Category Archives: EB-5

Sh*t My Governor Says

The topline of yesterday’s Covid presser was all about the schools. Id est, how the Scott administration is imposing policies and expectations on the schools but refusing to lift a finger to help them handle the additional workload.

But there were several other statements we shouldn’t allow to pass unmocked. So here’s a sampler, a Children’s Treasury if you will, of dumb stuff said by the governor plus a couple of entries from Finance Commissioner and Number Cruncher Extraordinaire Michael Pieciak.

We’ll start with Scott playing pure politics, something he likes to accuse other people of doing. As he continues to resist calls for tighter anti-Covid measures, he was asked what he’d do if the Legislature passed such measures and sent them to his desk.

“I don’t think it’s necessary,” he said. “If they want to come back into session and they want to introduce a mask mandate, they want to limit travel, they want to shut down bars and restaurants, they want to limit gatherings, they want to cancel Christmas, I mean, that’s up to them.”

The deliberate exaggeration of opposing views is classic passive-aggressive Phil Scott. But cancel Christmas? When did the governor start watching Fox News?

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We’ve Got an Overflow in the Moral Sewer of Vermont Politics

Something stinks around here, and it looks like the Powers That Be are scrambling to keep anyone from identifying the source of the stench.

For those just tuning in, tonight’s VTDigger brings us the happy tidings of an agreement between federal prosecutors and Bill Stenger, one of the defendants in the EB-5 fraud case. The two sides have agreed on what evidence will be presented in Stenger’s case… and in exchange, Stenger’s lawyers won’t force a whole bunch of well-connected Vermonters to testify under oath.

See, Stenger’s defense had argued that state officials knew about the fraud long before it was publicly revealed and did nothing to stop it. Given the contents of a recent document dump, it’s clear that Team Shumlin knew a great deal and did their best to keep it under the rug. So their appearances under oath would have been at least embarrassing and perhaps incriminating.

The Vermonters in question include former governor Peter Shumlin and at least five top officials in his administration. They would have taken the stand next week, so this deal is a last-minute reprieve for these worthies. And yet another roadblock in the path of public disclosure. This fraud goes back at least a decade, and we’ve still only seen the faint outlines of official complicity.

Imagine, just for shits and giggles, Shumlin takes the stand and his testimony is at odds with the evidentiary record. Or he ducks the questions and pleads the Fifth. Not a good look, that.

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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?

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There Are Two Ways This Can End, and They’re Both Terrible

Anne Galloway, the Captain Ahab of Vermont journalism, has returned to port with another big bloody chunk of the Great White Whale.

The whale is the EB-5 scandal, about which fundamental questions remain unanswered because a lot of information has yet to be made public. I don’t agree with how VTDigger is stonewalling its union, but this is an example of why we need Digger. Galloway is doing a tremendous public service by chasing a complicated story that no other media outlet has been willing to tackle.

Should I do a brief recap of the EB-5 thing? Is that possible? Well, here we go.

EB-5 is a program that offers green cards to foreign investors who put money into development projects in designated rural and/or poor areas. It was a small thing in Vermont until the great recession of 2008-9, when it suddenly took off. State oversight failed to keep up with its rapid growth. A lot of good projects got built, but Ariel Quiros allegedly committed large-scale fraud by taking money for projects he never built. He was assisted in these efforts by Vermont businessman Bill Stenger.

The state of Vermont, particularly the Shumlin administration, either failed to detect the fraud or tried to cover it up. Which one? Probably both, but we don’t know because a lot of key documents are still, several years later, being kept under wraps.

VTDigger has been diligently pursuing those documents, and keeps winning partial victories. Which then gives them reams upon reams of documents to go through.

On Wednesday, Digger posted another installment in its series. This time, it reports that state officials knew there was fraudulent activity two years before the the scandal was revealed by federal regulators in 2016.

Yikes.

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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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