoring sheet wasn't immediately available for review Wednesday.
It was unclear whether Housing Development Fund board members knew what projects would seek stimulus funding when they approved the selection criteria and scoring sheet at the September 2010 meeting.
On Dec. 29, Housing Development Fund staff members selected 11 projects and awarded $18.3 million of the $25 million in funding allocated to West Virginia from the federal stimulus package.
Pauley's project received $3.67 million, the second largest grant. A Jefferson County apartment complex project, Willow Spring Farm, was awarded $4.3 million, the highest amount.
The Housing Development Fund's meeting minutes also show that Pauley's Mason County project came before the agency's board as far back as 2006.
At a meeting in May that year, Housing Development Fund lawyer Samme Gee told board members that state law prohibited them from "having a personal financial interest in a public contract," according to the meeting minutes.