Category Archives: Business

In the cards: Vermont captive insurance tax break

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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.inthecards

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.

Milne sells majority stake in Quechee Highlands development

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The Upper Valley News is reporting that Scott Milne will sign a tentative agreement today with Utah developer David R. Hall to sell his controlling interest in the Quechee Highlands development in Hartford Vermont.

Portrait of two businessmen shaking hands against white backgroundHall and Milne took questions at the Vermont Law School. (Hall was visiting VLS in South Royalton to discuss the massive new building he has proposed financing for the struggling school. It would house the  D. R. Hall Vista Center for study of experimental econo-systemic communal living.)

 

Quechee Highlands is Milne’s proposed project for a 15 acre mixed retail and residential development bordering Interstate 91 in Hartford. The project, years in the works, won a significant court case but has several permitting hurdles remaining.

The April 1st Quechee Highlands agreement with Hall may not be a surprise to Milne’s political fan. Speculation is that this is part of an ongoing plan to simplify his business interests. With an eye on a run on the Republican ticket against Democrat Senator Patrick Leahy, Milne acknowledged the need to simplify his business holdings – He explained  that the prior sale of the family travel agency freed him from obligations “should I get lucky … it gives me the ability to step back for six years.”

Motives for Utah millionaire David R. Hall’s purchase of the planned Hartford development are less clear, though it may also be part of a larger vision. Hall has quietly bought an estimated 900 acres of land in four towns in the area. He hopes to build a large contiguous plot to house 15,000 to 20,000 residents who would live in a utopian econo-systemic styled community, modeled on the Mormon teachings of Joseph Smith (who was born nearby in Sharon, VT).QuecheeVista

One local Republican office holder commented anonymously on Milne and Hall’s deal:

“At first glance it seems he[Milne] finally made a smart strategic move and freed his campaign to promote more development and rail against regulatory overreach without a blatant conflict of interest .”

However the outspoken Republican says she is worried over the municipal implications of a large retail mall near Interstates 89  and 91 interchanges, that would in her words be owned “…by a quasi- independently governed 20,000 resident tax free ‘city state’.”   

And added “It is only April 1st and heaven only knows how this will all play out for the Upper Valley. But honestly, now he looks to be more a troublesome wealthy fool than a visionary.”  It was not clear to whom she was referring.

How to build a utopian community in White River Valley

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A mega-wealthy buyer gathering up parcels of land is news that will cause unease and even strike fear into most small town residents — except maybe a local real estate agent or two.

Well, that’s what is happening in the White River Valley as a Utah businessman recently bought almost a thousand acres in four local towns. David R. Hall, a Mormon developer, has $100 million set aside to spend, and says he’s just getting started.

newvistavt 1The ultimate goal is NewVista  a settlement he wants to build, composed of 50 diamond-shaped communities of 15,000 to 20,000 people each.

 

Over the next 30 to 50 years, Hall hopes to realize plans by the Mormon religious leader to create an integrated community that could house as many as 20,000 people within a few square miles. In a telephone interview Tuesday, Hall said he was hoping to purchase enough land to create a large contiguous plot on which to base his development, which he hopes could provide a model for an environmentally friendly, sustainable way of living.

[…] In 1833, Smith [Joseph Smith, founder of Mormonism] and his followers imagined something they called a “Plat,” or “Plot,” of Zion — a city on a rectangular grid that would integrate all needs of a community into one design.  

“That’s the fundamental background,” Hall said. “We’re of course doing all the engineering to figure out how it might work.”

[From The Valley News’ upgraded, snazzier than ever website]

David Hall  inherited his fortune from the family engineering business, Novatek, which makes synthetic diamond drilling technology. Novatek, a privately held company, was acquired in 2015 by Schlumberger Ltd, the international an oil and gas exploration giant.

Vermonters in Royalton, Sharon, Strafford and Tunbridge are predictably worried about what this might do to their communities. Hall claims there should be no cause for concern, and with a time frame of 30 to 50 years this guy is obviously planning long term. Eternity perhaps?

So how do you build utopia in the White River Valley ?

Now reports are that Hall hasn’t reached out to the community, but I believe he actually has, just not in the  a way you might expect. He may not be out shaking hands to reassure the general public, but buried like a shale oil deposit to pump later is his inspired “good will” gesture.

Hall said he hopes to work with the Vermont Law School in South Royalton — “The best environmental law school in the country,” he called it — and floated the idea of building a research center nearby and giving grants to professors there.

Dangling that offer in front of  a struggling law school is better than showing up at twenty years’ worth of town meeting days. Do you think, perchance, David Hall might have permits and environmental regulations in mind?

Note to self: To build a 20,000 resident utopian paradise in a small town

  • First step: buy …err invest in a law school and professors.

Peter Galbraith: “Galbraith to enter Democratic Primary for Governor”

Business, International, local/regional, National, Uncategorized, ,

After weeks of hints and waiting, Peter Galbraith, yes Peter Galbraith will announce today that he,Peter Galbraith will enter the Democratic gubernatorial primary race.PGalbraith3

After extensive consultation with Peter Galbraith, Peter Galbraith has concluded the time is right to offer Peter Galbraith’s leadership to the state of Vermont. Peter Galbraith will be holding a news conference at the Vermont State House today.

Former Vermont Democratic State Senator Peter Galbraith has retained former Republican Roger Albee as Peter Galbraith’s campaign treasurer.

Neal Goswami of Vermont News Bureau tweeted that Peter Galbraith’s announcement was emailed to him by Ian Moskowitz who recently was political director for the New Hampshire Democratic Party and most recently emailed Peter Galbraith’s gubernatorial announcement email.

Peter Galbraith will be joining Sue Minter and Matt Dunne who entered the race prior to Peter Galbraith’s announcement later today.

Bruce Lisman pitches his southern strategies

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Republican Bruce Lisman once again looks to a state down south to find one of his bright ideas for “fixing” Vermont. LISMAN_CHUNK_OUTLINES.indd

Lisman, who is campaigning in the Republican gubernatorial primary, wants to cap Vermont’s budget growth and to that end he casts his budget cutting gaze due South, this time to North Carolina.

In asserting that he could find real savings in Medicaid, Lisman pointed to North Carolina, where auditors found potential for $180 million in savings over a biennium. He said his Medicaid reforms would not unfairly strip benefits from those in need.

Lisman’s suggested southern strategy, according to reports, involves changes that are roiling North Carolina’s Medicaid program. And it is neither fast nor painless, and it is all very controversial:

Hardest hit will be the family practitioners and pediatricians who are supposed to take the lead in providing better medical care for about 1.7 million low-income children and adults in North Carolina. […] In fact, a 3 percent cut in North Carolina’s Medicaid rates, originally slated to start in 2014, took effect Jan. 1 – and doctors may have to go back through last year’s billing and pay that money back.

“This would wreak havoc with the finances of any business,” a statement from the N.C. Medical Society says.

The last time Lisman looked south for inspiration, he found a statewide jobs program from Bobby Jindal’s Louisiana. In this instance, while on one of his Vermont “good Ideas” listening tours, the crowd listened to Bruce praise a D+ rated program from Louisiana.

And it’s as if Bruce didn’t bother or care to do much homework on this one either. A non-partisan research group gave the program a D+ rating. The state-subsidized private-sector jobs created at an annual cost of $1.1 billion had few performance standards, no wage requirements, and according to the state’s own evaluation, subsidized workers unable to afford their own health insurance may fall onto the rolls of Medicaid, negating any positive economic benefits. 

Soooo…Bruce, let’s see how would that work?  Your “good idea”  jobs program is likely to fill up Medicaid rolls at the same time you slash away at Medicaid benefits. Looks like your “new direction” for Vermont might be circular.

So go for it Bruce. A little havoc — kind of like your era on Wall Street circa 2008. No worries for a one-percenter as long he keeps his state’s budget capped at 2% growth?

NRC praises ‘flexible’ strategies

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Once in a while, just to see what I can see I’ll take a look at the US NRC blog. It is a special place where it almost seems believable that everything nuclear is always under control, always has been and always will be  — forever and ever.FukushimaMeltdown101113 However, a recent NRC post, on the anniversary of the Fukushima disaster tells me  “…great strides” have been made in the past five years. The NRC is getting even better!

A key lesson from the accident was that plants must be prepared for events not contemplated when they were designed and constructed. Plants’ strategies to address external events must be flexible enough to deal with variety of circumstances.

VYkidpoolAll that would be much more reassuring if  images of Entergy’s half dozen or so  kiddie pools full of tritiated water at Vermont Yankee weren’t still fresh in the mind of Vermonters.VYkidpool2 Granted Entergy’s plant is not operating but this can’t be what the NRC meant by flexible strategies.

 

 

Multiple choice: Snyder, Lisman or Scott

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Okay time for a pop quiz:

Who said the following?“It is time for a new model.  It is time for customer service government.  The role of government is to treat you, the citizen, as the customer and look at life through your eyes and say ‘How can we help you succeed and how can we get out of your way.’”

A.) Bruce Lisman (R, Wall Street)  wsi 1

B.) Rollo Tamasi

C.) Gov. Rick Snyder (R, MN)

D.) Lt. Gov. Phil Scott (R, VT)

E.) none of the above

Answer:  C.)

It is Snyder’s governing philosophy as he explained when he first became Michigan governor. He also issued assurances that  radical streamlining of regulations aka ‘getting government out of the way’ wouldn’t be detrimental to the health and safety of the public or to the environment.

The city of Flint Michigan’s lead tainted drinking water, caused in part by Snyder’s administration, probably was in the back of many people’s mind when reports surfaced that we are having a toxic water crisis right here in Vermont. It is much smaller scale but just as bad for those affected.

We are already seeing how our state agencies and government officials will cope with the short term issues-supplying drinking water, testing wells, etc. In the long run an examination of how the contamination was allowed to happen and future regulatory policy corrections will likely be explored by the next governor we elect.

It is probably worth noting that both Vermont Republican primary candidates for governor are expressing strategies for governing eerily similar  to Snyder’s.

In fact Lisman’s recent editorial about what he calls the “valued customer citizen” could have been cribbed directly from the Michigan Governor’s remarks. “First, I’d ask you to re-imagine our state’s government – one that treats its constituents as valued customers and sees employers as strategic partners,” said Lisman.

And  like Lisman, Lt. Governor Scott has a vivid imagination. “Imagine if we had a governor’s office that treated every sector in the same way,” he says. But all sectors are not the same.

Financial sector regulations are designed to guard against poisoning the economic wellbeing of the state. However, in a different sector, say the chemical industry, unique rules must prevent poisoning people, water, and the economy. There was plenty of bailing out done but there was no need to distribute bottled water during the credit default swap crisis.

And speaking of the chemical industry: Lt. Gov. Scott had a chance to practice the industry-friendly philosophy he preaches when he cast a rare tie-breaking vote in the Senate. That 2015 vote probably pleased the chemical industry. His “Yes” vote killed a bill that would have strengthened recently enacted regulations (Act 188) controlling toxic chemicals used in children’s toys.

Scott opposed the changes, so as not to ‘create uncertainty’ for the industry, and suggested the existing weaker regulations should be “given a chance” so we could “see what happens.” It is worth stressing his choice was between strengthening the existing rules governing “chemicals of high concern to children” in toys or keep the law in its present form, which is considered weaker.

Hard to know exactly what form governor Lisman or governor Scott’s re-imagined government might take, but a quick glimpse at the havoc wrought from Snyder’s Flint-style customer service gives a frightening preview of the experiment.

Re-imagine that.

Donald Trump is an EB-5 funded developer

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It seems Donald Trump and Vermont’s NEK mega developer Bill Stenger have something in common-they both love EB-5 investors from China.

Considering all his anti-immigration and China is “killing us,” stealing our jobs and money rhetoric, Trump surprisingly has no qualms accepting Chinese investor financing for a development project in New Jersey under the Trump® name. chairmantrump1

The Federal EB-5 visa program provides foreign investors with a US green card, for them and their families, and (after two years) permanent resident status in exchange for agreeing to invest $500,000 in an approved US business.  In recent years the majority of EB-5 foreign investment funds have been from wealthy Chinese. EB-5 provides a “safe” place for their cash outside of China. Is it possible Donald’s EB-5 immigrant investors are issued a Trump visa card?

The Trump investors’ EB-5 money is for a 50-story luxury apartment building in New Jersey only a short distance from Lower Manhattan. It is licensed under the Trump name and run by the Kushner Company. Jared Kushner is married to Trump’s daughter Ivanka.

Kushner Companies is a New Jersey-based real estate firm built by Kushner’s father Charles, a former rainmaker in New Jersey Democratic politics who pleaded guilty to a federal campaign finance violation, filing false tax returns, as well as attempts to silence a witness. Charles was sentenced in 2005 to a prison term of two years. He remains active in the company. Jersey City is the first and, so far, only Trump project for the company.

About the Chinese funded NJ development, a Trump spokesperson says: “This was a highly successful license deal but he [Trump] is not a partner in the financing of the development.”

In his campaign for the Republican nomination for president Monday, Trump took a break from beating up on China, and in remarks the NYTimes.com called “unusual, if not anachronistic,” went after Japan for currency manipulation. And the band — or at least its bombastic tuba — plays on.

Antonin Scalia: International Order of Friendly Sons of the Raccoons

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Well sadly no, the late Justice Scalia was not a member of the fictional working class lodge the International Order of Friendly Sons of the Raccoons*. ninonorton 2

Scalia was a member in good standing in the very real International Order of St. Hubertus, a kind of a Raccoon Lodge for the 1%’ers — perhaps just as silly.

The US chapter of the Order of Hubertus was established in 1966 at the infamous Bohemian Grove in California. Originally the order was founded in Eastern Europe by Habsburg Count Franz Anton von Sporck in 1695. Now members of the worldwide, male-only society wear dark-green robes emblazoned with a large Iron Cross and the motto “Deum Diligite Animalia Diligentes,” which means “Honoring God by honoring His creatures.” Members hold titles, such as Grand Master, Prior, and Knight Grand Officer. And the Order of Hubertus is an IRS non-profit, too — tax free for the Prior and Knights.

That’s as brief a history as possible for fear of falling into a tangled web of well known conspiracy involving Ronald Reagan, Richard Nixon, flaming owls, and perhaps even lizard people.

Before his death Scalia flew on a private plane for his free stay at the exclusive remote Texas hunting “camp” with fellow Hubertians[?]. Scalia was a frequent flyer: between 2004 and 2014 he traveled 258 times on privately subsidized trips.

His companion on the Texas jaunt, C.Allen Foster, is a prominent Washington lawyer. Foster may be just a Hubertus Knight, but he threw himself a 65th birthday bash fit for Count Von Sporck.

In 2006, Foster was featured in The Post when he celebrated his 65th birthday with a six-day celebration in the Czech Republic. He flew his family and 40 Washington friends there to stay in Moravia’s Zidlochovice, a baroque castle and hunting park. The birthday bash included “tours of the Czech countryside, wine tasting, wild boar and mouflon (wild sheep) hunts, classic dance instruction and a masked costume ball.”

A strange semi-secret society with roots in Eastern Europe and the surprise death of a Supreme Court Justice at a remote Texas hunting camp is the stuff of more than a few conspiracy theories.

But plots and murder are less likely than the simple explanation about the Order of Hubertus. The truth is often odd and pedestrian:

“The main purpose of the International Order of St. Hubertus is to provide a venue for hunters who have been successful in their lives to gather and enjoy each other’s company outside of their normal business, social or religious groups.”

And of course there’s prestige and privilege. Among the privileges the Honored Raccoon Brothers enjoy are opening the first clam at the annual clambake and free burial with spouse at Raccoon National Cemetery in Bismark, North Dakota.

The equivalent in the International Order of St. Hubertus might be opening the first oil drilling rig in the Arctic National Wildlife Reserve. But I am sure the Knights and Grand Masters would stress the camaraderie at the exclusive society is simply a venue for hunters who have been successful in their lives to gather enjoy each other’s company outside of their normal business.”

Well sure there’s all that. However, should the need ever arise; a good quiet way to subtly nudge a court case this way or that is just a quail hunt away.

But who believes all this conspiracy stuff anyway?

*For those too young to remember or old enough to have forgotten the Raccoons were the fictitious working class lodge of TV’s Ralph Kramden and Ed Norton on the Honeymooners.

VY fuel rods: behind the barn or deep in the heart of Texas?

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In a recent visit to Brattleboro Vermont Rep.Peter Welch suggested a solution for Vermont Yankee and other location’s spent nuclear fuel storage problems may be at hand.wcsgmd

A location to store/dispose/bury high level nuclear waste is desperately needed for the federal government to avoid nuclear power industry related lawsuits. This would be since the US Government’s long promised Yucca Mountain radioactive storage site appears locked permanently in limbo.

Welch said he and some congressional colleagues are making a fresh push for an interim storage area – possibly in Texas – that could accept spent fuel from plants like Vermont Yankee.

“Here’s what’s changing: There are more communities that are having their plants decommissioned … so it creates the potential for me to work with allies,”

In the US House and Senate proposals to adjust laws that regulate storage of high level nuclear waste may soon make possible a solution of sorts.

Texas Congressman Michael Conaway (R), perhaps Welch’s key ally, has introduced legislation called the Interim Consolidated Storage Act in 2015. (Conaway, by the way, is also champion of federal legislation that would kill Vermont’s GMO labeling law.) The nuclear waste storage bill amends existing regulations so government agencies can partner with private companies for storage of deadly high-level nuclear waste. Draft language makes more than $30 billion from the Nuclear Waste Fund available. The NWF consists of fees charged to nuclear customers and was intended to fund the federal Yucca Mt. waste facility in Nevada.

This will work a real sweet deal for one of Rep. Conaway’s district’s largest businesses — Waste Control Specialists LLC — which will reportedly apply for high level waste storage permitting. WCS happens to own the country’s only for-profit, private facility that handles low-level waste. Slightly misnamed ‘low level waste’ covers a very wide range from slightly radioactive trash to highly radioactive activated metals from inside reactors. The thousand-plus-acre nuclear waste dump is located in Andrews, Texas, just over three-hundred miles from Dallas.

The daughter of WCS founder billionaire Harold Simmons now controls the business. Simmons, who died in 2013, was heavily involved in conservative national politics. He provided funding for the Swift Boat Veterans for Truth, and was a top conservative super PAC contributor in the 2012 Presidential race. Notably he referred to President Obama as the “most dangerous man in America”

The state of Vermont has for many years enjoyed its own sweet deal in Texas, a near-exclusive agreement with WCS to accept “our” low level nuclear waste. There are two Vermonters and one alternate (also from VT) who sit on the board of the Texas Low-level Radioactive Waste Compact Commission that oversees some of what WCS can do. Looking out  for our low-level nuclear disposal needs deep in the heart of Texas are: Peter Bradford, a former NRC official, and Richard H. Saudek,  former Commissioner of the Vermont Department of Public Service; Jane O’Meara Sanders is an alternate board member.

The environment around Andrews County, Texas, will bear the long-term effects of the nuclear dump.

However, senior Project Director of the WCS Commercial Interim Storage Facility Mike McMahon sees quick  Texas sized profits: “We can de-inventory these sites quickly, in a straightforward way – we get a very high [return] for it, we get very strong political support,”

In 2013 The Texas Observer online wondered whether WCS or Andrews County, TX, could cover potential liabilities and potential future costs associated with the private nuclear dump.

“It’s an important question because although the dump’s profits flow to its owner, Dallas billionaire Harold Simmons, the state and federal governments will eventually own the dump and its millions of cubic feet of radioactive waste. In other words, the taxpayers could be on the hook for a lot of dough. What’s to guarantee that Waste Control won’t take the profits and run?”

After reports about plastic swimming pools filled with contaminated water at the  Vermont Yankee power plant, Vermonters will probably be fine if the spent nuclear waste gets buried in Texas – never to be seen here again. And deep in Texas, “Swift Boat” Simmons’ WCS may just take the money and run.