Smart move by Vermont Senator Patrick Leahy who pivoted nimbly to advocate for reform of the EB-5 program, just in time to make the same news cycle as the raid on Q-Burke.
As you can read in the story below, EB-5 is the particular briar patch into which the developers of Q-Burke dove headfirst, only to later find themselves hopelessly ensnared.
From its inception, we on GMD have questioned the value of this program to the public and couldn’t help wondering whether it would evolve into a government sanctioned ponzi scheme.
Senator Leahy was a big supporter of the EB-5 program for Vermont, as was Governor Shumlin. Job one for governors and senators is to promote economic growth, so their initial enthusiasm is not surprising; but even the earliest news stories about Mr. Stenger’s and Mr. Quiros’s scheme should have set off a few alarm bells.
As I recall, the original pitch promised a hotel, conference center, airport, high-tech window manufactory and a state of the art bio-tech plant; and that was to be just the start. There were big plans to see EB5 investments plumping local economies all over the state.
In a corner of the state where winters are long and opportunities are few, such a drastic transformation might initially mean construction and service jobs for the locals; but it seemed likely that low wage locals would soon find themselves priced out of the housing market in a burgeoning resort town.
With things having gotten so far out of hand in the finance department that the SEC has blown the whistle, it now looks like the jig may be up.
So announcement of Senator Leahy’s reform efforts couldn’t have come at a more opportune moment.
Sadly, it is may be too late to save Vermont’s credibility for international investors.
Well, well, well, here we have Bill Stenger and Ariel Quiros’ EB-5 NEK Empire suffering a full SEC body slam.
The SEC and the state of Vermont allege misuse of $200 million of investor funds by Jay Peak Inc. owners Stenger and Quiros.
‘‘The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft,’’ said Andrew Ceresney, director of the SEC’s Division of Enforcement.
In Miami, a federal judge granted the SEC’s request to temporarily freeze Quiros’ assets and prohibit Quiros and Stenger from participating in projects associated the EB-5 program while the litigation is pending. A receiver has been appointed to oversee the Jay Peak and Q Burke resorts.
The allegations specifically suggest what many Vermonters have suspected for quite some time, that the massive NEK EB-5 developments were being run as a “Ponzi” like scheme.
VtDigger.com has the best rundown of yesterday’s seizure and today’s news about SEC: that charges were laid out in a federal court case in Miami, where Quiros lives. Digger has had an eye on this story and one reporter was asked to leave a meeting on Q-Burke property a couple weeks ago before the SEC charges.
It seems that nothing as complex or exotic as credit default swap contracts or complicated derivatives trading took place here in Vermont – just an old fashioned Ponzi scam. Pay the first investors off with money from the next batch of investors – just rinse and repeat as needed. It is kind of a quaint old scam really, except that it played so heavily on the hopes of NEK residents for jobs, decent development and an improving economic outlook for the historically depressed area.
Among one of the interesting charges in terms of convergence is that Ariel Quiros allegedly bought one of Donald Trump’s condos at Trump Place in Manhattan with funds from foreign investors. Trump himself has an approved EB-5 luxury hotel development in Jersey City, just a few miles from Quiros’ condo at Trump Place – maybe he can see it from his balcony.
Oh and Q-Burke won an award this week too!
Business Facilities, an online trade magazine, just named Q-Burke one the three most successful business achievers in cluster developments in the US for 2016. They got it half right, clusterwise: – it is likely to become known as one of the state’s award winning financial cluster-f#*ks.
Does this sound familiar to you? You’re quietly reading news articles and blogposts when suddenly, very loudly, an ad blares from your computer. You look all over the screen to try and find the sneaky link that you have inadvertently triggered, but fail to see one.
So you sit there fuming for the duration…not listening, just fuming. At the close of the seemingly endless interruption, you hear “…Paid for by Bruce Lisman for Governor, blah, blah, blah…”
That’s right: like the ubiquitous “Kilroy” in WWII, Lisman was here.
Bad idea, Mr. Lisman. No one likes those annoying pop-ups, and fewer than no one can tolerate their audio counterpart.
Whoever sold you this bill of goods must be working for the other side.
Whatever it said (and I honestly didn’t hear a word as I furiously looked for the ‘off’ button), the message it unmistakably carried was that Mr. Lisman has more dollars than sense, as my dad used to say.
Why would anyone support a man for governor who can’t respect their online privacy?
New Hampshire’s former senator and governor Judd Gregg is menaced by socialism and worried, very worried about growing support for Bernie Sanders’ bid for president. I wonder what trigger threshold, visible only to financial industry lobbyists and certain Democratic pundits Bernie just reached.
In an opinion piece in The Hill titled: Sanders fans are blind to reality of socialism Gregg wonders where “a significant percentage of the Democratic ‘base’ is headed.”
Says Gregg in The Hill: Now large segments of the Democratic Party are embracing with gusto the socialist creed as carried forth by Sanders — and at a less dramatic level by the likes of Sen. Elizabeth Warren of Massachusetts.
Gregg suggests Sanders’ support comes from naive college age voters, schooled in the dark arts of socialism by professors who fail, he says to teach of “the horrors of socialism.”
They might start with the experience of the Union of Soviet Socialist Republics. Notice the name. Or the National Socialist movement called Nazism. Notice the name again. Or Maoist China, a socialist state again in name. Millions of people died under these banners of socialism and millions more were impoverished.
Notice this name: The Securities Industry & Financial Marketers Association. I imagine they wouldn’t welcome any extra scrutiny from Sen. Warren or a President Sanders and for years they paid Gregg millions to help avoid that possibility.
It is no secret but The Hill doesn’t bother to mention in his bio that most recently Gregg was not senator or governor but the CEO of the Securities Industry & Financial Marketers Association, an industry lobby group. SIFMA in 2014 spent $7,430,000 on lobbying, and made political contributions totaling $833,175.
Thankfully Gregg (or his ghostwriters; could he actually write this stuff?) doesn’t belabor the fascist/red baiting theme for more than a beat before trying a different angle. He evokes American exceptionlism and chants the holy names of the American hyper rich: Zuckerberg, Musk, Schultz, and Gates.
They all give America a unique economic edge in a competitive world. And they are all products of America, and our market economy.
Try to find such opportunity or such prosperity in a socialist nation.
Well Gregg might be shocked — shocked! — to learn that socialist Denmark has a rapidly rising number of dollar millionaires [individuals whose net wealth exceeds one million US dollars]. This in part is due to Danish stock prices increasing more rapidly than those in other European countries, according to a 2015 report on worldwide wealth patterns by the Royal Bank of Canada. That’s a kicker — a growing number of millionaires and a thriving equities market in a nation where socialism has been allowed to run rampant!
Some 69,000 Danes can proudly call themselves millionaires when measured in US dollars, reveals RBC’s annual World Wealth Report.
“[…] the Danish dollar-millionaire club is growing significantly faster than in most European countries.In 2011, there were only 45,600 Danes that fell into this category – a figure that has since risen by 51 percent.
“The number of dollar millionaires is rapidly rising,” Jacob Graven, chief economist at Sydbank, told Ekstra Bladet.
So Judd, who is going to tell all the Danes and their recent millionaires they are living and thriving in a socialist hell? Or maybe if he closes his eyes real tight, he can keep pretending they just don’t exist.
Lt. Gov. Phil Scott (R), Senator Dick Mazza (faux D) and Senate president pro tem John Campbell (D) are the powerful Senate Committee on Committees. The C of C’s is the three member Senate group charged with choosing senate committee assignments, chairs of committees and “personnel,” as Campbell says.
But the band is breaking up. John Campbell announced he will not seek re-election but will take a job as executive director with the legislatively created Vermont Department of State’s Attorneys and Sheriffs. One duty of the executive director is to represent the group’s views to the legislature. Lt. Gov. Phil Scott will be moving out and/or up depending on the results of his run for governor. And who knows what “king maker” Dick Mazza may have in store for the next session.
On occasion in the past their collective wisdom has been questioned. The chairman they put in place as the head of the Senate Natural Resources Committee several years ago was what you might politely call unsure about climate change.
However, due to some end-of-session senate resignations that opened up committee seats last week, the gang of three was able to raise some eyebrows and hackles yet again with their unilateral decision making — maybe for the last time.
After a brief consultation with each other, Campbell, Scott and Mazza elevated Sen. Dustin Degree, (R-Franklin) from Senate Education to the powerful Senate Finance Committee. Then they named Degree’s Committee replacement without consulting or notifying Ed. Committee Chair Sen. Ann Cummings of their choice of “personnel.”
The Committee on Committees is in charge of “personnel,” as Campbell describes it, and does not hold public meetings. Decisions are often made unilaterally by the close-knit group of three men.
And in this instance, there actually was no meeting to vote on the matter — the decision was made in casual conversation before the Friday Senate session.
Campbell happened to be talking to Scott in front of Senate Transportation where Mazza is the chair and the subject came up. Scott then talked with Mazza and the deed was done.
“We made these appointments through individual conversations with each other over the past few days,” Scott said in a written statement. “It’s difficult to find a time when all three of us can meet, so we talk in pairs until we come to an agreement. No formal committee vote is needed, simply an agreement on the appointment between the three of us.”
Just more of that olde time, good ol’ boys’ we-know-what’s-best-for-Vermont style that comes so naturally to these three. So good they don’t even bother with a smoke-filled room!
Phil Scott opened his run for governor by declaring: “I saw a need for a leader who could bring people together.” His history with Mazza and Campbell on the Committee on Committees says otherwise.
Unlike stocks, in Scott’s case, past performance may well predict future behavior: if elected governor, he will likely prefer to make his important decisions behind closed doors, just as he’s done here.
Well, isn’t this nice? The boys on the Committee of Committees, all three of them, had a huddle and decided to put Dustin Degree onto the Finance Committee. That’s gubernatorial candidate Phil Scott, resigning Senate Pro-Tem, John Campbell and reliable blue-dog, Dick Mazza.
Don’t ask to see a record of the deliberations. There isn’t one. Just three good ol’ boys making it work…for them.
Guess whose going out stumping for Phil Scott, other than Dick Mazza whose allegiance is already a matter of public record?
Look for a dutiful DD to hit the election trail with Scott…and maybe even a surprise appearance from good-buddy Campbell.
We, in Franklin County have some serious doubts about Dustin Degree’s judgment, following the Norm McAllister debacle; and they will no doubt be raised in the heat of the election campaign. McAllister and Degree campaigned in tandem in the last two election cycles, often appearing joined at the hip.
If we are to believe he had no idea of McAllister’s penchant for predatory sex, even after his teenaged ‘intern’ repeatedly accompanied McAllister on his overnights in Montpelier, it is difficult to understand how Degree’s powers of observation and simple judgment should not be suspect, too.
So when a vacancy opened on one of the most desirable committees in the statehouse, how is it that Degree sprang so quickly to mind for the gang of three?
Surely there is someone in the senate who has a more impressive record of good judgment than has McAllister’s sidekick.
How’s that ethics committee coming along, Boys? Is it going to be seated in a similar manner?
It would be a shame to see the Democratic primary race descend into the sort of food fight we‘ve lately witnessed from the GOP.
One would think that there are enough differences on policy between the candidates so that hyperbolic characterizations might be set aside. Sadly that doesn’t seem to be the case.
When the candidates begin to show a little strain, the media is right there to stir the pot, dangling ‘he said/she saids’ and hoping for a strike. All too often, they are rewarded with a juicy bite of red meat that keeps them coming back for more.
Bernie Sanders was finally provoked into suggesting something which I am sure he regrets: that Hillary Clinton might be ‘unqualified’ to be president, based on a series of regrettable decisions from her political career. He was responding to a leaked Clinton campaign plan of attack on Sanders described as “disqualify, defeat, and then reunite (the party).”
It was a war of words with a candidate who is extremely capable of dishing it out herself. Neither came out of the exchange smelling like a rose; however, it is Bill Clinton who ought now to be apologizing for his implication that somehow Bernie was being sexist in his remarks.
Of course, he was not; Bernie was simply hitting her on the issues in response to her campaign’s implication that he might not ‘qualify’ as a real Democrat.
It is an insult to women everywhere when a man such as Bill Clinton cries ‘wolf’ as he has in this case.
Sexism is a very real and pernicious obstacle that women deal with every day. It is not a false flag of political convenience to be trotted out whenever a female candidate is exposed to criticism for her policies. Most female candidates use the accusation only rarely, and even then, judiciously. They recognize the damage done to legitimate outrage when sexism is invoked without cause.
Certainly Bill Clinton should be the last man on earth to challenge Bernie Sanders on his feminist credentials. I have the impression that he still doesn’t ‘get’ that he is the very embodiment of sexism for many American women.
It is a mistake for the Clinton campaign to let Bill off the leash. He made a hash of her campaign against Obama and he may just do it again if somebody doesn’t send him on a long vacation.
I figured this was a late breaking April Fools story, but it isn’t. 7-Eleven stores are now an official payment location for federal taxes. If the US Post Office hadn’t been allowed to wither due to budget slashing it might have been considered for this service but you can’t get a slushy at the P.O.
The agency [IRS] has teamed up with OfficialPayments.com and PayNearMe so taxpayers can make payments up to $1,000 in cash at more than 7,000 7-Eleven locations in 34 states. Most stores are open 24 hours a day, seven days a week, making it even easier for Americans to pay what they owe to the federal government.
Taxpayers are given a receipt, payment should post in two business days, and 7-Eleven charges $3.99 for the service.
Official Payments Corp 7- Eleven’s partner was given a $574 million dollar contract with the US Treasury Dept. in 2015.And the other partner, tech business PayNearMe a start-up that provides services to the “un-banked” recently laid off one third of their fifty employees but is reportedly “bullish” on this new venture.
Well, why shouldn’t we be free to pay our US Income tax at 7-Eleven if we want? They are after all as fine a symbol of patriotism as next convenience store-maybe not McDonalds. And because in fact they were “the first convenience store retailer to give guests ‘freedom of choice’ by offering all major soft drink brands at the fountain.” that is according to their own fun-facts page.
And if that doesn’t get your flag waving or float your boat-another fun-fact: enough fountain drinks are sold at 7‑Eleven stores in a year to fill Walt Disney World’s Typhoon Lagoon twice (approx. 600,000 gallons)
Vermont’s specialized captive insurance businesses just got a gift in the form of a tax break from the State legislature. Captives are registered to be run out of Vermont, a few US states, Cayman Islands, Malta and Panama. The company we keep.
Now wouldn’t you think if a legislator gave out a break it would make headlines? Well this one will get a few, but likely most of them only in the sheltered world of corporate captives.
Vermont lawmakers Friday gave final approval to legislation to clarify that certain types of captives, such as sponsored and industrial insured captives that are not writing any business be allowed to enter a dormant status, exempting the captives from Vermont’s minimum annual premium tax.
The measure, H. 538, also allows for cells to be converted from a protected cell to an incorporated cell, allows cells to be transferred or sold, and allows cells to be converted to stand-alone captives of any type.
Vermont regulators provide a host of advantages to large corporations and wealthy families that form captives for modest licensing fees a small tax on premiums. But its tough to compete with Panama and Malta for business .So now with this “house cleaning” legislation, the state is exempting their annual premium tax in some situations–discounting revenue the state would otherwise get from the captives.
Corporations not only lower their insurance costs by forming captives but gain tax shelters and special tax benefits for them. A year ago the IRS took notice and placed some captive insurance on their “Dirty dozen” list of abusive tax scams. Commenting on corporate tax shelter benefits, a lawyer specializing in captives said:“[…] those are the icing on the cake – the cake is the numerous other non-tax advantages of captives”
But this cozy type of regulatory accommodation – tax break and rule adjustment on request is exactly what JV at the VPO says Republican candidates Phil Scott and Randy Brock want to promote here in Vermont.
And Phil Scott is fond of saying“Imagine if we had a governor’s office that treated every sector in the same way”
For those who may have forgotten or may not know: A captive insurance business is a specialized company set up by (and captive to) a larger business to handle their own liability risk insurance needs. Essentially, an enterprise forms and manages its own insurance company as a subsidiary, and the enterprise’s other operating subsidiaries purchase insurance from the captive.
Nice business if you can get it or make it — and get the state legislature to “protect” its benefits from the state’s own tax laws. And who is on the hook for every dime these “captives” don’t pay in taxes? Why, of course! It’s the rest of us taxpayers.
Utah millionaire David R. Hall answered questions from Vermonters by phone on Saturday to tell locals about his NewVista project he plans for that area. Nicole Antal who writes for the online events and news publication DailyUV researched and broke this story last week. She has a rundown of Saturday’s Q & A session here and they provide an audio file of it here. [correction note:Hall answered questions from a Tunbridge Library forum by phone. The diary was changed to reflect that, BP]
The NewVista project,as described in a planning document [link paragraph five], will be what they call “a massively scalable and sustainable community econosystem.” And it is well worth a glance at the details :
When individuals come to a NewVista community, they will deposit their intellectual assets and cash with the community capital fund (except for operating cash, which will be deposited into an account at the community’s approved bank), receiving legal instruments acknowledging the deposits.
Hall, a Mormon, has bought hundreds of acres of land near the birth place of Mormon Church founder Joseph Smith in Sharon Vermont. Some spill-over development will occur in Tunbridge, Strafford and Royalton.
At Saturday’s meeting local residents asked thoughtful questions and Hall answered openly. It also seemed from Antal’s report Hall explained what was going to happen, not to ask what the residents might want to happen to their town.
Like some kind of 21st century utopian-engineer-colonialist, Hall is determined to plunk down his 15,000- to 20,000-resident city-state in four upper White River Valley towns. The impact shouldn’t be underestimated. The size and scale to the rest of the state is notable: one local resident made the point that only three cities in Vermont have populations that large or larger than his NewVista city.
Here are a couple quick takeaways .
NewVista may, according to Hall, take upwards of half a century to complete, but it is a process, starting sooner rather than later. So heads-up. His ideal time frame: “Within 15 years, I hope to do multiple districts throughout the US in different places.” Curiously and without explanation he mentioned at the meeting that Vermont wasn’t part of his initial plan.
One thing is clear: Hall’s NewVista dream is well funded. NewVista is “a for-profit trust, and pays taxes.” I am not that familiar with corporate tax structure but it is likely to complicate a small town’s existing tax structure.
And for anyone who doubts his lack of sensitivity to the local towns control I have copied part of one exchange from Antal’s DailyUV article:
Question: “You have mentioned a couple of times that you wouldn’t be interested in going forward with this if the local people weren’t interested, is that right?”
Mr. Hall: “That’s right; it’s not going to happen if people of Vermont don’t want it.”
Question: “I would suggest that instead of buying any more land that you and your family and whoever come here and meet the people and find out what we are like, and what we want, and what we don’t want
Mr. Hall: “I already know that the local people don’t want this. In time, over time, people will probably like it if they understand it. There is not one place in the United States, or even in the world where local people ever would embrace change. That’s just the logical truth.”
Question: “I assume you are local to someplace?”
Mr. Hall: “Yes I am”
Question: “What do you think about changes in your neighborhood?
Mr. Hall: “I am a much broader-thinking person than most people. Others aren’t. You can’t compare what I would think with. My neighbors hate this idea. So I can’t do anything about that.”
Question: “I might suggest that before you buy anymore properties, if you say that you are not going forward if the locals aren’t for it, then why you would continue buying more properties. What about a study?”
Mr. Hall: “I didn’t say I wouldn’t do it if the locals aren’t for it. I said I won’t do it if VERMONT is not for it. (…) It’s not rational to expect a local person who is established, a 7th generation or something, to ever support this. That’s unreasonable. “
If I lived in Sharon or any surrounding town that exchange would sound more than a few alarms. Hall admits locals probably don’t want his city/state, but that’s because he is a “broader thinking person.”
David Hall at the wheel of a Vanderhall vehicle, made by a NewVista enterprise.
The locals, he says, probably will like it once they understand it. Do you suppose this would be after they sell or after they are enlightened to his vision?
David Hall says local opposition is not rational. I’d guess he believes resistance is “feudal.”
