Ten months ago, the U.S. Securities and Exchange Commission accused Bill Stenger and Ariel Quiros of using more than $200 million of investor money for purposes other than where it was supposed to go. The SEC described the fraud as a “Ponzi-like scheme.” Quiros was also accused of using money diverted from investor accounts for his own personal benefit. This scandal shocked most of us because we believed that fraud allegations of this magnitude happened elsewhere, but not in this state.
Until last year, most Vermonters paid little attention to the EB-5 program — a federal program through which foreigners seeking to live and work in this country can invest $500,000 in projects and ultimately receive a green card that allows them to stay in the United States. But the scandal has changed that. Now Vermonters are fully aware of the EB-5 program and have become more skeptical of it, of the people that promoted it, and of our state government that was supposed to provide oversight and prevent these types of financial shenanigans.
And yet, almost a year since the public was informed about the scandal, Vermonters are still in the dark regarding the actions of state officials. That’s because state emails pertaining to the EB-5 program are being kept from Vermonters.
The Vermont attorney general’s office still refuses to release the emails of state officials that would provide Vermonters with insight into the EB-5 program. A lack of transparency never quells skepticism, it only fuels it, and leads to the inevitable question: What are they trying to hide?
The reason the attorney general’s office is refusing to release EB-5 emails keeps changing. First, these emails were under what the attorney general called “a litigation hold” and therefore couldn’t be released. But as Vermont Secretary of State Jim Condos explained, a litigation hold is meant to prevent the destruction of emails, not to prohibit their release.
Then the attorney general’s office said even if they were to agree to release EB-5 emails (which they are adamantly against doing), it would cost VTDigger — the online news service that has asked to see these emails — approximately $200,000 for the state to review and copy them. This cost would have to be picked up by VTDigger. But Condos found he could respond to a similar email request in a much more efficient manner using existing state technology rather than the elaborate and costly process the attorney general’s office insists on using.
VTDigger took the state to court and the state vigorously fought against the release of these emails under the auspices that there could be future litigation against the state, or that the state of Vermont may wish to pursue litigation against others at some future date. First of all, there is no current litigation against the state, and if the state wishes to pursue litigation, it seems that civil or criminal action would have begun by now. Using this future litigation argument allows the state to withhold emails for years. It’s indeed ironic that taxpayer money is being used to prevent these same taxpayers from seeing emails regarding this scandal.
What’s being hid? Vermonters don’t know. Likely there are emails that will embarrass. But embarrassment is not a good reason to withhold emails from the public. In 1973, a special U.S. Senate committee began investigating the break-in at Democratic National Committee headquarters at the Watergate office building. Republican Sen. Howard Baker asked White House counsel John Dean this famous question: “What did the president know, and when did he know it?”
Vermonters should be asking a similar question. What did state officials know, and when did they know about problems in the EB-5 program? The answer can only be obtained by the release of the emails now being held by the Vermont attorney general’s office. If the emails are released, perhaps the skepticism hanging over program and the people involved, including government officials, will subside. Mike Smith is the host of the radio program, “Open Mike with Mike Smith,” on WDEV 550 AM and 96.1, 96.5, 98.3 and 101.9 FM. He is also a political analyst for WCAX-TV and WVMT radio and is a regular contributor to Vermont Business Magazine, the Times Argus and Rutland Herald. He was the secretary of administration and secretary of human services under former Gov. Jim Douglas.
- State of Vermont vs Bill Stenger & Ariel Quiros
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Ariel Quiros & Bill Stenger
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