EB-5 public records lawsuit before Vermont Supreme Court

EB-5 public records lawsuit before Vermont Supreme Court

2023/02/05 12:36pm

The Vermont Supreme Court on Wednesday heard arguments related to the state’s withholding of public records in the Kingdom Con EB-5 scandal.

The Vermont Journalism Trust, which operates the online news site VTDigger, filed a lawsuit in 2020 against the Vermont Agency of Commerce and Community Development. Reporters were trying to get records that would show why the state allowed Jay Peak developers to continue signing up investors for EB-5 projects even after federal officials were investigating some of the projects for fraud. A lower court ordered that the state turn over nearly 1,000 documents, but they withheld some 75 records and have not identified what they contain.

In court Wednesday, Solicitor General Eleanor Spottswood argued that the state is not required to identify which documents are being withheld. “You can identify a document in 100 different ways, but the state isn’t required to give all 100 of those ways. You might as well reproduce the document itself,” she said.

But Vermont Journalism Trust lawyer Harrison Stark says the Vermont Public Records Act requires they disclose that information. “Whether those documents share certain fundamental factual information that could then justify withholding -- which is essentially the same explanation for each -- that may very well be true your honor, but here we don’t even know what the 75 documents are,” he said.

The Vermont Journalism Trust is now trying to secure what’s called a “Vaughn index” or a written justification from the state on why they are withholding materials.

The federal EB-5 program gives green cards to foreign investors who invest in economic development projects. A group of those investors in the Jay Peak projects has alleged in an ongoing civil case that the state was complicit in defrauding them out of hundreds of millions of dollars by failing to oversee the projects. What’s contained in those undisclosed records could shed a light on that case. too.

There’s no timeline for when the high court will reach a decision.