Category Archives: EB-5

This is how a judge gives the one-finger salute

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Pity Ariel Quiros. Our least favorite dark-skinned flatlander is a nine-figure millionaire, but his assets are frozen due to his (alleged) massive fraud in the Jay Peak case.

He claimed monthly expenses of $250,000, which I’m sure we can all agree is the absolute minimum required to sustain human life. He asked that the court unfreeze all but $50 million of his estimated $200 million fortune.

For those who failed elementary school math, he wanted to get his hands on $150,000,000.

The judge’s response: 

The court granted Quiros access to three Merrill Lynch accounts containing $41,308.69.

And that’s how a judge, acting officially, gives someone the middle finger.

A little backdoor action at the Statehouse

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We’re in the late stages of the legislative session, a time when everyone wants to hear the final gavel come down and get out of Dodge. And when a whole bunch of bills are flying from chamber to chamber, from committee to committee, providing plenty of opportunities for lawmaking legerdemain. Or, as one observer put it, “the time of year when stuff is going to be slid through the cracks.”

I hear of two provisions designed to open the door to expanded gambling in Vermont. Both are attached to seemingly unrelated bills. In both cases, gambling opponents are trying to keep their eye on the bouncing ball.

The culprit, it’s safe to say, is Sen. Kevin Mullin, Republican chair of the Senate Economic Development Committee, a staunch supporter of, and crafty finagler on behalf of, expanded gambling in Vermont. For a number of years, Mullin has been pushing to expand the definition of state-sanctioned gambling, by hook or by crook.

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A little prayer for ethics reform

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Ah, Ethics Commission, we hardly knew ye.

Vermont will remain one of a handful of states whose politicians are unburdened by an ethics watchdog. The final benediction was pronounced Tuesday by House leaders, but the fatal blow had been struck in the Senate.

Well, not a blow, actually. The cause of death was slow and methodical.

A bill to establish a state Ethics Commission was shackled to the stone walls of a windowless chamber somewhere beneath the Senate. The cryptkeeper was Jeanette White, chair of the Senate Judiciary Committee, who openly questioned the need for any ethical oversight at all.

Senate Bill 184 was permitted barely enough gruel and water to survive. Over time, its muscles atrophied and it became a mere shadow of itself. Its teeth and claws were extracted, just to make sure it could never do any damage.

And finally,  at the end of last week, after months of captivity, it was paraded across the hallway, shambling, emaciated, wincing at its first glimpse of sunlight since January. By then, it was too far gone to revive. Not that the House put much effort into it.

Rest In Peace, S. 184.

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Update from the Free Press: “Never Mind”

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Earlier today, the Burlington Free Press posted an alarming story on its homepage. It quoted Michael Goldberg, the attorney currently operating Jay Peak and Q Burke, as saying the resorts were almost out of money and might permanently close.

I saw that, had the predictable “WTF” reaction, and wrote a post immediately.

The Free Press’ story was a stub, the industry term for a short urgent item that will be updated when more facts become available. And boy, what an update.

The full story confirms that the two resorts are cash-poor — but there’s still plenty of potential for their future, and Goldberg says he will “find a way to keep Jay Peak open, and open Q Burke Hotel in the fall.” He adds that there are already two high-profile hotel chains sniffing around Q Burke.

Well, that’s kinda different.

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This would be very bad.

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In case you thought the Stenger/Quiros/EB-5 mess couldn’t get any worse, take a look at this from the Burlington Free Press:

Jay Peak ski resort could shut down; Q Burke Hotel may never open.

Those are the dire conclusions reached by Michael Goldberg, the attorney who has taken over the Vermont properties as receiver…

Goldberg says the two resorts have very little cash on hand “and numerous upcoming expenses that…

… will quickly use up available cash and, if additional money is not obtained, force the Receiver to shut down operations at Jay Peak and eliminate any possibility of Q Burke opening.”

Goldberg notes, with an air of understatement, “This is a very different situation than the one claimed by Ariel Quiros in his sworn investigative testimony before the SEC.”

Dare I say, the worst possible scenario is now on the table? Dare I say also, Goldberg’s findings make Stenger and Quiros’ denials of wrongdoing seem that much less credible?

Whatever you think of ski resorts — their environmental impact or quality of jobs — this would be a severe blow to the Northeast Kingdom. It would also add a new dimension to the political fallout from this scandal.

Chances are, this won’t happen. Jay Peak in particular would be an attractive bargain-basement purchase, since it’s chock full of EB-5-funded amenities. Q Burke has a new hotel ready for occupancy. But the mere possibility of complete closure has to send shivers down the spines of everyone in the Northeast Kingdom, and everyone in Vermont politics.

Were the Newport projects just a bait-and-switch?

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Over the weekend, VTDigger’s Anne Galloway posted a detailed history of the Stenger/Quiros scandal entitled “Jay Peak’s Path to Fraud.” It’s a must-read for those wanting to get a good summary of the affair; the reporting is backed up by Digger’s two-plus-year investigation of the story.

And it raises a huge question in my mind: Did Stenger and Quiros ever seriously intend to build the megaprojects in Newport, or were they nothing more than flashy promises designed to dazzle the politicians and the public, and pave the way for what they really wanted — the transformation of their ski resorts?

In September 2012, Stenger and Quiros announced a bold initiative including major improvements at the resorts, a new terminal at Newport’s airport, and a suite of ambitious projects in Newport itself, including a window-manufacturing plant, a five-story office building, a hotel and conference center, and a marina, as well as a biotech facility in the works since 2009.

The numbers were mind-boggling: over half a billion dollars invested in the perennially impoverished Northeast Kingdom, and a rebirth for the city of Newport. Up to 10,000 new jobs.

Today, many of the ski resort improvements are complete or largely so, while nothing much has happened in Newport except for the demolition of some historic downtown buildings, leaving a hole in the cityscape. And now it looks like nothing will ever happen.

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Vermont, wellspring of twee liberalism

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Disclaimers first. Ben Hewitt is a terrific writer who’s accomplished more at a young age than I ever will. His book about the food scene in Hardwick is marvelous. He’s also got to be a better farmer than I, because our garden is friendly only to the hardiest of plants. (Garlic, green beans, potatoes, and tomatillos. Boy oh boy, do we get tomatillos.)

But I have to take issue with a commentary he wrote for VTDigger, entitled “The Northeast Kingdom’s True Prosperity.” It’s the kind of thing that makes millions of working-class Americans vote Republican.

Hewitt argues that the collapse of the Stenger venture is actually a good thing, because if it had been fully built, it would have radically transformed the Northeast Kingdom and its precious essence would have been lost.

The people of the Northeast Kingdom already have everything we need to truly prosper, and not merely in a material way. Indeed, with its abundance of unspoiled natural places, and its population of people who understand that a vital connection to the land and to one another is a type of affluence no silk-tongued developer can ever match, the Kingdom is already a region of true prosperity.

Not to put too fine a point on it, but holy f*cking crap.

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Serenade for Tiny Violins

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MouseTinyViolinPoor, poor Ariel Quiros. The alleged fraudster has had his assets frozen by the big bad federal government, to the point where he can’t “feed his family” or “purchase… a cup of coffee, let alone defend against the SEC’s allegations.”

So says Quiros attorney Charles Litchman, who is asking for the freeze to be lifted.

The people of the Northeast Kingdom weep for him.

But Vermonters are a resourceful breed. Maybe we can suggest some ways Ariel could generate a little cash, even as his millions remain sequestered.

For starters, perhaps he could sublet that $2.2 million Trump Tower condo, allegedly paid for with money looted from Quiros’ EB-5 development project.

I’m sure he has other properties that could be rented out or even sold; these guys always own a fistful of homes in the garden spots of the world. I hear he owns a 42-foot oceangoing sailboat; maybe he could hire it out.

I hear tell of a thing called “Groupon.” It’s how the kids are getting all kinds of great deals on the Interwebs. He should check into it.

There’s always the local food pantry. I’m sure they would welcome him with open arms, since a man of his means must have donated liberally to worthy causes in his community. Right?

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The hottest potato in Vermont

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Our political elites are still involved in the unedifying spectacle of desperately trying to create distance between themselves and a former best buddy. Unedifying, and beggaring belief.

The best bud, of course, is alleged EB-5 scamster Bill Stenger, who still denies  — also beggaring belief — that he knew nothing about the misuse of $200 million in investor funds, and that it was all the dark-skinned flatlander’s fault. Pretty much everyone in Vermont politics has cozied up to Stenger in the past, and anyone in a position to bestow favors did so on a regular basis. Democrats, Republicans, even Bernie. (Who has thoroughly ducked the issue, his endless narrative about the evils of corporate influence notwithstanding.)

At the head of the “run away from Bill” parade is none other than our esteemed Governor, Peter Shumlin. One of his worst attributes as a leader is his extreme reluctance to admit he screwed up, even in the face of overwhelming evidence. And that makes his frantic positioning in this case all the more incredible; you can almost hear him claiming that Vermont’s handling of Stenger was a “nothing-burger.”

Yeah, that phrase will be on his political headstone, and it’s largely his own fault. He’d be better off just acknowledging unpleasant realities and accepting responsibility. Because as the state’s chief executive, he is uniquely responsible.

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Did Bill Stenger make a deal with the devil?

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Previously in this space, I questioned if it was possible that an experienced businessman like Bill Stenger could actually be clueless to the rampant looting of his own project, and remain that way for several years running.

My conclusion: No, he could not.

Which brings us to this: If he knew what was going on, why did he let Ariel Quiros (who had illegally used EB-5 investor money to become Stenger’s boss) pursue this crooked scheme? Why did he put his own finances and reputation on the line, even when the signs of trouble became impossible to miss?

Two possibilities. First, he was getting a cut. Could be.

Second, he was in severe financial straits and needed a Quiros to bail him out. Call Quiros a “devil investor,” if you will. Certanly not an angel.

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