Category Archives: Business

Did Scott Milne just launch a run for U.S. Senate?

Business, local/regional, , , , ,

Scott Milne recently sold his stake in his family travel agency and began floating serious trial balloons about running against longtime Vermont Senator Patrick Leahy. In March he discussed his qualifications with vtdigger.com:

[…] you know, I’m a travel agent and I think I got a shot at taking out the longest-serving senator in Vermont history and currently the longest-serving senator in the United States,” Milne said.

He now, it seems, is exploring whether the investigations into the (alleged ) “Ponzi” scheme at Jay Peak and Q-Burke is an issue that Senator Leahy, a champion of the Federal EB-5 program, may be vulnerable on. Could it have legs for Milne?

mobbingIt seems unlikely, so we will see, but Scott Milne didn’t wait and  jumped head first into it:

“Peter Shumlin and Patrick Leahy have both displayed a lack of competence and a lack of leadership in the way the EB-5 program has been structured and managed,” Milne said, lumping Leahy in with the Democratic governor he nearly defeated in 2014. “On the federal level, I think it just wasn’t structured with auditability and transparency built into it.”

Milne may not have thought this one through. You see he and his business partner Attorney David Boise (his former college roommate and largest contributor to his failed campaign for governor) explored using EB-5 program to help finance their mixed use Vermont development.

B&M Realty and Development has been attempting to build a mixed used development, Quechee Highlands in Hartford near the intersection of Interstates 89 and 91. B&M’s project has been wrangling in the courts over regional land use regulations (one of Milne’s signature issues).

In 2009 at their own expense, B &M partners Milne and Boise joined an EB-5 road trip to Asia with then-Governor Jim Douglas.douglaseb-5Saigon  Milne must have enjoyed the trip.He returned impressed with EB-5 and sang praises to its entrepreneurial qualities without qualification.

“To me, it [EB-5] is the perfect storm of government policy capturing the best of entrepreneurial spirit,” Milne told the Valley News a week after returning from Asia. “I was pleased beyond my expectations.”

Although still hemming and hawing a bit about challenging Sen. Leahy, Milne says former Vermont Republican Party chair Jim Barnett has been advising him.

I’d think Barnett might have told Scott Milne not to tie his shoe laces together if he wants to run … or walk in the election. Penny loafers might be a safer bet for this Republican.milnescottdouglas

Candidate Phil Scott’s roundabout bid

Business, local/regional, , , , , ,

By now every voter in Vermont must know that Lt. Gov. Phil Scott is the longtime co-owner of Dubois Construction – a company that competes for and receives millions in state highway contracts. Considering his position as an elected official, it is surprising that this issue has only been raised a few times during his 15 years as a state senator (on the Transportation Committee) and his time as Lt. Governor.

roundaboutconflict 1Early on when Scott was about to enter the race for governor, he attempted to preclude any discussion of conflict of interest and told Vtdigger.com he would temporarily distance himself from his highway construction business, should he become governor.   “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.”

Well, one of his “quiet accomplishments over the years” (listed under ‘transportation’ on his campaign website) may conflict just a bit with that statement.

In 2005 (five years before he became Lite Governor) while serving on the Senate Transportation committee, Scott successfully lobbied U.S.Senator James Jeffords to place  a specific type of funded project  in a Federal transportation bill.

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.

Modern traffic roundabouts are recognized safety improvements for traffic and pedestrians, and usually significantly improve intersections. They’re also pricey, so in 2005, getting the Feds to cough up 100% of the cost of building them was significant.

It also turns out Scott’s Dubois Construction Company made several attempts to get a piece of that federal roundabout funding he had arranged.

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

One bid [CONTRACT ID : 04B198] in 2008 was worth $1,388,412.00, 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 were awarded to Scott’s company. Taken together, the three bids would have been worth over 15 million dollars to Scott and Dubois Construction.

Up until recently, it was accepted as gospel that Vermont’s government was uniquely honest. But with the EB-5 Regional Program now under fire over Jay Peak’s alleged “ponzi scheme,” an overly active government-to-business revolving door, and finally the state Senate’s embarrassing efforts at (not) passing any ethics regulations, this bit of bogus gospel is due for a revision. One longtime Vermont commentator recently declared that “Vermont state government is still pretty squeaky clean.”  Kind of an ethical gray area — you know, like, being “sort of” honest?

At least in a ’roundabout’ way, Phil Scott may have provided a road map of how, if elected governor, his ethics will intersect with his private business interests.

Right in character: F-35 fails latest test

Business, local/regional, National, , , ,

Look up in the sky! It is a bird or even superman —  but not an F-35. The troubled new jet fighter scheduled to be deployed to Burlington International Airport in 2019 continued right in character — performing poorly.f35csmp1

“The Air Force attempted two alert launch procedures during the Mountain Home deployment, where multiple F-35A aircraft were preflighted and prepared for a rapid launch, but only one of the six aircraft was able to complete the alert launch sequence and successfully takeoff,” the Pentagon’s top weapons tester disclosed in written testimony to Congress on 26 April.

Under development for 15 years the F-35 program has set records burning through $400 billion of our tax dollars. Currently the cost per aircraft is estimated to be of $412 million. And after all that time and money, the results of the recent deployment test are probably the last thing supporters of deployment to Vermont –notably Senators Leahy and Sanders, Rep. Peter Welch, Gov. Shumlin, and Mayor Miro Weinberger — want to hear.

Glitches that required system and/or aircraft shutdown and restarts that prevented launches were blamed on “immature software.”

For now at least, the F-35 is a fully mature employment program for some defense contractors. Currently these aircraft at one base require 60-90 industry tech reps per squadron. And in Senate testimony just last week Lt. Gen. Christopher Bogdan said the program needs about 2,600 people to oversee it at a cost of $70 million per year. One Senator said he had numbers indicating it was nearly 3,000 people and $300 million a year.

Now, seven years since its first flight hour, the F-35 has reached the 50,000 flight hours mark.  Lt. Gen. Christopher Bogdan, F-35 Joint Program Executive Officer: “The next 50,000 hours will be achieved much quicker as we double the size of the F-35 fleet worldwide in the next three years alone.”

The 50,000 flight hours are comprised of two categories: System Development and Demonstration flights (SDD)  test hours (12,050) and Operational flying hours (37,950).  Therefore, the total for Operational flight hours is only 37,950 hours-about a quarter less than the total flight hours of 50,000.

When he was defending the safety of deployment to Vermont in 2013, Lt. Col. Chris Caputo said the new fighter would have 750,000 flight hours before it comes to Burlington in 2019. A lot more F-35’s will have to be flying  and an awful lot of Operational flight time (700,000) will have to be logged in three years if the Vermont Air Guard is  to receive a plane that meets that goal.

Another question for the brass hats — and the F-35 cheerleaders –how realistic (or affordable) is reaching that goal in three years considering all the “glitches” and “bugs” haunting the aircraft?

A GMD bonus fun-fact:

Lockheed Martin was the biggest federal contract in 2014, Lockheed’s Pentagon contracts alone are worth more than the federal government provides in grants to the state governments of North Dakota, South Dakota, New Hampshire, Vermont, Delaware, Wyoming, Montana, Hawaii, Rhode Island, Idaho, and Alaska combined.

Get to the bottom

Business, local/regional, , , , , ,

It has been a busy week since the SEC locked up Q-Burke and cracked down on Stenger and Quiros’ “Ponzi like” EB-5 scheme.

One thing that has grabbed a lot of attention is a “batch” of emails from the Shumlin administration that had been slated to be deleted.  Speculation is rampant about the timing – why in early April, prior to the SEC action, this batch of correspondence was slated to be wiped.EB-5 chart 1

They reportedly may contain correspondence between Shumlin’s former staff member Alex MacLean, who was then working for Jay Peak’s Bill Stenger, and the governor’s office. Administration officials say the request to delete was routine. And they want them made public however Attorney General Sorrell is said to be reviewing the issue.

Now The Vermont House has scheduled a debate for Friday to consider a proposed resolution calling for the release of the emails, joining several candidates for governor and others requesting the contents be made available to the public.

Rep. Chris Pearson (P-Burlington), who heads the House Progressive caucus, says there’s an easy way to put to rest any lingering questions.

“I agree with a whole lot of Vermonters that something seems very fishy here,” he said. “But I’m not asserting anything. I’m saying: Show us the emails and prove it to us.”

To that end, he and four fellow Progressives have introduced a resolution asking Shumlin to deliver the emails to a House committee by May 1.

Maybe it is worth asking this: Is it more likely the email batch is simply an embarrassment (a big one perhaps) for the Shumlin administration, or could it be a smoking gun?  I’d bet on embarrassment over smoking gun. So good: “show us the emails” because the longer it hangs fire the more suspicion gathers.

But if the point is to get to the bottom of how the state allowed this Ponzi scheme to happen, why not start at the bottom rather than the top?

Not exactly the bottom, but how about at the state Agency of Commerce and Community Development(ACCD). This would be the state agency that had the schizophrenic task of promotion and oversight of approved EB-5 programs until February 2015 when oversight began to be shared actively with the Department of Financial Regulation (DFR).

The ACCD’s directors of the Regional EB-5 Center for both the Douglas and Shumlin administrations had day-to-day dealings and traveled extensively overseas in support of Jay Peak and Q-Resorts’ team.

In their designated role former Regional Center Directors James Candido (Douglas’ man) and  Brent Raymond (Shumlin’s former Director) were the faces Vermont presented to foreign investors. Their attendance at worldwide EB-5 conventions signaled Vermont‘s stamp of approval for Jay Peak /Q-Burke, helping  Stenger and Quiros gather funds.

Considering the scale of fraud alleged could state officials so familiar with the operation not have expressed some worries or had suspicions? And just what was the calculus that weighed in favor of ignoring the tell-tale signs, of favoring the developers-cum (alleged) robber barons over their responsibilities to the people of Vermont and the (alleged) foreign-investor-victims?

At some point Vermont’s  combination “watchdog” and enabling agency – going back to the Douglas daze – deserves as much or more attention than Shumlin’s batch of emails is now getting. The Regional EB-5 Center was there helping sell the snake oil from the start. What did the directors know and when might they have known it ?

Scott to visit community affected by toxic chemicals

Business, local/regional, ,

Republican gubernatorial candidate Phil Scott will attend, according to his published schedule the Vermont Department of Environmental Conservation community meeting for residents of Bennington, North Bennington, and Shaftsbury.

When the PFOA well contamination first came to light, Lt. Gov. Scott initially referred to the contamination as a “spill” and did not mention monitoring private or public wells and only suggested “We should start by helping municipalities upgrade systems to prevent spills of raw sewage and untreated wastewater.”

I’d be surprised if Scott has any legislative recommendations to propose that might help prevent a disaster like this happening to Vermont families. That is because the Lt. Gov. had a chance in 2015 to improve regulation of toxic chemicals and chose not to.Philscottphilscott

Scott cast a tie breaking vote last session in the legislature that killed a bill designed to expanded existing rules governing chemicals allowed in children’s toys. The lieutenant governor said he sided with the business community, which opposed the changes, so as not to create uncertainty for them.

No small irony then that he is on the road today to campaign …err I mean to visit a community suffering from toxic chemical exposure. I wonder if Scott would go back and change his veto on chemicals in children’s toys -or maybe he just hopes voters won’t look back too far at his record on chemical regulation.

Q-Resorts fallout: revisionist photoshopping we might see

Business, local/regional, National, ,

Reports are, as you might expect, that Vermont pols are working hard to put a little sunlight between themselves and alleged EB-5 ponzi artists Bill Stenger and Ariel Quiros. It will prove a little harder for some than others.

Early on in the EB-5 saga, in October 2009 Governor Jim Douglas went on a junket to South Korea with Stenger and Quiros . While there, according to a press release at the time,  he facilitated the first EB-5 investor seminar for the now-failed AnC Bio as part of his economic development mission to Asia.

Will former Governor Douglas try to blur it away even though he had a front row center seat?douglas ancbio 2

Vermont.gov press release: “On behalf of the people of Vermont, I want to welcome AnC Bio VT to Vermont,” Douglas said while at the AnC plant in Seoul. “This is an exciting opportunity that can bring hundreds of high-tech, good paying jobs to our state.” — Gov. Douglas 2009 [vermont.gov noted that pictures were available for the press]

Starting in 2004 EB-5 was Led by Jim Douglas

The following is from Bill Stenger’s 2011 written testimony to US House Subcommittee on Immigration Policy and it couldn’t be clearer:

It was not until late 2004, because of improved C.I.S. [U.S.C.I.S.] efforts and the renewed commitment by our state officials led by Governor Jim Douglas, that the program became truly functional from our perspective in Vermont.

To be there or not to be there?

This was Bill Stenger’s birthday celebration on September 27 2012, Newport’s Lake Memphremagog.

getmerewrite
#1 Left to right: Congressman Peter Welch, Bill Stenger, Sen. Patrick Leahy, Sen. Bernie Sanders, Gov. Peter Shumlin, Ariel Quiros and William Kelly. #2 Left to right: Bill Stenger, Ariel Quiros and William Kelly

No one is exactly trying this, because you can’t just photoshop yourself out of the recent past, but a few Vermont politicians may try to blur the lines and change the focus, with or without technical wizardry.

 

Stenger, Quiros, meet The Backstreet Boys – sort of

Business, local/regional, ,

 

Yesterday, Miami lawyer Michael Goldberg was appointed by the SEC as the receiver to oversee and administer the assets of Q-Resorts’ EB-5 projects, now under a cloud of federal and state fraud charges.

The choices and arrangements made by Attorney Goldberg on behalf of the SEC as receiver will have big impacts on Vermont’s NEK. And after a ton of  litigation wallows its way through the courts, and depending on the outcome of those legal proceedings, the receiver is tasked to recover and protect funds and other assets the defendants have obtained in connection with the fraud and to distribute those assets to injured investors if a determination of liability is made.

And Michael Goldberg, Q-Resort’s SEC appointed receiver, has managed some of the largest Ponzi scheme liquidation recoveries in U.S. history, according to his bio.

A notable one he manged was as Trustee of the Louis J. Pearlman and Transcontinental Records estates  also known as Lou Pearlman’s twenty-year Ponzi scheme.

BSBoysPearlman, aka the “Svengali behind the ’90s boy-band craze,” created and managed the Backstreet Boys, and NSYNC. Pearlman was convicted of defrauding investors to the tune of $300 million by creating an airline and airline service company which did not exist. He tried to flee, but was caught on the run in Indonesia and brought to court.

Now, thanks to a simple twist of fate, the SEC (and indirectly to Carlo “Charles” Ponzi), Bill Stenger and Ariel Quiros share more with NSYNC’s Justin Timberlake than ever dreamed possible.

Q-Burke and EB-5, cue the lawyers

Business, local/regional, National, , , ,

Well, well, well, here we have  Bill Stenger and Ariel Quiros’ EB-5 NEK Empire  suffering a full SEC body slam.Qdownside

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.

One of the projects, AnCBio, was a proposed medical device business, and, according to the SEC, it has from the beginning been “rampant with fraud” and is now years behind schedule. AnC Bio started life as Ariel Quiros’ company called The Sports Seoul 21 Company Ltd.

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.

Is Judd Gregg really blind to socialism or just a fool in The Hill?

Business, National, , , ,

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.”

chartdemos
Charts documenting Denmark’s socialist “hell”. [not from Gregg’s opinion piece]

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. Juddsifma

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.

The United States of 7-Eleven: Freedom of Choice

Business, National, , ,

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. usa711

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)