See who took money from tax credit scammers and where they stand on reform

See who took money from tax credit scammers and where they stand on reform

The Portland Press Herald has identified four out-of-state companies that helped push the New Markets tax credit program through the legislature and then profited from shady practices, including one-day loans to inflate the perceived value of their investments, to scam Mainers out of more than $30 million in state funds.

Advantage Capital Partners, Stonehenge Capital and Enhanced Capital, three finance firms from Louisiana, lobbied for the law, including the loopholes they later exploited. Cate Street Capital, a New-Hampshire based firm, orchestrated the Great Northern Paper investment scheme that cost Mainers $16 million in tax credits even as the mill in East Millinocket was shuttered and sold for scrap.

Now that some legislators are seeking to reform the program and recoup money lost through sham transactions, we thought it might be interesting to see which Maine politicians took campaign contributions from these companies over the past few years and where they now stand on stopping the scam. The contributions, more than $24,000 in total, were made to the campaigns and leadership PACs of both Republicans and Democrats, at all levels of government.

 

Paul LePage (R) – $7,500

Governor Paul LePage, who was in office as the tax credits were enacted, and advocated on Cate Street’s behalf to the Finance Authority of Maine, has received the most of any Maine politician. All the contributions were to his re-election fund. They came from the company itself, executive Alexandra Ritchie, and CEO John Halle and his wife, Sharon, (who apparently controls his bank accounts for legal liability reasons).

Stance on reform bill: Opposed

LePage has said several times that the program worked as intended and that, if given the opportunity, he would make the same deal again with Cate Street. At a recent Belfast town hall, he falsely claimed that “Cate Street wasn’t a subsidy, Cate Street was a loan,” and that “we bought two years of economic activity of about $250 million.”

 

Troy Jackson (D) – $5,200

Troy Jackson was a State Senator (and Senate Majority Leader) who ran for Congress in Second District in 2014 (losing to Emily Cain in the Democratic Primary). He now serves as a Democratic National Committee member for Maine. He received two contributions for his congressional campaign, each for $2,600, from John and Sharon Halle.

Stance on reform bill: In Support

“I voted against that in the budget and I am glad the Democrats on committee are trying to fix this,” wrote Jackson by email. “I didn’t even know about Cate Street’s involvement with it when I met John Halle. My dealings with him were about logging and wood going to the mill that we had a similar views on.”

 

Emily Cain (D) – $1,750

cainEmily Cain served as House Minority Leader in 2011 and 2012 and then served a term in the Maine Senate before running for Congress in 2014 (losing to Republican Bruce Poliquin). She is currently running again for the same seat in 2016. She co-sponsored the original New Markets bill. She received contributions to her leadership PAC from Stonehenge and Advantage Capital and contributions to her congressional campaign from Stonehenge executives Thomas Adamek and Ben Dupuy.

Stance on reform bill: In Support

According to Cain, her campaign reviewed their 2014 finance reports in April (when the Press Herald began publishing its investigation) and gave all contributions from the donors in question to domestic violence prevention programs in Penobscot and Piscataquis Counties.

“I applaud the state legislature for working to reform the New Markets program. It needs to happen,” said Cain by email. “The intent of New Markets has always been to help expand business in low income and rural parts of our state and it’s outrageous that there are those who would abuse this program at the expense of Maine’s workers and taxpayers. I still believe there needs to be a full investigation and accounting to ensure that this type of abuse never again occurs.”

 

Robert Nutting (R) – $750

Former House Speaker Bob Nutting co-sponsored the original New Markets bill. He still serves in the House, representing District 77 (Oakland and Sidney) and sits on the powerful Appropriations and Financial Affairs Committee. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Unknown

Nutting has not made a public statement on the reform bill and did not respond to a request for comment.

 

Justin Alfond (D) – $500

Justin Alfond is the current Senate Minority Leader and former Senate President. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Leaning in favor

While Alfond has not made a public statement on the reform bill as amended by the committee last week, he has previously accused Cate Street of committing “financial fraud” and said he supports significant reforms to the program, including a clawback provision for companies that don’t fulfill their promises.

 

Ken Fredette (R) – $500

Ken Fredette is the current House Minority Leader and sponsored the original New Markets bill. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Unknown

Fredette has not made a public statement on the reform bill and did not respond to a request for comment.

 

Terry Hayes (I) – $500

Terry Hayes, a former Democratic Representative and Assistant House Minority Leader, now serves as State Treasurer. She sits on the board of the Finance Authority of Maine, which administers the New Markets program. She received contributions to her leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Unknown

Hayes has not made a public statement on the reform bill and did not respond to a request for comment.

 

Roger Katz (R) – $500

Roger Katz is currently a State Senator serving on the Appropriations and Financial Affairs and Government Oversight Committees. He formerly served as Assistant Senate Minority Leader. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Leaning in favor

While Katz has not made a public statement on the reform bill as amended by the committee last week, he has previously said that he regrets voting for the original New Markets bill and supports reforming the program.

 

Mike Thibodeau (R) – $500

Mike Thibodeau is President of the Maine Senate. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Unknown

Thibodeau has not made a public statement on the reform bill and did not respond to a request for comment.

 

Jeff Timberlake (R) – $400

Jeff Timberlake is a state representative in his third term in the House and serves on the powerful Appropriations and Financial Affairs Committee. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Unknown

Timberlake has not made a public statement on the reform bill and declined a request for comment.

 

Mark Dion (D) – $400

Mark Dion represents Falmouth and Portland in the Maine House and serves as chair of the Energy, Utilities and Technology Committee. He received contributions to his leadership PAC from Stonehenge and Advantage Capital.

Stance on reform bill: Unknown

Dion has not made a public statement on the reform bill and did not respond to a request for comment.

 

Andre Cushing (R) – $350

Andre Cushing (pictured here with Stonehenge, Enhanced and Advantage Capital lobbyist Josh Tardy) is the current Assistant Senate Majority Leader and serves on the Labor, Commerce, Research and Economic Development Committee. He previously served as Assistant Majority Leader of the House and co-sponsored the original New Markets bill. He received a contribution to his campaign from Stonehenge Capital.

Stance on reform bill: Opposed

Cushing voted against the reform bill in committee and claimed Democrats were attempting to “sensationalize” the issue. He previously said that he believes the companies involved in the Cate Street scheme were acting “in good faith.”

 

Other politicians who are no longer in public or party office also took contributions from these firms, including former Senate President Kevin Raye, Former Congressman Mike Michaud, and former Senator Chris Rector. Stonehenge also made contributions to the House and Senate Democratic Campaign PACs. (According to his office, Democratic House Speaker Mark Eves “strongly supports the LCRED committee’s report to prevent sham transactions.”)

Have you heard more from one of these public officials on whether they support the bill to stop the scam? Let us know and we’ll update the list.

You can make a difference on this issue. Sign the MPA petition to stop the tax credit scam right here.

 

All photos from official government and campaign websites.

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