Boo This Man

It’s possible, in this moment of his ultimate disgrace, to feel just a little bit sorry for ex-governor Peter Shumlin. From fall 2014 to summer 2015, he endured three separate political de-pantsings — any one of which could have felled a lesser man in his tracks. First, his near-defeat at the hands of political outsider (and truly terrible campaigner) Scott Milne; then, having to admit failure in his signature push for single-payer health care; and then, in the spring of 2015, finding out that the Quiros/Stenger EB-5 projects were built on fiscal and ethical quicksand.

That said, his governorship will have to go down in history as singularly disastrous.

We know this now because of the dogged efforts of VTDigger to unearth a trove of documents kept secret by state officials. Its pursuit of the EB-5 White Whale was rewarded last week by a federal judge’s ruling that the documents must be made public.

And now, after poring their way through the docs, Alan Keays and Anne Galloway have published one of the most damning political pieces in recent memory. They recount how Shumlin and his team knew by the spring of 2015 that the EB-5 projects were fundamentally fraudulent and doomed to collapse… and yet they kept on flogging the projects for a full year. Their efforts only ended in the spring of 2016 when the feds launched a massive civil suit against Bill Stenger and Ariel Quiros.

That’s bad. But Keays and Galloway document a variety of ways in which the story is even worse than that dreadful topline. Let’s run the highlights, shall we?

  • A lawyer in the Department of Financial Regulation warned in 2015 that the state and administration officials could be targeted by the feds for having “aided and abetted” the fraud.
  • In April 2015, a Department of Financial Regulation document reported that “Every [Quiros/Stenger] project appears to be involved in an array of deceptive practices.”
  • The same missive warned that investors in the projects might lose the preferred immigration status they were promised in return for their investments.
  • In August, then-deputy DFR Commissioner Michael Pieciak held a briefing for Shumlin, attorney general Bill Sorrell and others, in which he laid out “a spaghetti map of bank transactions the developers used to perpetuate the fraud.”
  • Particularly troublesome was a proposed biotech facility in downtown Newport. The South Korean company that planned to operate the facility had been sold at auction by that company’s government — in 2014. The head of the firm had been prosecuted for fraud — in 2012. Didn’t stop Team Shumlin from going full speed ahead.
  • Administration officials did their level best to prevent disclosure of any of this to VTDigger. Then-commerce secretary (and now president of Vermont Technical College) Patricia Moulton said the quiet part out loud: “We are on a public records exemption for any more details out to Anne [Galloway].” In other words, the administration specifically stonewalled VTDigger. I don’t think that’s a legitimate exception to public records law.
  • While the coverup was in progress, Shumlin and his top officials were fully informed and regularly kept up to date. They have zero excuses.

This is bad, very bad, unimaginably bad and toxic and reprehensible. I want to hone in on two aspects of this badness.

First, the responsible officials are still held harmless by Vermont’s political class. People like Sorrell and Moulton and Liz Miller and Alex MacLean and Lawrence Miller and and and continue to hold responsible and/or lucrative positions inside and outside state government. They have paid no price for their complicity. It remains to be seen if they will now that the cats are out of the bag. I’m not holding my breath; generally speaking, once a person is inside the bubble, they are rarely if ever ejected.

Second, Shumlin’s disgrace has shaped our political landscape in significant ways. The year 2010 was an opportunity for the Democrats to slam the door on the Jim Douglas era and take full control of state government. Shumlin ended up narrowly winning the five-way gubernatorial primary that year thanks largely to his promise of single-payer health care. In retrospect, the party might have been better off with any one of the other four.

Because in the end, Shumlin’s political collapse cleared the runway for Phil Scott to succeed him as governor. The new EB-5 revelations make the contrast between Shumlin and Scott painfully clear. Shumlin was a big talker. If you want to be harsh, you could call him a con man. Scott isn’t a visionary, but he’s solid and dependable.

Shumlin sold voters a bill of goods on single-payer and did his level best to hush up the EB-5 scandal. In the process, he squandered a king’s ransom in political capital. One has to wonder how Vermont’s recent political history would have been different if Shumlin had lost the 2010 primary.


2 thoughts on “Boo This Man

  1. John Brabant

    Wow. Exactly John. In a nutshell, you have said it all. And your thoughts on the Vermont political getting a pass and continuing along in their lucrative, and highly influential, jobs, continuing to shape the political discourse and public policy both inside and outside the legislative process. I am not holding my breath either. Vermont can be a dirty little place once you pull back the curtain.


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