Article IV, Part Third, Section 14 of the maine State Constitution

Article IV, Part Third, Section 14 of the Maine State Constitution says:

Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained, and, however formed , they shall forever be subject of the general laws of the state ( emphasis mine)

Quote from the legislative Charter for Brunswick Landing Maine's Center for Innovation : The Midcoast Regional Redevelopment Authority is established as a body corporate and politic and a public instrumentality of the State to carry out the purposes of this article. The authority is entrusted with acquiring and managing the properties within the geographic boundaries of Brunswick Naval Air Station. [2009, c. 641,
§1 (AMD).]
1. Powers. The authority is a public municipal corporation and may:D. Exercise the power of eminent domain; [2005, c. 599, §1 (NEW).]


Saturday, June 4, 2011

Maine Needs to follow South Carolina with Guidelines for what qualifies as “State Wide Interests”

Last Week Shawn Hannity aired a segment on eminent domain. The segment focused on row house homeowners in New Jersey who were being driven from their homes through the power of eminent domain in order to make way for a business development. The homeowners were not compensated well enough for their properties to afford a new home.

In Maine we have a potential similar situation at The Brunswick Landing Maine’s Center for Innovation, chartered by special act of legislation under the name of The Midcoast Regional Redevelopment Corporation. The charter states that it is a “municipal corporation” and an “instrumentality of the state”- a contradiction in legal terms if ever there was one. The charter also grants this newly chartered “instrumentality of the state” the power of eminent domain over adjacent property.

Making the MRRA a “municipal corporation” was clearly an attempt to get around Article IV Part 3rd Section 14 of the Maine State constitution which prohibits chartering corporations by special acts of legislation with an exception for “municipal purposes”. By definition, a municipality is locally governed, thus the constitution grants the authority to amend a municipal charter to the “inhabitants of the municipality” – not to the legislature. When I pointed this out in a correspondence with the legislature, Senate Majority Leader Jon Courtney shrugged it off with the thought that it will never be challenged because should that happen the 8 million dollar bond and associated federal grants (tax payer deficit) will have to be returned. 

A bond is a public debt. The voters of Maine passed the 8 million dollar bond funding the Brunswick Landing Maine’s Center of Innovation in June 2010. How many of those that voted for it knew that it included granting the power of eminent domain to the state?  When bonds are up for vote they ought to be presented with information about the current debt the taxpayers owe and how much the new bond increases that debt per taxpayer, the same information as is considered when entering a debt agreement in the private sector.

Once the legislature charted the MTTA as a municipal corporation it went about excluding all local governance from the board of directors of the new state owned business development. They used amendments to the original charter to do so. It was not until I read the federal regulations that outline the qualifications for a state grant, that I truly understood the legislature's motivations in excluding all local governance from the board of the MRRA. Local governance disqualifies a project from receiving state grants from the federal governance (I am not a lawyer and so cannot say there is no loophole - however the disqualifying character of local governance is repeated several times in the regulations). On the MRRA website, the MRRA is described as a “non-local unit of government” despite the fact that the charter identifies the MRRA as “a municipal corporation”. 

The legislature received little opposition to the usurpation of power beyond its constitutional authority. John Courtney’s assessment is proving to be correct. The Maine State Constitution has been bought & paid for with taxpayer debt. Government chartered business developments such as the MRRA and the Loring Development are promoted as benefiting “state wide interest” but in the charter for the MRRA, the “targeted sector” clearly identifies special interest beneficiaries, the same beneficiaries  that have been the “targeted sector" of reams upon reams of legislation written over the last couple of decades. Last summer, when the legislature silently expanded the Pine Tree Zone, originally designed for low income, high unemployment areas to the whole state, they added legally useless words, “including precision manufacturing” after the general manufacturing category, sending a clear message about which special interests they would prefer that the Pine Tree Zone benefits. 

The high tech industry so favored by the legislative investment bankers depends in large part on the availability of rare earth minerals found only in China. If one is investing in the private sector, one can hedge that with other investments not so dependent on rare earth minerals, but the tax payer is a captive investor and the legislature assigns no value to all which has not been delegated as “innovative” and “creative”, a government delegation that has an entirely co-incidental relationship to concentrated investment capital.

The only justification offered for claims of a  “state wide interest” is that the government is “creating jobs” This is reported by a compliant media, which fails to include any examination of the cost to the taxpayer for the jobs that the government creates. The text of the charter, the  eminent domain, and the regulations governing the acceptance of state grants, all go un-reported by the main stream media. As Jon Courtney said- who will mess with all that "money " (otherwise known as tax payer debt). This is truly a case of "there is no wrong done unless caught" and then the wrong becomes very very wrong for it will not be the special beneficiaries of government chartered corporations which repay the federal government if the fraud is discovered, it will be the Maine state tax payer. The longer the MRRA continues to spend the taxpayers money on giving deals you can refuse to private businesses and choice pension plans to its employees, the greater becomes the potential debt covered by Maine state taxpayers if the underlying fraud is discovered.

The Annual report for the MRRA for the years ending in 2009 & 2010 is not listed as a link on the MRRA's website but it is available on line. It sates that certain expenses are not allowed to be funded by state and federal funding sources. Identified are  “certain compensated absences”, which contribute to the unfunded balance sheet deficit. The MRRA intends to use future unrestricted income sources to fund these balance sheet shortfalls.

I do not know what the cryptic term “certain compensated absences” means, but it sounds like certain people are being paid for time not spent on the job and that MRRA’s earned income will be used to compensate for that time.

In another section there is mention of yet another amendment made to the charter by the legislature which says that 25% of the income tax of those employed at the MRRA will be used for further development. It does not say who will be the beneficiary of the development fund. - Will it be “state wide” or will it be “targeted” for the special interest groups?  

There is also a paragraph about pension plans for the employees of the MRRA. Since the MRRA is an “instrumentality of the state”, the employees must be state employees, but since it is also a “municipal corporation”, then employees must be municipal employees, and since the MRRA is primarily funded by taxpayer money, the employees must work for the public. Why are these public employees of the MRRA not covered under MPERS? Why does the public have no role in authorizing money promised for pensions plans? Why is an un-elected board of the MRRA authorizing further promises of indebtedness on behalf of the taxpayers?

In South Carolina the Supreme Court produced a guideline for what qualifies as “for the public benefit”. The court quotes from the State Attorney General “….citing Anderson v. Baer (1975): “It is not sufficient that an undertaking bring about a remote or indirect public benefit to categorize it as a project within the sphere of “public purpose.”

Maine also needs to establish guidelines as to what authentically qualifies as “public purpose”.

The full correspondence with Senate Majority Leader Jon Courtney and well as with Speaker of the House Honorable Robert Nutting is published on my blog, Main Street Economy at There are also links to the Annual Report for the MRRA and an article on the Supreme Court of South Carolina’s guideline for “public purpose”.

Note on June 17th- I just submitted this letter to the Boothbay Register for the third week in a row. I will keep submitting it.