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Tuesday November 21, 2017
Posted: Apr 24, 2015

Poliquin, Cain and the Great Northern blame game

Up Country

By now, you’ve probably read Whit Richardson’s great Maine Sunday Telegram article about how owners of the Great Northern Paper mill in East Millinocket were able to legally get $16 million from a relatively new state tax break program before shutting the mill down in 2014.

It’s complex, but here’s the short of it: Using the Maine New Markets Capital Investment program, which reimburses businesses investing in low-income places, mill operators made what looked like a $40 million investment in the mill that was far less in practice, returning a large sum to the mill owner.

This news is big for Maine’s 2nd Congressional District: The deal got different kinds of help from U.S. Rep. Bruce Poliquin and the Republican’s 2014 and likely 2016 opponent for the seat, Democrat Emily Cain.

Now, legislators are calling for changes to the program, as is the Finance Authority of Maine, which oversees the program. Richardson’s story partially implicated lawmakers who didn’t understand the program’s nuances when it was rolled into the state budget in 2011.

The frankest response I’ve seen yet from a legislator came from Sen. Roger Katz, R-Augusta, who supported the deal: “Shame on us, shame on FAME, shame on everyone who was involved for not completely understanding the deal,” he told WGAN. “It’s not a proud moment for any of us.”

Cain and Poliquin, however, aren’t responding in that way.

As House minority leader at the time, Cain co-sponsored the bill establishing the program that was rolled into that year’s state budget. As Richardson recounts, the bill was drafted by lobbyists working for a Louisiana company that would net a brokerage fee in the Great Northern deal. Poliquin, as state treasurer, sat on FAME’s board in December 2012, when it unanimously approved the Great Northern deal.

I sent three questions to spokespeople for both of them, asking for their reactions to the company’s maneuvering, whether or not they thought they and colleagues gave proper oversight to this tax break and if they foresaw a situation like this happening.

Here’s how Cain responded, in full:

“I am outraged about this extensive abuse of the New Markets program. This law was intended to create jobs and support economic growth in rural Maine. It is unacceptable for bad actors to benefit by gaming the system at the expense of small businesses, workers, and Maine taxpayers. I urge the legislature to conduct a full and thorough investigation to ensure Maine taxpayers get the accountability they deserve. This needs to be fixed immediately – with the changes necessary to remedy the damage done, stop the bad actors from profiting further, prevent future abuse of this program, and maintain our continued goal of helping small businesses create jobs in Maine.”

Cain answered the first question, so I followed up with another question: “Does Emily think the legislature and co-sponsors could have done a better job examining this before it was enacted?”

The response: “This was a breach of trust with the state and taxpayers by bad actors, and it’s a stark reminder that more must be done. That is why an immediate and thorough investigation by the legislature must be a top priority this session.”

Poliquin political adviser Brent Littlefield responded by forwarding minutes from that December 2012 meeting where the Great Northern deal was approved. Here’s the relevant portion:

“Treasurer Poliquin cited several instances where the State of Maine misused federal funds in the past and his concern is whether this use of tax credits meets the spirit and technical components of the law and questioned if there is a litigation history. Representatives of the law firm of Pierce Atwood expressed their comfort with this transaction, responding to Treasurer Poliquin that transactions such as these have never been challenged.”

“His statement in the minutes speaks for itself about his very serious concerns about the nature of this program and proposal that was created by the Legislature and vetted by the staff,” Littlefield said in an interview. “He would like to see hundreds of people working at the mill.”

There’s a lot of blame to go around and these two shouldn’t be singled out. But they shoulder some of it: Poliquin joined a unanimous vote approving the break despite concerns he may have had; Cain backed the lobbyist-drafted bill that created it.

The mill was once one of the 2nd District’s most notable employers. During the campaign, it might be one of the few controversies that neither one can blame the other for.

 

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