Category Archives: EB-5

Lost in the weeds

Sue Minter seems to be spending a lot of time lately trying to out-ethics Phil Scott. After he announced he would sell his stake in Dubois Construction if elected governor, she continued to pound on potential conflicts of interest. Now, she’s returning campaign donations from a lawyer connected to the scandal-plagued EB-5 developments ni the Northeast Kingdom.

Maybe it’s just me, but I think this is a waste of time and unlikely to resonate with voters. It’s the kind of stuff that political insiders (and us outsiders who obsess about politics) care about, but I seriously question whether the voters do.

Besides which, trying to blacken Scott’s reputation is a mug’s game. He’s such a familiar figure with such a positive image; you’re not likely to change people’s minds unless there’s an October Surprise lurking in Scott’s closet.

Better, in my mind, to focus on the issues, where Scott is weakest.

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Journalism in defiance of press release

Round of applause for the Burlington Free Press’ April Burbank, who filed an appropriately skeptical report on Scott Milne’s umpty-billionth attack on Sen. Pat Leahy’s integrity.

The subject of his latest sally was, once again, EB-5. In a press release and news conference, MIlne played his favorite hits and added a couple new verses while depicting Leahy as The Great And Powerful Wizard of EB-5.

Unfortunately for Milne’s desired narrative, Burbank began her story thusly:

Scott Milne said he’s “not ready” to discuss specific policies he would pursue if elected to the U.S. Senate, other than ethical questions he has raised about his opponent, Sen. Patrick Leahy.

Yeah, boy, is he “not ready.”

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Pat Moulton has a great idea.

Commerce Secretary Patricia Moulton was far too busy to comment on the sudden, unexplained departure of Gene Fullam as head of Vermont’s EB-5 office, but she did manage to make time for a live interview on Thursday’s “Vermont Edition.” Subject: EB-5.

Inexplicably, host Jane Lindholm didn’t ask about Fullam’s departure. A deal, perhaps?

UPDATE 7/23: Got this Tweet from Lindholm:

Immediately preceding Moulton was State Auditor Doug Hoffer, who’s been critical of the grant programs administered by her agency. Among other things, he pointed out that it’s impossible to prove whether the state grants actually create economic activity that wouldn’t exist in their absence.

And then Moulton came on and admitted that those programs operate on the honor system. Regarding the Vermont Economic Growth Initiative, she said:

… we believe the CEOs, when they sign an application, that the material is true and correct.

Aww. Isn’t that sweet. “We believe the CEOs.”

Because a CEO would never lie to us.

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The limits of credulity

Okay, so after less than one year on the job, the director of Vermont’s embattled EB-5 program has resigned. And nobody is saying boo about it. No explanation, no praise for the departed, just No Comment across the board.

Nothing to see here, folks. Move it along.

Well, sorry, but if there’s one area of state government where That Dog Won’t Hunt, it’s the scandal-plagued EB-5 program.

Plus, we’re not talking about some schmo plucked from bureaucratic obscurity to caretake EB-5 through the fag end of the Shumlin administration. When he was hired in August 2015, Gene Fullam appeared to be the idea candidate.

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Jobs for the Boys (and Girls)

Patricia Moulton just became the latest high-ranking rat to leave the Good Ship Shumlin. The Commerce Secretary, under whose watch the EB-5 scandal went on undetected for years, has herself a soft landing spot as interim president of Vermont Technical College.

Moulton is one of those seemingly unmovable fixtures of Montpelier life — a species that moves effortlessly between government, private sector, and government-related nonprofits. She’s served in the last two administrations, Douglas and Shumlin; and I wouldn’t be at all surprised if she turned up in a hypothetical Phil Scott cabinet.

What are her credentials to lead an educational institution? Pish tosh. Who needs relevant experience when you’re one of the cross-partisan In Crowd?

“… I can bring to that institution great knowledge about education and workforce for the state of Vermont,” Moulton said in an interview Thursday.

Well, that’s one way to spin it.

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EB-5: the tar baby of Vermont politics

I was wondering when a candidate would dip his hand into the EB-5 cookie jar. It’s easy pickin’s if you want to criticize Democratic leadership of state government. And here we go, Phil Scott’s dug in for some sweet treats.

After positing his support for EB-5 “with proper oversight,” he laid into the Shumlin administration on a specific point:

I was disappointed to learn… that the Shumlin Administration enabled the owners of the EB-5 projects in the Northeast Kingdom… to continue to solicit investors for months after the SEC had suspended that permission for Jay Peak. … By the Administration’s own admission, it was a ‘calculated risk.’  Yet, they’ve not yet explained why they took this risk or why they allowed the problem to continue to grow.

Now, here’s the problem.

The Shumlin administration made that decision in the spring of 2015. (More on that in a moment.) In June of that year, VTDigger’s Anne Galloway broke the news that federal authorities were investigating Jay Peak.

For months after that, Lieutenant Governor Phil Scott expressed his wholehearted support for Jay Peak. Indeed, in November he criticized the administration for inserting itself into the process, thus delaying payments to contractors.

Despite the issues at Q Burke, Scott says he still supports Vermont’s EB-5 program. He added that he sympathizes with [Jay Peak contractor] PeakCM, as he owns his own construction company.

So, hypocrite. But wait, there’s more.

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The sun sets on the Vermont Enterprise Fund

Hey, remember in January, when the state Emergency Board approved two grants from the Vermont Enterprise Fund? GlobalFoundries was given $1 million, and $200,000 went to BHS Composites. Well, turns out those will be the last VEF grants ever awarded. During its recently concluded session, the Legislature rejected Governor Shumlin’s bid to add new money to the Fund — and decided not to extend the program.

The Fund is empty, and in the absence of legislative action, the program will sunset at the end of the fiscal year.

“It’s disappointing,” says Shumlin spox Scott Coriell*. “The Enterprise Fund has been a useful tool, but we do have other tools at our disposal.”

*Say that five times fast.

There was some funny business around those January grants that may have sealed the fate of the two-year-old program.

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Breaking Up Is Easy To Do (When You’re Under Indictment)

Ever since the Securities and Exchange Commission brought the hammer down on the Jay Peak/Northeast Kingdom EB-5 developers, there have been plenty of Vermonters hoping that local hero Bill Stenger will turn out to be nothing more than a dupe in a massive fraud scheme by Ariel Quiros. That’s certainly the tale that Stenger’s been anxious to tell.

Well, now it’s Quiros’ turn to throw his partner under the bus. VTDigger’s Anne Galloway reports that Quiros has deployed an interesting defense — one that tacitly acknowledges wrongdoing on a significant scale.

The Miami businessman was not responsible for offering documents and did not communicate with investors, defense attorneys said. They allege that Stenger was the one who made misrepresentations to investors.

Oh, ho, ho, ho, ho. Cute.

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Scott Milne’s shotgun attack

Too-coy-by-half Senatorial candidate Scott Milne has come out firing with both barrels on the EB-5 program, hoping to use it as a wedge issue against perpetual incumbent Pat Leahy. Some of his criticisms are valid; others reveal a profound misunderstanding of Leahy’s role in the program.

Either misunderstanding or rank political opportunism. You make the call.

Milne is on solid ground when he accuses Leahy of being a prominent advocate of EB-5, and for being a vocal cheerleader for Vermont developers taking advantage of the program. Leahy has basked in the glow of ribbon-cuttings and high-profile announcements for years; he deserves his share of the heat from the collapse of Jay Peak and the involvement of his “good friend” Bill Stenger in an alleged fraud scheme.

It’s also fair to criticize Leahy for pushing a program with a fundamentally problematic premise: selling green cards to high rollers.

However, I don’t expect Milne to hit too hard on that point, considering that he himself toyed with the notion of soliciting EB-5 investor funds. Seven Days’ Paul Heintz reports that Milne traveled to China and South Korea in 2009 with Bill Stenger and then-Governor Jim Douglas, and came back an EB-5 enthusiast:

“To me, it is the perfect storm of government policy capturing the best of entrepreneurial spirit,” he told the Valley News a week after returning from Asia. “I was pleased beyond my expectations.”

“Perfect storm,” hahaha. There’s a malapropism that turned out to be horribly apropos.

Milne goes off the rails when he accuses Leahy of “mismanagement,” and lumps the Senator in with Governor Shumlin for “the way the EB-5 program has been structured and managed.”

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Yes, Virginia, the rich are different

Poor Little Rich Man.

Poor Little Rich Man.

Break out the tiny violins. Hold an onion under your eyes and squeeze out a few tears for Ariel Quiros, alleged EB-5 fraudster. His assets have been frozen by a federal court, and he’s having trouble making ends meet. Probably eating cat food for dinner and shacking up under a freeway bridge.

He’s claiming poverty in a court filing discovered by VTDigger’s Anne Galloway. But it’s a very special definition of “poverty” that could only come from a man accustomed to great wealth.

Quiros claims he needs $100,000 a month for “so-called reasonable living expenses.” In addition, Quiros is seeking $300,000 [a month] for professional expenses related to his court case.

Yeah, a hundred G’s just doesn’t go very far these days. I wonder if he qualifies for food stamps.

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