Op-Ed: Maine’s wealthy elite profit from political connections

But hey, what are friends for?

By J Dwight

Distrust of—and anger toward—the politically connected elite is one of the primary drivers of electoral politics in the last two election cycles. In fact, it is nothing new. Throughout American history, these revolts happen periodically.

That distrust proved to be warranted with the recession in 2008-09. It helped elect Paul LePage and a Republican Legislature in 2010, and it is one of the important motivations in 2012.

The revolt led to an historic upset in Maine with conservatives being elected in numbers that changed the State House in dramatic ways. The Tea Party movement exemplifies the revolt that has evolved into a movement that strongly continues.

The politically connected in business, media and government colluded to enrich themselves in ways that infuriated voters and taxpayers. In Maine a small number of powerful and rich people who can be named are at the center of this.

Exposure of gift cards scandals, lavish junkets and sweat-heart grants and finance deals have only confirmed that distrust and emboldened reformers.

This work has been difficult and at times marked by vituperative attacks from both sides. The work of cleaning up Maine’s house has just started. The elites are fighting back.

Four politically connected groups had control and got the “spoils” in Maine: the environmental elite; the mainstream media; the politicians; and the politically connected wealthy elite. All four have profited handsomely from their political influence.

Just consider in Maine how several prominent politically connected individuals got wealthy—or wealthier—at the voters and taxpayers expense.

Let’s start with two recent egregious examples that lead to more “hidden” ones.

By now everyone knows that Dale McCormick (former director of the Maine State Housing Authority) and Paul Violette (former director of the Maine Turnpike Authority) used their positions to dispense favors and money at the expense of the taxpayer. But few know how other political insiders have personally profited.

Remember that Dale McCormick was treasurer of the State of Maine while Angus King and John Baldacci were governor. One has to wonder what kind of deals were made during that time?

By now everyone knows that former governor Angus King and his business partner Robert Gardiner used their political connections and friends (Congresswoman Chellie Pingree) to help get an unnecessary Federal Loan Guarantee for the Record Hill Wind Power Project, as reported by The Maine Wire.

That loan guarantee immediately added some $4 million to $5 million to the bottom line for King and Gardiner by enabling them to sell the debt at below-market interest rates. This kind of advantage comes at the expense of the ratepayer and taxpayer. The means by which that federal loan guarantee was obtained is now under investigation by the Committee for Oversight and Government Reform, as also reported by The Maine Wire.

One could argue that Angus King took the recent step to distance himself from his project as a civic duty and that he “is smart, not clairvoyant,” as his handler said. But that argument is weak in the light of the letter effectively subpoenaing all communications sent before King announced his “divestiture,” which was dated before his announcement.

This isn’t the first time Robert Gardiner and Angus King used the taxpayer and voter gullibility to their advantage. The Maine taxpayer is still paying principal and interest (some $700,000 annually) on the bonds issued to pay for Maine Public Broadcasting Network’s upgrade. The bonds were issued under King’s signature. Gardiner is the former president of MPBN.

Not to forget that MPBN still receives an annual subsidy of almost $2 million. How that became part of the General Fund budget is being looked into. One could say that it was a debt of friendship for 20 years of working at MPBN hosting “Maine Watch” or just payback for helping Angus get elected. Hey, what are friends for?

One of King’s first jobs in Maine was lobbying for the Natural Resources Council of Maine at the State House. He later made millions by taking advantage of laws he lobbied at the State House for while employed by NRCM.

After being governor, he returned to the NRCM as a board member, along with other highly prominent political figures, such as Obama Bundler Robert “Bobby” Monks and long-time friend and political ally Congresswoman Chellie Pingree (who is still an advisory board member).

Though Chellie Pingree likes to take credit for shepherding through the Legislature “Maine’s largest land-bill initiative, Land for Maine’s Future”, Angus King signed the $50 million bond. It also saddled Maine citizens with heavy bond payments. Dale McCormick was state treasurer then.

Let’s get to the “or wealthier” part of this narrative

Robert Monks, Jr., one of the wealthiest individuals in Maine, is also owner (10%) and director of Maine Today Media, along with Chellie Pingree and her husband Donald Sussman (75%) and the Guild Union (15%).

Bobby Monks is known to own or have owned close to a billion dollars of real estate. He was campaign manager and chief money-man for Obama Maine 2008. His wife is Obama’s money-bundler for 2012.

He also owns some of the most prominent properties in Portland: One City Center (new home for Maine Today Media’s staff) and One Portland Square (Maine Headquarters for TD Banknorth). He also rents luxury apartments in Portland for $950 to $1,400 per month at three locations in Portland. Amazingly, he received low- or no-interest loans and no principal payment for 30 years from Maine State Housing Authority. Guess who was state treasurer and later executive director at Maine State Housing? Dale McCormick.

The sweetheart-financed Monk’s properties, 53 Danforth Street, Casco Terrace and Walker Terrace, are renting out as luxury apartments. Ostensibly these properties are “subsidized housing for low-income people”, but we, the taxpayers and citizens, are the ones paying one of the richest men in Maine the subsidies. He is pocketing the profit.

When the Democrats say, “The Maine State Housing Authority is an economic engine for the State of Maine,” they were being truthful—to a point. It was an engine of profit for one of the richest men in the state.

What is ironic and infuriating is that all of these rich, powerful, politically connected elite know that virtually none of this is illegal. Well, except for the gift card thing. And doubly ironic in that as it is not corruption, and that they do all of this “in the name of the people”.

Well, we the citizens and voters of Maine have the last say about that. We can elect reformers to continue to clean up Maine. Or we can let this group continue to profit at our expense.

J Dwight is founder and President of Dwight Investment Counsel and is on the Board of Advisors at the Maine Heritage Policy Center