By Grant F. Smith
Will Virginia counties again be left holding the bag?
Project Jonah was for half a decade the most secretive project of the Virginia Israel Advisory Board (VIAB). Secrecy was needed, according to VIAB board minutes, because “leaked information could jeopardize funding opportunities from the state.”
VIAB is the only state government agency exclusively devoted to promoting and subsidizing Israeli companies. It was behind the launch of a Sabra Dipping Company plant in Colonial Heights, the Israeli military contractor Oran Safety Glass located in Emporia and the rollout of Energix Renewable Resources, Ltd solar utilities across the commonwealth. The Israeli company behind Project Jonah is AquaMaof, which obtained its core recirculating technology from a Minnesota inventor in 2016.
Project Jonah has gone through iterations since it was first hatched by VIAB in 2013. At first the project was to grow tilapia for direct distribution through the nearby regional Food City supermarket chain headquartered in Abingdon. Perhaps because it was unsightly to challenge Virginia’s unsubsidized innovative tilapia market leader, Blue Ridge Aquaculture, Project Jonah’s Ecosus LLC then rebranded to Dominion Aquaculture LLC and claimed it would instead become a leading salmon producer.
In 2017, Project Jonah owned 123.09 acres surrounding the Richlands wastewater treatment plant on the Clinch River. Project Jonah emulated Sabra Dipping Company’s further entwinement by forcing Virginia Tech to become an unpaid market research asset via MOU. Project Jonah also drafted a MOU for Southwest Virginia Community College (SWCC) to deliver vocational training to aquaculture workers.
Perhaps realizing the floodplain of the Clinch River in Richlands was both too risky and distant from SWCC, in 2020 Project Jonah began negotiating to purchase a 161-acre tract of land owned by the SWCC Foundation for its fish farm. Project Jonah’s successful purchase of the site at the foot of the college led to an even more comprehensive training MOU with SWCC, the signing of which is a condition for a number of state loans. Project Jonah has now fully reemerged as Pure Salmon LLC.
Because VIAB lobbies other state agencies from within the state government, it has effectively put together an attractive package for Project Jonah from multiple state entities. The Tobacco Region Revitalization Commission gave Project Jonah a $1.5 million development grant in 2013. The Virginia Economic Development Partnership promised another $1.8 million in economic incentives to Project Jonah in September of 2020. The Virginia Coalfield Economic Development Authority (VCEDA) dangled a $10 million low interest, partially forgivable loan subject to evidence of groundbreaking and execution of the SWCC training program agreement. VCEDA seems amenable to closing on the loan in June, with its director appearing in an article about the project and a much less significant trout operation thereby positioning the region as aquaculture friendly.
But, as with many other VIAB projects, the question remains as to whether the designated Israeli company has the expertise to actually execute.
In December, AquaMaof was sued for $25 million by Aquatech Fisheries based in the Negev in Israel. The lawsuit accuses AquaMaof of “disgraceful conduct” and acting in a “blatantly unprofessional manner.” Aquatech contracted with AquaMaof to build a $30 million facility to grow snapper (sea bream). In less than a year, nearly a million fish died in the facility, a mortality blamed on AquaMaof’s “many failures and defects.” Because of AquaMaof’s “lack of transparency” concealing materials, “failures and defects,” it did not function as required by the performance parameters set out in the agreement.
Project Jonah has never built or operated a salmon facility as large as what is proposed in Virginia, preferring to start very small and expand. Project Jonah has also committed to performance parameters with state funders.
Project Jonah has promised to spend $198,370,000 in capital expenditures, create 218 new jobs with an annual wage far in excess of regional averages, at $59,133.
However, the entities responsible for “clawing back” grants and loans made to VIAB projects have shown little willingness to do so.
In nearby St. Paul, Virginia, the failure of the Israeli company Transbiodiesel left an outstanding balance of $210,000. The Tobacco Commission executive director, Evan Feinman, forgave the amount after VIAB vice chairman (and partner in the failed project) Charles Lessin lobbied for relief. See the report “Partners in Corruption: The Virginia Israel Advisory Board and the Tobacco Commission” in the January February, 2020 Washington Report on Middle East Affairs.
OSG in Emporia veered off its trajectory to gross $386 million in direct contracting revenue for bulletproof glass sales to the U.S. Army by 2020. In 2015, the Army found OSG was delivering substandard product and clawed back contract payments. Direct contracts dwindled to $1.6 million by 2020 as OSG became a military subcontractor. OSG essentially squandered $200 million due to its own malfeasance, leading to increased use of temporary employees and missing Tobacco Commission performance agreement benchmarks.
Although VEDP tried to claw back funds subsidizing OSG through Greensville County, in 2017 the Tobacco Commission extended additional funding. OSG continues to fall short of Virginia employment benchmarks.
Another uncertainty is Project Jonah’s financing through the Singapore based investment bank 8F. Comprised of mostly alumni of the failed investment bank Bear Stearns, and lacking a track record, 8F lost its seemingly only experienced aquaculture expert, Martin Fothergill, in March. 8F says that three large sovereign wealth funds invested $360 million in its aquaculture private equity funds, and although it has provided little evidence, the claim does seem possible.
The American Israel Public Affairs Committee (AIPAC) was instrumental in sponsoring the overseas politician junkets that hatched Project Jonah. It is therefore possible that AIPAC has netted some UAE or other large Arab country sovereign wealth funds in exchange for paving the way for the Abraham Accord side deals of arms sales, official recognition of occupied territory, or other goodies from the U.S. Karim Ghannam , co-founder and partner in 8F investment, did not respond to an email query about which sovereign wealth funds were investing with 8F.
