Category Archives: Economy

The Augean Stable of state government

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

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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The Sergeant Schultz of Wall Street

“Waiter, waiter! My table is on fire! Can we have some water?”

“Sorry, sir, that’s not my station.”

I ended my last post about Bruce Lisman with a reminder of his 2010 comments to the effect that the 2008 financial collapse was some sort of unforeseeable natural event, a “Darwinian asteroid,” “this thing that happened.”

Well, he did offer some further comments on his Wall Street tenure during his interview with Mark Johnson, but they didn’t do anything to soften my criticism. He expressed pride in his own record as a Bear Stearns executive, and professed ignorance of the gross malfeasance that was going on at the doomed company.

In a sense, he had a point. He was busy running his own division, and it wasn’t his responsibility to make himself aware of what other executives were doing. Although, it must be said, the misdeeds of his fellow Bear Stearns execs turned out to be a disaster for his division’s clients as well as everyone else in the goddamn world.

And what does it say about his insight, his judgment, that he could be stationed on the deck of the Titanic and not see the iceberg coming? Or not raise serious questions about the decision to steer the ship through the North Atlantic ice fields? Especially when he’s so sharply critical of the Shumlin administration’s failure to plan ahead, take the long view, make government predictable and accountable, and gather the data necessary to make intelligent long-range decisions?

He is expecting far more of state government than he expected of himself and his fellow executives. And he is demanding a level of accountability for state officials that he is still not willing to assume for the catastrophic dealings of Bear Stearns, the firm where he spent his entire career.

Think I’m being harsh? Let’s look at the transcript.

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Keurig Green Mountain and the limits of tax incentives

Photo from killthekcup.org.

Photo from killthekcup.org.

Last week, Keurig Green Mountain announced 330 layoffs, including 200 in Vermont. The move came after sales and profit shortfalls hammered the company’s stock price. (Last November, KGM traded at more than $150/share. Now it’s barely over $50.) One analyst told MarketWatch.com that KGM shows “‘telling’ signs of a company struggling to turn around its business.”

The layoffs were widely reported in the Vermont media. What wasn’t mentioned is that since 2007, KGM has received approval for a whopping $7 million in job creation tax incentives through the state’s Vermont Economic Growth Initiative (VEGI). What does KGM’s contraction (and uncertain prospects) mean for its generous tax incentives?

I sought answers from Fred Kenney, Executive Director of the Vermont Economic Progress Council and head honcho of VEGI. He offered a fair bit of reassurance on the VEGI mechanism and state oversight of KGM grants, but I remain dubious on the fundamental concept of tax incentives as a means to economic growth.

In short, while VEGI is a well-designed program of its kind, the KGM experience rings some very real alarm bells about it.

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Internet access: We’re shooting behind a moving target

Note: This post cited incorrect FCC information. Please read the following post for an update.

Ever since he became Governor, Peter Shumlin has put a high priority on providing high-speed Internet access to everyone in Vermont:

In early January 2011, Shumlin created Connect VT, “an ambitious plan to deliver broadband and cell service to every corner of Vermont,” he said soon after in his State of the State address.

His initial promises were overly optimistic; reaching every nook and cranny of a sparsely-populated, rugged state is a tough task. But in late 2013, Shumlin was able to announce that over 99% of Vermont residences had high-speed Internet.

Hooray, right?

Perhaps not. The Federal Communications Commission tells a completely different story. When you look at the FCC’s state-by-state data for broadband Internet access, Vermont ranks 49th in the nation with 80% of our people lacking broadband. Only Montana is worse, at 87%.

No other state has more than 60% unconnected, and only three others are in the 50s — Arkansas, West Virginia, and Idaho.

So how can the Governor claim 99% high-speed Internet access, while the federal government puts us at a measly 20%?

The secret is how you define “high-speed Internet access.”

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Phil Scott wants your money

Now that the July 15 campaign finance reporting deadline is past, Lt. Gov. Phil Scott has begun to actively fundraise. He’s sent out a missive to “Friends and Supporters” asking for money. (And since the next reporting deadline isn’t until March 2016, for God’s sake, it’ll be the better part of a year before we find out how he’s doing. Way to fly under the radar, Phil.)

Not clear exactly what he wants money FOR, because he’s not yet ready to decide. Or so he says.

He does, however, inch noticeably closer to the gubernatorial starting line: “… we have more work to do, and I am preparing to step up and lead.” (bold print is his.) And later on, he writes:

“Strong teams get the best results. With the challenges we face right now in Vermont, teamwork is more important than ever and I believe I can lead a team that can make these things happen.”

Oooooohhh!

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Drawing the Shmethical Line

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

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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The Prince, Alone on His Balcony, Awaits the Adoring Throng

Welp, the biggest tease in Vermont politics is at it again. Our old buddy, retired plutocrat Bruce Lisman, is dropping hints that he’d possibly-maybe let himself be crowned governor if only the people would realize that he is exactly what we need.

No really, it's just a hat.

No really, it’s just a hat.

There’s been speculation about a potential Lisman run for governor since he founded his self-funded advocacy organization, Campaign for Vermont, almost four years ago. And every once in a while, for no apparent reason other than to draw attention to himself, he floats little trial balloons. Usually it’s with assertions like “many people have asked me to run…” and similar humblebrags.

But while I’m sure there are folks in his circles who think he’s the bee’s knees, I’ve seen absolutely no evidence of a Lisman groundswell, ever.

This week brings an opinion piece, posted on his own blog and also on VTDigger. It’s entitled “Let’s Snatch Victory From the Jaws of Defeat.” The gist of it: We need a leader (ME) with vision and fresh ideas. A leader (ME) exactly like, oh, modesty forbids. But you know who (ME) I’m talking (ME) about (ME ME ME PICK MEEEE). Continue reading

Win Smith’s 47% Moment

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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