Case Closed: Feds Drop Investigation of Burlington Telecom

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.

Prosecutor: No Criminal Charges in Burlington Telecom Probe (VIDEO)

* Update below: Burlington Mayor Bob Kiss reaction * 

After a six-month investigation, a top prosecutor announced today he is not filing criminal charges against anyone involved in the high-profile case of Burlington Telecom.

At a morning news conference, Chittenden County State’s Attorney T.J. Donovan said he decided not to prosecute city officials for “neglect of duty” as it relates to complying with a key condition in the municipal utility’s state license.

That condition required BT to repay any money it borrowed from the city’s universal checkbook — the so-called “cash pool” — within 60 days. BT ended up borrowing $16.9 million from the cash pool, which to date has not been repaid. Plans to refinance BT’s growing debt fell apart in 2008 when the global financial markets crashed. It wasn't until late September 2009 when the public first learned that BT was in such deep debt.

Donovan said the burden of proof required to bring a "neglect of duty" charge against one or more officials would be too high to guarantee a win at trial. Also, it would cost "tens, if not hundreds of thousands of dollars of the public's money [and] cause greater division with the city and disrupt the governance of the city, all with an uncertain outcome and no possibility of restitution of $17 million."

Even if it was a sure conviction, Donovan notes, anyone found guilty of the crime would spend a maximum of only one year in jail and face a $1000 fine.

Women's World Cup is Happening... Without the Vuvuzelas and the Media Hype

Question: How many of you knew that the FIFA Women's World Cup began on Sunday?

I'm going to go out on a limb and say about three of you. And for two of you, it's because you saw the story about the Muslim female soccer players in the Sunday New York Times. If you're not one of those three, you can be excused for not knowing that this event was happening. I didn't know it was going on and I like to think I know a thing or two about women's sports. That said, I'm pretty embarrassed that the World Cup took me totally by surprise.

But why didn't we/I know the tournament — arguably one of the largest in the women's athletic calendar— was happening? During last year's men's World Cup, people were tripping over themselves to watch the games at bars around Burlington and talk about their mutual hatred of the South African vuvuzela. Seemingly everyone had an opinion on Cote d'Ivoirian player Didier Drogba's fearsomeness and Spaniard Carles Puyol's Weird Al-like hair. We collectively crossed our fingers that powerhouse Ghana would become the first African nation to win a World Cup (They didn't. They were routed by Uruguay in the quarterfinals.). And we all grimaced when the slick-rick U.S. team couldn't make it past their bracket. Again.  

So Very Special

I'm usually not much for reality TV unless it involves Padma Lakshmi, but this is kinda cool. Or horrifying, depending on how you feel about Radiohead.

It seems a UVM pre-med student, Devon Barley — who is also the music director of UVM a cappella group the TopCats, of which I was once a member, many years ago — is doing quite well on NBC's latest Star Search ripoff, the Voice. For the unfamiliar, the show, hosted by Carson Daly, is a reimagining of a Dutch TV show of the same name, in which aspiring pop singers compete for the right to be on American Idol. Or maybe to win a ton of money and a record deal. I can never remember.

The contestants are judged by a panel of pop stars, including Cee-Lo Green, Blake Shelton, Christina Aguilera and Maroon 5's Adam Levine. In tonight's episode (NBC, 10 p.m.), Barley squares off against another hopeful — on a stage that vaguely resembles a boxing ring, no less — to move on to the next round. Again, I'm not terribly familiar with the show. But this particular contest seems loosely based on the rap battle concept, with contestants alternating verses of a song. Except that instead of freestyling, they tackle a poppy karaoke rendition of the radio edit version of Radiohead's "Creep." (Video below.) Thom Yorke must be rolling in his grave.

All kidding aside, congrats on your success so far, Devon. And best of luck tonight. 

 

Judge Denies Burlington Telecom's Request to Delay Court Case

Vermont Superior Court Judge Helen Toor has denied Burlington Telecom's motion to delay a hearing on whether the utility is in violation of a court order issued last year barring it from using city general funds for BT expenses.

The ruling means that a contempt of court hearing will be held on May 23 in Vermont Superior Court in Burlington.

In 2009, two disgruntled taxpayers — former city councilors Gene Shaver and Fred Osier — sued Burlington Telecom and Chief Administrative Officer Jonathan Leopold to repay the city's cash pool the $16.9 million that had been borrowed and not repaid. The failure to repay the money within 60 days is a violation of BT's certificate of public good issued by the state and also potentially a violation of the city charter.

Leopold tried to plead immunity from being named in the suit, but to no avail. That means he could be on the hook financially for some of the money repaid to taxpayers if the court finds in the taxpayers' favor.

As part of the civil litigation, BT agreed to not use city funds for ongoing expenses unless it repaid the money within 60 days. Last year it was learned that the city spent several hundred thousand dollars on consultants for BT-related items, but BT didn't fully repay taxpayers. Shortly thereafter, Osier and Shaver's attorney filed a contempt of court charge.

Burlington Telecom Seeks Delay in Civil Case (Again)

If at first you don’t succeed, try, try again. And again. And again. And …

For the sixth time, Burlington Telecom is asking Superior Court Judge Helen Toor to delay a civil court case filed by two disgruntled Burlington taxpayers.

Instead of Toor, BT wants the Vermont Public Service Board to weigh in on proposed fixes to its financial and regulatory problems first — fixes the city has yet to propose to the PSB.

The city is expected to update the PSB later this week on its efforts to restructure its finances and potentially find a new business partner.

The civil suit — filed last year — seeks immediate repayment of the $16.9 million BT borrowed from the city’s “cash pool” to prop up the struggling muni telecom. It also names Chief Administrative Officer Jonathan Leopold as a defendant, and he is potentially on the hook to repay some of the money. Leopold sought, and was denied, immunity from the lawsuit.

Leopold offered a tempered, and brief, apology to city taxpayers two weeks ago when he announced his resignation, which is effective June 30.

According to its original certificate of public good, BT was required to repay the money within 60 days and it failed to do so. Last year, the city agreed to a court order barring BT from incurring additional debt to the city.

The two taxpayers, Fred Osier and Gene Shaver, argue that the city is currently in contempt of that order.

How so? In December, the city revealed that it paid $227,795 to consultants Dorman & Fawcett to renegotiate BT’s lease with CitiCapital, along with roughly $9000 in other BT-related expenses — all out of the city’s general fund. The city defended those payments, claiming the consultants’ work benefited the city, not just BT.

The taxpayers’ attorney, Norman Williams, disagrees.

Layoffs at Burlington Telecom

Six people were effectively laid off today at Burlington Telecom, less than two weeks after city officials proclaimed that the muncipal utility was paying all of its bills and netting a positive cash flow — absent paying off the debt it owes to taxpayers.

The six positions are slated for elimination as part of a staff restructuring being overseen by outside consultants. The positions include two technicians, two customer service representatives, an outside plant manager and BT's marketing coordinator. The six people who hold those posts were placed on administrative leave today; the City Council will have to approve the changes. Once approved, the six people will be officially laid off, said consultant Gary Evans of Hiawatha Broadband.

At a special City Council meeting two week ago, Evans said the main problem facing BT was too few subscribers. So, why axe the marketing position?

"This doesn't mean that BT's marketing efforts will stop," Evans said.

After the layoffs, BT will have a workforce of 20 employees. "We don't think there'll be a need for additional layoffs," said Evans. "This action does, in no way, suggest the beginning of the end or that this is the end of BT. On the contrary, we feel as if this will put BT at the right staffing level for its customer base."

Got Al Jazeera?

As the world continues to be glued to the unfolding revolution in Egypt, cable TV viewers in the United States are receiving a decidedly Western view of the ongoing protests and unrest.

That is, unless you're a Burlington Telecom subscriber. If you are one of the few thousand BT subscribers you can watch Al Jazeera English (AJE) on Channel 132, tucked between TruTV (which used to be Court TV) and FOX Business.

AJE has received plenty of kudos from news analysts for providing some of the most comprehensive, on-the-ground coverage of the burgeoning revolution and calls for the ouster of President Hosni Mubarak.

Despite its financial transgressions, BT remains one of the few cable television providers in the country that offers AJE to select subscribers. To watch AJE, you have to subscribe to BT's "standard plus" cable package.

The only other cable operators that offer AJE are in Ohio and Washington, DC, according to a recent report by Huffington Post.

BT came under fire for offering the channel to its subscribers and initially was prepared to drop the channel, but free speech proponents and Mayor Bob Kiss thwarted that effort.

When the topic came to a head at a BT advisory committee meeting in 2008, Al Jazeera dispatched a reporter to the scene. Shortly after, BT signed a contract to carry AJE.

Maybe the unrest in Egypt will help boost BT's subscriber base. Then again, maybe the last thing Mayor Kiss wants is unending footage of people rioting in the streets and calling for the resignation of an unpopular leader.

If you're not a BT subscriber, and can't become one, you can go to AJE's website and stream live coverage — for free.

 

The Good, the Bad, the Burlington Telecom: Citizens Question Officials About the Future of BT

They came, they saw, they vented. More than 100 people crammed into City Hall Auditorium in Burlington for a special city council meeting Thursday night about the status of beleaguered Burlington Telecom.

The nearly four-hour meeting probably didn't change many minds. Diehard BT supporters are still insisting the utility can be saved. Likewise, those who would like to see the mayor resign and be held personally liable for returning the $17 million BT owes Burlington taxpayers weren't swayed by arguments that the company is now "cash flow positive."

In all, more than 40 questions were put to city officials, outside consultants, lawyers and city councilors. Of those, 35 were submitted in writing ahead of time (see below).

Mayor Bob Kiss and the outside consultants said while BT's financial troubles left a hole in the city's cash pool, the utility has turned things around and is in a better financial position to seek outside investors now. Kiss also refuted some of the claims that have been made about his administration's failing in regard to BT operations and oversight.

His words, however, didn't seem to resonate with most people at the meeting — even BT supporters.

Citizens Ask Court to Find Burlington in Contempt for Using Taxpayer Funds

Two Burlington taxpayers are asking a Chittenden Superior Court judge to find the city of Burlington in contempt of a court order prohibiting certain use of general funds to support Burlington Telecom.

The motion was filed today on behalf of Fred Osier and Gene Shaver by their attorney Norm Williams of Gravel and Shea. In his complaint, Williams argues that more than $235,000 in city general fund dollars used to pay an outside consultants to restructure Burlington Telecom is verboten.

A February 2010 court order issued in this case, and agreed to by the city, prohibits the city from using any general fund dollars to prop up BT unless the money is repaid within 60 days. The city is also required to provide the court with accounting records to ensure that it's not in violation of the order.

The city paid more than $227,000 to Dorman & Fawcett to help BT restructure its operations and renegotiate its lease with CitiCaptial, among other things. The city also paid out more than $5000 to a broadband consultant to review BT's operations, and roughly $3000 to Langrock, Sperry and Wool for legal "defense" consultation as a result of state criminal investigations. These funds were all paid out of the city's general fund, not from BT's operational funds.

The consulting fees came to light after two city councilors and Seven Days requested a complete record of how much money the city has paid outside consultants and lawyers as a result of the various BT cases and investigations.

As of late December the city and BT paid out more than $625,000 to various consultants and attorneys. That figure was $500,000 as of late August.