Tag Archives: Lt.Gov. Phil Scott

Criminal history and all, Vermont loves captive insurance companies

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How much are they loved? Well, a former head of the Vermont Captive Insurance Association once called captives the “crown jewels in the state’s tiara” and swooned “There is maple syrup and skiing and cheddar cheese and captive insurance. What more could you want from life?”VT captive

The State of Vermont licenses more than one thousand captive insurance agencies (which exist to insure their parent companies). Once almost alone, but now one of eight states and the District of Columbia that currently have legalized captives in the US, the state fights for a share of the pie. “Vermont’s focus will always be licensing quality companies and regulating them in an appropriate manner commensurate with their risk.” says Dave Provost, Vermont’s Deputy Commissioner of Captive Insurance.

This isn’t car insurance. These are complex companies set up by (and captive to) a larger business in order 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. 

For modest licensing fees, a small tax on premiums, and a friendly regulatory climate, Vermont provides a host of advantages for large corporations and wealthy families toward forming captives. Corporations can substantially lower their insurance costs, and captives provide shelter from certain federal corporate taxes. Premiums on small captives, also known as “cell” captives, hold special tax benefits for corporations. The benefits are so good, in fact, that in 2015 captive insurance was on the IRS’ “Dirty dozen” list of abusive tax scams

So then, how friendly are Vermont’s captive regulators? Well, only one member of each captive insurance board of directors is required to be (or become) a resident. And only one in-state meeting per year is required. But even that small demand is “waived” away by regulators : We do understand that the annual meeting requirement can be a hardship and have made many allowances over the years […] for last minute health or weather problems that made travel difficult.

In 2015 there were 33 new captives who chose to take shelter in Vermont. One notable captive with a colorful criminal history is Marubeni, a large Japanese commodity trading corporation.

Between 2012 and 2014 Marubeni paid $88-million and $56.6-million in US criminal penalty violations of the Foreign Corrupt Practices Act. This bit of unpleasantness is part of a long line of scandals going back to accusations of hoarding rice to profit on the black market in the 1970’s. In the 1980’s Marubeni executives were arrested and charged with bribing Japanese government officials to favor Lockheed Aircraft in Japan. These arrests lead to several suicides and the resignation of the prime minister. They followed that up with a round of bribery scandals involving Philippine President Marcos and several national development funds.

Every year the Vermont Captive Insurance Association hosts a weeklong conference. This gathering is attended by those directly associated with captives. It is also a magnet for the likes of Governor Shumlin and Lt. Governor Phil Scott, both of whom never seem to tire of reminding the captive insurance visitors that we are the kindest, warmest, most wonderful regulators a captive could ever want.

Conference attendee Lt. Governor (and gubernatorial candidate) Phil Scott said our captive regulator model should be expanded to all Vermont’s regulated sectors.“Imagine if we had a governor’s office that treated every sector in the same way” said Scott recently.

Sure, can’t you see Killington or Stowe welcoming Marubeni Corporation, perhaps advertising as the new second home to criminal “captives”? And is this vision of a corporation-colonized Vermont a place you want to live, when we’re paying the taxes they’re avoiding?

Phil Scott’s drive by crisis

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Crisis managers are in almost universal agreement that the first days of a crisis are the most important. The quality of response can have a sizable impact, and may even set the tone, as events move forward.

Phil Scott has been Lt Gov. for five years and spent 10 as state senator. He currently has 70% name recognition among Vermont voters and has good chance to become the next governor.

His political personality is described as notably low key and non-aggressive. And given the constitutionally small role a Vermont Lt. Gov. plays in governing, specific examples of Scott showing actual leadership or governing skills are by nature kind of slim anyway. Here’s a rundown of the Scott style from last year [he] knows the knock: that he doesn’t take strong positions, sometimes changes his mind and doesn’t have a signature issue that defines him politically.

As he starts his race for the big office, it is worth noting how Lt. Gov. Phil Scott behaved last May when confronted by the crisis brought on by the arrest at the statehouse of fellow Republican Senator Norm McAllister on charges of felony sexual misconduct.

The unprecedented crisis began with McAllister’s dramatic arrest at the statehouse on a Thursday, and he was formally charged on Friday. The next Monday for a moment it seemed Lt. Gov. Scott was getting a grip on parts of the situation in the senate.

Early Monday he announced: “I received word earlier today that Sen. McAllister will be submitting his resignation to me within 24 hours,” Scott said,adding that he had yet to speak directly with the senator. Senator Peg Flory had spoken to McAllister and passed this news on early Monday to Lt.Gov. Scott.

The situation changed, rapidly skidding away from Scott as reporters took the time to actually call McAllister at home. McAllister told them he hadn’t made up his mind what he would do …and [he had] no time line for making up his mind on whether to resign.The reporting isn’t too clear about why (or if) Sen. Flory was mistaken or misinformed when she passed on the information.

So except for some comments on the wisdom of resigning, by Wednesday Scott had basically surrendered himself to McAllister’s timeline.

Scott said he hoped that his media statements would have given the state senator the impetus he needed to make an announcement. The onus, Scott said, is on McAllister to call him.

“He has my number, and I have not heard from him since this came to light,” Scott said in an interview Wednesday.

Scott said he’s not sure that calling McAllister directly will change the outcome. Beyond waiting for the state senator to make a decision, he said, there is very little he can do. “I don’t think any amount of talk will change his mind,” Scott said. [added emphasis]

The Lt. Gov.  did, in one way take an uncharacteristically firm position. “He has my number,” said Scott, refusing to even to call the disgraced Senator to urge or pressure him — for the good of the state and senate — to resign.

So very quickly back in May Phil Scott made the decision: “There is very little we can do,” and in effect he [Scott] resigned himself … to Norm McAllister hanging-on for months forcing his fellow Republicans and senators to vote to suspend him.

The issue dragged on until this week when the senate voted 20 to 10 to suspend Norm McAllister. It was reportedly an ugly decision in the state senate but it seems mostly behind them now.

About the vote, Lt. Gov. Scott says:

“It is unfortunate the Senate was forced to take such action in this unprecedented situation, as it is my belief Senator McAllister should have resigned before now.”

It’s kind of surprising to look back at how quickly Scott slammed on his brakes and stopped urging McAllister to resign way back in May. But it’s not surprising how fast Scott sped away — his fans say he knows the knock .car jump

Ducking Donald but Phil Scott might like a little Cruz

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Yesterday many Republicans expressed shock — shock! — at Donald Trump’s call for a total and “[…] complete shutdown of Muslims entering the United States until our country’s representatives can figure out what is going on.” With this latest outrage  some prominent Republicans repudiated the remarks, among them candidate Jeb Bush went so far as to call Trump “unhinged.”

Such repudiations are long overdue but perhaps a bit odd given Bush’s own near unhinged call, made after the Paris attacks, to screen out all Mideast refugees coming to the US who are not Christians.

But a Republican strategist recommends candidates stake out  Trump turf. In September a Republican memo on how to deal with Trump and his supporters suggested the following strategy “Trump will continue to advance those messages, but you don’t have to go along with his more extreme positioning,” [NRSC head Ward] Baker writes. “Instead, you should stake out turf in the same issue zone and offer your own ideas.”

CruztrumpTed Cruz has his own idea in that issue zone and it may please Vermont’s own Phil Scott. Earlier, along with Scott, Bruce Lisman suggested a ban on allowing Syrian refugees into Vermont and both expressed worries about the thoroughness of the Federal vetting process for immigrants fleeing war zones. A gaggle of Republican governors expressed similar fear, all using almost identical language. Phil Scott was briefed by security officials and he claimed to be reassured for now.

But Ted Cruz‘s Trump-light legislation seems designed with these exaggerated fears in mind. Cruz wants to allow governors to refuse to participate in resettlement programs if they, “[…] conclude that the federal government has not done a sufficient job ensuring that the safety and security of the citizens of the state will be protected.” Cruz’s position might please Scott if he once again questions security.

For now Scott firmly twittered his criticism of Trump’s latest remark but he seems basically aligned with Cruz’s legislation. This is the Trump/Cruz issue zone, a dark-alley, Constituion-free twilight zone that Scott and Lisman have already peeked into. Would Phil Scott want the Cruz legislation to use as governor?

And more tellingly, would Scott admit it if he did, or just ride Cruz’s coattails on legislation that recalls some of the worst excesses of right wing fanatics?

Go, Man, Go: Mark Johnson is a big fan

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He’s a fan, yes, and it couldn’t be more obvious after reading the following bit from Mark Johnson’s piece about Phil Scott’s gubernatorial campaign extravaganza kick- off held last week. In Phil Scott: Holding the Pole with Few Policy Positions, Johnson wrote this about Scott’s reaction to former Governor Jim Douglas’ candidate intro for VtDigger.com:

A small, knowing smile curled across the broad face of the 57-year-old Scott, the all-time winning driver at Thunder Road racetrack, long before a reporter reached the finish line to the Douglas anecdote.Go,Man,Go

He saw it coming, like a potential pass on the inside groove picked up in the sideview mirror.

Scott, second-in-command for the past five years, a state senator for 10 years before that, knows the knock: that he doesn’t take strong positions, sometimes changes his mind and doesn’t have a signature issue that defines him politically.

Yes, that’s right. You probably spotted it too. Mark Johnson is a total fan of the obscure 1950’s paperback author Edward De Roo. In fact, Johnson’s fandom stands out like sore thumb at a manicurist’s.

Go, Man, Go by Edward De Roo:

The speed demons were a non-association gang of wild, daredevil hot-rodders. They had the 100 m.p.h. chariots, the crazy drag races, and all the thrill-hungry chicks in the neighborhood. That’s why Paul Sanders was ready to do anything to get in with them and drive his own hyped-up bucket of bolts. But what they wanted of him was nothing short of a nightmare!

Notice the similar lingo, the hyped-up phrasing of Go, Man, Go that Johnson uses: He saw it coming, a potential pass on the inside groove picked up in the sideview mirror. And this: Scott […] knows the knock.

Phil Scott may indeed be the nicest guy in the history of Vermont politics and not have (or want) a signature issue that defines him. This may be his great advantage in a largely Progressive/ Democratic state. But after ten years in the state senate on the Committee on Institutions and the Transportation Committee, and five years as Lt. Gov., Scott has left a record that should be reported on. Maybe before the election some Vermont reporter will make like ‘50’s author De Roo says and “go man go” and find it. Over fifteen years many votes were cast and deals were made to “get things done.”

Or the reporting might just be a hyped-up bucket of bolts driven to Election Day.

To paraphrase  Bobby Kennedy:  Every society gets the kind of candidate it deserves. What is equally true is that every community gets the kind of journalism it insists on.

Phil Scott’s Summer Party

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Banking on the RLGA

Lt. Gov. Phil Scott joined the Republican Party in Boston a couple days ago. The supposedly reluctant Republican found time to attend his first Republican Lieutenant Governors Association (RLGA) meeting. And of course he didn’t “just join” the party in the sense of becoming a bona fide member, but you might be forgiven for receiving that mistaken impression if you read his comments in the Free Press’s VtBuzz. In fact, given the way he (and by lazy reportage, the Free Press) races to spin himself as a moderate, you might have gotten the impression that the entire Republican Lieutenant Governor’s Association meeting was a special bipartisan training workshop.

One Democrat, Massachusetts Lt. Governor Tim Murray, was on hand for one session, but that hardly makes the typically highly partisan event politically neutral. Murray is resigning office soon for the private sector. This is the Tim Murray who, some may recall, was arrested in 2012 for crashing a state-owned Crown Vic into a rock ledge at almost 100 mph. He was at the RLGA conference to discuss emergency preparedness planning.

So VtBuzz says Scott scooted out of town for the Boston meeting Sunday after racing at the Devils Bowl in West Haven. Scott has certainly been in politics long enough to know what to expect, but surprisingly claimed he didn’t know what to expect (and Freep political blogger Nancy Remsen takes his word for it):

“I didn’t know what to expect,” Scott said about attending a meeting of just Republican lieutenant governors. “I thought it was going to be more partisan.” [emphasis added]

Partisan enough, on the flip …

Scott claims he didn’t know what to expect, but he did expect it be “more partisan”. Well, how partisan was it?

A partisan organization, the RLGA bills itself as the only national organization committed to raising money and assisting Republicans in campaigns for Lieutenant Governor.  The RLGA is one of the party-building groups overseen by the Republican State Leadership Committee (RSLC).The RSLC chief is Ed Gillespie (former counsel to President GW Bush), who with Karl Rove founded the American Crossroads “superPAC.” Don’t know how much more ‘partisan’ the RLGA can get.

The Vice Chairman of the RLGA is Lt. Gov. Tate Reeves of Mississippi,  elected in March. His task:

“[…] helping elect more strong conservative leaders to lieutenant governor offices around the country,”

And Scott might have visited with Mike Huckabee, the former Arkansas Governor and ordained Southern Baptist minister who is certainly no stranger to red-meat partisanship, who was  on hand at the event. A happy Huckabee tweeted with joy:

Joined impressive #conservative lt. governors in Boston for @theRLGA National Meeting. Important to support these strong leaders!

Unfortunately VtBuzz’s Remsen hardly bothered to question Scott’s reporting from Boston. And it leaves one wondering: What prompted the Vermont Republican-lite lite gov to tear himself away from the race track in mid-summer?

Hmmmmn, could it possibly have been to make a pitch for campaign funds from the national Republican money raising group?

Not to mention, Scott’s first outreach to the RLGA looks more than a little interesting in the light of recent stories of a rift in the VT Republican Party that supposedly pits Scott’s “moderate” faction against that of red-meat party Chairman Jack Lindley, whose fundraising efforts lionize folks like Maine’s Gov. Paul LePage, who has broken the veto record for his state and engaged in a very public scrap with most of the state’s major dailies.

Of course, maybe it’s as simple as Scott realizing that his party is broke(n) under Lindley’s leadership, and the money to run has to come from somewhere. And Scott may have to run further to the right to qualify for RLGA funds. Attending the conference was likely a step in that direction.