Category Archives: Business

Redirect: The view from inside the stable

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In response to yesterday’s post about the troubles in the Vermont Training Program, I got a nice call from Lucy Leriche, Deputy Secretary of the Agency of Commerce and Community Development, which I believe I referred to as the Augean Stable of state government.

Well, nice to know somebody’s paying attention.

She made some good points, and some not-so-convincing points. Overall, I have to say my view of ACCD hasn’t changed much.

The #1 item she brought to my attention: “the reboot.”

The Vermont Training Program was overhauled in 2014. …The Auditor began his inquiry and report in 2015. What he had to work with was data from before the reboot. We have made a lot of changes, but the report is based on old information.

Hoffer’s response: he was aware of the reboot, and considered it in his report. His view: the reboot made some changes, but fell short in many ways. “It still relies on self-certifications [by applicants],” he wrote in an email. “The program should do some independent validation, as is recommended by the State’s Internal Control guidance. It’s a matter of adopting best practices in order to be accountable. These are taxpayer funds.”

Over to you, Ms. Leriche:

The Legislature made it clear they didn’t want us to build a big bureaucracy. They wanted as many dollars to go to grants as possible. If we did everything Doug Hoffer suggested, it would take at least one full-time person. That would take a lot of money away from grants.

Okay, let’s see here. They didn’t want “a big bureaucracy,” and following Hoffer’s suggestions would take “at least one full-time person.” That doesn’t sound like “a big bureaucracy” to me. It sounds more like a reasonable investment in protecting taxpayer funds.

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The Augean Stable of state government

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The Agency of Human Services comes in for a lot of green-eyeshade scrutiny when budget time rolls around. With good reason; thanks to outmoded software and management, I’m sure AHS could do a better job than it does. And thanks to our jobless, middle-class-killing “recovery”, it’s coping with ever-increasing demand.

Mr. Hoffer detects an unpleasant odor. (Not exactly as illustrated.)

Mr. Hoffer detects an unpleasant odor. (Not exactly as illustrated.)

But pound-for-pound, I doubt that any part of state government can top the Agency of Commerce and Community Development for waste, futility, and inside deals.

In the latter category, we had the backroom agreement last spring that landed Lake Champlain Region Chamber of Commerce a $100,000 no-bid grant for developing business with Quebec. And now, in the second category, we have a rather devastating memo about the inadequate structure of the Vermont Training Program, which provides grants to businesses for employee training.

In his memo*, Auditor Doug Hoffer is far too politic to use the most appropriate term — “clusterf*ck.” But that’s the message. As I was reading the memo, my thought was, “Maybe we should just burn down the whole place and start from scratch.” His bullet-point highlights:

*As of this writing, not available online. But check the Auditor’s website; it should be posted soon.

— The VTP has no effective internal controls to ensure that applicants meet the various eligibility requirements or that grant funds are only used for supplemental, rather than replacement, training.

— The wage increases reported for trainees may not accurately reflect changes in hourly wages and may reflect other factors not related to VTP training.

— A substantial portion of VTP’s total resources are directed to a few large corporations year after year.

Yeesh.

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Tales of perfidy from the business pages

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Hey, working folks, hope you enjoyed Labor Day. Yep, you got your one day; the other 364 belong to the employers.

We’ve got two examples of capitalism at work in Vermont: another shifty move from the formerly conscience-ridden Keurig Green Mountain, and a T-shirt factory meets its inevitable demise.

First up, from the Reuters news service:

When Keurig Green Mountain Inc said last December it was shifting its coffee buying operation to Lausanne in Switzerland from its headquarters in Waterbury, Vermont, it said the move would establish the company as a “global beverage player.”

The seller of brewing machines and single-serve coffee pods said nothing about a little-known exemption in the U.S. tax code…

Ah yes, the tax code: refuge of capitalist scoundrels.

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Paid sick leave: everybody’s binky for 2016

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It’s been a years-long battle to enact a paid sick leave law in Vermont. The issue came close in 2015, passing the House but failing to survive the Senate. Next year? Bet on it sailing through.

As Seven Days’ Terri Hallenbeck reports, top Democrats (with the consicuous exception of Senate President Pro Tem John Campbell, a PSL skeptic) held a news conference Wednesday at Hen of the Wood Restaurant* to announce that PSL legislation would be on top of their agenda for 2016.

*Nice work if you can get it.

The move was not at all political, no sirree. Just ask declared gubernatorial candidate, House Speaker Shap Smith:

Smith dismissed his political ambitions as a factor Wednesday. “The election has nothing to with it,” he said. “It’s the right thing to do.”

Regardless, Smith will be up against other Democratic candidates who support the concept. If he’s able guide the bill into law in 2016, that success will give him a boost in a Democratic primary race where the issue is likely to resonate.

Yup.

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Drawing the Shmethical Line

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Brent Raymond’s move from regulating the EB-5 program to operating one of them is proving impossible to ignore. How impossible? Top Shumlin administration officials are actually raising questions about it. They’re even invoking the feared Executive Code of Ethics.

“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. “The governor has also asked (the Agency of Commerce and Community Development) to review the communications leading up to this departure to ensure that all actions were in compliance with the Executive Code of Ethics and conflict of interest policies.”

Ah, the Executive Code of Shmethics: the Mock Apple Pie of good government. (Mmmm, Ritz crackers and RealLemon!)

This picture should not be interpreted as visual commentary on the content of this post.

This picture should not be interpreted as visual commentary on the content of this post.


The most interesting phrase in the above paragraph is “leading up to his departure.” It would, indeed, be instructive to know how long Mr. Raymond was negotiating his new job with an EB-5 developer while continuing to be, at least in title, the state’s EB-5 regulator.

And how in Hell he thought it was okay to do that.

Well, at some level he probably knew it wasn’t okay. Otherwise he wouldn’t have kept his superiors in the dark until he actually had the job in hand. Whereupon they waived his 30-day notice and showed him the door toot suite.

He’ll still get paid for the 30 days. Because after all, why punish the guy?

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A particularly obvious spin of the revolving door

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Oh looky here, another top Shumlin administration has turned in his resignation. This time, it’s Brent Raymond, the chief overseer of (and cheerleader for) EB-5 programs in Vermont. His biggest task has been to kinda-sorta ride herd on the Bill Stenger suite of projects, including a major expansion of his ski resort in the Northeast Kingdom.

And where’s Mr. Raymond going?

Raymond said Monday he has accepted a position working for Mt. Snow and Peak Resorts…. Mt. Snow has a $52 million EB-5 project with the Vermont Regional Center.

… Raymond said as part of his new duties he will be working on Mt. Snow’s EB-5 project.

Small world, isn’t it?

Once again, I am moved to say “This is exactly the kind of thing that makes people think our government is a den of corruption and insider dealings.”

And “This is the kind of thing that illustrates, as if any further illustration was required, the need for an independent state Ethics Commission. And some tougher ethics laws, while we’re at it.”

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Logrolling In Our Time, Bespoke Contracts Edition

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Here’s me doing something I never thought I’d do: recommending a story on the right-wing website Vermont Watchdog that I believe is an actual scoop of some importance.

Vermont Watchdog, for those just joining us, is the Montpelier outpost of a conservative journalistic enterprise that gets its money from the Usual Suspects, i.e. the Kochs et al. The site’s usual content is vastly overblown at best, completely off the mark at worst. But this time, VTW’s Bruce Parker got hold of something.

Business development groups in Vermont are demanding to know how a $100,000 appropriation for fostering business with Quebec was awarded exclusively to Lake Champlain Regional Chamber of Commerce, according to emails obtained by Vermont Watchdog.

The appropriation in question was included in S.138, an economic development bill that passed the Legislature this year. The bill’s language does not mention LCRCC; it simply says the $100,000 will go to the state Agency of Commerce and Community Development “to implement a targeted marketing and business expansion initiative for Quebec-based businesses…”

One could reasonably infer that once the bill was signed into law, ACCD would fashion a means of using the money for the intended purpose. But apparently there was a backdoor deal to simply hand the 100 G’s over to the LCRCC, whose Executive Director, Tom Torti, held high positions in the Dean and Douglas administrations, and was recently referred to by Seven Days’ Paul Heintz as one of “the state’s traditional power brokers,” whose counsel, sez Heintz, would be invaluable to potential candidates for governor.

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The NRC has faith in the stock market

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Our government’s nuclear watchdogs made a move yesterday that reinforces their image as the Industry’s Best Friend.

The Nuclear Regulatory Commission has granted requests from Entergy Nuclear Operations Inc. to use some of the $665 million in its decommissioning fund to store used fuel rods that remain radioactive for thousands of years.

And by “some,” we mean $225 million, or more than one-third of the same decommissioning fund that’s woefully underfunded for the task of actually decommissioning Vermont Yankee, which is why we’ll have to wait 60 years before the thing is safely disposed of.

And here’s the ha-ha funny thing.

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Rent-to-own abuses reined in

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On Monday, Governor Shumlin announced something or other. Everybody paid attention.

On Tuesday, he signed a bill that will help a lot of people. Pretty much nobody paid any attention.

S.73 is a consumer protection bill whose primary purpose is to prevent rent-to-own stores from preying on the working poor. When I was a guest on the Mark Johnson Show after the legislative session and he asked me which piece of legislation would have the most impact, I said that for some, it wouldn’t be education reform or RESET or the budget or Lake Champlain; it’d be S.73.

Rent-to-own stores, at their worst, are a lot like payday lenders: they allow the poor to acquire consumer goods like furniture, electronics, and appliances with little or no money up front. Instead, they charge monthly lease rates. In some cases, a consumer will pay far more over the life of a lease than they would have if they’d paid cash (or had a credit card) up front. Like 200% more.

It’s usury by another name.

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Win Smith’s 47% Moment

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What’s this in my inbox? Why, it’s a heart-rending tale from the desk of Win Smith, co-owner of the Sugarbush ski resort and president of the Vermont Business Roundtable. And former Merrill Lynch executive. And reportedly a member of a secret Wall Street society described as “‘”a sort of one-percenter’s Friars Club’ whose annual dinners are filled with elitist, sexist and homophobic humor.”

(Bruce Lisman’s also a member, but I digress.)

Smith’s business partner in Sugarbush is, of course, State Rep. Adam Greshin, who wrote and lobbied for an amendment that forestalls a significant increase in Sugarbush’s sizable utility bills. And was, dubiously and privately, cleared by the House Ethics Panel.

Smith’s essay is being distributed to Vermont news outlets; I’m sure it will shortly be cluttering up your local paper’s content-hungry Op-Ed page. It’s a pretty amazing piece of work, managing to be both politically and literarily obnoxious. It’s a subtle retelling of stale conservative myths about poverty and government. You know the stuff: welfare mothers with Cadillacs, poor folks lulled into dependency by public-sector largesse, and the myth that “47% of Americans pay no taxes” and therefore have no stake in responsible government.

Smith begins with the sad story of “a childhood friend of mine” whose mother expressed her love by serving “large portions of tasty food.”

Unfortunately, Mom’s generosity had deadly results.

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