Burlington Telecom’s financial debacle gets more expensive every day. The old $17 million figure is just that — old. Now Queen City taxpayers are on the hook for more than that.
According to contracts and other financial records obtained by “Fair Game,” the city has racked up close to $500,000 in consultant and legal fees dealing with the BT debacle.
Burlington has doled out $225,000 to its outside legal team from McNeil, Leddy & Sheahan, including $43,000 paid to the state Department of Public Service and the Vermont Public Service Board so they could hire experts to examine BT’s books.
In line behind the law firm is Dorman & Fawcett, the Quechee-based management consultants the city council hired in March to renegotiate BT’s lease with CitiCapital. After the telecom company missed several interest and principal payments, Citi gave BT until the end of September to propose a new repayment plan.
D&F has been paid about $150,000 for its work to date. That figure doesn’t include the price of day-to-day management the firm has provided since the departure of BT general manager Chris Burns.
The firm receives a base fee of $3000 per week, along with $1600 per day for D&F founder Terry Dorman, if he does anything above and beyond managing the project and negotiating with creditors. Other D&F senior staff are paid between $950 and $1600 a day depending on the work they do.
In its contract with the city, D&F specifies that it does not want publicity. It notes that if D&F hadn’t been mentioned in the media earlier this year, the firm would have required a “no public disclosure” clause. The contract also states, “In light of the nature of our business, we do not want any type of public recognition in this process and usually require that our engagement be kept confidential to any parties that are not directly related to this restructuring process.”
The “Blue Ribbon” probe into BT’s viability generated more consultant bills. In addition to D&F, the city paid Hiawatha Broadband Communications $27,475, Stratum $15,740 and NorthPoint $5000. Each of those consultants evaluated BT’s operations.
In May, D&F hired Hiawatha, for another $2660. In a new agreement with the city, Hiawatha is charging a flat fee of $7000 per month to help restructure BT.
Meanwhile, the Vermont Public Service Board may be closer to mandating a timeline to get BT back into compliance with its certificate of public good.
Attorney General Bill Sorrell says a legal probe of BT’s financial dealings from Orleans County State’s Attorney Keith Flynn should be ready within six weeks.
Hard to believe it’s been almost a year since BT’s financial woes went public.
If You Can’t Say Anything Nice
On Monday, Republican Brian Dubie and Democrat Peter Shumlin squared off for their first official, mano-a-mano debate on WVMT-AM’s “Charlie, Ernie and Lisa Show.” About midway through the debate, host Charlie Papillo asked each to say something nice about the other.
“I think Brian is an incredibly decent person and would give you the shirt off his back,” said Shumlin.
Then came Dubie, who had a much harder time responding. Perhaps he’s reading too many of the press releases from his campaign that are calling Shumlin “ethically challenged” and a liar?
“Peter is someone who is passionate about what he believes in,” said Dubie. Then he added, “I appreciate the fact that Peter loves his daughters. That’s a good thing.”
Yeesh. He probably cares about his mom, too. Maybe even apple pie.
Both candidates made mistakes during their first debate: Dubie said he’d “target the most vulnerable” when cutting state spending; Shumlin claimed he led the charge to lower the sales tax from 5 to 4 percent in the late 1990s.
Shumlin’s campaign later admitted the sales tax was supposed to drop to 4 percent but the legislature kept the rate at 5 percent — a gaffe that confirms Shumlin’s rep for stretching the truth.
Dubie’s campaign later claimed the lite gov meant to say “protect” the vulnerable rather than target them. Maybe, but if you listen to the rest of Dubie’s quote, he said state programs needed reform.
I’m sure he meant all the nonvulnerable programs, right? Right.
You can hear a replay of the live debate by tuning into 620AM Thursday at 7:10 a.m.
The pair have two more verbal sparring sessions this week. They debate Wednesday night at 7 p.m. on Vermont Public Radio and again Friday morning on WDEV’s “Mark Johnson Show” at 9 a.m.
The latter will be broadcast live from the Tunbridge World’s Fair.
Save the Rich!
Dubie loves to talk about cutting taxes, but doesn’t follow up with many details about for whom or how much.
That’s why Rep. Michael Obuchowski (D-Rockingham) recently asked the Joint Fiscal Office to quantify Dubie’s tax cuts. The estimate? Dubie’s plan amounts to another $248 million for Vermonters, including the wealthiest 1400, plus an additional $7 million or so in cuts to the corporate income tax.
Dubie argues the tax cuts would go to “job creators” who would invest that money in new companies, new hires, etc.
It’s a good theory, but a recent Moody’s Analytics study found that the wealthy saved the money they received from the tax cuts handed out by Pres. George W. Bush.
It’s also important to note that Dubie’s cuts wouldn’t be put in place until after the state closes an expected $110-120 million budget gap next year.
Neither candidate was specific about how to fix that financial problem, even when pressed during the WVMT debate.
Dubie said he supports completing the Challenges for Change effort and implementing some of the so-called Tiger Team suggestions ignored by the legislature — proposals that included cuts to the nonprofit housing and mental health agencies and trimming the state’s Medicaid rolls. Good luck getting those past a Democratic majority.
“Challenges” is the multiyear program designed to make government more efficient — I know, I know, it’s an oxymoron.
Shumlin wants to do more with “Challenges,” too, adding that his plan to create a single-payer system will save money — but didn’t say how much. He also suggested the state could save as much as $40 million in corrections. He favors releasing nonviolent offenders from jail, claiming they’d benefit from less-expensive drug treatment.
So, Now What?
Now that the primary is over, where do the “loser” campaign managers go? Some are staying on for the rest of the electoral season, while others are returning to private life.
Deb Markowitz’s campaign manager, Paul Tencher, is now running the Democrats’ coordinated campaign effort, which supports all statewide Democrats running for office.
Democratic Party executive director Robert Dempsey said the party picked up four or five ex-campaign workers from a variety of losing primary campaigns.
Others, however, are moving on or waiting for a phone call.
Kevin O’Holleran, Matt Dunne’s campaign manager, has moved to Washington, D.C., where his spouse took a job, and is taking some time off before rejoining the workforce.
John Bauer, Susan Bartlett’s campaign manager, is going back to his role as a marketing consultant.
One key campaign manager looking for work is Amy Shollenberger, who ran Doug Racine’s campaign.
With scant resources but an army of union supporters and volunteers, Shollenberger fully applied her grassroots organizing skills.
If a job doesn’t turn up within the party, however, Shollenberger says she’ll focus on ramping up her consulting biz, Action Circles, whose slogan is “building movements with action and hope.”
Shollenberger started the business last year, just before Racine hired her to run his campaign.
Because Shollenberger was focused on the recount, Dempsey said the party is only now trying to find a spot for her on the fall election team.
“Her effort did not go unnoticed,” said Dempsey. “She also has a lot of important connections to different groups and constituencies with whom the party would like to stay connected.”
Like Vermont’s unemployed campaign workers, many of the state’s labor unions are looking for a new horse, since theirs — Doug Racine — lost by a nose in the Democratic primary.
The Vermont AFL-CIO, the Vermont-NEA and the Vermont State Employees Association all supported Racine.
On Tuesday, the 7500-member VSEA backed Shumlin. Other major unions will likely follow suit in the coming weeks.
Another key state employees’ union — the Vermont Troopers’ Association — may endorse in the races for governor and lite gov within a few weeks. It’s already chosen Democrats Sen. Patrick Leahy, Rep. Peter Welch and Jim Condos for secretary of state.
As for other unions, the Teamsters joined Shumlin’s team early on, and Dubie had the pre-general election support of the Professional Fire Fighters of Vermont and the chapter of the International Brotherhood of Electrical Workers. The IBEW represents about 200 workers at Vermont Yankee nuclear power plant.
The IBEW and PFFV, both members of the Vermont AFL-CIO, are pushing the AFL-CIO’s executive committee to either back Dubie or sit out the race. Look for that decision on September 26. IBEW has three of the 23 votes on that executive committee, but it’s likely not all members will attend the meeting.
“In my mind a decision to not endorse is akin to backing Dubie,” says one union source who asked to remain anonymous. “If the AFL-CIO backs Dubie, it will spell the end of the union’s political relevance for the next 10 years. It will break the trust we have built with working-class Vermonters over the last decade.”
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