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July 15, 2011

Case Closed: Feds Drop Investigation of Burlington Telecom

Monopoly In a terse, three-sentence statement the U.S. Attorney's office announced today that it was "closing its investigation into possible violations of federal law by Burlington Telecom and related entities and individuals."

In the statement, U.S. Attorney Tristram Coffin said the investigation had "produced insufficient evidence to file criminal charges, and therefore the investigation would be closed."

The office offered no further comment.

No surprises here, as Coffin intimated to Seven Days two weeks ago that he might break tradition and make a public announcement if his office wasn't bringing charges. Breaking that traditional code of silence about federal investigations signaled that the feds were likely leaning against prosecution.

When asked by Seven Days if he might issue a release if they didn't bring charges, given the high-profile nature of BT's case and the concerns that unending investigations could hamper its talks with financiers, Coffin offered this rare public concession for a federal prosecutor: “We typically don’t, but there are times when we might make a decision to do otherwise. This might be one of those times.”

Coffin made that statement shortly after Chittenden County State's Attorney T.J. Donovan and Addison County State's Attorney David Fenster declined to prosecute BT and city officials on a variety state charges. State's attorney Bob Simpson led the investigation for Donovan and it's unclear whether Simpson recommended the state bring misdemeanor charges for "neglect of duty" against unnamed city officials.

A civil suit brought against BT officials and Chief Administrative Officer Jonathan Leopold is still pending.

At the end of June, BT's attorney told state regulators that the muni telecom has two “letters of intent” — one from a financial investor, one from an out-of-state, independent telephone company — to help address BT’s woes. An in-state telecom firm remains interested but has not made a formal offer.

BT is seeking permission from the Vermont Public Service Board to finish wiring its network throughout the Queen City based on how much cash it has on hand — not how much it can borrow.

An August 2009 audit found that BT’s services reached all but 3297 — or 20 percent — of the city’s addresses. Of those, about 1355 addresses are located on private rights-of-way. BT is asking the PSB for a green light to reach the remaining 1942 addresses. BT plans to spend more than $500,000 on capital investments this year — up more than $200,000 from last year — to hook up new customers.

BT is also seeking PSB approval to exempt the utility from having to reimburse the city several hundred thousand dollars it spent on financial advisers Dorman & Fawcett to renegotiate the city’s $33.5 million lease-purchase deal with CitiCapital.

The city has not heard from CitiCapital since February. The city terminated its lease with CitiCapital last fall. The financier hasn't yet made any moves to repossess BT's equipment — or file a lawsuit — to recoup its losses.

So, the Get out of jail free card would indicate there would be something in the article about your opinion about the decision. Nothing in the article about it though. Maybe you'll explain why you think someone should be in jail. Otherwise, you're pretty much the same as a commenter on the BFP website.

"The city terminated its lease with CitiCapital last fall."

Actually, they defaulted.

Oy, you mean outside of the admitted violations of the CPG and state law?

Of course the feds weren't going to file charges, the dynamic duo didn't break Federal law, they broke state law and our bought and paid for card carrying Dem chose not to pursue charges and shirked his duty.

Kiss and Leopold are off Scot free. Leo is gone, Kiss will be and best case scenario the PSB will step in and shut down BTC and end the bleeding.

Another turn in this painfully drawn out drama. The voters will have their say at the ballot box, maybe by then the fate of the BT venture will be determined. One can only hope.

Jcarter, are you a Burlington resident? Are you aware that the dems and progs havent gotten along since Bernie won? Donovan would have prosecuted if he had a case. Get it? What happened is that all this investigation and it's hefty price tag is brought to you by the dems in Burlington who are using the economic downturn to win the mayors office back and they don't care how much it costs.



No he wouldn't, Donovan has no interest in prosecuting anyone. And in case you hadn't noticed the left and their ultra left wing partners have set aside their differences for the betterment of their cause. Think the Dems not running a Senate candidate against Bernie, or No Prog candidate against Scummy.

Get it?

Actually, I believe the investigation was initiated by a DPS commish who was appointed by Douglas, two BTV residents that were former Republican council members (if I'm not mistaken) and Keogh our Dem Head of the council has been entirely and utterly useless.

Tell me again Bob how this is all a cleverly enacted hoax by the Dems to take back City Hall?

"Think the Dems not running a Senate candidate against Bernie, or No Prog candidate against Scummy."

EXACTLY! Not to mention that the Dems would NEVER run a candidate against Mayor Kiss ... oh, wait ...

Well, they never ran against Mayor Clavelle ... oh, wait ...


Don't lose site of the forest through the trees chief.

Yeah, 20 years ago they didn't really get along much. Heck no one has ever really like Pollina, but since he has taken a back seat there have been some compromises. Come on into the 21st century. The 80's and 90's have passed.

Regardless, there is zero evidence this is a plot by the Dems go get a mayoral candidate elected, nor does it make the slightest bit of sense. That's nearly as crazy and the 9/11 conspiracy theories.

Ok. So far no one has done anything wrong according to law in the Kiss administration. We are out 16.9 million and counting but no one is held responsible. Welcome to Burlington where the Mayor and CAO can do whatever they please and not have to be responsible.
I again want to thank Mayor Kiss for his tremendous leadership on this issue of taking 16.9 million from taxpayers, simply because he could, as is opinion on our best interests are the only thing that matter.
I trust very dearly that his involvement in the Moran plant re-developement will bring us the same , don't worry I know what is best for you attitude, and we will all live happily ever after if you just follow my (Mayor Kiss) leadership.
Thanks Mayor you have set the example for future Mayors as how not to run a city, and I hope all candidates use you as a case in study to help themselves and more importantly we the taxpayers.
Sorry to be harsh Mayor, but have a good weekend, resting comfortably knowing in your own mind that so far you got away with it.
One civil suit to go and that could be the big one, as the balance of justice needs only to sway a precious trickle over the 50% preponderance of evidence mark to put you and the former CAO financially responsible for what you did.

"Donovan would have prosecuted if he had a case."

Actually, he made it pretty clear that not having a case had nothing to do with not prosecuting.

"Kiss and Leopold are off Scot free."

Oh, I wouldn't say that. The judge in the civil case cares not a whit for what the peanut gallery says, and the fact that she's separated Leopold from the City is very, very bad news for him IMO.

Yes, we know you're right Mr. Perp Walk. You've been spot on about everything, so far.

Shay, How many customers does BT now have, 4,000 or 5,000? If they expand their buld out, how many customers does that add? 1,000 or 2,000? What is their breakeven cost, 10,000 customers? What rates would need to be in effect to breakeven $200/month per customer? and when will this happen? I'm a Burlington taxpayer and I am interested if this "amazing asset" will ever be profitable or just a huge liability.

Talkin' to me, Oy? What have I been wrong about, exactly? Here's a refresher on what wrong looks like:

"I am interested if this "amazing asset" will ever be profitable or just a huge liability."

They're in default on a $33.5m loan, they owe the City $17m, and Citi could legally take all of their equipment - including the cable in the ground - any time they want. Take a wild guess.

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