Tourism CEO says Youngkin ad agency hired partly because of ‘familiarity’ with governor
The advertising agency behind Gov. Glenn Youngkin’s TV ads won a $268,000 state contract to produce a promotional tourism video, in part because of its “familiarity” with the governor, according to the CEO of the Virginia Tourism Corporation.
No other firm submitted a bid to produce the video, and the ad agency, Poolhouse, has no record of doing work for state agencies on the commonwealth’s procurement site. The contract cut against VTC’s procurement policies, which require the taxpayer-funded corporation to solicit at least six bids for procuring services worth more than $100,000. But the group’s CEO, Rita McClenny, said she has the authority to overrule those policies at her discretion and pointed to VTC rules that give the corporation’s CEO “unlimited authority to procure goods and services.”
VTC initially gave Poolhouse the contract without soliciting any bids at all. Mike McMahon, vice president of operations and finance at VTC, said when the corporation inquired about the governor’s availability to film the video, Youngkin’s office expressed concern about the perception that the procurement process was biased.
“His office expressed concern over the potential for misperceptions,” McMahon wrote in an email. “They asked us to cancel the contract and seek bids.”
The contract sparked questions from ethics experts, a competing ad agency and Democratic Party of Virginia Chairperson Susan Swecker, who called for an “immediate investigation” into the procurement. The top Democratic lawmaker in Virginia’s House of Delegates, Del. Don Scott (D-Portsmouth), said he was discussing next steps with the caucus, which might include calls for investigations by the FBI and the Office of the State Inspector General.
McClenny argued in an interview that Poolhouse was the best firm for the job. The ad agency, which has offices in Richmond and Atlanta, is best known for its work for Republican politicians. The company produced more than $1.5 million worth of ads for Youngkin when he was a candidate and continues to create content for GOP congressional candidates in Virginia, including for Yesli Vega and Jen Kiggans. They’ve continued working for Youngkin as governor, including a pro bono ad promoting COVID-19 vaccines.
McClenny said that while VTC has never worked with Poolhouse before, they were chosen because of “their expertise [in] speaking directly to [the] consumer.”
“We, of course, know their work with the governor,” McClenny said. “That was a part of their attractiveness, in addition to doing high-quality work. And so, familiarity with voice and working with his style, I mean, it all was very helpful in the production of it.”
McClenny denied that the governor’s office had any input in selecting Poolhouse. But Scott said he’d like her to repeat that under oath.
“It reeks of corruption,” he said.
Youngkin’s spokesperson, Macaulay Porter, did not respond to specific questions from VPM News and instead offered a two-sentence statement explaining that the governor “was excited to take part in highlighting the Commonwealth’s top attractions.”
A meeting with the governor
McClenny said the “Welcome to Virginia” video came about after a March meeting between her team and the governor. She said Youngkin offered to help promote state tourism and VTC staff subsequently developed the idea of a video that would be shown at state rest stops and airports in the commonwealth, including Dulles International and Regan National airports — both of which see millions of visitors every year.
Later in March, VTC approached Poolhouse to produce a concept video, according to McClenny. She said Poolhouse also signed a noncompete contract, meaning VTC wouldn’t solicit quotes from other possible vendors. But then McClenny reconsidered and ultimately solicited quotes from two other vendors for the project.
McClenny said The Martin Agency — the Richmond-based ad firm behind VTC’s flagship 2022 ad campaign “Virginia is for …” and VTC’s agency of record — first learned of the project at the same time as Poolhouse, in late March. But D'Eric Watson, a spokesperson for the agency, said they were informed of it on April 25.
McMahon said they’d had informal conversations about the project with The Martin Agency before then, but wasn’t sure on an exact date.
On May 5, McMahon said VTC sent an invitation to bid on the project to both Poolhouse and the Martin Agency.
That same day, Poolhouse submitted a bid for $268,000, according to VTC’s procurement paperwork. The same paperwork lists a May 9 response from the Martin Agency, saying the agency couldn’t meet the project’s deadlines and scope of work.
Watson declined to comment on whether The Martin Agency objected to the procurement process.
VTC contacted a third agency, Henninger Media Services, on May 10. The invitation to bid outlined an ambitious schedule: bids were due back May 17 and preproduction on the video would begin May 27. Henninger didn’t respond to VTC’s invitation to bid or an email from VPM News seeking comment.
Will Ritter, founder and president of Poolhouse, said in an emailed statement that they were “ecstatic to win the bid and get a chance to showcase our favorite people and places in the ‘Welcome to Virginia’ campaign.” He did not immediately respond to follow-up questions sent Wednesday morning.
A sense of urgency
McClenny, who also served under former Gov. Ralph Northam, a Democrat, defended the process and said she would have done it the same way again.
Despite the fact that the idea for the video was new — there were no similar videos at airports and rest stops until the Poolhouse promotion was produced — McClenny argued there wasn’t time to solicit more bids, as outlined in their procurement policy. VTC wanted the video to roll out during the summer as a way to help the state bounce back from the pandemic.
“Given a full bid process, that would not have happened,” she said.
The video features actors surfing, doing yoga, and in Youngkin’s case, sitting behind the wheel of a NASCAR pace car, beckoning tourists to visit the commonwealth. It began running Labor Day weekend.
Poolhouse’s contract to produce the video was first reported by Rachel Everett, creative director for EVERGIB, on the ad industry site Muse by Clio. After a subsequent article from the Richmond Times-Dispatch on Wednesday, Swecker, chairperson of the Democratic Party of Virginia, issued a statement calling for an investigation.
“There are ethical — and possible criminal — implications for Glenn Youngkin’s limited-bid scheme to use taxpayer dollars to pay his political advertising company to produce what is basically a presidential campaign video,” Swecker said.
In a call, DPVA spokesperson Gianni Snidle said the party wanted Attorney General Jason Miyares or any other law enforcement group to look into the contract. A spokesperson for Miyares did not immediately respond to a request for comment.
Shruti Shah, president of the good governance nonprofit Coalition for Integrity, said VTC risked losing public trust by ignoring its procurement process and not conducting a broader search for vendors.
“I'm no expert on video production,” Shah said. “But I don't know whether I necessarily — as a layperson — believe that there's only one firm that has the expertise to produce a video for Virginia tourism.
“You don't know what's out there until you invite competitive bids,” she added.
Exempt from state procurement laws
State law exempts VTC from state procurement procedures. It received more than $23.6 million in funds from the commonwealth during the past fiscal year — on top of $51 million in federal money as part of the American Rescue Plan Act of 2021. VTC’s CEO is selected by the corporation’s board, whose members are selected in staggered terms by the governor.
Everett, the creative director who first wrote about the ad, argued in an email that the governor was leveraging the video for his own political aspirations, including a possible run for president. She said the problem wasn’t that the video featured Youngkin, but rather the involvement of his primary ad agency and the context in which it appeared.
“It's about the timing of the video's release during the lead-up to midterm elections in which he's actively campaigning for other candidates,” Everett said.
Scott, the House Democratic leader, called on Youngkin or Poolhouse to refund the state for what he called “a campaign ad.”
“I question how many minority and women-owned businesses would have gotten such a hookup,” Scott said. He argued that Youngkin’s political team was “rushing to get something out to be in D.C. airport[s], where donors come in — all part of his presidential primary outreach and donor outreach that he's been doing. And it appears that they got sloppy.”
GOP strategist Matt Wolking — a consultant at Axiom Strategies, which helped run Youngkin’s campaign — dismissed Scott’s call on Twitter for the FBI to investigate.
"Yes, you’ve identified a real scandal here,” he wrote on Twitter. “The administration asked 3 firms for a proposal. Two either didn’t respond or declined. So a Richmond firm won the contract. Brilliant attack, I hope you stick with it."
Editor's note: This story was updated Oct. 5 at 5:55 p.m. to include additional information from VTC