Category Archives: Business

Rutland Herald & Times Argus SOLD!

Two struggling Vermont newspapers, the Rutland Herald and Times Argus, have been sold to a Maine-based publishing company. stoppressingThere had been reports that The Herald was having problems paying employees, causing some to stage a walk-out .

The Herald’s longtime editor, Alan Keays, was fired when he ran a story on the labor trouble in the paper.

Prior to that, in June, the publisher announced they would cut back from seven to three days a week in their print editions.

The new owners are “Maine-based entrepreneur Reade Brower and printing and marketing executive Chip Harris.” Harris has a local connection, having founded the Upper Valley Press Inc. in North Haverhill, NH.

And by all means take notice of the link to the article: http://www.rutlandherald.com/article/20160811/THISJUSTIN/160819917/0/OBITUARIES

Check the last bit in it…someone at The Rutland Herald is maintaining a sense of humor.

 

Blind trust in Phil Scott

Anyone who has had a radio on in the past couple days has probably heard Phil Scott moaning and sounding sooo hurt over how mean his gubernatorial primary opponent Bruce Lisman is being to him. Says Scott’s campaign: “For month’s Bruce Lisman has lied to voters about Phil’s record.” Philscottphilscott

In aggressive campaign ads, Lisman is raising the appearance  of a conflict of interest over Scott’s ownership in Dubois Construction company should he win election to the Governor’s office. Dubois does millions of dollars in contracted State of Vermont business: Since 2001, DuBois Construction has received $3.785 million  in payments from the state Agency of Transportation, The Department of Forests, Parks and Recreation, and the Departments of Buildings and General Services  and Fish & Wildlife.

If elected, Scott says, he is planning to form a blind trust to handle his interest in the business, but Lisman and others are skeptical that this maneuver adequately addresses the ethical implications. The Vermont Democratic Party commented: “Scott would still be completely aware of where his private profits were coming from and which policies could increase them while he collects a state salary.”

I wrote a diary in May about how Scott has handled the issue in his past.  When he began his campaign Scott commented on his contracting ethics to Vtdigger.com:  When a project he has supported as an elected official goes out to bid, Scott said he makes sure his company does not seek the contract. So he said. But a closer look reveals that this hasn’t exactly been his practice.

As a state senator Scott served on the Senate Transportation Committee and successfully lobbied Senator James Jeffords (PDF p. 10) to put a certain provision in Federal  legislation for specific transportation funding.  Vermont (USA) Senator Jim Jeffords (I-VT) credited Vermont State Senator Phil Scott (R-Washington County) with the provision in the new federal transportation legislation adding modern roundabout projects to the list of safety improvements eligible nationwide for 100 percent federal transportation funding.

And then, first while Scott was a state senator and later as Lt. Governor, Dubois Construction  submitted bids on contracts  receiving this particular federal funding when the monies became available in Vermont. Total potential worth of the bids on these projects: $15 million.

Over several years, Dubois Construction bid on at least three Vermont state roundabout projects, including two since he became Lt. Governor.

One bid in 2008 was worth $1,388,412.00 [CONTRACT ID : 04B198], one in 2011 worth $1,754,788.83 [CONTRACT ID : 08B126], and in 2013 (what would have been a biggie) worth $11,953,592.58 [CONTRACT ID : 78D082]. All his bids were in the middle of the pack, but not being the lowest bid, none was awarded to Scott’s company.

But the important point is he did bid on them  after lobbying for specific funding; taken together, the three bids would have been worth over 15 million dollars to Phil Scott and Dubois Construction.

Scott’s tax returns indicate that the bulk of his wealth is tied up in Dubois Construction. He has said he would temporarily distance himself from his construction business should he become governor, but he wants to return to it afterward.

Phil Scott may not like Lisman questioning his possible business conflict in the primary, but it is fair game. And regardless of his promised temporary blind trust arrangement, a good hard look at his company’s past and future state bidding is likely inevitable in the general election.

And, as Phil Scott himself asks in his response tv ad to Lisman’s attack, “Who are you going to trust?” wherein he cites Governor Jim Douglas’s support as proof of his trustworthiness. Shall we trust Phil Scott, who promised his company wouldn’t bid on contracts he was politically involved in? Or the record of Dubois Construction’s bids on at least three such major contracts?

Trust shouldn’t be blind.

Scott Milne and his axe grinding campaign

In a recent statement, Republican US Senate candidate Scott Milne, reacting to the massive futuristic “utopian” city David Hall is planning for Vermont, makes it obvious he views the entire New Vista issue through his own peculiar personal lens. Milne zeroes in almost exclusively on his pet issue in his 2014 run for governor: alleged “overreach” by regional development boards and Act 250.milnesaxe

For a number of years Milne and his business partner (and campaign funder), attorney David Boise III have been attempting to build a mixed use development project on land they own in Hartford, Vermont.

The Quechee Highlands project, which borders Interstate 91 in Hartford, has wound its way through the development review process and various court cases for a number of years. After a defeat in one contentious hearing several years ago an angry Milne remarked: “I’m going to try to figure out if I’m going to do anything, and if I do, it’s probably going to involve more lawyers, and it’s just going to continue to brand Vermont as a bad place to do business,” Although the project recently won a significant court case, hurdles remain — along with apparently some bitter feelings on Milne’s part.

Milne’s comment (below) on the massive thousand-acre multi-town New Vista project was part of an ongoing batch of local and statewide candidates’ reactions gathered up by Nicole Antal, who follows this issue for the Daily Upper Valley community website.

Although I appreciate the candor of folks who are whispering about it not being right — because “it’s inspired by Mormons” or because it could attract hardworking Republicans to Vermont and upset one-party rule — particularly in Windsor County, [only two of the towns targeted by New Vista are in Windsor County]  I hope we will get folks with those prejudices out of the way as judges, juries, or regional planners — so Vermont can carefully and soberly review this idea.

Not sure what he even means by “the candor of folks who are whispering.” But Milne  could have taken the time to educate himself about the project’s origin and found that early on it was David Hall himself who said the project was partly inspired by his Mormon background, although Hall has maintained that he does not want the LDS Church’s official involvement. The official LDS (Church of Jesus Christ of Latter-day Saints) reaction to the project can be found here.

Generally, the reactions of all dozen or so Republican, Democratic, and Independent candidates for local and state offices indicated a basic level of caution over the massive project and sympathy for community concerns. And all save Milne seemed thankful to have the Act 250 development review process in place to regulate the process.

Let’s unpack his comment a bit. Milne alone of the candidates contacted fails to comment on objections to the size and scale Hall’s proposed population of up to 20,000 residents for the self-sufficient city/state he has in mind for the rural area. Without evidence, Milne implies New Vista will not get a fair hearing due to “one party rule — particularly in Windsor County” and suggests Democrats are acting out of fear of what Milne thinks would be an influx of “hardworking Republicans.”

While the contest he’s in is a low-key senate campaign for now, Scott Milne is again a man running with his own little axe to grind — a personal dislike, perhaps even a hatred of regional planning boards and the act 250 development review. One wonders how he thinks becoming a US Senator will solve his local development issues. What axe would he be able to wield? And how sharp would it have to be to cut through the red tape of local and state control?

 

Solved! Rutland Herald, Facebook and loose lips

Hold the presses! A mysterious Department of Defense-US Navy oversized load being hauled by truck goes off the road on Wednesday while traveling through rural Vermont. Susan Smallheer at The Rutland Herald/Times Argus  smells a story, starts making calls — officials refuse to answer questions and won’t speculate.

Front pageThe newspaper presses officials for information — they ask: Helicopter blades headed for the Portsmouth Naval Shipyard? No, said Lt. Kevin Andrews of the Vermont Department of Motor Vehicles.

Cruise missiles? “I’m not going to speculate,” said Colleen O’Rourke of the Navy’s Naval Sea Systems Command.

The facts as known and reported Friday, July 8, by The Times Argus/ Rutland Herald:

The long, unmarked gray metal container originated in Williamsburg, Virginia, and was being hauled to New Hampshire by Crofton Specialized Hauling of Virginia, according to Lt. Kevin Andrews of the Vermont Department of Motor Vehicles.

The reporter was stymied regarding the contents of the hauler, and the mystery deepened: Officials at the shipping company didn’t return messages Thursday. Andrews said the shipment entered Vermont on Route 279 in Bennington, and at the time of the crash, it had been making a turn from Route 103 to head north on I-91.

Security must not be all that good at Crofton Specialized Hauling in Virginia as they posted an image of the truck and what the “secret” cargo was on July 1 –– days earlier on Facebook. Crofton ind.Seven days later and the paper never checked.

The cargo, it turns out, is a ship’s propeller shaft — or in Navy-speak, a “primary output shaft for a Navy cruiser”; for now reports are that it, along with the truck and driver, will stay in Vermont until repairs can be made.

Well, next time, Times Argus/Herald reporters, you may find it first on Facebook. And in case you are wondering, Crofton Specialized Hauling hasn’t posted anything more to Facebook about it — better check Twitter. And how about that next “secret” D.O.D/US Navy hauling contract…

EB-5 “ponzi” brokerage Raymond James: Flashing blue lights in the rear view mirror

The Vermont Commissioner of the Department Financial Regulation, Susan Donegan, has announced a $5.95 million agreement with Raymond James Associates, a Florida-based securities broker-dealer. brokerwhacking

This is the brokerage firm implicated in the massive Jay Peak EB-5 ponzi scheme allegedly perpetrated by partners Bill Stenger and Ariel Quiros. The pair face a variety of federal and state lawsuits and are accused of misappropriating $200 million EB-5 immigrant investor economic development funds.

Federal and State lawsuits allege the brokerage house broke securities regulations by arranging illegal access to EB-5 immigrant investor funds.  Quiros’ ready access to these funds played a pivotal role in the complicated illegal eight-year scheme to flow money away from the mandated EB-5 targeted development at Jay Peak, Burke Mountain Resorts (formerly Q-Burke) and other NEK EB-5 job creating projects.

In a press release announcing the settlement Vermont DFR Commissioner Donegan explained: This agreement provides for the payment of $4.5 million to the appointed federal receiver in the case SEC v. Quiros for the purpose of reimbursing possible claims by investors. Additionally, $200,000 will be paid to DFR for the cost of the investigation and $1.25 million will be paid to Vermont’s general fund as an administrative penalty.

The broker agreed to the settlement terms but is not required to admit to or deny the department’s allegations. DFR’s Donegan has said the brokerage had “inadequate written supervisory procedures” for collateralization of margin loans. The Commissioner pointedly notes the firm ultimately profited from the Jay Peak EB-5 fund transactions.

Well, the $5.95 million payout that Vermont DFR got may sound like tidy sum money, but look at it this way: it is less than what Raymond James pays their CEO Paul Reilly. His total pay package for 2015 is estimated to be $7.8 million (up 37.7%) and all four top executives at the firm made over three million each in 2015. Last year the company recorded an annual income of $502.1 million, up 7 percent, not exactly proportional to the boost its CEO got.

The firm also has a long trail of fines paid out over the years. Lax supervisory procedures, such as those mentioned by Commissioner Donegan, appear to be a feature — not an aberration — at the brokerage house Ariel Quiros chose to help build his complex web of alleged financial fraud.

In 2007 Raymond James was fined $2.75 million by the National Association of Securities Dealers for failing to maintain an adequate supervisory system to oversee the sales activities of over 1,000 producing branch managers working in offices throughout the United States.

And in May 2016 the Financial Industry Regulatory Authority Inc.(FINRA) fined them a record-setting $17 million for widespread compliance failures in the brokerage firm’s anti-money laundering programs.

(FINRA, the Wall Street funded industry watchdog, is the successor to the National Association of Securities Dealers, Inc. [NASD]. It is a non-governmental organization that regulates member brokerage firms and exchange markets.)

 Raymond James Associates reportedly is pleased that a guilt-free settlement was reached with Vermont DFR. No doubt they are happy to be clear of this latest little bit of unpleasantness — and it must seem a bargain price at only $5.95 million! moneygo1

The amount will likely not satisfy the EB-5 immigrant investors seeking green cards, and it won’t do a thing to put the NEK economy back together again.

The settlement is simply the cost of doing business for a brokerage firm like Raymond James — on the level of a speeding ticket for the rest of us. And there is no admission of “wrong doing,” so no points accumulated on their brokerage “driving licenses.”

Given the firm’s history, there’s no evidence that such a penalty will even make its managers wary enough to look in their rear-view mirrors for flashing blue lights.

Smack in the middle: New Vista, candidates and a lobbyist

Intrepid blogger/reporter Nicole Antal, who writes in the Daily Upper Valley community website, has written her sixth story about David Hall and New Vista for her Very Vermont column.

Antal, who was first to break the story, has now compiled how local and statewide candidates and office holders stand on the proposed massive project. Hall is the Utah-based engineer/developer and Mormon (member of the Church of Jesus Christ of Latter Day Saints, aka LDS) who has set out to build a 20,000-resident utopian community in Sharon (the birthplace of LDS founder Joseph Smith) and several surrounding towns. Plans for his futuristic New Vista and descriptions of the proposed community make it sound, at least to me, like a benevolent real-life version of Zardoz.keepitnice2

Although they were contacted twice by Antal, gubernatorial candidates Minter, Lisman, Galbraith,[update: Peter Galbraith commented 6/16 on New Vista on Reddit.com in response to question ] Paige, and Ericson did not respond. Phil Scott and Matt Dunne responded by email.

Dunne expressed a strong desire to preserve the character and quality of Vermont life and says the Act 250 process should support that goal.

Phil “listen and learn” Scott wants to “learn a little more about this curious project to make sure it’s a good idea for the community and the state.” He wonders if “perhaps there’s a good idea in here somewhere.” And, he says, “Like any other developer, they [New Vista] would have to follow the rules and regulations laid out in Vermont’s laws, so we’ll have opportunities to learn more.”  Funny, I notice Scott just can’t quite bring himself to mention Act 250 here in a positive context. Perhaps there’s a good idea in Act 250 after all, Phil.

The area targeted by Hall includes Vermont House districts Windsor-Orange 1 (Royalton, Tunbridge) and Windsor-Orange 2 (Sharon, Thetford, Norwich, and Strafford);  Antal contacted and got responses from all the legislative candidates. It is well worth reading the candidates’ full comments on the Daily Upper Valley website.

All of the local respondents (three Independents, one Republican, and a Democrat) indicated degrees of caution and skepticism over the wisdom of plunking down New Vista and its 20,000 people in rural Vermont. Another notable common thread was how they all seemed thankful to have the Act 250 regulatory process in place. As far as I know New Vista is not far enough along to have become involved in the Act 250 development approval process.

District 2 Republican House candidate David Ainsworth also notes the Act 250 requirement and adds he is “a little bit apprehensive about it [the project’s scale]” but couldn’t resist adding this: “But one of my biggest concerns is the overreaction and putting in a lot of regulations that will restrict everyone else’s opportunities to do things.” Have futuristic utopian city/states, throughout history always favored fewer government regulations and low tax states? I guess he fears Vermont might lose out on the coming boom in utopian city/state developments to New Hampshire.

Nicole Antal’s ongoing effort to get candidates and elected officials on public record early on in this process couldn’t come at a better time:  it looks like David Hall will begin a more systematic wooing of Vermonters’ support.

Recognizing a lucrative opportunity, Montpelier lobbyist/PR man Kevin Ellis reportedly solicited Hall for his business and offered his services. Ellis will be making connections and smoothing the way for the high-density 20,000-resident New Vista development. “This may be a great idea,” Ellis says. New Vista, he believes “…would inject millions of dollars and lots of new people into communities.” He could also add, but doesn’t, that the “injection” of dollars and lots of new people (20,000) would permanently, radically change — basically destroy — the existing rural character and lives of a large part of central Vermont.

Luckily we have a record of what the candidates say about New Vista now, let’s see what happens when long-time Montpelier lobbyist and PR ace Kevin Ellis sweet talks them in the years to come.

For now, says Ellis, David Hall is (under his guidance) “reaching out to local officials and residents.”  And later, should the need arise for any state rules or regulations to be adjusted favorably to the planned development by the legislature, long-time Montpelier lobbyist Kevin Ellis probably wants “to be in the middle of it.”

Hmmm,right ‘smack in the middle of it,’ that sounds familiar…

Man with no-name: “Baxter’s over there, Rojo’s there, me right smack in the middle”

[Yup, somebody gets a fistful of New Vista dollars]

Man with no-name: Crazy bell-ringer was right. There’s money to be made in these parts.

Trump U. grifters once charged with fraud in Vermont

In the beginning, before Trump University there was the “National Grants Conferences” (NGC). This was the business platform Trump University was built on — a classic get-rich-quick scam.griftboybest

It turns out just about the time NGC was shape shifting into Trump Institute (soon to be Trump U.) the company was successfully sued for consumer fraud here in Vermont and 32 other states .

In 2006, NGC [Trump University’s precursor] was sued by Vermont’s attorney general, Bill Sorrell, who said that it had violated state consumer protection laws. The case was settled later that year, with NGC agreeing to pay nearly $325,000 in refunds to Vermont customers, along with attorneys’ fees. [$65,000 worth of legal fees]

NGC traveled the country offering free seminars, heavily advertised in local newspapers and on TV that promised to share the secrets of real estate investment. Gaining access to “hundreds of billions of dollars” in “free government money” was the key pitch to the success they claimed to provide.

At the end of the session, dozens of attendees lined up to buy $999 NGC “memberships,” receiving two thick books full of government programs and the promise of ongoing coaching and support.

It almost goes without mentioning that the coaching, support and wealth never arrived for those who had spent thousands to learn the secrets to success NGC claimed.

Through the 1990’s the business weathered a series of lawsuits from the Texas Attorney General. However NGC was a successful model for Mike and Irene Milin, and Donald Trump caught wind of it sometime in 2006. He simply replaced the lure of imaginary “free” government money with promises to teach enrollees how to run Trump’s imaginary magic money machine. By the way, the Milins were also high rolling Republican donors including to the Romney/Ryan 2008 2012 Presidential campaign.

Eventually a “blizzard of legal woes,” including the 33-state legal action Vermont had joined, brought the original National Grants Conferences to an end. But by then Trump had partnered with the company founders using the existing template NGC provided to form his own huge University — that  he recently compared to Harvard.

And Donald J. Trump, the future Republican candidate for President, moved quickly to raise the old NGC fee from $999 to $1,300 and up.  It has been “classy” and “huge” since. According to the Donald, strictly Ivy-league caliber stuff — truly a record to run on.

EB-5 funded snow making job proceeds

Well that didn’t take long, just a few short weeks after Bill Stenger and Ariel Quiros’ EB-5 ski resort scandal broke, a similarly funded Vermont project  is on track to proceed like nothing happened.

snowgunsPeak Resorts Inc. (NASDAQ:SKIS), the Missouri based company that owns Mt. Snow (no connection to Jay Peak/Burke Mt.) announced that a $52 million EB-5 funded snow making system expansion will continue now that the Federal government has agreed to release immigrant investor funds held in escrow.

The flow of funds was halted while the United States Citizenship and Immigration Services (USCIS) reviewed the EB-5 immigrant investor funded project.  The Federal review process is somewhat mysterious as reports note no further information is available from USCIS because “as a matter of policy, we cannot comment on specific EB-5 projects.

The release of funds is welcome as the resort says they had invested millions of its own money in the expansion project. Mt. Snow is reportedly running short on cash. The resort attributed its need to lay off workers to the snow-starved winter.

Peak Resorts CEO Timothy Boyd commented on the snow making upgrades and expansion projects: “The master plan for Mount Snow is expected to enhance the overall visitor experience at the resort by bolstering snowmaking capacity and adding a new three-story, state-of-the-art ski lodge.”

I suppose it is just standard rah rah boosterish language but Peak Resort’s Timothy Boyd might want to temper his tone so as to avoid sounding so eerily similar to Jay Peak’s alleged fraudsters Stenger and Quiros.

Mt. Snow resort representatives always stress that they have no connection at all with Jay Peak but they do enjoy a very close relationship with state government.

President Dick Deutsch stressed: “It’s important to know that we are in good standing with the state of Vermont,”

No doubts there. Mt. Snow is in good standing with the state. In fact in some cases they are standing so close you could hardly slip a piece of paper between them. You see, in 2015 Mt. Snow hired Brent Raymond — the former head of State of Vermont EB-5 Regional Center —  to run their EB-5 funded expansion. In his job for the state, Raymond was tasked with promoting and monitoring compliance of Vermont’s EB-5 programs, including Peak Resort Mt. Snow’s $52 million upgrade.

However, Patricia Moulton, head of the Agency of Commerce and Community Development (ACCD  runs VT’s EB-5) characterized Raymond’s departure through the revolving door to the resort business as nothing more than “standard turnover, nothing out of the ordinary.” Raymond parted ways with the agency “amicably and respectfully,”she said.

Oh and ACCD’s Moulton added the reassurance that her brother David Moulton, director of operations at Mt. Snow, was “not involved in hiring Brent,”

Oh well, nothing out of the ordinary, nothing to see here — and the EB-5 snow-making job continues.

Campaign dollars to donuts

Insidegov.com has taken the time to catalog some of the day to day ways the Republican and Democratic presidential primary candidates have spent millions of campaign bucks. Using Federal Election Commission filings they have documented the primary season through the Iowa’s Caucus and New Hampshire primary- from Jan. 1, 2015 to Feb. 29, 2016.

Hillary Clinton’s campaign has a slight lead over Bernie Sander’s on the amount they spent at Dunkin Donuts.  However Clinton’s donut and coffee tab of $2,806.00 only slightly exceeds the $2,577.00 Sander’s campaign spent. Some still maintain Sanders will close this gap.doughnuts

In addition to coffee and donuts the Clinton campaign has spent aggressively on pizza. Clinton campaign staffers around the country were treated to $17,000 worth of pizzas –mostly from Domino’s.

While the Clinton team munched, Sanders’ campaign bought his book. Reportedly they spent almost $455,000 at Verso Books on Outsider in the White House, the book Bernie wrote.

Republicans and Democrats combined spent $111,703 on Uber Rides . And the filings show the Trump campaign loves Trump’s businesses. Trump ran up $665,461 in rent and lodging expenses with Trump owned businesses Trump Tower, Trump Grill and the Trump Payroll Corporation. It is all about what’s good for the Donald, who also spent heavily on security, shelling out almost $200,000 for  “security services” and “security consulting”.

Not sure if this spending explains anything of significance about each candidate — other than the Clinton campaign goes for pizza, Bernie bought his own book and Trump is feeding his campaign money back to his business empire .

But I for one would love to know what exactly losing Republican candidate Dr. Ben Carson got out of more than $6 million he spent on various types of consultants, or what fate has in store for $300,000 worth of Rubio bumper stickers, T-shirts, signs, hats and sweatshirts.

I wonder if Vermont GOP leadership (who cleverly supported Marco Rubio) stocked up on Rubio sweats and T-shirts?

Thursday insta-diary

Here’s something quick with a chart and a Vermont connection.wolrd_military_spending_barchart_large

In an editorial Monday titled: A Better not Fatter Defense Budget the NYTimes.com suggested the time has come to take a look at throttling back US military spending. And one of the most expensive aircraft ever, the F-35 (scheduled to be based in Burlington VT 2019)caught their eye.

The Pentagon can do with far fewer than the 1,700 F-35s it plans on buying.

[…]For nearly a decade after 9/11, the Pentagon had a virtual blank check; the base defense budget rose, in adjusted dollars, from $378 billion in 1998 to $600 billion in 2010. As the military fought Al Qaeda and the Taliban, billions of dollars were squandered on unnecessary items, including new weapons that ran late and over budget like the troubled F-35 jet fighter.