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The Paper Trail 

Fair Game

Published November 4, 2009 at 9:26 a.m.

Fair Game is Seven Days’ weekly political column.

The media has engaged in plenty of navel gazing and hand wringing in the wake of several small “s” scandals involving officials keeping info secret from the public.

Oh, if we only had more resources, we’d be able to hold officials accountable, has been the mainstream media’s lament. What would the public do without us? How our democracy would suffer.

Sure, newspaper layoffs and the downward financial spiral have fostered an institutional malaise amongst those left standing. Many can’t help but wonder, Am I next? Still, uncertainty shouldn’t make journalists forget what they’re paid to do while journalism still exists.

As “Fair Game” pointed out two weeks ago, the common thread among scandals big and small in Burlington, Montpelier, Winooski, Waterbury and elsewhere is the increasingly common use of executive sessions to discuss matters that are better aired in public forums.

But there’s more to it. After reviewing a stack of documents requested from Montpelier germane to the $400,000 overpayment the city made to Scott Construction, I can say: City Manager William Fraser made numerous, public mentions about the repayment, or lack thereof, dating back to 2007. They were included in weekly managers’ reports provided to the mayor and council. The public and the media could review them at Montpelier City Hall.

In fact, Fraser told “Fair Game” that if a reporter or any member of the public had asked about Scott’s promissory note, he was prepared to turn it over immediately.

Dan Scott asked us in our meeting if we could keep this quiet, and we said that we couldn’t — that it would be in our budgets, and I would turn over a copy of the note if anyone asked,” recalled Fraser.

As a result of the public outrage, the city will post city council material online. It’s also reviewing its policy regarding executive sessions.

In Burlington, the paper trail is not as easy to follow, and that has fostered all kinds of conspiracy theories. In fact, the biggest “crime” related to the $17 million “loan” from the city’s checkbook to Burlington Telecom may be one of omission. Who’s guilty? It could be any number of folks, from Chief Administrative Officer Jonathan Leopold to Mayor Bob Kiss and the city’s cadre of lawyers.

I can honestly say the media — “Fair Game,” included — missed the story in Burlington, too, along with the Burlington City Council and the Board of Finance.

All the evidence was right there in the city’s audited financials. Look at the annual report available at Burlington City Hall and you can see BT’s deficit mushrooming between FY 2007 and FY 2008.

A separate document, the FY 2008 audited budget — issued in June 2009 and available on the city’s website — explains the shortfall: “Burlington Telecom has negative pooled cash in the amount of $8,654,981 at June 30, 2008. Subsequent to year-end, that negative balance has increased substantially. The City intends to refinance its debt to include paying back the other City funds. The City believes it has the ability to do this. However, if this does not happen, it could have an adverse impact on the City’s cash flow and on the classification of the negative cash, resulting in a significant reduction in the City’s General Fund balance.”

Scary stuff. Who wrote it? None other than the alleged loan, er, lone gunman himself: CAO Leopold.

Who Knew What When?

As city councilors and residents continue to sort through the Burlington Telecom mess, a couple of questions keep coming back: How did the “loan” approval go unnoticed? And what did people know and when did they know it?

To the first question, as “Fair Game” has reported, the decision to use pooled cash to fund BT was largely Leopold’s to make, and was done so with the apparent consent of the mayor, BT managers and perhaps several members of the city’s crack legal team.

The loan was made without explicit approval from the council or the Board of Finance. In other words, a system with checks but no balances. Leopold says the board, and the council, gave implicit approval when they OK’d the annual budgets.

Mayor Bob Kiss said he will implement new rules governing how money from the cash pool is loaned to various departments, with the goal of providing greater transparency. His recommendations will be unveiled on Monday at the Board of Finance meeting.

That’s great for moving forward, but one has to wonder if anyone on the council or the Board of Finance ever reads the detailed reports supplied to them by the city’s outside auditor, Sullivan & Powers. Audit reports, which are considered public documents, are distributed annually to the Board of Finance.

In both the FY 2007 and FY 2008 audits, the green eyeshades at Sullivan & Powers raised concerns about how the city was accounting for BT’s cash loan to fund its operations.

In FY 2007, the auditors noted that the city was not properly accounting for how the BT loan was being invested in capital assets. In FY 2008, they believed the loan was a possible violation of its Certificate of Public Good (CPG).

Both years, Sullivan & Powers noted that BT has “no controls or procedures in place to monitor and document compliance” with the CPG. This despite the fact that BT has a full-time compliance officer.

Glad to know someone was paying attention and speaking up. Too bad no one was listening.

The Fix Is In

Two separate committees formed to address the Burlington Telecom financial fiasco will start meeting next week.

One committee, chaired by Councilor Karen Paul (I-Ward 6), will craft the rules for an audit of BT’s finances and operations. The other, chaired by Councilor Joan Shannon (D-Ward 5), will look at BT’s governance structure.

At their Monday council meeting, councilors are expected to take up a resolution making public all the relevant correspondence between the Kiss administration and its lawyers.

That could answer lingering questions about whether the city rebuffed legal advice to disclose CPG violations a year ago.

City attorneys said they advised the administration last November to bring the violation to the attention of the Public Service Board. The administration agreed to do so, but only when it also could offer a financing remedy. That remedy never materialized.

Those same attorneys then told the mayor directly in April that they needed to immediately correct the situation.

Finally, in May, attorney Joe McNeil said he brought the issue to the attention of City Council President Bill Keogh, and outlined the need to present the city’s case to the Public Service Board.

At last week’s five-hour city council meeting, Councilor Ed Adrian (D-Ward 1) wondered aloud whether the legal team encouraged the administration between November and April to come clean on the CPG violations.

He and other councilors asked to see all legal correspondence. They got the packets on Friday. At next week’s council meeting, Adrian and others will urge fellow councilors to vote to make the files public.

The Robots Are Taking Over

Profits at the parent company of the Burlington Free Press — Gannett Co., Inc. — fell 53 percent in the third quarter, marked by a 28 percent drop in ad sales in the company’s publishing division.

Despite the declines, GCI still made a profit thanks to layoffs, falling newsprint prices and other cost-cutting efforts. The nation’s largest newspaper chain earned $73.8 million, or 31 cents per share. That’s about half what it earned a year earlier: $158.1 million, or 69 cents per share.

In the coming months, Gannett will roll out new efforts to save money: It will implement self-service obituary notices and will consolidate all ad production at two sites: Des Moines, Ia., and Indianapolis, Ind.

Though still profitable today, the company’s future looks increasingly bleak as the circulation of daily papers continues to plummet.

As of March 31, 2002, the Free Press had a weekday circulation of less than 45,000, and 50,000 on Sundays. The most recent Audit Bureau of Circulation report puts their weekday circ at 33,489 copies weekdays and 42,180 on Sundays.

That bad news came in the same week the Freeps published a letter to the editor advocating that people take hunters out into the woods and shoot them. The oversight incurred the wrath of hunters nationwide.

The paper issued a public apology and pulled the letter from its website. But they may have connected with a new demographic in the process: militant, gun-toting vegans.

Dunne Deal

Two’s company, three’s a crowd, and four’s … a lot of Democrats running for governor.

On Tuesday, former Windsor County State Sen. Matt Dunne entered the Democratic primary for CEO of Vermont.

That makes a quartet of Dems vying for the right to take on the GOP’s presumptive gubernatorial nominee: Lt. Gov. Brian Dubie. Dubie is not likely to face an opponent in the Republican primary.

Dunne joins Secretary of State Deb Markowitz, State Sen. Doug Racine (D-Chittenden), and State Sen. Susan Bartlett (D-Lamoille). On November 16, Senate President Pro Tem Peter Shumlin (D-Windham) also will enter the race for guv.

Dunne, 40, who works as community affairs manager for Google, may be the one to watch in a primary that could only require 12,000 votes to win. In just three weeks, he said he’s raised $30,000. Not a bad start.

Celebrating a Life

In a recent “Fair Game” I mentioned the passing of two of Vermont’s iconic civil-rights figures: Larry McCrorey and John Tucker. A memorial service was held last month for McCrorey at the University of Vermont, where he taught for many years. A memorial for Tucker will be held this Saturday, November 7, 3 to 5 p.m., at the Unitarian Universalist Society in Burlington. End of an era.

Got a news tip? Email Shay at [email protected]

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About The Author

Shay Totten

Shay Totten

Shay Totten wrote "Fair Game," a weekly political column, from April 2008-December 2011.


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