INTRODUCTION: This letter was submitted twice on line. After receiving no response, I sent it certified mail and cc'd it to Attorney General William J. Schneide on March 23, 2011, also by certified mail.
Dear Governor Lepage,
Dear Governor Lepage,
Second Submission to make sure that it was received.
Re: Challenging the constitutionality of corporations chartered by special act of legislation.
Source: Maine State Constitution, Article IV, Part Third,Section 14
Dear Governor Le Page,
You have asked the business community for input concerning regulations that inhibit business growth but there is gorilla in the room that no one talks about, which is the escalating structure of corporations chartered by special act of legislation, which have increased dramatically since 1990.
As you know, having taken an oath to uphold the Maine State Constitution, Article IV, Part Third Section 14 of the Maine State constitution prohibits the charter of corporations by special act of legislation, with two exceptions. Although language used in some of the legislation attempts to suggest that the corporation being chartered satisfies either one of these exemptions, it is unlikely that the plethora of corporations chartered by our legislature could all satisfy one or the other of the exemptions. In my opinion, none satisfy the exemptions.
I am writing to request an investigation into the government chartered corporations, be they non-profit, quasi-public, or entirely state controlled corporations and whether they are called “the fund”, “the fund of funds” “trusts, or non-profit corporations. A corporation by any other name is still a corporation.
A few years ago I encountered the Small Enterprise Growth Fund at the Juice Conference. It was there that I learned that the taxpayer invest 10% of the total amount of “the fund’s” assets in a “roll over fund” meaning a fund that keeps rolling over to re-invest in “the fund”. Conversely, the other 90% of investments from private “high growth” investors demand an “exit strategy” (typically selling the business) as part of the terms of agreement, in order that the high growth investor can make a profit.
Small business owners are well aware of “roll over investments”- this is a primary source of capitalization in the private micro-economy sector- it just means that self-generated profits are re-invested in the business as on-going operating capital. When the Small Enterprise Growth Fund uses tax payer money to underwrite its investments, it does by extracting capital investment funds from the entire economy.
What private sector corporation can use taxpayer funds as “roll-over” investment capitalization? When the legislature charters a corporation and in so doing assigns the use of taxpayer funds to be used as investments or as promissory notes to back up private investor losses (as in the case of last year’s “Fund of Funds” (LD1), they create an unequal competitive edge for the government sector over the private sector. Is not this a reason why, in the 19th century, our legislature added Article IV, Part Third, Section 14 to the Maine State constitution prohibiting corporations from being chartered by special acts of legislation?
The Small Enterprise Growth Fund is but one building block in a steadily escalating network of corporations chartered by special acts of legislation. These corporations are aimed at underwriting a favored sector of the economy, which is composed of the high tech sector, the academic sector, the green energy sector, the health care industry, and data centers. Government chartered corporations are partially or completely controlled by the state and are granted a competitive edge over private sector competitors through the use of taxpayer dollars. All that the taxpayer gets in return for the use of our capital is a claim that the government is creating jobs in the private sector. When did it become the government’s role to manage the Maine economy?
The legislature has also devised ways for government chartered corporations to accumulate capital from foundations grants and private gifts, whether they be non profit corporations or merely “municipal corporations which are an instrumentality of the state” as in the newly chartered Brunswick Landing Maine’s Center for Innovation. This recently chartered corporation is authorized to seize private property by eminent domain. What do you find across the street from this newly chartered corporate state, complete with an airport, a campus for the University of Maine, and housing for the workers”- you find long standing micro businesses that are in the government’s un-favored economic sector! This expresses openly and clearly the attitude with which our legislature regards that part of the economy, excluded from its favored sector- The legislature would bulldoze it over so the land can be claimed for the ever expanding corporate state.
The charter for the Brunswick Landing Maine’s Center for Innovation is full of contradictions which have no other explanation than that they exist as a blatant attempt by our legislature to get around Maine’s constitution. “A municipal corporation” which is simultaneously an “instrumentality of the state” is a contradiction of terms. When, in the 19th century, the legislature made an exception for municipal corporations, they did so because they had no other choice. Towns are municipal corporations but cannot exist until they are chartered. There for it is necessary that there be an outside authority which charters the town. This authority was granted to the state but the legislature wisely granted unto the “inhabitants of the municipality” the authority to amend the charter created by the legislature. The intent seems clear: a municipal corporation is self-governing. The state is not a municipal corporation and does not have governing authority within municipaliti
Whereas real estate deeds and towns have specific boundaries defined by longitudes and latitudes, the geographical location of the municipal corporation known as The Mid-coast Regional Redevelopment Corporation is identified as “within the geographic boundaries of Brunswick Naval Air Station” and also includes other geographically separate property that the authority determines should be part of the base .
Quoting from the legislation chartering this corporate state:
- "Brunswick Naval Air Station" or "base" means those properties and Facilities within the geographic boundaries of the United States Department of Defense naval air station at Brunswick existing on the effective date of this section "Base" also includes other geographically separate property that the authority determines should be part of the base if the municipality in which the property is located has chosen not to accept the property and use it for other purposes” (emphasis mine)
- "Real or personal property" means those properties and assets transferred by the United States Government or the United States Navy after the closure of Brunswick Naval Air Station.”
Since the above does not identify to whom the property was transferred, I am assuming it was the state. The state can constitutionally create a municipal corporation but I argue that municipal corporations are intended by the 19th century authors of our constitution to have a geographical location, while the website for The Brunswick Landing Maine’s Center For Innovation describes it as a “non-local unit of government”
The bylaws that the legislature created when they chartered said “municipal corporation” call it a “public municipal corporation”. What is the meaning of the additional term, “public”? Is it to mean that this is a town collectively owned by the people of Maine- i.e. the state?
By what constitutional authority can the legislature create a state owned municipal corporation? The legislature inserted the word “public” into the bylaws of this corporation in an attempt to pull the wool over our eyes. The constitution clearly states that “the inhabitants of the municipality” have the power to amend the charter of a municipal corporation, but the legislature is attempting to alter this by including in the bylaws that the charter can only be amended in ways that are “consistent” with its own charter. This is a usurpation of the powers of “the inhabitants of the municipality”- which is not “the general public” but specific individuals and business which inhabit the vaguely defined territory of Maine’s new mini-corporate state.
The charter for this “municipal corporation” and “instrumentality of the state” has granted unto itself the power of eminent domain to seize adjacent property – Is this what is meant by the charter’s claim that “The authority is entrusted with acquiring and managing the properties within the geographic boundaries of Brunswick Naval Air Station’?
Given that our legislature has claimed in a vague and provisional manner that the geographical territory includes territory which it intends to acquire, then do the current “inhabitants of the municipality” include those small businesses and other private property that are the target of the Mid-coast Regional Redevelopment Authority’s self-claimed authority of eminent domain?
Is it not a mockery of the Maine State Constitution to include in a charter that it can only be amended in a way that is consistent with the states’ charter- which is arguably inconsistent with the intended meaning of Article IV, Part Third, Section 14 of the Maine State Constitution.
Governor LePage, you campaigned on the concept that it is not the government’s role to manage the economy- but the only justification that our legislature has given the public for the massive structure of corporations chartered by special acts of legislation over the last fifteen or more years is that the government is “creating jobs in the private sector”. This is also the way in which our media reports on Maine’s entrenched state capitalism. Note that “creating jobs” is not one of the two exceptions that the constitution grants to its prohibition against corporations chartered by special acts of legislati
I request that the Attorney general’s office challenge the constitutionality of the charter for The MIDCOAST REGIONAL REDEVELOPMENT AUTHORITY’ and that an investigation be initiated into the constitutionality of the entire network of government chartered corporations, to include making known the private investors who are the beneficiaries of our government’s wheeling and dealing.
I understand that the media has painted a picture of this scheme as seen through rose-colored glasses. If you believed the media, it is about creating jobs- end of story. There is much more to it than that. We are told it is only about “creating jobs for Maine”- but how are these investors being attracted? It is reasonable to speculate that they are being offered deals that they cannot refuse-paid for by the taxpayers of Maine.
Cleansing Maine of unconstitutional state capitalism is a national media story. We may lose the “high growth investor” attracted by the get rich quick deals offered by our government but we may attract a new breed of entrepreneurs hungry for an honest, free and equitable environment in which to conduct business.
If we don’t do this now, in ten years our state may be taken over by mini corporate sates like the Brunswick Landing Maine Center For Innovation armed with the power of eminent domain to seize private property which is not “consistent” with its vision - that is if a Chinese embargo on rare earth minerals hasn’t caused its collapse- at the taxpayer’s expense.
