It was an “oh, by the way” moment for the ages. And an outrage against good government.
On Wednesday, Attorney General Charity Clark told a House committee that we, the taxpayers of Vermont, are on the hook for a $16.5 million settlement of the EB-5 scandal.
You know, the settlement that allowed key players to avoid the embarrassment and potential legal liability of testifying under oath? Yeah, that one.
Once in a while, an issue or development just hits me so hard that I find myself lying in bed wide awake, staring at the ceiling and grinding my teeth until I have no choice but to get up and write something. And here we are. Let’s recap the high points, shall we?
- Through a combination of incompetence and hubris, state officials allowed themselves to be flim-flammed.
- Other state officials then covered up the truth about the affair by claiming they had to keep key documents secret pending court cases.
- On the eve of trial, the state settled a lawsuit by EB-5 investors just days before former state officials (up to and including former governor Peter Shumlin) were set to testify under oath.
- If all those documents were ever released once the legal peril was removed, it somehow escaped my attention.
- The state’s insurance company, AIG, took one look at this mess and denied coverage.
- The state rolled over and accepted a token payment from AIG.
- The Scott administration and Attorney General Charity Clark then waited as long as possible to reveal the AIG denial — only doing so when they had to go ask the Legislature for the needed funds.
Are you grinding your teeth yet?
Oh, and let’s not forget all the collateral damage — the lost funds and green-card dreams of EB-5 investors, the dashed hopes of communities around the Northeast Kingdom, and one hell of a big hole in the middle of downtown Newport.
According to VTDigger, the only news outlet that reported the latest EB-5 outrage, state officials learned of AIG’s denial of coverage IN JANUARY OF 2020. FOUR YEARS AGO.
It was only revealed now because (a) Digger had filed a public records request about the matter, and (b) the state had to include payout funds in a budget request to the Legislature.
Attorney General Clark, per Digger, “told members of the House Appropriations Committee [about the denial on Wednesday], though she didn’t go into great detail about the company’s reasoning.”
Didn’t go into great detail? That’s a whale of an understatement. She didn’t even try to explain AIG’s denial. Nor did anyone on the committee ask about it.
Clark’s appearance lasted about 13 minutes. It included a brief summary of the EB-5 debacle and a rundown of the state’s liability payouts. Committee Chair Diane Lanpher and one other member asked some clarifying questions about the dollar figures. That’s it.
I suppose members of House Appropriations would argue that their remit is handling budget requests, not probing into the scandal. Part of the $16.5 million will come out of the FY2024 Budget Adjustment Act, which is being introduced to the committee by administration officials on Friday. That’s the extent of Appropriations’ responsibility, and that was all they were willing to address.
I think we can safely assume that everyone in state government wants as little exposure as possible to this disgraceful episode, even if it means complicity in keeping the rest of us — you know, the people they were elected or hired to serve — forever in the dark. Indeed, Clark capped her testimony by saying “I hope we never have to talk about this again.”
I’ll bet you do. I can’t share the sentiment.
We still need answers. We need to know how Vermont became a poster child for the abuses of the EB-5 program. We need to know which state officials betrayed their trust by enabling the fraudulent scheme.
I fear we will never learn the truth. That’s mainly because state officials are more interested in covering their and their predecessors’ asses than in serving we, the people.
Well, got that off my chest. Still don’t feel like sleeping. Maybe I’ll go piss up a rope.
The Vermont Political Observer. 
No surprises here as I continue to collect stories of these kind of abuses at the local levels as well. I can tell you first hand the state, nor your local elected select-board, give two shits about its average citizens or the incompetence, ineptitude or corruption of the town’s staff – that stuff always is swept under the carpet, the ruling clique just gaslights its critics. The main concern is always about how much more money they skin off the average household and transfer that wealth into private hands for the pet projects. Its the neoliberal mentality that the only good is someone making money and only those with money count as human beings. You simply do not exist nor matter if you are not white, affluent and middle class. This is why so many people are desperate and go into great debt just to maintain the appearance.
I’ve watched over the last 20 years how the professional and managerial classes are no longer accountable to their professional callings, to the public or their clients, or operate in good faith as Doug Hoffer pointed with the shoddy consulting work that probably cost $10Ks of taxpayer dollars and no one in the state gives a shit about this nor does the firm even care about its name on a piece of crap. All that matters is someone got paid. The one’s who are held to account are the poor, the working classes, those are the other side of the divide and wrong side of the fence who are always stuck with bill and admonished that its all their own fault for not having money.
The professional and managerial classes are now largely cartels, monopolies, a social class whose main task is just to skin the unsuspecting and swill at the public trough. This reflect their interests of their master, who also, as a ruling class, simply can no longer be held accountable for the monstrous consequences their incompetence, greed and psychopathy. Voting???…pleasssse. This is corruption – the corruption of civil society by those who only care about their fucking houses and lawns, their cars, their jet setting vacations and second homes, careers, pensions, etc….and not the totality of social life for the maximum good. They think they are the measure of all good but once you scrap the surface – it’s just dark, dank and empty like an old Vermont cellar.
I wish the state and every little town was audited by the federal government (not that I have much faith in that process) but at least some attempt to instill accountability and clean up the decrepit reality of Vermont.
Here is a good one – hold on folks as they just announced another ass pounding tax hike coming – all this while young people can wait to get out of the state as soon as they are able:
…and they are killing us with their policies and ideology…
https://www.sciencedirect.com/science/article/pii/S0277953623007554?ref=pdf_download&fr=RR-2&rr=8390d888ece7c329#fig1
Thank you for remarking on what the communities in and around Newport lost. That loss includes 75 in-town super affordable living units that have not been replaced in any way. It includes the loss of hope, for many. Loss of faith in leadership. When the federal prosecutor made a speech in Newport (near the “pit”), my organization asked her about a restorative approach for the community – apologies and reparative work. She was intrigued, but nothing happened. Meanwhile, one of the people involved is out of jail early. Money and power have meaning in justice. I will say, the Newport area is resilient. The town itself is looking good, and new things have arisen. “The pit” is almost nice…..there are poplar trees growing out of it and it’s almost a decent streetscape except for the fence, and the number of people we know are homeless in the region. However, I think people in this area are due for a lot of positive attention from Vermont’s government, particularly in the area of housing, health care, and addiction help. You know, towns bounce back, somehow. This is truly a REMARKABLE area. But 60 years of struggle and this EB-5 thang sure have an effect on individuals and families. ACES, anyone? Ask the schools.
How did that rope thing go, John?
Have the Montpelier PoPo been knocking on your door yet to serve you with a criminal complaint filed by Peter Shumlin?
And you already know that Digger will never stop reporting on EB5. That’s Anne’s baby. She personally lamented once, how she felt so alone when first reporting that story.
Ironically, after being effectively forced out of Digger by the very ‘apathetic’ and ‘not particularly good writers’ that she herself mentored, EB5 is her legacy.
I will always recall a meeting I attended in Newport, in another life, where the mayor spoke and did nothing but extol the virtues of the group behind the mess that eventually became the EB-5 scandal. I think there is still a large hole in the middle of their downtown. I thought all of the development things that were to happen were never going to happen, thinking that and smiling to myself.
Ah jeez, at the time didn’t Governor Shumlin say that the State of Vermont audited the whole process? Another accomplished liar in State government.
I wrote this on X but don’t see it so again: Thank you Gov Shumlin and Sen Leahy both huge supporters of this mess.
Ground my teeth to nubs long before this came out, while actually working within the executive branch seeing this sort of shameless grifting and CYA almost daily. It was so bad, I had to quit in order to live with myself.
I’m afraid this is just one more example of what a cesspit Montpelier has become. Corrupt to the core.
The irony of hearing Governor Scott lament the loss of faith in ‘public servants’ just a day later in his words to our revered legislature really brought home how tone deaf our elected officials are.
Unreal.