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GOP Governors Love the French Revolution: Cake & Guillotines

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This is Michigan Gov. Rick Snyder’s (R, plumbago) wife’s birthday cake.  Really! snydercake

The Governor took some time recently away from dealing with the Flint city water emergency to celebrate in style behind blacked-out windows at an upscale Michigan restaurant.

The owner of the boutique bakery said : […] “We knew that renting out West End Grill is not a cheap thing to do on a Saturday night, but we have a lot of high end clients. We just didn’t know this one was the governor.”

The cost of the cake was not divulged but it took 30 hours to bake (build/design?), and the bakery charges by the serving: there were 60 servings in this cake. The outlandish cake seems almost by design to draw contrast to the thousands of Flint residents unable to drink and in some cases even wash with their tap water.

While under management of Gov. Snyder’s hand-picked overseer, the water system of the city of Flint, Michigan (pop. 100,000) became contaminated with high levels of lead. The contamination apparently happened, at least in part, as a result of cost saving measures. Congressional hearings are being held, but Republican Governor Snyder was not subpoenaed. Several members of his administration were forced to testify but Snyder has ‘declined an invitation’ to testify before a congressional committee on February tenth. Guess he must be busy planning his wife’s party, er, I mean, managing the water crisis.

So what is it with GOP governors and the French revolution? Last month Maine Governor Paul LePage  publicly expressed his interest in bringing back the guillotine for criminals. And now Governor Snyder’s cake recalls a similar level of insensitivity to the plight of others as Marie Antoinette’s famous,  “Let them eat their cake” remark directed at starving peasants.

But let’s be fair, Governor Snyder isn’t totally insensitive and he does make sacrifices. With a net worth in 2014 of approximately $200 million, the former venture capitalist and Gateway Inc. president  selflessly declines his yearly state salary of $159,300 and returns it to the state. Still, it leaves him enough for cake.

Garrett Graff: You can’t get there from here

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Garrett Graff , a former editor from The Washingtonian and Politico magazine, has run headfirst into residency requirements and has decided not to run for Lt. Governor. Candidates for Lt Gov. are required to live in Vermont for four years before running for the office.

In November the 34 year-old left his job with Politico Magazine in Washington DC and made it known he was moving back to Vermont and planned to explore a run for Lt. Governor. graffgaff

Graff grew-up in Montpelier; his father was for many years the AP’s Vermont bureau chief covering the statehouse and currently is media spokesman for National Life.

 

Graff-the-younger seemed to be taken by surprise when he found himself at odds with residency eligibility laws. He had lived outside the state for 10years, but kept a state drivers license,was still registered to vote and claims Vermont remained his “mental home”.

He complains that the residency rule “[…] is going to discourage precisely the types of people that we would want to be involved in state government,” Shouldn’t residency, he wonders, be measured by a different mix of “physical presence” and “intent to return” — specifically those former residents who left the state for academic or professional enrichment and wish to return. Lucky for Graff  unabashed enlightened self interest isn’t frowned on too much, because the type of people he says Vermont should encourage for state government also happen to be mostly …well,  mostly him.

In a VtDigger.com commentary, Graff expresses support for certain residency requirements: “to ensure that someone running for office has ties to and knowledge of the state of Vermont.” Well, he might have wisely stopped there (note to Garrett: as of 2009 almost 50% of Vermont’s population was born outside the state)…but he adds: “I don’t want some flatlander like Jack McMullen arriving to buy a Senate seat any more than the next Vermonter.” But keep out the riffraff and millionaire flatlanders?

Poor Jack McMullen will forever remain the classic flatlander punching bag (see Fred Tuttle). You know, for all his many faults and the credible carpetbagging charges, he did actually have knowledge of the the state’s eligibility requirements before running for office.

Graff defines his own eligibility…

by pedigree: “But I am no flatlander and have the credentials to prove it. Born at Central Vermont Hospital and reared in Montpelier, I am a product of the city’s great public schools — and our family ties go back centuries. One of my ancestors was even a Green Mountain Boy at Fort Ticonderoga with Ethan Allen.”

Perhaps the residency requirements do need refining. However, I have to wonder, can Graff be totally unaware of how his clamoring “I am no flatlander” might be off putting to other new Vermonters… you know: some residents outside Montpelier and Washington DC. Even flatlanders are allowed the vote now- if they meet residency requirements.

In his legendary primary race against Fred Tuttle, Jack McMullen demonstrated  just how tone deaf to statewide political sensibilities a person can be. And young Graff,back after ten years, found a shortcut to display his own tone deafness to Vermont voters -he did it without entering a race at all.

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?

EB-5 extended despite “constantly evolving” schemes

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Critics and some supporters of the EB-5 investment and immigration program agree it needs improvements in oversight to avoid fraud. Yet with the passing of the Congressional omnibus spending bill in December, the program was extended without changes for the next nine months. This is in spite of the fact that the Government Accounting Office raised doubts about regulators’ ability to keep up with “constantly evolving” schemes to defraud investors.

However, according to one business publication there is rejoicing. Congress’ extension without changes is welcome news for all participants of the program— investors, regional centers, developers, and marketing agents alike—for the time being.

The Immigrant Investor Program grants permanent residency to foreigners who are willing to invest $500,000 in certain approved businesses that promise to create at least 10 jobs. Vermont’s Regional EB-5 Center has several such programs, including developments at Mt. Snow, the Trapp Family Lodge, and Sugarbush. The largest by far is Bill Stenger’s $750-million Northeast Kingdom Economic Development Initiative which includes Jay Peak, AnC Bio and Q-Burke.EB-5 map2

A year ago this February, the state of Vermont was sufficiently worried about security fraud allegations that they shifted oversight of the program (in VT.) to the Department of Financial Regulation. Nationally, the SEC reportedly subpoenaed Jay Peak’s EB-5 records and conducted interviews with development associates.

Alarms and warning bells have been going off nationally for a while.

As of May 2015, the Securities and Exchange Commission and other federal law enforcement agencies had 59 open investigations relating to EB-5 projects, 35 of which “primarily involved securities fraud issues,” according to the report. The SEC received more than 100 “tips, complaints and referrals related to possible securities fraud violations” between January 2013 and January 2015.  

EB-5 supporters Senators Chuck Grassley and Patrick Leahy hoped a proposed series of reforms would tune up potentially fraud-ridden programs. Among the changes that made it to a compromise bill (but which eventually proved to be sticking points) were rules to narrow definitions of employment areas, closer supervision of regional centers, impose filing fees for investors and increase the investment requirement to $800,000. The powerful US Chamber of Commerce and the Real Estate Roundtable, along with large developers, opposed the changes.

But none of that was destined to happen. And EB-5 developers, lawyers, and marketing agents now have until September 2016 to drive stakes into future reforms. Are they really the  stakeholders, or are they the vampires sucking in money from investors seeking a return in addition to green cards?

Shouting “ethics” in a crowded revolving door

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Last July the longtime director of Vermont EB-5 Regional Center Brent Raymond resigned abruptly to lead Mt. Snow/Peak Resorts Inc. $52-million EB-5 funded expansion program. The Mt. Snow program is one that as State EB-5 director, Raymond  would have had oversight of.

A great gnashing of teeth over the possible conflict of interest followed causing Governor Shumlin to go so far as to  cry “ethics” aloud as Raymond exited from his administration out the revolving door.

A spokesman for the governor said then: “The governor has concerns about the potential for a conflict of interest in this decision. […] We fully expect all appointees and former appointees to comply with the Executive Code of Ethics,” spokesman Scott Coriell said in an email.

Later with questions over possible conflicts of interest in the legislature and executive mounting Shumlin publically endorsed plans already underway for an independent commission to handle ethics complaints.

In the meantime back at the Mt. Snow’s $52-million EB-5 project, if you hunt around on mountsnoweb5.com, a press release pdf that lists Brent Raymond as an employee can be found. However Mt. Snow’s webpage (shown below)more prominently pimps out their new hire Raymond  as a Vermont State Employee – image tagged : Support of government officialsscshotsnow

Some steps have been taken in the last year to address growing questions of ethics and conflict of interest in Vermont government .Secretary of State Jim Condos continues his tireless campaign for a transparency and an ethics commission for the executive and legislative branches. The Vermont House adapted a formal code of ethics and the Vermont Senate Rules Committee will likely continue their recent series of skirmishes, err, hearings to discuss formal ethics and financial disclosure guidelines.

Oh by the way, the other VT EB-5 Regional Center employee seen in that image on mountsnoweb5.com is Specialist Becky Fu. She left the state Regional Center in 2015 — not long after Brent Raymond. Specialist Fu left her state Regional EB-5 Center job to help shepherd along the Von Trapp Family Lodge $22-million EB-5 program.

So go ahead, shout as loud as you want. For now, I doubt anyone wants to hear “ethics” while passing through Vermont’s revolving doors. Nah, it’s business as usual.

How I Learned to Stop Worrying and Love the VT Senate Rules Committee

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Wednesday’s Vermont Senate Rules Committee meeting on ethics and disclosure ended in a minute and huff. Well maybe it ran longer than a minute — but it did end in a huff. The meeting, called  to discuss new ethics disclosure rules for those serving in the Vermont Senate, ended with an abrupt adjournment on Wednesday.

The finger-pointing, heated conclusion to the Senate Rules Committee meeting came after an exchange between two of the chamber’s leaders, Sen. Philip Baruth, D-Chittenden, and the Senate President Pro Tem, John Campbell, D-Windsor, who was backed up by veteran and influential Sen. Richard Mazza, D[?] -Grand Isle/Colchester.

The dust-up between the party leaders peaked when Baruth, the Senate Majority Leader, felt the other two Democrats were not taking him seriously, while Campbell, who holds the most powerful post, and Mazza, a senator for more than 30 years, were offended and thought Baruth was accusing them of “hiding something.”

Senate President Pro Tem, John Campbell, D-Windsor walked out after a “dust-up “with Senator Phillip Baruth.

Said Campbell: “Wait. I didn’t say it’s laughable,” Campbell shot back, then talking over Baruth said. “No, no, don’t. You have reporters here. Do not, Do not…”

VTethicsbowl

Campbell’s unease at openly discussing ethics and financial disclosure with reporters present recalls the classic admonition from Dr. Strangelove “Gentlemen, we can’t fight here: this is the war room.”  We can’t discuss disclosure — you have reporters here.

The fact that the discussion, limited as it was, is taking place at all perhaps shows Senate leader Campbell’s views may have evolved since 2014. When asked then to react to actions the Vermont House successfully took to formalize ethics guidelines Senator Campbell saw no need to make similar efforts in the Vermont Senate. “I think most people are ethical,” Campbell said “Hopefully, you elect people you trust.”

Sure, Senator Campbell, hopefully most people are ethical but, gentlemen, this is the Senate rules committee isn’t it?

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

Bruce Lisman’s Vermont: Re-imagine valued customers…

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In his latest opinion piece in VtDigger.com, Bruce Lisman the multi-millionaire candidate running in the Republican gubernatorial primary says: “It’s time to dare to be great!”

His top priority if elected would be: “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.”

Well yes sir, Bruce! Re-imagine – Constituents as valued customers ! Whoa, that’s a  catch phrase for voters to rally round.

The problem with this suggestion is the role of constituents (citizens) and customers are different. On a government service level citizens experience interactions that are similar but not the same as those a customer might experience. Briefly a customer in the market place has the opportunity to choose what, where and when to buy. And a citizen using government services can’t exactly shop around for the best price on something. You can’t shop around for the best deal on your truck registration. The state of Vermont has a total monopoly on that one. And unlike a customer/seller relationship ,citizenship comes with collective obligations for the common good.

The retired Wall Street banker might just be listening to the call of his own imagined greatness propelling him forward.

Perhaps he hears echoes of Abraham Lincoln’s moving 1862 address to Congress “Fellow customers, we cannot escape history… The fiery trial through which we pass, will light us down, in honor or dishonor, to the latest generation.”

Aristotlecustomer 1

However Bruce Lisman might give consideration to the ancient philosopher Aristotle’s words of caution : “It is not always the same thing to be a good customer and a good citizen.”

Church Street Marketplace “free” WIFI, fo,fum

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“Free” WIFI was installed at the Church Street Market place in the summer of 2015. The $50,000.00 system, with support from Burlington Telecom, was paid for by private donors, and the largest chunk chipped in by L.L. Bean.

Now, six months later, WCAX News reports the WIFI network shows 20,000 people visited the Burlington shopping destination on its busiest Saturday.

“We started collecting data in June, so once we start to have a full year of data, we’ll be able to say we we’re up or down in terms of pedestrian traffic. That’s going to help us measure how we’re doing,” said Ron Redmond with Church Street Marketplace.”Sometimes they’ll be thinking it was a bad day, and we can show them, well actually there were 12,000 people on the street that day. It provides them with a little sense of security.”

free wifiNot to go all paranoid but privacy concerns are an ongoing worry with “free” WIFI areas. Data storage and collection from WIFI devices is a relatively new area, not subject to uniform privacy protections as cell phone data is supposed to be. In 2014 a California coffee shop ran into privacy complaints when it was discovered that it used tracking analytics that could locate a device as being unique from others in the area. In that way specific conclusions could be drawn from the data:  how long an individual device user stayed in an area, in a store, or even where an individual stood. Because of public pressure the coffee shop stopped using the software. Do you get Free WIFI in Burlington and a bell on your collar too?

The goal at Church Street Market Place is to monitor foot traffic and individual store sales. With this data, individual retailers can better analyze the effectiveness of their current and future sales promotions and advertising.

It is too bad it never occurred to WCAX, Vermont’s [self-proclaimed] “best news source” to probe a little deeper and ask about what else might be gained by those businesses that put up $50,000.00 for “free” public WIFI. It is a surprise just plain curiosity wasn’t enough for WCAX News to ask who owns and stores the data collected: the city-owned Burlington Telecom or a private entity. And could whoever does control the data be able to profit from it by sharing (for a price)  the stored shopping and traffic marketing information?

The common claim is that most Americans are willing to give up some privacy for discounts and sales. But in a report called the Trade off Fallacy: How Marketers Are Misrepresenting American Consumers and Opening Them Up to Exploitation the Annenberg School of Communications found it may actually be a simple matter of resignation.

Americans, the report contends, aren’t happy that they have to give their name, phone number, email address, and other data to get discounts. They do it because they believe marketers will get the data anyway. “Rather than feeling able to make choices, Americans believe it is futile to manage what companies can learn about them,” co-author Joe Turow says.

And should we be equally resigned to WCAX News missing some obvious follow-up questions that would have made a fluffy item into a local news story?

Just another tool in the police toolbox?

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The Vermont Senate Judiciary Committee will be dealing with a variety of issues in the upcoming session and one of them is an omnibus privacy bill that attempts to update laws and regulations that haven’t kept pace with technology. Under consideration will be limits on cell phone and license plate reader data collection. The regulation of drones or unmanned aerial vehicles (a term the UAV industry lobby wants used to avoid the negative images “drones” often carry) is also targeted. Previously attempts were made on all of this during in past sessions with mixed success and some proposed drone regulations banning weapons were redlined out of a recent bill as passed.

Specific to drones, Committee Vice Chairman Senator Joe Benning (R-Caledonia) previews some of what the Judiciary Committee now wants. For the average person, the bill prevents the owner or operator of a drone from attaching a weapon to it. Otherwise, civilian drone use would be governed by the rules created by the Federal Aviation Administration, which will require drone owners to register their crafts with the administration beginning in February.

The bill would prohibit law enforcement from using a drone without a warrant. If a warrant is granted to police to use a drone, police may only collect information on the subject of the warrant and may not collect data on any other home, person or area.

Yearly notification requirements and limits on the length of time collected data can be kept are also included. But at least in this recent news article, no mention is made about how or if the Judiciary Committee will deal with law enforcement arming drones with weapons of the lethal or “non-lethal” kind.

Well, Vermont lawmakers had better define “weapon” very, very thoughtfully. Look at what happened in North Dakota when they tried to tackle legislation on law enforcement drones.taserdrones

With the passage of a new law earlier this year [2015], North Dakota has become the first state to legalize law enforcement use of armed drones.

Though the law limits the type of weapons permitted to those of the “less than lethal” variety — weapons such as tear gas, rubber bullets, beanbags, pepper spray and Tasers — the original bill actually aimed to ensure that no weapons at all were allowed on law enforcement drones.

With eyes wide shut, that state passed a landmark law that did require warrants for police drone surveillance. But perhaps, in an attempt at balancing privacy and tools for law enforcement, the ND law included rules that allow rubber bullets, beanbags, and Tasers and tear gas canisters (non-lethal weapons) on drones. Many of these non-lethal weapons can maim and kill people.

Meanwhile back in Vermont, limiting average (non-law enforcement) people from arming drones gets a big thumbs-up from the VT Fish and Wildlife Department. Notably, an earlier VT Senate effort S.18 (sponsored by Senators Tim Ashe D/P-Chittenden and Joe Benning) sought an outright ban on weapons on all drones, as well as the law enforcement use of facial recognition technology, except to locate a person subject to a warrant. If the Judiciary committee has designs to attempt a blanket weapons ban on law enforcement drone weapons (non-lethal or not so non-lethal)they have chosen to be very quiet about it.

About the 2016 legislative session, Committee vice Chairman Sen. Benning says : “ […] the lawmakers look to strike a balance between personal privacy and giving police the tools they need to do their job” Let’s hope North Dakota’s landmark drone weapon law hasn’t tipped the balance for Vermont to follow. Put many more tools in that law enforcement tool box and they’ll need a tank to move it around.