State officials have declined to release details of a $10,000 emergency legal contract for the troubled EB-5 foreign investor program, arguing that the contract is relevant to ongoing litigation.
The Vermont Department of Economic Development entered into a contract for "emergency EB5 legal counsel" with the nationwide law firm Baker, Donelson, Bearman, Caldwell and Berkowitz on Dec. 19, 2016, according to the state's online master database of contracts. The agreement is listed as a sole-source contract that was awarded without a standard bid process.
The state also reached beyond Vermont borders to contract with the law firm Locke Lord LLP for "legal services in support of the Vermont EB5 Regional Center" in July 2016, according to the database. The no-bid $50,000 contract expired at the end of June.
The Burlington Free Press requested both contracts through an Oct. 18 public records request.
After missing the 10-day deadline for a public records response, the Agency of Commerce and Community Development denied the request.
"In light of pending litigation involving the Jay Peak projects and the Vermont Regional Center," wrote Dale Azaria, general counsel for the Agency of Commerce and Community Development, "the records you requested are exempt from public inspection and copying pursuant to 1 VSA sec. 317(c)(14), as they are relevant to pending litigation in which the state is a party."
In April 2016, Vermont announced a massive fraud complaint against Ariel Quiros and Bill Stenger, the businessmen who used the EB-5 program to finance economic development projects in the Northeast Kingdom. The case is pending in Vermont Superior Court.
Meanwhile, some of Quiros and Stengers' investors have sued state officials who oversaw the EB-5 program. The federal government has moved to shut down the Vermont EB-5 Regional Center because it "failed to properly engage in management, monitoring and oversight for many years."
Gov. Phil Scott has said that state government needs to be transparent in EB-5 matters to rebuild the public's trust. His administration is preparing to release thousands of pages of EB-5 records that are relevant to the ongoing litigation in response to "a very great public interest."
The Burlington Free Press has appealed the state's decision to withhold the legal contracts.
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