Winning Formula

Christine Chmura has built a reputation as the go-to economist in Virginia. But is her research truly independent?

Petite and soft-spoken, economist Christine Chmura approaches the podium at the Westin Arlington Gateway Hotel. On this early spring morning, Richmond’s best-known and often-quoted economic forecaster is in Arlington County addressing the Virginia Investor Conference, a confab of financial gurus put together by investment house Davenport & Co.

Chmura is the starting pitcher at the conference, which features such fiscal heavyweights as State Treasurer Manju Ganeriwala and others from Hampton Roads, Northern Virginia, the Virginia Department of Transportation and the Metropolitan Washington Airports Authority.

One of the most successful female business entrepreneurs in Richmond, the founder and head of 14-year-old Chmura Economics & Analytics handles the job with aplomb. Her topic today is the impact of sequestration, the forced cuts in federal jobs that mean so much to the Old Dominion. Last year, federal contracts represented $54.6 billion, Chmura notes. The number of jobs that are lost could spell whether global money managers still see Virginia as a good investment.

She reviews employment, regional growth rates and corporate relocations. Then she strays from the script to tout Republican Gov. Robert F. McDonnell, a top client for whom she also serves as an economic adviser. “From the first day in office he has said that jobs are No. 1,” she says. “We’ve seen him make good on that promise.”

Are plugs like this a bit over the top? Some people think so. Several economists and public policy advocates wonder whether Chmura has morphed into a cheerleader for the McDonnell administration and other public officials who have awarded her hundreds of thousands of dollars in contracts.

Asked about the criticism, Chmura answers: “We have worked for multiple administrations and each of them have probably viewed our proximity [in Richmond] as an advantage in working together, as well as our thoughtfulness and thoroughness and customer focus. Some of those studies have tight deadlines, and some clients prefer to work with firms close by that have a reputation of on-time delivery. And, yes, we do work closely with our clients to help them succeed.”

Indeed, Chmura came out with three timely reports that boosted McDonnell’s ideas for what may well be his legislative legacy: a $3.4 billion transportation plan that raises funds for roads by eliminating the gasoline tax and increasing the sales tax. Crumbling roads and declining revenues to fix them had long vexed a statehouse averse to raising taxes — until McDonnell was able to make the case that better roads equate to economic vitality and jobs.

That’s where Chmura came in. A Jan. 28 news release from the governor’s office cemented his case: “New Study Confirms Benefits of Governor’s ‘Virginia’s Road to the Future’ Transportation Plan.” The General Assembly passed the bill that McDonnell signed into law May 13. On that same day, Chmura released another report that was cited in a release from the governor’s office, which asserted that the transportation bill would create 13,058 jobs and spark $9.5 billion in investments.

The study was presented as independent verification that McDonnell’s plan was an economic winner. But are the numbers reliable? And where, exactly, does the data come from? It’s usually buried in the footnotes, and often the assumptions plugged into Chmura’s studies are supplied by partisan sources.

This raises another question: Is Chmura’s research truly independent or part of a marketing effort? A review of Virginia Department of Transportation documents for some of this work obtained by Style Weekly under the Freedom of Information Act reveals that payment to Chmura’s company was listed as “advertising/public relations.” A spokeswoman for the state transportation department says that Chmura was acting as a subcontractor for Siddall Inc., a public relations company that was the prime contractor for a state communications contract. Asked about the public-relations designation, Chmura tells Style that it’s a “procurement” matter better addressed by VDOT.

Chmura’s work is too often “economic rhetoric” that “is not state of the art by any means,” says Terance J. Rephann, a regional economist at the Weldon Cooper Center for Public Service at the University of Virginia, and a Chmura competitor. Rephann says such studies are public-relations work, not analyses, and politicians are hiring “someone to put out some numbers. They don’t know where the numbers come from so they put a lot of credibility on the source.”

Stewart Schwartz, director of the Coalition for Smarter Growth, says that some Chmura studies seem to be part “of an integrated public relations campaign for projects that already have a preordained conclusion. Instead, we need independent analysis and consideration of alternatives. We have to depoliticize the planning process.”

The economic studies often seem to rely on assumptions that have vague sources. A Chmura report last year plugged a successful plan by Richmond officials and McDonnell to build a Washington Redskins summer training facility behind the Science Museum of Virginia. Chmura’s report says the facility will generate $8.5 million in revenue annually, most of it coming from some 100,000 spectators, 40,000 of whom would be from outside the area, expected to descend on Richmond to watch the team practice in late July.

When Style asked about the source of that 100,000 figure last fall, it turned out that a Chmura economist used it from another economic consulting company’s report. That report’s author got it from the Redskins themselves, who are enjoying more than $4 million in incentives to keep their headquarters in Ashburn and move their training camp to Richmond.

When Richmond was considering bidding for the 2015 UCI World Road Cycling Championships in 2011, Chmura predicted that the nine-day-long event would generate $158 million by attracting 452,580 bicycle enthusiasts, or 150,000 more people than attended a similar event in Melbourne, Australia, in 2010. Chmura’s report says that her estimate is higher because Melbourne is a “relatively isolated location.” The same race drew only 230,000 when it was held in 2003 in Hamilton, Ontario, less than an hour from Toronto, Canada’s largest city with a metropolitan population of 6 million people.

Yet the numbers are almost universally held as fact. In March, McDonnell praised the bike-race plan and lauded the state for putting in $2 million, with the city paying $2 million to reach a funding goal of $21 million to serve as host of the event. He praised the financial payback of the deal. “While you all see bicycles,” he said, “I see tax revenues and jobs.”

Chmura has some staunch supporters among her professional peers. Stephen Fuller, a George Mason University professor who’s regarded as one of the leading authorities on real estate economics in the Washington area, says that he’s known Chmura since the 1980s and respects her work. The two are sharing an $800,000-plus contract to track the effects of federal job cuts in Virginia. Chmura’s share is about $400,000, he says. “I picked Chmura because of the quality of her work and the acceptance of her work in the state,” he says.

Chmura defends the integrity of her work by saying she would never accept an assignment in which the client demanded skewed results: “We have demonstrated our work both in Virginia and other states that our firm provides balanced, comprehensive, and nuanced analysis that stays true to established applied economic analytic methods and the findings of rigorous academic and scientific studies.”


Chmura’s chosen field dates back to 18th-century France, when policymakers realized that detailed economic studies would help them plan for the future. Economic forecasting and analysis really took off in the 1960s when software modeling became available for number crunchers. A pioneer was a German-born Harvard economist named Otto Eckstein, who co-founded Data Resources Inc., a consultancy whose work caught the eyes of corporate executives and professional economists who advise governments.

What had been arcane wonkery has become rocket science. Entering this exciting field in the 1970s was a bright young woman who’d grown up in the Cleveland area and still has close family and business ties in northeastern Ohio.

Chmura earned a bachelor’s degree in business administration from Clemson University in South Carolina, where she later received a master’s degree in economics. She moved to Richmond, which then was a major regional banking center, to take a job as an associate economist at the Federal Reserve Bank of Richmond in 1984.

Her career took off with a series of important jobs, with Chmura breaking the glass ceiling that had held back women in the male-dominated field of finance. She spent seven years at the Federal Reserve, where she helped analyze economic performance in states from Delaware to South Carolina. She then worked as chief economist at Richmond-based Crestar Financial Corp., which at the time was the 30th largest bank in the country before being bought by SunTrust in 1999.

By then, Chmura had developed a deep knowledge of the economics and business conditions in Virginia and other mid-Atlantic and Southeastern states. She decided to hang out her own shingle. “I started as a one-woman company in 2000,” she says. “At first I had one economist working with me and most of our work was with the private sector.”

That soon expanded into public work. Chmura started handling analysis for then-Gov. Jim Gilmore, although she had been on gubernatorial economic advisory boards since former Gov. Doug Wilder was in office in the early 1990s. In 2000, the Gilmore administration asked her to work with the Virginia Center for Innovative Technology. “We were asked to step in and finish a study of the high-tech industry,” she says, “because the university economist the state had retained was not providing the practical level of analysis needed.”

In 2002 she partnered with Leslie Peterson, another Clemson alumna, who pushed the company to take on more public contracts and helped create a software package available online under the trademark JobsEQ, which helps predict where jobs may be created. During the next decade she brought in another economist, Xiaobing Shuai, among other professionals. She opened a Cleveland office led by relatives John and Greg Chmura in 2005. And she moved her Richmond staff into a red-brick Shockoe Slip office that her website says is overseen by a cavalier King Charles spaniel named Reilly.

Her firm has compiled 150 economic impact studies and consults in 20 states, including work for private corporations and public entities. Chmura says that some projects take up to a year, but her group has turned studies around in just a few days. Besides bidding on work that she learns about through a state-operated website called eVA, which announces possible projects open for bidding, she says, “Some of our work comes from referrals from satisfied customers.”

Chmura won’t disclose how much her contracts with public groups are worth, but a check of several contracts gives an idea of what kind of public work her firm has done and what was paid. Documents obtained through the state Freedom of Information Act show some work totaling about $78,000 for VDOT, and a $208,694 package by Virginia Commonwealth University to study the potential of the state’s aerospace industry.

She also won a contract worth at least $11,300 from the Virginia Tobacco Indemnification and Community Revitalization Commission to help it use economic data to learn if it’s being effective in helping Southside and Southwestern counties switch their economies away from growing tobacco. Chmura suggested tracking high-school graduation and unemployment rates. Asked why the commission waited 10 years to seek such data, Tim Pfohl, grants program director, says: “That’s a good question. I guess we had to get some experience going before asking for some metrics.”

Meanwhile, Chmura has served on many boards, including Gov. Mark Warner’s finance transition team in 2001 as well as McDonnell’s transition team eight years later, along with various national groups: the Harvard Discussion Group of Industrial Economists, the National Association of Business Economics Board and the American Banker’s Association. She’s been writing a monthly column in the Richmond Times-Dispatch for about a decade.


Over time, Chmura has emerged as the state’s top go-to forecaster. On just about any issue, including controversial questions such as whether to allow uranium mining in Pittsylvania County, Chmura has proven her company can turn out a report. She and her staff have been asked to give talks in locations as far away as Alaska.

Like many analysts, Chmura relies heavily on a popular modeling software called IMPLAN. Rephann, the economist at U.Va., says IMPLAN was designed to handle much smaller economic impact projects, such as what happens when a factory hires 50 workers. And when applied to much larger projects, “this analysis doesn’t really capture the complexity of the infrastructure,” he says.

Chmura counters that IMPLAN works well, although “all economic models have limitations” depending on the subject.

Another criticism is that Chmura’s projects may be too hasty. Rephann says that proper studies of complex issues such as new highways can take six months or more, and probably are better suited for engineering firms.

Two years ago, for example, Transportation Secretary Sean Connaughton was gearing up for one of his signature projects — a new $1.4 billion toll road paralleling U.S. Route 460 from Suffolk to Petersburg. Connaughton insisted that the road would be important to help Hampton Roads handle the increase in port traffic as a result of the widening Panama Canal in 2014. It also could help a rural farming tract that’s seen annual employment increases of only about 1.6 percent — considerably less than the state average of 2.1 percent — and suffered some major employment losses.

According to documents obtained by Style, Leslie Peterson, Chmura’s partner, informed state transportation officials on Nov. 7, 2011, that if the department could have a signed proposal and data for the superhighway study in her company’s hands by Nov. 9, then Chmura could finish the report by the end of the month.

The report was delivered Dec. 8 — a month later — and was immediately used by Connaughton to build support for the new toll road that parallels U.S. 460 as it slices from Interstate 95 southeast through the rich peanut and cotton fields near Disputanta, Wakefield and Zuni.

With the new toll road, Chmura predicted a massive boost in jobs and investment: $7.3 billion in economic impact through 2020. Besides 4,295 temporary construction jobs, the project would support 14,120 other new jobs. These include 4,730 jobs in Hampton Roads linked to greater port activity and 689 jobs at the 40 service business — at least four for each of the highway’s nine interchanges — that would accompany the new thoroughfare.

The bulk of the remaining jobs — 8,415, more than half of the predicted number — could come from advanced manufacturing or automotive factories that might locate at industrial “megasites” in Isle of Wight and Sussex counties.

Connaughton says the road is essential if the state is to take traffic pressure off clogged Interstate 64. What’s more, when the Panama Canal is widened next year, it will be able to handle ships two and a half times larger than it currently does. Those vessels can have drafts of as much as 50 feet and few East Coast ports have channels that deep. Hampton Roads, however, is one of them. The new toll road will give Virginia an extra advantage, Connaughton has said.

The findings of Chmura’s report came down solidly in line with Connaughton’s campaign. But the report doesn’t examine how many gas stations, restaurants and other convenience stores could be affected if traffic dies out on the existing 460, which supports such tourist destinations as the venerable Virginia Diner in Wakefield. The study assumes that every cloverleaf on the new road will have at least four new businesses, but even the heavily traveled Interstate 64 from Hampton to Richmond, which has been in existence for decades, can’t boast of that.

A Chmura report states that an average day in 2010, the existing U.S. 460 handled 14,000 cars a day. The new road, she predicts, will handle 25,000 cars by 2020. In 2011, Interstate 64 from Richmond to Newport News handled from 50,000 to 140,000 vehicles a day.

Where does the jobs data come from? Chmura’s prediction that new road will lead to 8,415 new jobs from “two manufacturing mega sites located in the Isle of Wight and Sussex Counties” came from the Virginia Economic Development Partnership website, Chmura says, and minutes from boards of supervisors meetings.

Neither county has nabbed a major, advanced manufacturing site or car plant. “We always have plans for that,” says Don Robertson, assistant county administrator for Isle of Wight County. He says the largest tenant its mega site has attracted is Green Mountain Coffee Roasters, a coffee company that eventually hopes to employ 800 people.

Sussex County officials couldn’t be reached. Last year, the Virginia Tobacco Indemnification and Community Revitalization Commission approved a $4.4 million to help develop a mega site on Sussex’s Beef Steak Road. The county website says that information about the site is “coming soon.” Searching for the mega site, a Style reporter recently drove on the road and found only a sewage plant, a compost facility, several houses and plenty of pine trees — but no factories.

Soon after Chmura’s report, Connaughton’s office issued a news release touting the project’s projected $7.3 billion in jobs and investment. “This new road is one of the most significant transportation infrastructure enhancements Virginia has seen in years,” Connaughton says in the release. “Everyone will benefit, both from a safer and faster new road to the huge economic impact this project will have.”

State records show that when the transportation department paid the $21,880 fee to Chmura for the study on Feb. 29, 2012, it was listed as “advertising/public relations.”

The vendor listed on the account is Richmond advertising and public relations company Siddall Inc. which also was listed as the vendor for another bill paid to Chmura for $17,950 on March 23, 2011. VDOT spokesperson Tamara Rollison says that Siddall was awarded a communications contract and that Chmura was a subcontractor.

John Siddall, chief executive of the marketing company, confirms that his company was a prime contractor providing advertising services to the highway department, and that Chmura had been a subcontractor gathering information as part of the process. But, he says he had no direct involvement in the matter.


How reliable are the economic forecasts? And should they be more thorough and time-consuming? Should they be vetted by fellow economists?

There have been few, if any, after-the-fact studies showing what predictions economists make regarding job growth actually come true. As far as thoroughness and vetting by third parties, Rephann says that some of his work for federal agencies has required outside review. One problem with that is that city and state agencies are short of funds. There aren’t many economic consulting firms available to do the work. Hiring a national consulting firm such as McKinsey or Deloitte usually is more expensive.

Another issue is the heat a politician can put on a project. One example, not involving Chmura, happened when Connaughton was interested exploring the privatization of the Virginia Ports Authority, a quasi-public entity that he considered to be performing poorly. The London-based ports consultant he hired, Drewry Maritime Advisors, found the port authority to be “fiscally unsustainable.”

But a similar study by the Joint Legislative Audit and Review Commission, which reports to the General Assembly, decided that the port authority would be profitable for years, much to the consternation of Connaughton, who dropped the privatization plans.

Asked about the port authority study, Chmura says that in the highly competitive world of global trade, “whenever we contemplate change there is disagreement,” and that she isn’t surprised about the conflicting opinions.

There had been a move among some of the state’s economic analysts in the past two years, led by some at the University of Virginia and Virginia Commonwealth University, to set up some kind of peer review system and standards group. Chmura, however, considers such a peer review system “impractical.” S


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