Category Archives: Uncategorized

Doug Hoffer on EB-5

Green Mountain Daily is pleased to host this op-ed, written by our  state auditor, Doug Hoffer, who has been an occasional contributor to our pages for many years:  

The unfortunate situation with the EB-5 program presents an opportunity to reflect on the State’s approach to economic development. Among other responsibilities, the State Auditor’s office examines various programs to determine whether they achieve the goals established by the legislature. That is, are we getting our money’s worth?

To answer the question, we conduct performance audits according to Generally Accepted Government Auditing Standards. To do this, we need evidence that is sufficient and appropriate (i.e., quantity and quality). In the absence of such evidence, we cannot reach meaningful conclusions or make recommendations.

Unfortunately, some economic development programs present serious challenges. Here are some examples.

 
1.  By statute, the Vermont Training Program may only award grants for training that is supplemental rather than replacement. That is, taxpayers should not pay for training that would have occurred anyway. For example, if a company routinely trains new hires, it would be difficult to justify a training grant intended for new employees. Although applicants are asked about the nature of the proposed training, their statements are not validated. Therefore, we cannot determine the program’s effectiveness because there is no evidence that the grants are only for supplemental training.

 
2.  The primary performance measure of the Department of Tourism & Marketing (T&M) is the annual increase in rooms and meals tax revenues. This assumes that growth in revenue is due to T&M spending. However, the legislature’s economist reported in 2015 that “current taxpayer-financed advertising expenditures for the tourism sector are estimated to represent a mere 3% of total industry advertising expenditures.” Thus, it is impossible to evaluate the impact of state spending when it represents such a tiny percentage of the total.

 
3.  The statute that created the Enterprise Fund (e.g., $1 million to Global Foundries) required the administration to submit a memo to the Emergency Board making the case for the award. Among other things, the Board was supposed to consider whether the information presented was sufficient for the State Auditor to conduct a performance audit. I reviewed those confidential memos and the answer was no. As a result, we cannot audit the impact of the grants.

 
4. The Vermont Employment Growth Incentive (VEGI) is predicated on a statement from applicants that “but for” the incentive, the promised jobs and capital investment would not occur, or would occur in a significantly different and less desirable manner. However, such statements are subjective and cannot be audited. Therefore, it is impossible to know whether some of the economic activity would have occurred without the program. That means that claims about the program’s impact cannot be verified.

 
The EB-5 situation highlighted another area of concern with some economic development programs; namely, the inherent conflict of interest between promotion and regulation. Bureaucrats charged with promoting development are unlikely to be unbiased in their oversight of those viewed as “partners.” In addition to EB-5, we see this in the decades-long relationship between the state and the ski areas that lease public lands.

 
Clearly, the state has an important role to play in creating and enhancing conditions for job creation. As the legislature and the new governor consider their options as to how best to allocate scarce resources, I hope they will insist that all programs are designed to provide the evidence necessary to measure their effectiveness. Without that critical information, how can Vermonters know whether we are getting a fair return on our investment?

If we can’t measure a program’s performance, we’re left with faith, which I can’t audit.

Doug Hoffer

Donald as the Princess and the Pea

As Donald Trump and Paul Ryan, on behalf of the entire RNC, engage in the dance of mutual castration, Democrats have reason for cautious optimism.

By the time the Democratic Convention crowns its nominee, Mr. Trump may be showing a little wear even for his most devoted accolades. That’s because the Republican nominee is as sensitive as the ‘Princess and the Pea.’

Behold a few of the metaphoric mattresses atop which his presidential hopes fitfully sleep:
1)    Cooperating with anybody, let alone ‘establishment’ Republicans is not a good look for the Donald; yet, he now needs them as much as they need him because he isn’t prepared to self-fund his campaign in the general.

2)    He can no longer claim to be self-funded and not beholden to anyone. We already
know by his own words that he understands the quid-pro-quo game all too well and
accepts as fair that there will be no “quid” without the requisite “quo.”

3)    His almost uncontrollable inclination to contradict himself, sometimes going back and forth in a dizzying display of indecision, has finally caught the attention of the media. Decisive he can’t claim to be.

4)    His unlimited need for attention has provided a life-time of stupid and offensive remarks ripe for the picking. If the Republicans didn’t have the balls to do it, Democrats will not hesitate to dispatch them in volleys.

5)    Unlike his Republican rivals, the Democratic nominee can and will resist the temptation to get down in the mud with him because there are plenty of capable surrogates like Elizabeth Warren (not Bill Clinton, please!) to do the job for her or him. Elizabeth Warren ties knots in Donald Trump without breaking a sweat…and both Hillary and Bernie are cool heads under pressure. The Bloviator-in-Chief  is decidedly not.

If, as seems increasingly inevitable, Hillary walks away with the nomination, she just has to leave Bill at home watering the plants, and she’ll be fine.  She’ll owe Bernie BIG time for mobilizing his minions to support her, but I think they can work out that deal so long as he keeps the faith with his supporters all the way to the Convention. It’s the policies that matter most to Bernie and its the White House that matters most to Hillary.

6)    Just because none of Donald Trump’s “unforgivable” insults have proven to be the ‘silver bullet’ necessary to disqualify him for Republican primary voters doesn’t mean
he’s out of the woods. The power high of winning the nomination will only curb his appetite for sensation temporarily. Dollars to donuts, he’s just one or two soundbites away from the next big goof. He’s programmed to offend. He can’t help himself.  And he’ll find that general election voters, reflective of the true diversity of the country, are not nearly so forgiving.

7)    No one even pretends anymore that he might know what he’s talking about. Ignorance ispretty much baked into his identity at this point. His supporters don’t care, but anyone not already in that delusional state is not likely at this point to be persuaded that he is the ‘smart’ candidate, no matter how much money he has…or says he has.

8)    Which brings us to his taxes. The longer he resists releasing them, the more everyone will be convinced they contain a bombshell. Why is the guy whose brand is supposed to be
spontaneity and transparency suddenly so secretive?

9)    Donald Trump has no sense of humor. We’ve all known people like that. They love to
ham it up and make jokes at other people’s expense, so long as they themselves aren’t the
butt of the joke.  In fact, they are particularly thin-skinned; apt to flush in anger and behave unwisely when teased.   I think we can guess what lies ahead in that department.  We’ve all seen the tape of his angry face at the Correspondent’s Dinner when the President poked fun at him.

10)   Donald Trump himself is not at all sure he wants or can even do the job for which he is
competing.  I swear I read somewhere that Trump once said that if he ever ran for President, he’d do it as a Republican because they’ll believe anything. Maybe I dreamt it, but it just seems so like him.

11)   DT says he “does great” among women; but what he really means is Republican women, which is, of and by itself something akin to an oxymoron.  He maintains the same fiction about his popularity with minorities. It was difficult to adequately test those assertions in the Republican Primary, since relatively few minority voters were involved, and there is a certain expectation of dysfunction from  women who identify with the party that would consistently act against their best interests.

The general election is a whole different animal. As unmotivated as minorities were to
vote in the Republican Primary, they will be doubly so motivated to vote Democratic in
the general election; firstly, out of a sense of outrage; and secondly, in preservation of
their own best interests that have been so conspicuously under attack from Donald Trump.

More than half of all women self-identify as leaning Democratic. Roughly 36% self identify
as Republicans. It can safely be assumed that most of these are women who also
self-identify as ‘conservative’ and many generally support conservative principles and
regional Republican candidates, but see Donald Trump as neither conservative
nor invested in their regional Republican concerns.

According to Newsweek (March 15 2016) female voters in the Michigan Republican Primary dividedtheir vote more or less equally between Trump and Cruz and Katich. That’s not a very impressive validation even from the relatively narrow pool of Republican women. As late as March of this year, 47% of Republican women “could not imagine themselves voting for Trump.”

This weekend, the New York Times  announced open season on Donald’s ‘female troubles’ with a scathing retrospective on his playboy years.

A theory that’s been going around is that Trump never really wanted to be president. This whole campaign was just an opportunity to burnish his brand and get a whole lot of face-time.

Now, it’s “Be careful what you wish for” time.

He clearly never prepared to win the nomination. Assured as he thought he was that the GOP would never let him have the nomination, I think he honestly believed he could play the aggrieved losing candidate to a sea of adoring Twitter followers for years to come, ensuring a new reality TV show and all the sycophants he could exploit for the remainder of his vapid life.

He’s not stupid (although he plays a stupid person on TV). He knows that if, God forbid, he ever did land in the White House, he would quickly become the most unpopular president of all time. His negatives would dwarf those of his campaign, and provide absolutely no amusement for him, because he would be stuck in the narrative that he himself recklessly created.

If Obama has had to endure eight years of abuse, can you imagine what thin-skinned Trump would experience in the same office?

I think he can.

Instead of being able to fling his feces at both the President and Congress,
from the safe distance of an ivory Trump Tower, he would himself be the target, day-after-day-after- endless day of blunders, indecision and head-on collisions with reality.

He’s already uncomfortable answering demands for his taxes and questions about his butler.  Even attempts to deflect to Hillary Clinton are failing to engage as the news media belatedly tries to drill-down on his pathological lies.

In what may have signaled the beginning of cognitive breakdown under pressure, Trump now appears to have double-punked the press, first by leaking an old tape of himself pretending to be a press agent boasting about Trump’s romantic conquests, then lying about the lie.  The permutations of his deceits are positively dizzying.

And I expect it isn’t fun anymore.

 

Trump struts upon stage and the GOP frets

The Republicans are still digesting the news of Donald J. Trump’s latest primary wins. And for now they seem to be in disarray — and it’s ugly. How ugly is it? Well, former Speaker of the House John Boehner (R, Orangeland) must be smelling sulphur, as he thinks fellow Republican  candidate Senator Ted Cruz  is the devil in red or “Lucifer in the flesh”  as he claims.

On a less metaphysical level, a recent Roll Call’s Capitol Insiders Survey shows rising Republican pessimism about election prospects:

A majority of the GOP staffers who responded to the April survey now expect either Donald Trump or Texas Sen. Ted Cruz to win the party’s nomination and nearly half of them —  a solid plurality —  think the Republican nominee will lose.trumpdigest

And with Trump likely the one at the top of the ticket, fears that the GOP will suffer losses in Senate races and that their majority in the House may shrink are growing rapidly.

GOP fretting about the Senate majority has grown throughout the year. When CQ Roll Call asked aides in January, only 28 percent of Republican respondents were worried. That rose to 45 percent in March, and now it’s nearly half. By contrast, this month only 37 percent of the Republicans said they expected their side to maintain control.

Any hopes that incumbent Congressional Republicans have for passing major legislation to aid their coming campaigns before the election are apparently slim.

They [congressional staff] gave the best shot to pending legislation that would revamp criminal sentencing rules. And even on that they are not hopeful. Only a quarter of the aides said they expected Congress to act. That compares to nearly 4 in 10 when CQ Roll Call asked about the issue in December.

Now, as Trump struts on stage and the GOP frets, it could it spell tragedy not comedy on a dramatic scale. You know, err… with the GOP lead by a poor player, an idiot, full of sound and fury signifying nothing.

RIP: Two-Party “System”

The Democratic primary is beginning to descend into more or less the same hell as is the Republican primary.

Are we approaching the final act of the two party system? Isn’t it about time?

In the U.S., we’re given to enshrining arbitrary social constructs, such as capitalism=good and socialism=bad, in the pantheon of sacred truisms that simply will not be challenged. The primacy of our two party system is one of those enshrined assumptions that deserves renewed scrutiny.

This system emerged in the infancy of our nation when its population was more or less homogenous and the practical value of cooperation was pretty generally accepted.

While growth and economic expansion was the primary goal of the young nation, unbridled immigration was a way to maintain a cheap labor force and gain entrepreneurial preeminence in the modern world.

As the population inevitably grew more and more diverse, there was never any thought given to retooling the one-size fits all, conservative vs. liberal divide represented in the rigid two party system.

We limped along, giving one side and then the other control in pretty rapid succession, leaving more and more individual viewpoints out of the conversation or dissatisfied with the available parameters.

Polarization within the two parties and distrust of government has resulted in a crippled process.

The party system has come close to going off the rails on a few occasions, but the 2016 primary race has taken us to a new low, with both parties seeing meaningful challenges to the party elite from an unyielding base on the perimeter.

‘Closed’ primaries, superdelegates, coin-tosses and all the rest are reflections of how undemocratic and arbitrary the two party system is. Somehow, these two ‘clubs’ have been allowed to seize the system, and because they are autonomous unto themselves, they are allowed to make all their own rules. Anyone who wants to play must join one of the two clubs or be reviled as a spoiler.

Sometimes, as in the case of the New York primary, it’s made very difficult for independents to gain a vote in either club.

While a closed primary may protect the establishment candidate on his/her path to the nomination, in the long run, it doesn’t do the party any favors. Independents can and will vote in the general election, so taking their preference into consideration in the primary would seem to be an essential first move.

We frown on business monopolies but have surrendered our democracy to a similar scheme.

Now we have come rather abruptly to the logical conclusion of such exclusivity, with both parties moving to opposite polls and gridlock resulting in Congress.  There is no possibility of coalition, as there is in the Canadian Parliament where several parties successfully compete and collaborate in the process.

If we gain nothing more toward reforming the election process, job one should of course be  reversing the Citizens United decision. Job two? Challenge the constitutionality of closed primaries.  In a nation where the majority of voters identify as ‘independents,’ closed primaries represent good ol’ fashion voter suppression.

Aren’t we better than this?

Better Late Than Never?

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.

Campbell, Mazza, and Scott three-spot rules

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. cofcsLt. 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.

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

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.

Not your father’s horserace

I know that everyone from the conventional media to Hillary Clinton is racing to discount Bernie Sanders in the 2016 race for the nomination, insisting that the “math” is already against him.

What they don’t seem to understand is that the “math” is of little consequence to Bernie’s supporters who are focussed on issues of economic and social justice; and the only way progress will be made on those issues is if we bring them all the way to the convention.

Personally, I think that Bernie should continue doing exactly what he has been doing. Campaign on the issues that are important to most Americans and contrast his record with that of Hillary Clinton. Every voter in every state deserves an opportunity to weigh-in before the convention.

This is doubly important in a turbulent election year like 2016, when so many new voters are engaged in the conversation. There will never be a better chance to move progressive values forward in the political dialogue.

Were Bernie to simply fold his tent and steal silently into the night, as President Obama and the conventional pundits so fervently desire, not only would Hillary Clinton suffer the immediate uptick of slings and arrows from Donald Trump, she would also be likely to seek the conventional security of a centrist position. This would mean death to the forward-looking face of the 2016 Democratic party which has excited so many new voters.

It would also mean that Hillary’s campaign would languish in the ‘old news’ department, relegated only to responding to each outrageous new attack that DT slings her way. This is not the way any candidate wants to capture voter attention. Better she should be forced to flesh-out her positions on important issues in response to Bernie’s legitimate questions and that Barack Obama remains neutral a little longer. His interference would not exactly burnish her progressive credentials and could further alienate Bernie’s not inconsiderable bloc of loyalists.

The fact is that the president’s endorsement will not serve to peel away any support from Bernie since Bernie’s supporters are inclined to be disappointed in President Obama’s underwhelming performance on some key progressive issues.

If our democracy is to limp forward with any hope of regaining public confidence, it is necessary that the Democratic party do just as much soul-searching as will be required of the Republicans.

The writing is on the wall. We can’t keep shorthanding the political process to the advantage of just a few big power brokers and high rolling lobbyists.

It’s time to recognize that this not your father’s horserace.

Sec. of State Jim Condos on “Sunshine Week”

It is always my pleasure to share Jim Condos’ words on any subject with GMD readers.  Open government has been Sec. Condos’ priority since he first stepped into the office.  It is a topic near and dear to my heart so it is a particular pleasure to bring this to you:

Sunshine Week, celebrated nationwide this week, is about opening the blinds and letting the sun shine in on government.

My long understanding about Open Government’s importance began while growing up in VT and is based on 18 years on the South Burlington City Council, 6 years on the VT League of Cities and Towns Board, 8 years in the VT Senate, and 5+ years as VT’s Secretary of State.

VT’s history has several examples of Vermonters who support Open Government – including former state legislator Matthew Lyon – jailed in 1798 for his beliefs; U.S. Sen. Patrick J. Leahy (D-Vt.) – strong advocacy of Federal Freedom of Information; and my work with current Democratic Governor Peter Shumlin, to strengthen VT public records laws.

Who can argue against open and transparent government?

It means different things to different people. Arguments can be clouded with misinterpretations of the law, personal interests, and other factors. It also is easier to make decisions when nobody is watching.

The vast majority of our elected state/local officials are trustworthy, dedicated and passionate individuals who want to do the right thing.  However, corruption can exist.  In small doses corruption can be just as corrosive to our democracy as any prominent scandal, undermining the public’s trust.

There are many cases in the news where public and elected officials have clashed on their interpretation of laws covering public meetings and/or public records. Sometimes one side is clearly right – the other side is clearly wrong. Sometimes there is grey area in the law that is open for interpretation.

However, even with these grey areas, Vermont’s Constitution and state statutes have always been clear in their fundamental intent:  VT’s public officials ARE accountable to the people.

From the Vermont Constitution, Chapter 1, Article 6:
“That all power being originally inherent in and consequently derived from the people, therefore, all officers of government, whether legislative or executive, are their trustees and servants; and at all times, in a legal way, accountable to them.”

This is the very basis of public office – elected officials represent the people and are accountable to the people.

And just in case there was any confusion over the intent of Article 6, the VT statutes for Open Meeting Laws (1 V.S.A. § 311(a)) says:
“…the legislature finds and declares that public commissions, boards and councils and other public agencies in this state exist to aid in the conduct of the people’s business and are accountable to them pursuant to Chapter I, Article VI of the Vermont constitution.”

Sunshine Week should be every week, and every day!

VT’s open meeting law recognizes that the media and the public are one and the same; AND they are entitled to: properly warned public meetings; posting of meeting agendas; an opportunity to express one’s opinion on matters considered by the public body during the meeting; knowing why a public body is going into Executive Session; and, the posting/availability of minutes 5 days after the meeting – even if in draft form.

Let’s continue this journey, that all public bodies conduct the business of the people and are, thus, accountable to the people.

Again, from the VT statutes (1 V.S.A. § 315), Access to Public Records:
“…to provide for free and open examination of records consistent with Chapter I, Article 6 of the Vermont Constitution. Officers of government are trustees and servants of the people and it is in the public interest to enable any person to review and criticize their decisions even though such examination may cause inconvenience or embarrassment.”

These excerpts support a mandate on government (state and local) transparency so the people of VT know what is happening in their government. The only time the people lose their “right to know” is when greater harm to an individual or the state could come from releasing certain information. However, in these very rare cases, the burden of proof for withholding information is on the state and the exemption must be laid out in statute.

Public records are defined as: “…any written or recorded information, regardless of physical form or characteristics, which is produced or acquired in the course of public agency business.”  1 V.S.A. § 317(b)

The courts have upheld the notion that the public’s access to records “shall be liberally construed to implement this policy, and the burden of proof shall be on the public agency to sustain its action.”

This means if that which is being disputed falls in a gray area – the courts will likely fall on the side of disclosure.

Simply, illegal meetings and improperly withheld public records offend our notions of openness, accountability, and the core of our democracy.

Open Government just makes good sense for officials and the people they serve.  

So, to any public officials reading this – please think twice about what you “text,” “tweet” or “email” a fellow board member or constituent.  Those messages can all constitute government work and be classified public records.
And to the public, in Vermont, you do have a right to know!

Let the sun shine in and on government – let’s restore our faith in government.

Jim Condos, Vermont’s 38th Secretary of State, has served since January 2011.