Tag Archives: Doug Hoffer

Too Many Cooks Equals No Broth

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Sorry to do this to you first thing in the morning, but it’s time for a reading and math comprehension test!

Take a look at this table, and see if any numbers jump out at you.

AuditorTable 7.16

The abbreviations in the first column are for three departments in state government: Human Resources, Information & Innovation, and Finance & Management. And the answer, or at least the answer I’m looking for, is on the DHR line.

The Department of Human Resources has 25 supervisors and 82 classified employees. That’s a rather stunning ratio of one supervisor for every 3.28 supervisees.

There is no absolute ideal ratio; it depends on many factors. But rarely, if ever, is 1:3 a reasonable figure.

There may be perfectly good explanations for DHR’s ratio. But to the outside eye, it looks like featherbedding.

This table comes to us courtesy of State Auditor Doug Hoffer. It’s included in his latest performance audit, which exposes a dismaying case of administrative sloppiness in state government. In those three departments, administrators routinely failed to conduct annual performance reviews with their staff.

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Hey look, Doug Hoffer may have a fly to swat

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Don’t ever accuse the VTGOP of not being generous. They’ve apparently gifted Auditor Doug Hoffer with a new toy to play with a “serious” challenger for his post. I haven’t seen a news release or anything; all I’ve seen is this Tweet from VTGOP Executive Director Jeff Bartley.

Yay! Dan “Mr. Four Percent” Feliciano! The man who can never quite make up his mind whether he’s a Libertarian or a Republican. But no matter what the label, there’s one thing you can count on:

He. Won’t. Win.

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The sun sets on the Vermont Enterprise Fund

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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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Inartful dodges and implausible denials

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Must be a new experience for Bill Stenger, having a hard time getting his calls returned. After all, he’s been a major player at the intersection of Vermont business and politics for a long time now, benefiting from sweetheart deals and inadequate oversight (see Postscript below) courtesy of at least two successive administrations.

After years of holding together his massive EB-5 project with chicken wire and spit, Stenger is now embroiled in the sales pitch of a lifetime: portraying himself as innocent in the face of federal and state investigations and an increasingly ugly paper trail.

From VPR’s Peter Hirschfeld, we learn that federal officials “had strong forensic evidence of a massive fraud” at least two years ago, and that Stenger was subjected to an intensive interview by SEC investigators in May 2014.

And from the Burlington Free Press’ Jess Aloe, we learn that Stenger’s top financial executive resigned in 2011 “after [Stenger] failed to address concerns about the use of money from foreign investors.”

It is literally impossible to believe that an experienced entrepreneur like Stenger could somehow remain clueless in the face of all that. But there he was, telling the Free Press last Monday (two days before the SEC raided his offices, seized his papers, and changed the locks) that nothing was wrong. And on Friday, two days after the raid, he doubled down.

“There was a lot of stuff in the presentation that I got on Wednesday that I was not aware of,” Stenger said. “I can’t go any further than that. I’ve got to let it go at that. I’m trying to figure this out as well. I just need to deal with it.”

Okay, I see what we’re doing here: blaming the dark-skinned flatlander.

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A little bit slow and a fair bit lacking

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This whole Stengerville fiasco presents a quandary for the three Democratic candidates for governor. On the one hand, it’s the biggest political scandal in years, ensnaring most of the state’s power elite in its icky-sticky web. You’ve gotta say something. On the other hand, well, it blew up on Governor Shumlin’s watch, and you’ve got to draw a careful line when criticizing your own party’s incumbent.

I guess that explains why it took Matt Dunne, Sue Minter, and Peter Galbraith a solid four days to issue any sort of response. And why, in the interim, the candidates’ press-release operations carried on as if nothing had happened.

There was Sue Minter on Thursday, holding a doomed-to-obscurity presser on “an aggressive plan” to address water quality issues from PFOA to Lake Champlain and beyond. A really nimble campaign might have taken notice of the Wednesday night SEC raid on Stengerville and postponed the event, but maybe that’s asking too much.

Matt Dunne did no better; on Friday he disclosed his personal financial information, as if anybody cared at that particular point. It may be unfair to conclude that the release was a double-barreled newsdump: it came on a Friday when everybody’s attention was focused elsewhere. Yes, it may be unfair, but these are cynical days.

As for Peter Galbraith, that rarest of phenomena: the sound of silence.

Finally, on Monday, all three came out with a gun or two a-blazing, but none have fully addressed the issues raised by this scandal — our scattershot approach to helping specific businesses and the lack of transparency and accountability in the process.

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There’s a gnat buzzing Beth Pearce’s head

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Oh goodie. In this campaign season full of ill-considered, no-hoper, “who asked for this” candidacies, comes yet another: a 30-year-old financial analyst with no political experience who’s only lived in Vermont for four years has decided to challenge State Treasurer Beth Pearce for the Democratic nomination.

Hahahaha.

You go to any campaign or party event, Beth Pearce gets louder cheers and more applause than anybody else. She is incredibly popular. She is not losing the primary, no way, nohow.

The financial analyst in question, Richard Dunne, is running because he favors divestment of state funds from fossil fuel stocks. He’s on the same page as Governor Shumlin among many others. And Pearce’s steadfast opposition to divestment has been a thorn in Shumlin’s side since he started tub-thumping the issue earlier this year.

But there’s no way he’s backing a challenger. There’s no way Dunne can ride this one issue to victory in the primary. And Pearce’s stand on divestment should not put her in danger of losing her post.

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A useless program gets a little better

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Raise a glass, boys, to Janet Ancel, hardworking chair of the House Ways and Means Committee. For it was she who ignored the express wishes of the Shumlin administration and added some oversight to a program that sorely needs it.

I’m talking Vermont Employment Growth Incentive (VEGI), the slush fund economic development program that gives public funds to private employers promising to grow their workforce. VEGI was up for renewal this year, and the administration wanted a permanent extension (or at least five years) with no strings attached.

What it got instead, thanks largely to Rep. Ancel, was a three-year extension with legislative oversight added. She also inserted a mandated “cost-benefit analysis” to determine whether VEGI is actually accomplishing what it’s supposed to. And yesterday, the full House approved an omnibus economic-development bill including her VEGI provisions. A noteworthy accomplishment, given the administration’s active resistance.

After the jump: the unprovable merit of VEGI. 

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The million-dollar greeting card

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Okay, here’s my promised post about the Vermont Enterprise Incentive Fund.

It’s garbage. It stinks. It’s an insult to everyone, liberal or conservative, who believes in good government.

It needs to die. Or at the very least, it needs a complete overhaul. Strong words, but I can back ’em up.

The Enterprise Fund, for those just joining us, is a program of state grants for businesses moving to, or making significant investments in, Vermont. It is meant to be used in “unforeseen or extraordinary circumstances.” Those are Governor Peter Shumlin’s own words, quoted from his own press release.

The Fund was most recently deployed last Friday with a $1 million grant to GlobalFoundries, in support of a $72 million investment in its Essex Junction facility. In a number of ways, this grant seems at odds with the Fund’s stated purpose. Let’s start with this: GlobalFoundries announced the investment in October. By November, it had already invested $55 million of the money.

So, absent a time machine, how could an investment made in October be contingent on a state grant approved three months later?

Even if you ignore that anomaly, if the investment is already well underway, how in the world can you classify it as “unforeseen or extraordinary”?

Well, you can’t. In the words of State Auditor Doug Hoffer, this grant was “basically a thank-you note.”

A million-dollar thank-you note. Next time, maybe just go to Capitol Stationers. They have a very nice selection.

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Is there a fight brewing over the Enterprise Fund?

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Earlier today, VTDigger broke the news that the state Emergency Board (four top lawmakers plus the Governor) had met on very (VERY) short notice to approve two state grants from the Enterprise Fund: $1 million to GlobalFoundries and $200,000 to BHS Composites. And I commented that this is the kind of thing that makes some see the Governor as a slippery dealmaker.

Well, here’s something you didn’t know. TheVPO has learned, as they say, that 50 state lawmakers wrote a letter to the Emergency Board asking it to postpone action on the grants.

The plea fell mostly on deaf ears, as the Board approved the grant on a 3-1 vote.

One of the letter’s signatories was Rep. Chris Pearson (P-Burlington). Via email, he explained the reasoning:

It was my hope that we could consider using the money to help fill the [FY 2017] budget gap or, more urgently, the [FY 2016] budget adjustment challenge.

The letter was written before the EB’s agenda had been publicly warned — which happened only yesterday afternoon. Pearson adds:

Now that it’s clear the money was for Global Foundries it’s puzzling how a company that was given $1.4 billion to take over the plant could find $1 million much of a game changer.

You and me both, but more on that in a moment. First, the political ramifications of this letter.

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The Hoffer report: an indictment of inertia

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State Auditor Doug Hoffer did something unusual on Friday: he pre-released one of his reports, embargoed until this morning at 10 a.m. Usually, he just releases them when he releases them.

The reason he did so, I infer, is that this may be the most explosive document to emerge from his office, and he wanted to give us media folks time to digest it. The report is entitled “Sole Source Contracts: Extraordinary Use in Ordinary Times.” The topline: state agencies issue a whole lot of contracts without any competitive bidding. And while sole-source contracts are absolutely justified in many circumstances, the quantity is staggering — and, too often, the stated rationale for bypassing the bidding process was wafer-thin.

Background: In the course of his work, Hoffer had repeatedly come across instances of sole-source contracts. Eventually he decided to assess the scope of the situation. His team reviewed nearly 1,000 contracts issued during FY2015 by five state agencies. (Reviewing all state contracts would have been a monumental task.)

The report paints a picture of administrative laziness at best, corruption at worst. Some key passages from the Executive Summary:

The SAO [State Auditor’s Office] found that while sole source contracts are intended for extraordinary circumstances, this selection method is commonplace for some departments and agencies. … Sole source contracts accounted for 41% of these contracts, and they valued $68 million, or 27% of the total amount.

… While some sole source selections were justified, many were not. Numerous memos lacked a justification for using a sole source selection, and others lacked evidence to substantiate claims. We identified memos based on erroneous information and time constraints that appeared to be of agencies’ own making. …Furthermore, familiarity with contractors often took precedence over an open and competitive process.

… The high frequency of sole source contracts across the five departments and agencies in this analysis raises serious questions about the effectiveness of the State’s contract management.

Yeah, it sure does.

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