Tom Salmon’s slippery evasion of responsibility has recently come under discussion here at GMD, and it seems to be attracting attention in the mainstream media as well.  As the Bennington Banner discovered in an interview they conducted with Tom Salmon this week, the current auditor accepts no responsibility for missing the five year-long embezzlement practiced by a state employee which targeted the Department of Children and Families’  “Reach-Up” program.  Says Salmon:

“While that was being identified, our auditors in our office were doing a look at another payment system, $8 billion in payments over a 24-month period. So the argument that we weren’t attentive — we were actually in the field, we just weren’t looking at that particular system,” Salmon said. “Unfortunately, the Newport thing was going on and not being caught. Vermonters need to know that we’re on it. We’re not reacting to Newport because while that was happening, we were doing the same work somewhere else.”

Say what?

Mr. Salmon’s opponent in the upcoming election, Doug Hoffer, fairly points out that the state auditor should be able to attend to more than one audit situation at a time.   The embezzlement took place over a period of five years, beginning two years before Salmon took office, and continuing for three years hence.  Even if the office might be excused for missing it for one or two years, it is baffling to understand why Salmon doesn’t see that he failed to fulfill his obligation as Auditor by allowing it to continue for a full five years.

In response to Mr. Salmon’s rationalizations to the Banner, Mr. Hoffer had this to say:

In my view, Auditor Salmon made some comments that deserve additional scrutiny.

The Banner’s reporter noted my suggestion that the five-year long embezzlement scheme should have raised red flags in the Federal Single Audit.

First, the implication is that the Auditor’s Office can only do one thing at a time, which is absurd on its face.  Moreover, the Single Audit (which missed the embezzlement scheme) is done primarily by consulting auditors from KPMG under contract to the State Auditor.  So regardless of what the Auditor’s staff were doing at the time, the Single Audit was taking place and it is the State Auditor who is responsible for and oversees the work of the consultants.  Note also that the explanation offered was for one year and ignores the fact that the embezzlement was a multi-year scheme.  What is the Auditor’s excuse for missing it the year before?  And the year before that?

Second, the suggestion that the Auditor was attentive but was simply looking at a different system is just a diversion.  This was not an either – or situation.  It is irrelevant what the staff was doing at the time because the Reach Up program is covered every year by the Single Audit, which (as was mentioned) is done by consultants under contract.  

Third, the reference to “payments over a 24-month period” could lead a reader to think that the audit that supposedly kept them from the embezzlement scheme took 24 months.  That is not the case.

Mr. Salmon tried to reassure us.  “Vermonters need to know that we’re on it. We’re not reacting to Newport because while that was happening, we were do the same work somewhere else.”

The effort to avoid responsibility is troubling because we don’t know if Mr. Salmon has taken any steps in-house or with the consultants to review the procedures that failed to see any red flags.  How can Vermonters be persuaded that the Auditor’s Office is “on it” if no one acknowledges the problem or explains how it will be corrected?  Finally, one wonders why under these circumstances the State Auditor is “not reacting to Newport”?

When a state employee succeeds in embezzling almost half-a-million dollars and avoids detection over the course of five years of annual Single Audits, it begs the question: “Who’s minding the store?” Current auditor Tom Salmon seems unsurprised by the discovery of long-term embezzlement by a woman in the Dept. of Children and Families, and blames his failure to detect it on aging software:

Salmon points to a state computer system called ACCESS that Kathy Lantagne used to authorize payouts, as one reason for possible break-downs in the system. ACCESS was new in 1983 and lacks more modern security checks to detect fraud.

To which he helpfully adds:

If someone wants to steal, they’re going to steal.

One might be excused for asking why we need a human Auditor at all if everything depends  on the software.  According to Doug Hoffer, who is challenging Tom Salmon in the upcoming election, Salmon should have picked-up on certain “red flags” in the expenditures made by the Department:

“There were two hundred fifty checks to unapproved entities all mailed to one address.  Auditors are trained to recognize patterns and to look for anomalies; that’s their job.  It is entirely possible for these activities to go unnoticed for a year or two.  But for the Single Audit to miss this for five years in a row raises some questions about the sampling protocols.”

Furthermore, says Hoffer in a press release,  deficient software is a pretty weak excuse for the number of years the theft remained undiscovered.

If Salmon knew of the weaknesses in the system, why didn’t he take steps to beef up the audit?  Moreover, what, if anything, did he do after learning of the embezzlement back in February?  Did he review the audit procedures with the consulting auditors at KPMG?  Did he step up efforts for the next Single Audit?

And if that one slipped through the gaping hole in the fence, how much more from other departments may be similarly misappropriated?   When asked what the potential loss to the state through embezzlement might be,  Salmon replied:

Conservative fraud estimates would be that we are at risk for millions. Millions in fraud.

Millions?…really, Mr. Salmon?  In these cash-strapped times, when the Governor was looking to balance his books on the backs of the state’s most vulnerable populations, wouldn’t it have been helpful if we had had an auditor who was a little more proactive about doing his job?

Discussions about the National Guard continue to be a sort of  “third rail” in Vermont politics, just as topics related to military service in general take on a peculiar hue when raised on the national stage. I don’t believe this is healthy, either for the democracy or for service members themselves; but it  is indicative of a sort of dysfunction in the American family. We all know that Grandma smells funny but we don’t discuss it because, after all, it IS Grandma; and then Grandma ups-and-dies from undetected gangrene.

I’m just saying, we’ve got to get over this odd squeamishness that has recently overtaken us with regard to all things service related.  In the coming decade, we’re looking at hundreds of thousands of battle-hardened men and women returning from the Middle East and being reabsorbed into our communities.  A large proportion of those returning warriors were barely more than children when they enlisted, and most of their social skills and world views have been shaped by the experiences of war.

I remember reading several years ago that it was estimated that one in three of those who serve in the Middle East wars will at some time in their lives suffer a mental disability due to combat experiences. One in three!  I had no idea whether that estimate had been revised up or down in the intervening years, until I found this link to a 2009 Stanford University study that pegs the number from Iraq alone to 35%! News sources have given us glimpses of a military culture infiltrated by religious zealots who take advantage of the captive consciousness that forms a command to proselytize and indoctrinate

What will this mean to the social order of America in the first half of the twenty-first century? These battle-weary soldiers will be returning to an economy that for some will be much worse than when they left it.  Jobs are scarce, public services are in a choke-hold throughout most of the states. The political conversation has descended from civil debate into unbridled warfare.

This will be the first generation of battle-hardened mothers raising their own children in the U.S. This will be the first generation of children with the potential of having two parents suffering from PTSD.  Are we really prepared in early education and healthcare for the challenges that this new reality (coupled with crushing economic issues) may have in store for us?  We’ve gotta talk about it, as uncomfortable as it may be to do so.

Which brings me back to my particular “third rail.” I have a nagging concern over the prospect of having the civilian commander of the Vermont  Guard (the governor) and the Adjutant General being brothers.  Consolidating command of our civilian militia in a single family has all kinds of potential for abuse and conflict of interest. I am really rather surprised that Michael Dubie has not voluntarily resigned and that no one has yet suggested that he should step down in recognition of this fact.  What are we, comatose?

Come on!  Let’s not allow our deep and abiding respect for the sacrifices of Guard members to overcome our instinct for vigilant scrutiny.  It’s time to have some tough conversations before we’re too deep in the soup to locate a paddle.

Once again, the St. Albans Town Selectboard is attempting to have its cake and eat it too.  In May, we learned that the Town joined Swanton in refusing help from the Conservation Law Foundation who were awarded  a $25,000. federal grant from Clean and Clear to develop a comprehensive plan for stormwater management for the area. According to the May 15 Messenger, Town Manager Christine Murphy feared that:

Any plan for the Exit 20 area had the potential to grow ‘regulatory legs’ because of the likelihood that the town will be required to obtain a Municipal Separate Storm Sewer System (MS4) permit.

Now we learn, also through the Messenger (no link available, of course), that the Town has denied the U.S. Geological Survey’s request  to install a gauge to measure stormwater run-off into Stevens Brook.  

Town manager Christine Murphy expressed concern that the gauge might detect a stormwater impairment…If a stormwater impairment was detected and the town is required to get an MS4 stormwater permit… the town could become liable for the $15,000. a year in maintenance costs on the guage under the permit, according to Murphy.

Oh, really? And is that the only concern here?  As noted in the Messenger piece, it has just been revealed that there has been an increase in erosion in Rugg Brook along Nason St. below the site of some recent development.  The town has apparently “asked” engineer Sam Ruggiano to come up with a plan to stabilize the bank, at a cost estimated to be at least $20,000.  Mr. Ruggiano can be found connected with just about every major development in the area and always seems to be the go-to guy for the Town Selectboard as well.  Whatever happened to competitive bidding?  

If you follow the bouncing ball, you will discover that both Rugg Brook and Stevens Brook are currently classed as impaired by agricultural run-off.  This has been raised as an issue with regard to the proposed Walmart at Exit 20 of I-89, another project for which Mr. Ruggiano is the engineer.

The Walmart project neatly skirted the stormwater permitting process, largely because Stevens Brook, located in its watershed, is currently classed only as impaired due to agricultural run-off. Should there be an official measurement of stormwater run-off, as would be yielded from the USGS gauge, it would almost certainly indicate significant impairment due to development and potentially be a limiting factor for future development in the Town’s “designated growth center” at Exit 20.  

C’mon, Town Selectboard, sooner or later this will all catch up to you or to your children.  How about doing the right thing right now for a change?  Instead of turning your back on planning and just winging-it in the hope that the tax revenues from sprawling development will somehow make despoiling our environmental heritage worthwhile, why don’t you take the opportunities extended to you, and look before you leap?  On the one hand we have seen how committed the Town Selectboard is to maximum exploitation of their “designated growth centers” and on the other, how unwilling they seem to be to shoulder the responsibilities that go with that exploitation.  Witness how reluctant the Town has been to install sidewalks in one of the most rapidly expanding residential communities in Vermont.  They want the rapid growth and the tax revenues they smell on that horizon, but somehow they don’t like the idea of having to maintain infrastructure like sidewalks and monitoring stormwater to ensure the health and sustainability of the local environment.

This is a great example of why we need effective statewide environmental protections.  The federal efforts may be frustrated so easily at the local level where special interests take the field in a sort of regulatory equivalent of the wild west.  You think the engineers that work with developers can be depended on to “do the right thing?”  Why should they, when failure to properly identify erosion potential can mean a $20,000.+ opportunity to do some repairs!

 

Doug Hoffer continues to demonstrate why he will bring greater credibility to the office of Auditor than it currently has under Tom Salmon.

With a watchful eye cast on the governor’s race, Doug is once again calling out Brian Dubie for telling the voters what might best be characterized as a whopper:  

“Vermonters have the highest property taxes in the country.”

As Doug points out, Mr. Dubie has misused Census data on state level property tax and conveniently ignored the fact that Vermont is the only state where education costs have been shifted to a statewide property tax, making the comparison Mr. Dubie is drawing completely without validity.   In fact, says Hoffer:

The figures do not account for the amount of property taxes paid by non-residents, which is an important consideration in a state ranked #2 in the percentage of vacation homes.  In 2007, the Joint Fiscal Office estimated that Vermont exported approximately $244 million in property taxes paid for second homes and commercial properties by non-residents.  If this is subtracted from the Census figure, Vermont drops down to 16th – quite a different story than “the highest in the country.”

Smarten up, Mr. Dubie, you’ve got the ultimate fact-checker hot on your trail.

(See below the jump for Doug’s complete comments.)

There he goes again.  A recent VPR story quoted Brian Dubie as saying “Vermonters have the highest property taxes in the country.”[1]  As with his comments about Vermont’s income taxes,[2] this statement is less than meets the eye.

First, Mr. Dubie is undoubtedly referring to Census data for state level property taxes.[3]  As has been reported many times (and as Mr. Dubie well knows), Vermont is the only state in the country that has shifted education costs to a statewide property tax.  As a result, statewide comparisons for this particular measure are meaningless.

When we look at state and local per capita property taxes Vermont ranks seventh behind NJ, WY, CT, NH, NY, and RI.[4]  But there is a fundamental problem with these figures.

The figures do not account for the amount of property taxes paid by non-residents, which is an important consideration in a state ranked #2 in the percentage of vacation homes.  In 2007, the Joint Fiscal Office estimated that Vermont exported approximately $244 million in property taxes paid for second homes and commercial properties by non-residents.  If this is subtracted from the Census figure, Vermont drops down to 16th – quite a different story than “the highest in the country.”

Important policy debates should be based on relevant facts, not figures intended to mislead.

Note: The Census Bureau acknowledges that state tax rankings can be misleading.[5]

1]    Wednesday 9.8.10[2    See my response at Seven Days (http://7d.blogs.com/blurt/2010/09/visions-of-an-auditor-to-come-hoffer-challenges-dubies-numbers.html) and vtdigger.com (http://vtdigger.org/2010/09/01/more-time-sir-um-probably-not/) .

3][4      Author’s calculations from Census data at http://www.census.gov/govs/est…

[5]    “The ranking tables should be interpreted with caution; analysis based on rankings or per capita statistics can be misleading and misinterpreted because of subtle yet important differences in state government organization and economic structure. For example, using total taxes or per capita taxes as a measure of tax burden on the citizens of that state can be misleading because different states use different approaches to taxation, comparing only the total taxes collected by each state is not enough to understand the economic impact of those states’ taxes – one must also understand how those taxes are collected. Comparing taxes across states can be difficult. The Census Bureau’s statistics on tax revenue reflect taxes a state collects from activity within the state, not necessarily from its people within a state. Alaska, for instance, does not have general sales taxes or individual income taxes, but it does collect severance taxes from companies that extract oil and natural gas. Like Alaska, Florida does not collect individual income taxes, instead Florida relies heavily on a general sales tax, which, because of its tourist industry, is partially supported by visitors from outside Florida. In that sense, both Alaska and Florida collect “exported taxes” – taxes from people or organizations that may reside outside of their state.”http://www2.census.gov/govs/statetax/2009stcmethodology.pdf#page=3

I left the Chittenden County Courthouse with the last wave of counters.  What began in tumultuous uncertainty ended rather quietly: outcome expected.  As I headed toward the entrance ramp to I-89, a Monarch butterfly lurched drunkenly past my windshield, braving the cross-currents of car exhaust and prevailing winds.

Here’s what I am thinking this fine evening in Vermont:  I’m thinking “Congratulations” to Peter Shumlin. You won the nomination, fair-and-square. Our efforts to defeat Brian Dubie are yours to command.  Honor the reasonable expectations of all of us volunteers who served the other campaigns and you will have a formidable army of support that will carry you to the governor’s chair and through as many terms as you care to serve.

…And I’m thinking how cynical and counterproductive it would be now to ridicule the recount or the people who called for it.  Certainly, political insiders can tell you six ways ’til Sunday why it was statistically unlikely that the outcome would be otherwise; but a lot of ordinary voters who were deeply invested in their candidate and whom we must hope will carry that investment forward to the nominee, could not have done so enthusiastically without the validation provided by the recount.

Going forward, there will be those who are tempted to blame Doug Racine for every kink and snarl, every rainy day that the campaign encounters between now and November 2.  That’s bogus.  No one could have been more aware of that than Doug himself when he girded himself to request the recount; but he owed it both to his supporters and to the general campaign to clear away any cloud of doubt that might  weaken the united force against Brian Dubie.  

What do you really think would have happened if he had simply conceded to Peter without a recount?  I’ve got a pretty good idea that many of his supporters, having the 2000 presidential recount still burning in their memory, would have seen his acquiescence as a betrayal.  That’s just his supporters!  His detractors, having lobbed plenty of criticism at him for being a “nice guy,” and for what they saw as his relative inability to turn endorsements into dollars,  would have publicly wailed on him, good-and-plenty, for surrendering when the vote difference was so small.  This was a no-win situation for Doug; but not the first he had been dealt in the campaign.  Labor endorsements, high-profile Progressive endorsements, and tremendous grass-roots organizing would seem to the uninitiated to be something to celebrate.  But if they are not accompanied by the requisite amount of expected cash they apparently turn to PR liabilities, so that much of the conversation in the media around Doug Racine’s campaign toward the end seemed to be all about the cash and not about the candidate.  What was everyone expecting in a deep recession from the candidate of the working class, environmentalists and famously underfunded progressives? I don’t know about you, but at my house, we’re having a tough time just keeping the lights on and the mortgage paid.

My final thoughts this evening:  we’ve gotta uncouple this horse from the locomotive.  It shouldn’t be all about the money; not in Vermont; not anywhere in America.   Political campaigns are nothing more than public information vehicles.  In the age of radio, television and the internet, they can and should be conducted with no private funding whatsoever.  And before the “free speech” paranoids jump all over me, tell me who’s protecting the right to be heard of the working class and poor who can’t afford a paid platform?

It’s all over but the crying in Franklin County this afternoon. We finished the recount by 3:00 PM, allaying fears among the volunteers that our sentence to the courthouse would be indefinite.

All in all, it was a pleasant experience with the atmosphere of community-driven democracy that some St. Albans City residents must surely miss from the old days before Town Meeting was replaced with conventional balloting.  The participants were so convivial in fact, that there were frequent requests to keep the noise down so that we could hear our partners read the ballots.   Most of the volunteers were from the blue-haired battallion (sixty and older), including surprisingly heavy representation by men.  Almost no one had prior experience with a recount and so, at the outset, confusion was the order of the day. After a few false starts, the teams of hand-counters each found their own rhythm and made short work of the job. A technical issue sidelined one of the machine readers but a replacement was soon brought in from Swanton.  If it weren’t for that minor glitch the machine count would no doubt have been finished even before the hand-count.

At lunchtime we were released to dine on pizza, check our phones and walk our dogs.  After a generous lunch break the count resumed.  At the end of the short day, many sat for a moment in dazed disbelief when we were told we were all through and could simply go home.

Once the word gets out, I think they’ll find it a lot easier to recruit volunteers in Franklin County the next time there’s a recount! ” ‘Piece a cake!” they’ll say.

A nice big crowd gathered to hear the Unity Team at Cosmic Bakery in St. Albans this morning, spilling over into Franklin County’s Democratic Headquarters next door when it became much too large to be accommodated in the bakery.  First to arrive were Doug Racine and Peter Shumlin, followed soon after by Susan Bartlett and then Deb Markowitz.  We were told that Matt Dunne will be joining them later on the tour.

The atmosphere was warm and jovial among the candidates, and the hot-spot was focussed squarely on Brian Dubie who just happened to also be in town. According to the Messenger, the format of Dubie’s appearances allowed little time for questions; but the Democratic juggernaut was more than happy to define Douglas’ deputy in the void.

Susan Bartlett pointed out Dubie’s lack of experience and weakness on economics.  When it comes to budget, says Susan,

“Dubie knows nada.”

Deb Markowitz pointed out that, although Dubie is all over spending cuts to education, he’d allow taxpayers to support religious schools.

Doug Racine very graciously stated for the whole group that Peter is the presumptive nominee; but no matter what the outcome of the recount, they are united in  a single vision for Vermont as a community.

As the presumptive nominee, Peter Shumlin gave the wind-up speech listing five areas in which the united Democratic campaign intends to challenge Brian Dubie and bring Vermont to renewed prosperity:

.Healthcare.  It’s not a privilege but a right.  Universal coverage will free business of a key limiting factor.

.Creating a tax structure that works for everyone’s benefit.



If we want to see Vermont run on an economically sound basis, Peter concluded,

“Let’s have someone who has actually run a business do it.”

After a few more minutes of schmoozing with the Franklin County faithful, and lots of questions from the press, the four boarded a big white Winnebago for the brief journey to their next whistle-stop in Shelburne.  Camp songs and s’mores anyone?

Having just read about Brian Dubie’s plan to redirect federal funds intended to support education into a property tax boondoggle, I received with great interest the latest news that, Senators Leahy and Feingold are introducing two bills to reform the notoriously underfunded and ill-conceived “No Child Left Behind.”  A legacy of the Bush years, “No Child Left Behind” has only succeeded in obscuring the very real issues that public education faces in a world of dwindling resources and growing need.

According to a press release:

The Improving Student Testing Act would:

o   Increase competitive grant funds for states to create higher-quality, authentic measurements of student performance. Examples include computer-based adaptive tests and innovative performance-based tests that can incorporate formats like science experiments and written essays and that require students to demonstrate their knowledge.

o   Clarify that existing federal funds for assessments can be used to develop better assessments and train teachers in the use of those assessments.

The Flexibility and Innovation in Education Act would:

o   Reform NCLB’s testing mandates and reduce its focus on high stakes testing.

o   Provide states and local districts with more power over the day-to-day decisions in classrooms by allowing states to use multiple measures of student achievement in classrooms in addition to reading and math tests and provide states with the flexibility to lessen the testing burden in their schools.

o   Revise the one-size-fits-all approach and provide states with flexibility to develop alternative accountability models such as growth models where schools receive credit for the growth students make throughout the academic school year.

o   Improve the Department of Education’s peer review process to ensure states have the ability to interact directly with peer review teams.

o   Include important measures to help ensure the privacy of students’ personal information contained in state education data systems.

With regard to funding concerns, we are assured that both bills are fully funded through offsets and will not represent any additional burden to the taxpayer.

The bills have the support of a number of educational peer groups:

the Wisconsin Education Association Council, the NEA, the Wisconsin Association of School District Administrators, the Association of Wisconsin School Administrators, the American Association of School Administrators, the School Social Work Association of America, the National Association of Secondary School Principals and the Vermont Principals Association.

You can count on this drawing out all the usual suspects who believe public education is a “waste” of public monies, promotes a “liberal” (read: informed) agenda, and undermines the stability (read: defacto class system) of America.

Doug Hoffer is fully engaged in his campaign against the hapless Tom Salmon; and he isn’t sparing Brian Dubie any slack either:

“It is disingenuous to talk about Vermont’s ‘income tax’ for the simple reason that Vermont does not have one income tax,” Hoffer wrote, in a press statement. “It has a progressive tax system so residents pay at very different rates depending on their income. I am certain Mr. Dubie knows this so it makes me wonder why he would use such language.”

Dubie’s recent claim that Vermonter’s income tax rate is higher than that of Maine, Massachusetts and Rhode Island is just plain misleading, says Hoffer.  As evidence, he offers a breakdown of income tax in Vermont, Maine and Massachusetts (excluding RI, for which equivalent information was not available), which demonstrates that, for instance, a married homeowner with two kids who earns $80,743. pays roughly half as much in income tax as he/she would in either Maine or Massachusetts.

In the world of facts and figures that the Auditor’s role entails, Tom Salmon must be having serious misgivings about his relationship to the vaporous Mr. Dubie who’s oddly disloyal mantra of “Vermont is bad for business” adds little luster to his own weak performance on the job.