Governor LePage Addresses Mountainf of Taxation Unapproved by Maine Voters.

In mid- February Maine's Governor LePage gave a radio address explaining why he declined to approve bonds promise by quasi governmental agencies These are a few quotes from LePage's Radio Address

 $19,448! If you are one of Maine’s 653,000 tax filers, this is your share of the Maine’s $12.7 billion in public debt. If you do not remember approving nearly $13 billion in bonds, you did not necessarily miss an election. More than 95% of Maine’s debt was never approved by voters as required by our Constitution!

As a voter and taxpayer you have only had a say on about $500 million in general obligation bond questions on the ballot. The remainder of our taxpayer-backed obligations is the result of promises made, but never paid for and decisions made by quasi-governmental authorities you have never heard of.

 ....Most of the remaining obligations backed up by Maine’s taxpayers were issued by boards or authorities you probably have never heard of. The debt was issued without your approval and passed onto other entities who we hope will repay the money.....

....Article IX, Section 14 of Maine’s Constitution is clear. With very rare exceptions, the credit of the state shall not be directly or indirectly loaned without a two-thirds vote of the Legislature and a majority vote of electors.

In an article for The Bangor Daily News, Matt Wickenheiser said:

“AUGUSTA, Maine — A $31 million bond package sponsored by a little-known quasi-state government body has stalled after Gov. Paul LePage’s decision not to approve it.


The decision highlights a fundamental shift in how the executive branch views debt in the state and has implications for agencies that issue bonds to help fund such things as college loans, low-income housing, and hospital and school expansions.


The Maine Health and Higher Educational Facilities Authority, or MHHEFA, is the government entity in the state that educational and health care nonprofit groups must go through under federal law to sell tax-exempt bonds, borrowing money for capital expenditures at low rates of interest.


Maine residents have not been asked to vote on such quasi-governmental agency bonds in the past, but that appears to be changing under the LePage administration.”

The bond issue discussed in the Bangor Daily News article is just the tip of a huge mountain of wheeling and dealing that has created a favored class that benefits and an unfavored class that pays. We will hear many voices trying to make LePage guilty by claiming that it is LePage’s actions which are bad for the economy. Although every one wants to see hospitals built and other worthy causes funded, it is outrageous that there are quasi public companies funding bonds at the taxpayers expense without taxpayer knowledge or consent.

One voice, in the above article, tries to make LePage the guilty party for stopping the funding of a hospital construction project and attempts to belittle LePage's actions with the words  that his reasons are "only a philosophical principle"- yes it is a philosophical principle- a political philosophical principle which is recorded and preserved in the Maine state constitution !. LePage gets credit for referencing the actual Article of the Maine state constitution which the issuing of bonds by quasi public corporations violates.

Over the years, the plethora  the wheeling and dealing by quasi government agencies has been justified by claims that it is for "the social benefit" and indeed some of it is, but what starts as a cause to benefit of the impoverished and struggling classes has been twisted time and time again to benefit the well to do. Such is the case with the recent statewide expansion of the Pine tree Zone, an economic zone which was originally conceived of as an act to benefit areas with low income and high unemployment to become, with the state wide expansion, aggressive corporate welfare, in which the favored private economic sector has tax breaks that non-profit organizations would envy, while avoiding an equal level of transparency as a non-profit organization must maintain by having publicly accessible annual reports.

Once the government starts manipulating, there is no end to it, and what starts out as seemingly reasonable cause is co-opted by the power elite to use for their own ends. This has become a massive practice in Maine, which LePage has only hinted at, but he is the first politician to do that.

Along with the manipulations comes the hidden and expanding expense of a bureaucracy needed to manage the transference of wealth to the chosen ones, whoever they happen to be. Just the bureaucratic expense, alone, wipes out part or all of the alleged benefit to the larger society. There is no way to even keep track of who the real beneficiaries are - given the combination of increased bureaucratic expenses and increased lack of transparency.

The other side of it is that it creates an artificial world in which some businesses and organizations are worthier than others. This is a mechanical and atheistic "philosophy", one in which the ruling elite takes the place of God.

In a state in which one discovers a new government chartered corporation or regulations designed to benefit the favored sector, every week, this is the best news I have heard in a very long time.

Imagine what resources might be suddenly freed up, if we could eliminate all special interest benefits with the swoop of a wand. It would be like the sudden rushing of a frozen river in the early spring.

Letter to Lepage Requesting State Attorney General Challenge the Constitutionality of The Brunswick Landing Maine's Center For Innovation

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,

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 19^th 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 19^th 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 19^th 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.

Wealth Creation VS Wealth Redistribution

In 2007 I was browsing the Internet, when much to my surprise I found a database for New England Arts, about which I had not previously been aware. I thought that I had already entered our business information in all the Maine and New England directories. I proceeded to add our information but soon found out that this database was different from all the others, it required agreeing to terms created by The New England Foundation For The Arts. Upon reading the terms, I found them completely unacceptable as it virtually required giving the New England Foundations For the Arts unlimited rights over any information submitted to the database or “deep linked” to the data base- with the term “deep link” left undefined.

In 2011 I am growing our business through another arts database, which is popularly known as Etsy. It is for all things handcrafted including paintings and other art works. The work that one can find in this database runs the gambit form the young artisan starting out and creating an original product in their living room to artists who have won national awards and been in many museum shows.

Etsy is so far a well known secret, a marketing venue designed for the micro economy that exists beneath the radar of public and private management of the economy which targets concentrated wealth and concentrated job creation. Etsy is a database, of sorts, but it is a visual storefront database, global in scope and conceived from the outset to be affordable to anyone, priced as a marketing venue collecting minimalist fees from those that partake of it. In the publishing world it is a highly recognized resource for ideas and talent, and so for the vendors of Etsy, Etsy is more than a way to sell their handcrafted art, it is also a means of exposure to magazines and blogs- a central piece of the social networking marketing, which is touted as the wave of the future for micro, small, and medium sized businesses.

Contrast this to that other database- The New England Foundation For the Arts that enjoys as its partners all the government art bureaucracies in New England. This is not surprising since the birth of extended government art bureaucracies coincides with the institutionalization of the National Endowments For the Arts. State government art agencies were created as conduits for the flow of capital re-distributed by the federal government through the NEA. The function of state art agencies as channels for redistributed capital has continued ever since. Today it is sometimes hard to distinguish a separation between government, foundations, and non-profit organizations. Just last summer the Maine legislature incorporated a new business classification into the statute governing the LLC. The new classification is known as the L3C designed to (allegedly) make it easier for foundations to give money to private enterprises without violating federal tax codes. One of the requirements for a business to procure L3C status is that it must not “intend” to make an “income”.

In order to have any information listed in the New England Foundation for the Arts Database, one must sign the terms of agreement, which allots onto NEFA unlimited rights over any thing in their database. The language of the agreement has similarities to language used by large private sector businesses such as Google and Adobe, but upon reading those private sector agreements one finds that there are limitations applied to Google and Adobe assuring the user that the company is only asking for rights that are necessary to conduct their businesses and no more. Over the years since 2007 I have written NEFA in objection to the terms of agreement. The phone is answered by voices sounding both young and naïve who explain it away by saying that the legal department just wanted to cover as broad a range a possible (for NEFA). They have certainly done that!

Why would anyone agree to the terms? – First and foremost because they don’t read them, and then because NEFA ties agreement to the terms with access to the inner networks of grants funding. The Maine Arts Commission is now using the New England Foundation For the Arts database to process its grants, which requires applicants to agree to the NEFA terms of agreement if they apply online.

The other night I heard The National Endowment For the Arts mentioned as a possible place to cut to reduce the national deficit. Can we as a nation exist without the National Endowment for the Arts? I don’t know about our government art bureaucracies, NEFA, and the vast network of non-profit arts funding – But Etsy can.

AFTER NOTE: This is an interesting Article on developments in Etsy. When third parties started developing new API's by reversing the Etsy API, rather that suing them, Etsy embraced and welcomed them in a win-win approach to innovative and creative marketing

Maine Marxism Takes a great New Leap Forward with The Brunswick Landing Maine Center For Innovation

 THE JOINT STANDING COMMITTEE ON BUSINESS, RESEARCH AND ECONOMIC DEVELOPMENT if not the most of the Maine legislature have been following a Marxist course for decades, First it was just using tax payer funds as playing card in a game with high growth investors but now the legislature has transformed itself into the investor- acquiring land and property and setting up "funds" composed of every imaginable source of redistributed wealth to channel as much as possible into the hands of the state.

They call crown themselves as "the innovative" or “creative economy"- In the Baldacci administration it began with promoting the template created by Richard Florida who set standard rules for measuring "the creative class" and cities, state and municipal governments across the nation flocked to conform to the Florida template by segregating society and economies into “the creative and innovative classes" and everyone else.

With flowery language packaging, the socialists ran into little resistance and so they grew bolder. No where is this more evident than in the corporate state that is the Brunswick Landing Maine Center for Innovation – which is envisioned as a walled community  where the favored class will work play and live isolated from the rest of society.

The Marxists in our state government have created a “fund” for at least the airport of their brand new corporate state, which will be funded by all means possible including those that are usually associated with non profit organizations.

The constitution of Maine prohibits the charter of corporations by special acts of legislation, with two exceptions- one being for municipal purposes. There had to be an  exception for municipal corporations because towns are municipal corporations. A town does not exist until chartered and so an outside agency must charter the town – but wisely the legislature assigned the authority to amend the charter to the inhabitants of the municipality.

Thus in creating their corporate state with its walled community, the Marxist in the finance committee declared the corporate state to be “a municipal corporation” and “an instrumentality of the state”- On the website for the corporation it is called a “non-local unit of government” in complete defiance of what a municipality traditionally is. Since it is impossible to determine who the inhabitants of “a non local unit” are- the legislature, in chartering said municipal corporation forgot to provide for a process where by the inhabitants of the municipality can initiate the process of amending the charter.

The legislature did however think to include the right of eminent domain over abutting properties, which happen to be micro business, many of whom have been at that location for decades. They also happen to be “the inhabitants of the municipality”

So when the “Innovative economy" talks about “community’ bear in mind that this means walled communities for the favored classes, which includes the academic sector, and it means doing everything in its means to wipe out instances of the “uncreative” and “non-innovative classes” that stand in the way of its aggressive and rapid advancement.

In the case of the newly chartered “municipal corporation” this means forgetting to set up bylaws for a process by which the inhabitants of the municipality can exercise their constitutional right to amend the charter, and then providing that charter with the authority of eminent domain to seize the property of the inhabitants of the municipality.

I submit the the Maine people who care about the original founding political philosophy need to mobilize for a constitutional amendment that states that by definition a municipality or a municipal corporation is local, has a physical territory and  inhabitants of the territory governed by the municipality.This should be retro active.

Can a Municipal Corporation be an Instrumentality of the State?

 This is a letter sent to numerous local newspapers.

Dear Editor,

I am writing to make a public suggestion that when proposed bonds are on the election ballot, that information be included about the current liabilities the taxpayer owes. Also I hope that those who vote in favor of such allocations of the taxpayer’s money will take care to carefully inform themselves about what they are really getting.

A bond was passed last summer that allowed 8 million for redevelopment of the Brunswick Naval Air Station to become “Maine’s Innovative Center” a high tech training facility. Leveraging $32,500,000 in federal funds.

I am sure those in proximity to the facility looked upon this as something that would raise the property value in the surrounding area.

However that fantasy was dashed by the legislation that chartered the Maine center For Innovation Corporation and when the management published a press release purportedly to announce their incredibly original name, but additionally announcing that the new “Innovative Center” included in its bylaws the “ the power of eminent domain – the ability to acquire property from abutters.” But not to worry because press release also says the Maine Center of Innovation does not foresee using the right.

Does the management of Maine’s New Innovative center foresee the effect such an announcement is likely to have on abutting real estate values- quite possibly reducing potential buyers of abutting property to one- and that of course is The Maine Innovative Center?

This is just yet another example of the usurpation and abuses of power that is going on under the name of a government managed economy. In order to get around the constitutional prohibition against legislative chartered corporations the legislature is calling the Maine Center for Innovation a "municiple corporation" that is the instrumentality of the state". This is the height of creativity and innovation from our legislature as used to get around  Article IV, Part Third, Section 14 of the Maine State Constitution says:
Corporations shall be formd 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 feorever be subject of the general laws of the state 

if the Maine Center for Innovation is “an instrumentality of the state”, then can it also be “used for municipal purposes”? Doesn’t “instrumentality of the state” imply that it is used for the purposes of the state ? - Even the name - The Maine Center for Innovation, implies that it is not a municipal corporation but a state corporation.  I would think that a corporation that was used for municipal purposes would be something along the lines a corporation formed to perform public services related and restricted to the municipality. The municipalities are supposed to have sovereignty but where is such sovereignty when the municipal corporation is an “instrumentality of the state?

So the next time you are at the polls- think twice- those bonds may not be what you are bargaining for- especially if you are next door to a muncipal corporation that is the instrumentality of the state, for which the legislature, in chartering said corporation, grants it the right of eminent domain.

Sincerely,

Mackenzie Andersen, East Boothbay, Maine

A Request To Representative McDonald for a Timeline of Changes in LD1 An Act to Stimulate Capital for Innovative Maine Businesses

Much to my surprise, when I recently clicked on my long standing link to LD1, it pointed to completly different content. The content which this link formerly opened is now called "original paper record. I have adjusted my list of links to incorporate the Original Paper Text, The Ammendment , and what is now called Public Law.You can locate them in the right side bar .

Without further ado, I am posting the letter I just sent to Representative McDonald in an attempt to establish a time line for the changes in the bill.

Dear Representative McDonald,


I recently received an email from you saying that you will keep in touch.

I was told by Representative McKane that you were on the committee for LD1- which goes by the title- An Act to Stimulate Capital for Innovative Businesses in Maine.

You may or not know that I write about the legislation that is passed by our legislature and so I have a list of links on my blog that I reference on a regular basis. The link for LD1 has been there since last spring when I first learned about the legislation around the time it was passed.

I was recently surprised to discover that the long standing link to LD1 link now points to completely different content.

The legislative website reports that the bill was passed on April 7 and signed on April 12. It was around that time that I contacted the web master to find out why there was no record of how each representative or senator voted. I was told that it was a gavel vote in which there was a call for objections and if there are none all are considered to have voted yes. I was also told that there were no objections.

At that time the content of the bill was the same as what is now listed as "original paper text. The fact of subsequent amendments indicates that there was a different version passed than what is now the content of the link- not just different but the original bill is erased and replaced.

And yet there are no further dates listed on the legislative website, which might lead some to conclude that it is the amended version that was passed on April 7 and approved by the governor on April 12.

I respectfully request that you provide a time line that includes the date of the amendment and when the amendment became public law.

Any further information about what has caused the bill to be completely replaced will be appreciated. I do not have the time during this busy moment to read the new version- but one can get the impression at a glance that the two versions were written by different parties. The first starts with a list of definitions, while the second just jumps in and starts talking about The Maine Public Employees Retirement Fund.

It’s Constitution Time, Governor LePage!

Note. This post was written as my introductory past for Portland, Maine edition of examiner.com. I applied and was accepted by Mr. Rick Brown with the words" You would make an excellent examiner". However when I went to post this article, I encountered a software glitch that prevented me from doing so. The examiner was changing its software and so at first I took it to be that I was encountering a general problem. However the glitch that I encountered was not listed in the common issues.

After a week of waiting for a response to my support ticket, and receiving no communications from normal channels, I contacted Rick Brown, who promised to look into it. After another week of waiting for further response form Rick Brown, I wrote and indicated that at that point I was inclined to believe that the software glitch was there by intent. Over a week has passed since then and I have received no further communication from Rick Brown. I no longer take seriously being a contributor to the Examiner.com. 

I believe that there are political forces at work that have an interest in silencing any discussion of the mountain of state capitalism that has been constructed by our legislature, with astounding speed, over the last fifteen years. The only way to know about it is to read the original sources- the legislative bills that have constructed it. I have provided a list of links to some of this legislation in this post.
It’s Constitution Time, Governor LePage!


The election is history and now LePage is Maine's governor to be.

As with the nation, the economy, the economy, and the economy are the first order impacting the now and future Maine. Inseparable from the economic debate is a debate about which political philosophy will lead Maine into the new decade and beyond.

LePage campaigned as a constitutionalist. Lepage has been among those that say it is not the role of government to create jobs, but rather to create an environment furthering creation of private sector jobs. The method by which the government influences the environment is slippery territory, which is why the constitution needs to be applied like a golden rule.

To my knowledge, LePage has not expressed a view on the entrenched structure of state capitalism, constructed by the Maine legislature over the last fifteen years. The legislation often reads like a corporate business plan. It is clear that our past and current legislature and administrations believed that it is their role to manage Maine’s economy and to move Maine toward their vision of the way we ought to be. The legislature has repeatedly utilized special acts of legislation to charter corporation after corporation, always promoting and justifying the acts with the vision that they are creating jobs.

Article IV, Part Third, Section 14 of the Maine State Constitution states in no uncertain terms that corporations shall not be created by special acts of legislation:

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 

 And yet state capitalism has been advanced with astounding speed.

The corporations, chartered by special act of legislation, and other associated legislation created since 1995 include:

1995 The Small Enterprise Growth Fund

1995 Contractual Agreement with the Maine State Public Employee’s Retirement Fund embedded into The Maine State Constitution, Article IX, Section 18-A and 18-B

1999 The Maine Technology Institute

2007 Government Task Force of Wind Energy Development

2007 Maine’s Innovative Economy Advisory Board

2008 Maine Expansion Fund

2009 An Act To Lower the Cost of State Government in the Departments under the Purview of the Joint Standing Committee on Natural Resources

2010 An Act to Stimulate Capital Investments for Maine Businesses
2010 The above act was amended by deleting and replacing the entire text.
The Amended Act became

An Act To Stimulate Captal for Innovative Maine Businesses
I am still researching the time line.

2010 The Maine Limited Liability Act ( into which was inserted a classification for the L3C)

In 1995, The Small Enterprise Growth Fund was chartered by special act of legislation. It focused on investments in Maine businesses. The Taxpayer accounts for 10% of the investment in “the fund”, as the SEGF is identified in the legislation. The taxpayer’s investments always “roll over” to reinvest in “the fund”. The other 90% of the investors are private “high growth” investors who require an “exit strategy” in order to realize a profit. The legislation mandates that The Small Enterprise Growth Fund submit it’s annual report to the legislature. The annual report is not readily accessible to the public, although the public is an involuntary investor in this investment corporation.

The Small Enterprise Growth Fund does not have a government web address, indicating that although it reports to the legislature and was chartered by the legislature, it is a private corporation. This is a common structure for the corporations that the legislature has chartered during the last fifteen years. The 1999 Annual Report for the Maine Technology Institute identifies the structure of the corporation in the following manner

MTI is a private, non-profit (501(c) 3) organization. It receives a direct appropriation from the Legislature through the Department of Economic and Community Development. $9,600,000 was appropriated to MTI for the 1999-2000 and 2000-2001 biennium. MTI is limited to using up to 7% of the appropriation for administrative costs. MTI is governed by its By-Laws (Appendix C), consistent with the word and intent of the legislation

The Maine Technology Institute is a nonprofit research corporation which functions as a conduit for transferring capital from the taxpayer and other sources available to non-profits to private commercial enterprises, which realize healthy profits from this arrangement. Like a magician doing a slight of hand trick, the government promotes jobs created thanks to the investment and research corporations chartered by special acts of legislation. The quasi government network regulates “social benefit” requirements on the beneficiaries of the re-channeled capital resources. The money flows from the taxpayer and other sources to the MTI to the MEP (Manufacturing Extension Partnership) to the privately owned business. The main stream media functions as the public relations arm of the quasi governmental network, exclusively encouraging the public perception that all is well and good because the government is creating jobs, and not to notice that capital funds are being transferred from the general economy to those that serve the government sanctioned “social benefit” agenda.

The social benefits are not completely defined in the legislation but instead much is left to the discretion of the Small Enterprise Growth Fund which functions as the head honcho in the network of government chartered corporations. At one time the Small Enterprise Growth Fund published the social benefit requirements on its web site but at last inspection they were not to be found. The social benefits included mandating that recipients of capital provide 50% of the employee health insurance as well as providing for pension funds. This in the face of the huge unfunded public liability resulting from the original government chartered corporation, The Maine Public Employees Retirement Fund- and so- highly problematic government policies are mandated on the private sector by the quasi governmental network.

LD1, legislation passed in early 2010 is misleadingly titled “An Act to Stimulate Capital Investment For Maine Businesses”. LD1 expands the authority and reach of the Small Enterprise Growth Fund, which is authorized to manage the “Fund of Funds”, a mutual funds investment corporation. Despite the title of the legislation, the text of the legislation prohibits investment in individual businesses and reduces the requirement to invest in Maine to a mere token. LD1 authorizes The Small Enterprise Growth Fund to minimize the risk for the private investors to the tune of 80 percent of a potential loss to be covered by the taxpayer in the form of “tax credits”. The Maine Public Employees Retirement Fund is identified as the “preferred investor”, And in so doing enabled the proponents of the new mutual funds investment corporation to tout the “Fund of Funds” as a benevolent solution to the unfunded liabilities created by The Maine Public Employees Retirement Fund. However to date the latest MPERS email newsletter made no mention of investing in the Fund of Funds, nor have I heard of it else where.

This is the climate in which our new governor finds himself. Will LePage take on the constitutionality of the massive structure of state capitalism in Maine? LePage has yet to comment on government-chartered corporations as a constitutional issue. As an election issue this is not an indicator as it is not a good election strategy to raise an issue with which the general public is disengaged. If state capitalism is ever to be reversed, the general public must become engaged.

This past election has shown the potency of public participation in the process. As an infamous politician recently said “Why waste a crisis?” That sentiment can be turned in any direction. We are still in crisis mode, though some would have us believe that we are past it, but that surely cannot be for the people of Maine who have the unfunded liability to Maine Public Employees Retirement Fund. Around 1997, the contractual agreement with MPERS was embedded into our constitution, conflicting with Article IV, Part Third, Section 18, of the Maine State Constitution which says that all corporations, however formed, are subject to general laws. The implication of embedding a corporation’s contractual agreement into our constitution creates an ominous precedent. The roots of state capitalism are long and deep in our past but If not now, then when can they be rooted out?

When, in 1947, the Maine Public Employees Retirement Fund was chartered by a special act of legislation, it was done with these words: “This is an essential government function”. The same words were used to charter The Small Enterprise Growth Fund. Although the state government had existed for many decades without either corporation, it was not deemed necessary to justify the claim, which is the basis of a political philosophy radically different from the political philosophy, which formulated the constitutions of Maine and the United States. Now is the hour to have this conversation. Good Morning, Governor LePage!

After Note: As I was working on the links  for this post, I realized that the 2010 “Act to Stimulate Capital For Maine Businesses” has been amended by deleting and replacing the entire text of the bill (See links above). I have not had time yet to read the new version but on first glance it appears to be that the Maine Public Employees Retirement Fund is no longer the “preferred investor”, it is now the only investor. The Small Enterprise Growth Fund no longer manages the “Fund of Funds”- now the fund is managed by The Finance Authority of Maine.

I am researching the time line but will not be able to immediately read the new version of the bill as this is a busy time of year. I will be posting on this matter and the amended version of the bill at a later date.