They say a fool and his money are soon parted. Barre resident Wallace Nolen thinks the State of Vermont should do more to wise people up.
Nolen is on a mission to reunite people with lost money from insurance policies, uncashed checks, old bank accounts or forgotten safe deposit boxes, among other assets. By law, when an asset is abandoned, it’s turned over to the state — the length of the holding period varies depending on the type of asset.
Treasurer Jeb Spaulding is the “lucky” politician whose office receives these assets, and it’s his job to see that the money is returned. What official wouldn’t want to give checks to people rather than asking them to cough up another tax payment to the state?
But Nolen doesn’t believe Spaulding is embracing the task with sufficient vigor. For months, he’s been gathering the names and contact information of state and local officials in an effort to notify Vermonters that the state has some of their money. He’s filed suit against the State of New Hampshire to force it to take additional measures to get money back into the hands of residents. He said a similar court action in Vermont is likely.
In 2007, a federal judge in California ordered the state to send out letters on official letterhead to claimants. At the time, the state was holding about $5 billion of unclaimed assets and adding about $900 million each year.
Nolen says if Spaulding, or Gov. Jim Douglas, wanted to “stimulate the state economy,” they would send out similar letters before being forced to do so by a judge.
The state is holding 211,087 unclaimed properties valued at $48 million, according to the treasurer’s office.
Nolen hopes to induce a sizeable raid on the state treasury as a way to force lawmakers to curtail additional spending. Or, at least make more people aware that they have unclaimed money.
“I don’t know what the treasurer’s going to do when people start filing claims en masse, but the state is going to have to make more cuts in order to pay out the money,” said Nolen.
Maybe. Spaulding said the state could find it difficult to pay back all the money it owes, but it’s doable.
“We’ve never had a huge run at once, and the money is being utilized by the state in the meantime,” said Spaulding. “Of all the potential financial challenges I could spend some imagining and planning for, this isn’t one of them.”
That’s because Spaulding said no matter how hard he tries, not everyone wants their money back. The treasurer said he wants to reunite people with their money, and his office is doing all it can. “Nothing gets people more excited than getting money, so it’s in my best interest as an elected official — and a politician — to make sure they get it,” he said.
Spaulding is getting far more unclaimed property back into the hands of Vermonters than did his predecessor — none other than current Gov. Jim Douglas. In his final two years as treasurer, Douglas returned a scant $3.9 million to their rightful owners. Since 2003, Spaulding has returned $28 million, or about $4 million a year.
That’s still not enough, said Nolen.
In 2009, the state paid out $5.5 million to Vermonters, an average of $625 per check, although a disputed estate of $2.5 million was doled out to heirs. That was the single largest payout in recent history. The next largest was $432,000, in 2004.
Still, the money is coming in faster than it’s going out. In 2009, the state took control of $8.2 million in unclaimed property.
“What’s interesting is, with the economy being the way it is, we’re seeing people claim smaller sums,” said Spaulding. “It was fairly typical in previous years to see people ignore amounts less than $100 or so, and now people are claiming everything they can get.”
Read the Fine Print
Plenty of Queen City residents were shocked to learn in last week’s “Fair Game” that they are floating Burlington Telecom a $17 million loan.
Their burning questions? Who approved that loan and when was it approved?
“Fair Game” contacted current and past members of the Board of Finance and the Burlington City Council, including Council President Bill Keogh, former president Kurt Wright and former councilor and finance board member Sen. Tim Ashe. None of them could recall being asked to approve a cash advance of any amount to BT. A “Fair Game” review of minutes for both boards found no evidence of any action, either.
CAO Jonathan Leopold told “Fair Game” he didn’t need special approval to loan the cash to BT, but added that he kept the finance board apprised of the cash transfer.
“Managing cash is part of the function of the treasurer’s office, and we do this kind of transfer all the time,” said Leopold. “The only time we get approval for anything that we do is when we conduct borrowing through outside entities.”
Leopold said the city often advances money to city “enterprise” entities such as BT, the airport and the electric department — usually because a bond sale or financing can’t happen fast enough. Once the bonds are sold, the money is repaid.
Not so with BT. The city is floating that money indefinitely — until it can refinance its existing debt or more cash comes in from a private or municipal partner. The latter is an option only if BT gets permission to expand beyond the city’s borders.
The revelation of the $17 million loan may stoke new interest in more structured oversight of BT. Currently, most of BT’s business occurs out of public view, due to concerns about proprietary information getting out to its competitors.
All we do know is that Mayor Bob Kiss said BT is willing and able to expand beyond the city’s borders. In fact, it needs to in order to make more money to survive. Currently, the city is in violation of two key covenants in its license to do business, known as a certificate of public good: It hasn’t laid cable past every Burlington home, and it hasn’t repaid taxpayers the $17 million.
At Monday’s city council meeting, Leopold admitted he was not aware the loan had to be repaid within 60 days.
Also missing is a detailed list of exactly how BT is spending the $17 million. When BT launched in 2006, officials said it would take $22 million to fund its initial startup. In 2007, that number had grown to $33 million.
Today, with only 4600 subscribers and about 85 percent of Burlington’s homes positioned to connect to BT, costs are closing in on $50 million as of the end of this year. It may take another $10 million.
In other words, real money.
Campaigns on Autopilot
Lt. Gov. Brian Dubie launched himself into the already crowded race for governor last week, ending weeks of speculation and setting off the next round of Campaign 2010 announcements.
Rather than hold a press conference, Dubie released a short statement via email and then conducted a series of one-on-one media interviews. Not a bad strategy, as it keeps the pols in control and minimizes the chances of a public gaffe or fumble.
To date, no gubernatorial candidate has held a press conference to launch a campaign. Of course, the cycle has started earlier than in previous years, and that means everyone needs to stretch their media exposure over as long a time period as possible.
Playing coy is one way to do that. Dubie managed that masterfully for several weeks.
In the end, candidates seem to be taking their kickoff tips from the world of restaurants: Have a “soft” opening to generate buzz, and then a “grand” opening to welcome the public.
Expect additional “soft” openings in the weeks to come as we await official announcements from Republican Sens. Randy Brock, Phil Scott and Kevin Mullin, who may run for lite guv, and Democrats Peter Shumlin and Matt Dunne, who are likely to enter the race for governor.
I’m already feeling stuffed.
It Doesn’t Add Up
Still no verdict on whether Democratic State Sen. Ed Flanagan will face charges stemming from alleged lewd behavior at the Greater Burlington YMCA. In the meantime, “Fair Game” has learned of another problem that could derail Flanagan’s political future.
According to a review of campaign finance reports with the Secretary of State’s office, Flanagan’s 2008 reports weren’t filed until May 4, 2009 — nearly nine months late and with no accounting of how he spent the $2300 he raised.
Compare that to his post-election report in 2006, a meticulous six-page accounting of all the money coming in and going out.
There are no penalties for filing incomplete and late reports, but, given Flanagan’s long political career, you’d think he would know the rules by now.
(War) Pigs Roast
U.S. Sen. Bernie Sanders (I) may make Congress regret its hasty action against low-income advocacy group ACORN.
Sanders and U.S. Sen. Patrick Leahy (D) were just two of seven senators to vote against withholding federal housing funds to ACORN. During a similar House vote, Rep. Peter Welch (D) voted with the majority to cut off funds to ACORN.
The votes came on the heels of a videotape aired nationally that showed some ACORN employees giving tax advice to two actors posing as a pimp and prostitute.
The legislation, however, was crafted so broadly that any group found to have defrauded the government could be banned from receiving money.
And, guess what? Defense contractors — known for their own version of pimping and defrauding taxpayers — should face the same scrutiny as ACORN, Sanders told his colleagues. Senators agreed, and amended the defense-spending bill last week to include a provision that would force the Department of Defense to calculate how much money is going to companies that have engaged in fraud, and then come up with penalties for repeat offenders.
“The sad truth of the matter is that virtually every major defense contractor in this country has, for a period of many years, been engaged in systemic, illegal and fraudulent behavior, while receiving hundreds and hundreds of billions of dollars of taxpayer money,” Sanders told his colleagues.
In some instances the lives of soldiers, not just money, has been at risk, Sanders said.
For the sake of comparison, ACORN received a mere $53 million over 15 years, while defense contractors receive hundreds of billions in a single year.
According to the nonpartisan Project on Government Oversight, the three largest government contractors — Lockheed Martin, Boeing and Northrop Grumman — have engaged in 109 combined instances of misconduct just since 1995, and have paid fees and settlements for this misconduct totaling $2.9 billion.
Now, that’s nuts.
Big Screen Bernie
As we noted last week, Sen. Bernie Sanders has a cameo appearance in Michael Moore’s new film, Capitalism: A Love Story.
In his one-minute cameo, Sanders explains that U.S. culture too often values greed over public service.
“One of the things we have done here is, we’ve become very religious in worshiping greed,” Sanders tells Moore. “On the magazines, we put on the covers guys who make billions of dollars and ignore the cops, the firemen, the teachers and the nurses who, every day, are doing so much to improve the lives of people. We’ve got to change our value system.”
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