Tax Fraud?

October 19, 2009 by Dick.

Vermont’s public service commissioner David O’Brien said the City of Burlington broke the law when it used $17 million of city money to set up a city-owned telecommunications service. Commissioner O’Brien also said statements by the city officials trouble him because the mayor and city administrator have admitted they knowingly disobeyed the law. “Taxpayers are not risk investors,” he said.

Burlington Telecom is a city-built, city-owned, city-operated, and now city-financed telecommunications company that is a division of the city government. It offers television, telephone, and broadband internet services to residents throughout the City of Burlington, Vermont.

It’s a nice system other than that little issue that “Taxpayers are not [supposed to be] risk investors.”

Bernard Sanders, (I-VT) and now the junior senator from Vermont, was Burlington’s mayor in the 1980s. The self-described democratic socialist formed the Progressive Coalition, the forerunner of the Vermont Progressive Party. Mr. Sanders was first to put forth the concept of a network that could connect every home and business of Burlington.

It’s a nice idea other than that little issue that the U.S. Congress has ruled that public entities like the National Guard may not compete with private businesses.

Burlington Telecom has an attractive and competitive cable TV plan that offers with 152 channels, 45 digital music channels, Local-On-Demand, Video-On-Demand plus 57 High Definition channels available on an optional package and a la carte access to premium channels. The free channel cable TV offerings include local channels plus Al Jazeera English on channel 132 and Fox Business News next door on channel 133. They even have the Speed Channel, a crucial offering for my friend Rufus, and Food Network, equally important to my friend Kay Ace now that she has all that time on her hands. The system operates on a city-wide fiber-optic network. Their “Triple Play Bundles” include free access to BT’s city-wide Wi-Fi hot spots and a telephone Call Block option that allows subscribers to create a blacklist of numbers that can’t connect to your phone. That would eliminate at least some spam calls that sneak around the Do Not Call list.

It’s a nice program other than that little issue that Comcast has the license to provide those services in Vermont.

Burlington’s Chief Administrative Officer Jonathan Leopold didn’t bother to inform anyone that BT was financing its activities with city funds. He is presently urging the city to relax its rules so BT can grab more city money to expand the system outside city limits which means the system could arrive in North Puffin sometime soon. Mr. Leopold said the money shouldn’t be regarded as “taxpayer” money because it comes mostly from other city “business activities.”

Right.

Commissioner O’Brien says the city violated the promise that taxpayer money would not be used to start a telecommunications company. With a wink and a nod, Mr. Leopold called the promise “overly optimistic.”

It’s a nice system other than that little issue that “Taxpayers are not [supposed to be] risk investors.”

Current mayor Bob Kiss (Progressive-Burlington) defended his actions and the business. “Commissioner O’Brien’s statements … are inaccurate, inflammatory, and totally inappropriate,” he said. I suspect that Commissioner O’Brien is on Mayor Kiss’ Call Block list now.

Mayor Kiss is right to be outraged. After all, Commissioner O’Brien chose to publicly excoriate the Chosen Ones of Burlington for using tax money to take over businesses and we now know that is perfectly legitimate behavior. After all, Mayor Kiss has the President of the United States and the United States Congress as bright and shining examples.

Or not.

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