Saturday, October 2, 2010

Postscript on tax delinquencies at The Ostrich

Subtitle: Accountability, and the lack thereof in public affairs.

The other day, we posted this little item passing along a news report that Brunswick Publishing, owner of The Ostrich (known to some as the Times Record), or as we have called it from time to time, the NOTWIUN, has been delinquent on its property tax payments to our fair town.  The report was found here.

As often happens, one realizes in retrospect that there is more to the story than first met the eye.  We refer, in the case before the court of public opinion, to this little nugget:

Three years ago, BP received financial assistance when the state provided it with access to $7 million in funding from the tax-free bond market through the Finance Authority of Maine (FAME). That move became controversial when, in 2008, Brunswick Publishing’s new owner, Sample News Group, laid off ten employees.

A Sample official had previously told FAME the bond money would be used to, among other things, “maintain current headcount and payroll” at the paper.

Failure to be held accountable is a constant complaint about our elected officials at all levels, and we bow to none when it comes to chagrin motivated by this failure.  In this example, we have a second order version of this phenomenon: the failure of elected officials to hold accountable those to whom they doled out public resources conditioned on commitments which end up being broken, sometimes almost immediately.

If you look at the linked item in the quote above, you’ll discover that the recently referred to Senator Stan Gerzofsky and former Commissioner John “Protocols” Richardson are (duhhhh!) tied to the story. 

So why wasn’t Brunswick Publishing held accountable?  You can make your own guesses.  You can ask, of course, what form such accountability might take.  And you can ask whether that form was specified in writing before the public was saddled with the obligations involved.

I can just hear the answers to an imagined question: “What could we do?  We can’t shut them down, and if we could, then more jobs would be lost.”

I think what we have here could be called a “one-sided corporate welfare” deal.  For the more worldly, we might call it a “quid non pro quo,” or loosely translated, something for nothing.

This story is “printers ink already through the presses” in a matter of speaking.  But there is a lesson to be learned.

The ill fated Oxford Aviation proposal for the base revealed a political entrepreneur who was adroit at securing various sweetheart government concessions for his company based on commitments he had a habit of not keeping.

You’ve probably forgotten that he was promising 200 jobs at the new “Brunswick Jet Division,” which still shows on their web site as opening in 2009.  (MRRA has really held their feet to the fire regarding misrepresentation, haven’t they?) 

They went so far as to hold a much ballyhooed “job fair” in town nearly two years ago, cruelly deluding the unemployed into thinking they could have a good job soon, even though the base isn’t closing till next year.  And before any sort of binding agreement between the principles had been negotiated and signed. 

Accountability?  Fuggedaboudit.  The MRRA and Richardson’s DECD were ready to bend over backwards to get a minor player with a troubling history on the books.

Now we have before us the Kestrel proposal, and in this case, we sense universal hope that it works out and prospers, Side included.  Regardless, the cast of players on the government side is little changed, and the relevant mechanics of any deal seem to be all the ones seen before. 

We suggest that the desperation level at MRRA and in Augusta is likely higher than two years ago, which will only make accountability and protection of the public interest all the more vulnerable to squishiness.

As reported in August in The Forecaster:

The state will seek $10 million in bonds for Kestrel, potentially through the Finance Authority of Maine and other entities with access to low-interest bond markets.  An additional $1.5 million is being sought to ready and upgrade Hangar 6 at BNAS for Kestrel's operations. Included in that amount is a $400,000 Community Development Block Grant, and another $200,000 development fund loan, which will be used for a paint booth.

A variety of government resources (and thus yours and mine) is once again part of the attraction, and we have every right to wonder what sort of accountability will be put in place for those who set up the deal, and for those who will be the recipients of the public treasure.

Unless a miracle occurs, there is no reason to believe that anything different from the Times Record deal, or the deal offered to Oxford Aviation will apply in the Kestrel opportunity now in the works, and presumably, any others that might follow.

To repeat the earlier sentiment, we sincerely hope the Kestrel deal works out for all parties, of which we can identify three: government officials in general; Kestrel and it’s investors; and the taxpaying public.

Of the three, two could never end up being declared bag-holders should the deal not work out.  So readers, in case it doesn’t, you might as well declare your preference now:


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