It cost $15,000, but he didn’t have the money.

What Roy did have was access to cash – someone else’s cash.

Roy, the longtime Republican politician from Somerset County, managed a federally funded agency’s checking account as well as the checking account of the state Republican Party, where he was treasurer.

Philip Roy Jr., photo Jim Evans, The Kennebec Journal

So in August of 2009, Uncle Sam and the Maine GOP bought Roy the camper.

Roy eventually paid the money back with interest, but in the process everyone from the FBI to the state auditor has been involved trying to find what happened, who’s responsible and what should be done.

Roy is a former Somerset county commissioner and chairman of the Fairfield town council. He was also a member of the Maine Board of Corrections Working Group, and the Kennebec Regional Development Authority and the Kennebec Valley Council of Governments.

Until now, what state officials have called the “misuse” of federal funds was kept quiet. Roy was allowed to resign from his job as fiscal agent at the federally funded agency, Central Western Maine Workforce Investment Board, and as treasurer of the Maine Republican Party without public acknowledgement that he had used both groups’ checking accounts for personal purposes.

And now he has authority over the $7 million-dollar budget for Hancock County, where he serves as chief financial officer.

Some of those familiar with Roy’s financial management history say he should never be in charge of public money.

“I would certainly not consider employing the individual in such a position,” said Peter Thompson, a longtime member of the Workforce Board.

“He certainly has shown poor judgment in terms of his fiscal responsibility,” said Craig Anderson, a vice president of Goodwill of Northern New England, who was the Workforce Board chairman during late 2009.

Roy did not make himself available for an interview, after repeated requests.

Using documents obtained through a Freedom of Access Act request and interviews, an investigation by the Maine Center for Public Interest Reporting reveals that in late August, 2009, Roy, who was the volunteer treasurer of the state Republican Party, asked GOP Chairman Charlie Webster if he could borrow $15,000 of party money for personal reasons.

Webster says he said “no,” and thought that was the end of it.

It wasn’t.

Roy then used a GOP credit card to transfer $15,000 into the party’s checking account. Then, wrote Ron Smith, the independent auditor who provided a narrative of the events to State Auditor Neria Douglass, “on around August 27, 2009,” Roy “transferred $14,600 from the Maine Republican Party’s operating checking account to an account in New York to pay for and complete the purchase of a camper.”

Next, Smith wrote, $15,000 from the Workforce Board’s checking account 
“went from the checking account to an account that Mr. Roy was personally authorized on at Savings Bank of Maine. The funds were then wired out of that account to pay for items of Mr. Roy’s personal use.”

Roy used that money to reimburse the Republican Party for the $14,600 he used to buy the camper, according to the auditor’s narrative.

Gary McGrane, photo Sun Journal

At the time, Roy worked at the Workforce Board part-time as the fiscal agent. The Workforce Board is one of four agencies in Maine that funnel federal funds into programs to train workers, and match employers and workers. The four agencies oversee the operations of the state’s Career Centers. The one for which Roy worked covered Oxford, Androscoggin, Kennebec and Somerset counties.

According to Gary McGrane, a Franklin county commissioner who was a member of the Workforce Board when Roy got the $15,000 from the agency, the normal oversight procedure that requires state approval and a second signature on checks by an agency board member didn’t happen.

“All the checks had to be approved by the state agency, and I would oversee that and would have the authorization from the state to go ahead, and he bypassed the whole process,” said McGrane.

These transactions were discovered in December 2009 when the federal government performed a routine audit of the Workforce Board’s finances.

Board member Thompson said Roy should never have used taxpayer funds to buy a camper.

“It was absolutely the wrong thing to do, not only legally, but also ethically,” said Thompson.

Roy said he borrowed the $15,000 in federal money from the Workforce Board., according to Smith’s narrative.

But if it was a loan, it wasn’t documented.

“No promissory note was executed between the parties,” wrote auditor Smith.

Roy told auditors that a state official told him he could borrow the money. But State Auditor Douglass denies that Roy was given permission to use federal money for personal purposes.

And Roy told auditors that the Workforce Board’s executive director gave him permission to take the money, too. That is true. The executive director, Bryant Hoffman, told auditors that Roy asked him for it, saying he needed the money “for his personal residence.”

But Jim Trundy, another member of the Workforce Board, said getting permission for the so-called loan doesn’t make it right:

“If I go into my boss one morning and say, ‘One of my staff is really irritating me, can I shoot him?’ If he says yes, that doesn’t make it okay,” said Trundy, who adds he was “appalled” at what Roy did.

Roy told the auditors that “the funds had been used to pay his mortgage so he didn’t lose his home,” according to state records.

After auditors discovered the loan in early December, Roy paid it back.

In mid-December, Workforce Board Executive Director Hoffman called a small group of agency board members to an emergency meeting to review the federal auditor’s findings.

The findings had been communicated to Hoffman in a letter about “possible improprieties” from the state Department of Labor’s Melanie Arsenault, head of the Bureau of Employment Services. The department has some oversight responsibilities for the state’s workforce investment boards.

Bryant Hoffman, photo Central Western Maine Workforce Investment Board

Arsenault’s letter not only questioned the inappropriate loan to Roy, but also a $100,000 line of credit opened by Roy without documented board approval.

She requested that the Workforce Board “suspend Philip Roy from conducting any financial affairs for Central Western Maine Workforce Investment Board until this matter is investigated and resolved by the appropriate authorities. The financial records that are stored at Mr. Roy’s office/residence must be seized immediately and turned over to … RHR Smith, the auditors for Central Western Maine Workforce Investment Board.”

According to McGrane, board members discussed whether to fire Roy.

“Some people such as myself were ready to fire him. There was concern about legal ramifications whether or not we were doing it properly in accordance with federal regulations,” said McGrane.

In the end, Roy was allowed to resign.

Executive director Hoffman also resigned later in 2010, at least partially due to the Roy incident, according to Thompson and other board members.

“The executive remained in place for a period which helped with transition,” said Thompson, “but it was clear he was going to take a step down and resign.”

Hoffman did not agree to be interviewed, despite multiple attempts to reach him.

In January, 2010, Roy resigned his position as GOP treasurer.

In June, 2010, Dennis Corliss, Service Center Director at the state’s Department of Administrative and Financial Services, wrote State Auditor Douglass that Rob Schenberger, one of his financial analysts at the center, “was contacted today by the FBI. They were looking for copies of pictures we had taken of text messages sent by Mr. Roy to Rob.”

In October, 2010, Corliss wrote to the new director of the Workforce Board, Jeffrey Sneddon, that “there is an ongoing federal investigation.”

The FBI would not confirm whether the investigation is still under way.

Workforce Board members who knew about the incident have never spoken publicly about it until now, and agency leaders failed to notify the majority of other board members until months afterwards.

“I would like to understand how something of this importance was kept from the full board for 3 months,” wrote board member Linda Walbridge in a March 17, 2010 email to other board members and staff. “The explanation that the Executive Committee found out about this the day after our last meeting is not convincing.”

Nor did board members tell Roy’s employers at Hancock County what had happened.

“Once he was done, he was done, we didn’t follow him around,” said McGrane. “If they’d asked us, we’d have told them. They didn’t do their due diligence, did they? That’s on their head, not ours.”

Likewise, when Roy left the GOP treasurer’s position in January 2010, party Chairman Webster simply told party members that Roy “believes that his attention should be dedicated to his family and his work.”

Charlie Webster, photo Portland Press Herald

But Webster knew what had happened. He and party attorney Dan Billings, who is now Gov. Paul LePage’s in-house counsel, had been told in December 2009 about the GOP funds diversion by Smith, the independent auditor, who investigated the incident at the request of the state.

Billings said he could not speak of the incident because of attorney-client privilege.

Webster said he felt no need to inform his fellow Republican Party leaders about what Roy had done.

“I couldn’t see at that point what difference it made,” said Webster. “I didn’t need to create a bunch of drama for the Republican Party. He made a mistake, he acknowledged it, he admitted to me he had done it and he resigned.”

In fact, the Republican Party had just been through a lot of drama around Roy’s management of its fiscal affairs. While Roy was treasurer, a paid bookkeeper had stolen almost $50,000 from the party; according to the Kennebec Journal, she ultimately pled guilty to forgery and felony theft charges, was ordered to pay restitution and sentenced to jail for six months.

That led to calls by some party members for Roy to resign as treasurer. Billings was the most prominent advocate for Roy’s removal, writing on the conservative website As Maine Goes, “Phil Roy was asleep at the switch while the party was being looted, yet he continues to hold the position of Party Treasurer.” According to a posting by Billings, a motion to remove Roy as treasurer failed.

The political price of publicly undermining the party’s image as fiscally responsible was evidently on Webster’s mind when Roy left over his own misuse of funds.

“What was I supposed to do, have a press conference? And hold it in front of the Democratic Party headquarters?” Webster said.

One of Roy’s bosses in Hancock County, Commissioner Steven Joy, began his service as commissioner at around the same time Roy went to work for Hancock County in early 2009. Joy said he did not know precisely what had happened at the Workforce Board.

“As far as I know nobody has sent us any information on that,” he said. “I was aware that there was something that happened there, but I wasn’t aware of the minute details.”

Is he concerned?

“Of course I’m concerned about that,” said Joy.

“I guess my question is, if somebody has convicted him or is going to charge him, we would take care of that right that minute. But I can’t do that on accusations I can’t tell are true.”

Financial conflict has continued around Roy in his job as chief financial officer for the county.

In early 2011, Roy had the county treasurer move $750,000 in federal funds from the Hancock County Airport budget into the county’s general fund. The airport’s manager, Allison Navia, charged that the transfer violated federal rules about how airport monies should be managed. The Federal Aviation Administration is now reviewing the incident, according to spokesman Jim Peters.

Joy said that Roy had been “overzealous” in investment of county funds, leading to a cash flow problem that required using airport funds to meet expenses. Joy said that the funds “were all under our control,” but that there was “commingling” and new procedures have been put in place to avoid future problems.

The Maine Center for Public Interest Reporting in a nonpartisan, non-profit news service based in Hallowell. Email: mainecenter@gmail.com. Web: pinetreewatchdog.org

Six of the seven worked for the same state agency during the administration of former Gov. John Baldacci and the seventh was a member of the System Board of Trustees during that period.

The current and immediately past chairs of the board both said that while they believe there was no improper influence in most of the hires, they also said a review of the process is warranted.

University Chancellor James Page, photo John Clarke Russ, BDN

And the new chancellor of the System, James Page, said he will add the hiring issue to a review he is doing about recent questions involving System pay raises.

“I take the allegations and concerns very seriously, but I’m not prepared to say what the strengths of those allegations and concerns are,” Page said. “Everything will be looked at.”

For three jobs – two of which oversee multi-million-dollar budgets – the System hired the former state staffers directly into the higher education positions, meaning there was no customary search for the best-qualified people.

Each of those job openings, which pay more than $100,000, were given emergency status that allowed the System to waive a policy that requires openings be advertised and a search conducted.

In another case, a trustee resigned from the board and a month later applied for and was subsequently given a $137,000 job at the University Southern Maine. Officials say this appearance of “impropriety” prompted the board to approve a new conflict of interest ethics policy requiring a one-year waiting period.

In other cases, administration officials were given jobs even though they did not have the college degrees the system listed as requirements or were not ranked as the top candidate.

Excluding benefits, the annual payroll for the seven positions is $898,000.

The use of the university system as a haven for high-level state officials did not occur under the previous governor, Angus King. Only one top King staffer went on to a system job, according to officials, and so far no one from the LePage administration has moved into a top UMS job.

Former Chancellor Richard Pattenaude, photo Bridget Brown, BDN

Most of the seven positions were approved by the trustees, who are appointed by the governor.

Richard Pattenaude was chancellor of the system while six of the seven appointments were made, some of them by him personally. He relinquished the position earlier this year.

Pattenaude said the connections of the seven system officials to the Baldacci administration was a coincidence and that he was never asked to find them a job.

“I understand why you would ask that question,” he said. But, he added: “No job was ever created for anyone … all are performing at the highest level.”

The hiring questions come on the heels of another personnel controversy in the system. The Portland Press Herald and Bangor Daily News revealed that the system gave millions of dollars in discretionary pay raises in recent years, while facing multi-million-dollar budget cuts.

Page, who took over on March 20, has said the pay raise reports “troubled” him and new discretionary raises were suspended or require his approval while he looks onto the issue.

Joe Wishcamper, who was chair of the System’s Board of Trustees when most of these appointments were made, acknowledged that “short cuts” may have been taken to hire people who were already known to the System from their state government work.

Although be believes none were the result of “inside baseball,” he added that the hiring processes “raise legitimate concerns and those concerns should be aired and reforms and changes made to take them into account.”

The hiring pattern was discovered in documents provided by the System in response to a Freedom of Access Act request by the Maine Center for Public Interest Reporting and the Bangor Daily News.

The seven are:

Rebecca Wyke: currently the System’s vice chancellor of administration and finance. She was hired without a job posting or job search. She had been Baldacci’s Commissioner of Administration and Financial Services (DAFS).

Ryan Low: hired as vice president for administration and finance at the University of Maine at Farmington without a posting or search. He held Wyke’s position after she went to the System job. He has since been promoted to be the System’s chief lobbyist after a job search limited to only other System employees.

Ellen Schneiter: named vice president for administration and finance at the University of Maine at Augusta. While there was a job search, her degree is not in the field required by the job description. She held the DAFS job after Low left.

Richard Thompson: chief information officer for the System, was hired without a posting or job search. He was hired despite having only a high school education and replaced a man with two degrees in computer science. He had been chief information officer in the Baldacci administration.

M. F. “Chip” Gavin: director of facilities management and general services for UMS, was hired despite not having a degree in any of the required fields, such as engineering, and despite a mostly critical report from the system’s own search committee. One of the finalists passed over in favor of Gavin had two engineering degrees and years of experience in facilities management. Gavin had been director of general services for Baldacci.

Elaine Clark: executive director for facilities and real estate at the Orono campus, was hired despite being rated No. 3 and No.  5 in search committee documents. She had been director of general services for the state. She has since left the job.

Margaret “Meg” Weston: vice president for advancement at the University of Southern Maine, was hired despite having no professional experience in fundraising. She applied for the job one month after resigning from the UMS Board of Trustees, prompting a new ethics policy requiring a year’s waiting period for moving from the board to a paid job in the system.

She was appointed to the board by Gov. King and was reappointed by Gov. Baldacci. It was during the Baldacci appointment that she got the USM job, which she has since left.

Only two of the seven responded to the Center’s request for comment. Low and Weston said they believe they were qualified for their jobs.

(See stories below for more details.)

Former Gov. John Baldacci, responding to question by email, wrote, “The men and women who serve at the top levels of Maine government are some of the most qualified in the state and have numerous opportunities for employment. I’m proud that members of my administration decided to continue public service when they could have found much more lucrative employment in the private sector.”

But a national expert of political patronage said the hires represent an “outrageous example” of using a higher education system to provide safe jobs for those with the right connections.

Martin Tolchin and his wife, Susan, are co-authors of “Pinstripe Patronage: Political Favoritism from the Clubhouse to the White House and Beyond.”

Tolchin said the University of Maine System “is being used as a dumping ground” for friends and supporters from the higher levels of state government.

Howard Segal, a professor of history at the University of Maine at Orono for the past 26 years, is a member of the Faculty Senate. He said the hires confirmed his belief that at the upper levels of the System “education is not the issue – political power is.”

“It’s terrible business-as-usual, and it’s outrageous,” he said. “These are my tax dollars, and I’m infuriated.”

POLICIES HAVE LEEWAY

The System’s hiring policy manual states, “It is impermissible to hire an individual who does not meet the state minimum qualifications.”

Former Chancellor Pattenaude and Human Resources Chief Human Resources Officer Tracy Bigney said the rules allow leeway, even with the minimum standards policy.

“When you get to a senior level,” said Pattenaude, “experience weighs as much or more than a degree from years ago.”

And Bigney said, “We are usually quite careful to say relevant experience can be substituted for education.”

However, none of the job qualification documents provided to the Center by the System’s office state that experience can be substituted for the educational requirements.

Wishcamper, who is president of a real estate development firm, said, “I believe none was a political appointment. I have had extensive experience working with governmental bodies and have seen many that are populated with patronage appointments to high level jobs. I have seen no evidence of this in the UMaine System.”

He likened some of the System hires to his personal experience in business, where an applicant who you already know is a “lower risk” than other applicants.

(All of the six former state employees worked in the same department, Administration and Financial Services, which was headed Wyke. She also headed that department during the time period the other five worked there.)

“To some extent, decisions were probably made here to take short cuts in the process rather than the full blown process the policy called for,” Wishcamper said. “My impression is there was probably someone available who we really wanted.”

Michelle Hood, the current chair of the UMS trustees, said she is confident the hires were made wisely, but did not recall details of any of the hires except Low’s.

“I personally have seen no evidence that there is an influence being applied from the governor’s office,” legislature or other policy makers in Augusta, she said.

But, she added, “I certainly plan to talk with the board and chancellor about some concerns some people might have about this to make sure we’re being as transparent as we can be.”

Bangor Daily News reporter Nick McCrea contributed to this story.

The Maine Center for Public Interest Reporting in a nonpartisan, non-profit news service based in Hallowell. Email: mainecenter@gmail.com. Web: pinetreewatchdog.org  

More details: the seven appointments

Senate moderates, those who do not follow a strict party line, have declined from 46 in 1977 to only six in 2009, according to one study.

In the same period, another study, this one based on conservative-liberal ideology, found that those who did not strictly adhere to either view dropped from 39 to nine.  Moderate groups in the two studies mostly overlapped.

In both of the studies, as well as in earlier years, Snowe and Susan Collins, Maine’s two Republican senators, rated as moderates.

The method of determining partisanship was developed by Keith T. Poole of the University of Georgia and his associates.  If 50 percent of party members voted in the same way on a bill, their position was considered the party’s position.  Each member was rated by how often he or she voted with party positions.  In 2009, Snowe voted with the Republican Party position about 60 percent of the time.

To determine ideological loyalty, the scores given each year by the leading conservative and liberal rating groups are combined by Congress Spectrum into a single score for each senator and member of Congress.  Each group selects its own issues for its rating and they differ somewhat.  The two rating groups – the American Conservative Union and the Americans for Democratic Action – use different standards for designating conservatives and liberals, so the study creates a common system: those with scores between 25 (that score or lower is liberal) and 75 (conservative) out of 100 are moderates.  In 2009, Snowe scored 41.5, tied with Collins and putting them the closest to the middle.  (Disclosure:  I developed and edit Congress Spectrum.)

According to the latest NBC News/Wall Street Journal national survey, 41 percent of voting-age people consider themselves moderate, 34 percent are conservatives, and 22 percent are liberals.

The composition of the U.S. Senate, in which only nine senators were not rated either conservative or liberal, was obviously far from the breakdown among voters.  The reason why few moderates are now elected, despite the public’s ideological preference, is probably the party selection processes, which increasingly produce candidates with strong ideological identities.

The partisan trend has been accentuated by moderates, who say they are frustrated by the pronounced partisanship and either do not seek reelection or lose to more ideological candidates.

The record suggests that the departure of senators like Snowe is likely to result in the Senate becoming even more polarized.

Of the nine moderates in 2009, only three are sure to be back next year.  Since that study, three, including Snowe, declined to seek re-election.

With the decline of the bi-partisan moderate group, each party has come closer to ideological purity when it comes to ideology: Only Republicans are rated as conservatives, and only Democrats are rated a liberals.

Much of what the studies found for the Senate is also true for the House of Representatives.  Many long-term members have been defeated or not sought re-election, and the partisan division is as sharp as in the Senate.

The decline of the moderates has meant that there remain fewer senators and members of Congress who are ready to compromise.  In both the House and Senate, the number of moderates is so small that they can no longer provide decisive votes that are needed to develop a majority for major legislation.  When they could influence the outcome, they forced compromise.

At one time, the so-called “Gang of 14,” composed of seven moderate senators from each party, came up with rules for confirming or rejecting judicial nominees.  They had enough senators to either block consideration or allow a vote.  Both Snowe and Collins were members.

Now, without enough moderates to influence results, partisanship is causing judicial nominations to pile up, awaiting Senate confirmation votes.

Both parties have been reluctant to compromise on bills when they had the votes to prevail in either the Senate or House.

When there is divided government with the two houses led by different parties, each able to block the other, there is a greatly increased likelihood of few major bills making it through the legislative process.  Without a strong enough moderate group, whose vote is needed for passage, compromise is likely to be replaced by stalemate.

Reversing the partisan-ideological trend would depend on parties selecting moderate candidates, who can appeal to the large pool of moderates in the electorate.  But with virtually unlimited political contributions available to more ideological candidates, the prospects for such a change are uncertain.

Sources:

Party loyalty: http://voteview.com/Polarized_America.htm#POLITICALPOLARIZATION

Ideology: http://congressspectrum.com

Gordon L. Weil is a contributing writer at the Maine Center for Public Interest Reporting (pinetreewatchdog.org). He is an author and publisher and served as a Maine state agency head. Weil was also a correspondent for the Washington Post and a columnist for the Financial Times. He is a former Harpswell selectman. He may be contacted at Weil.Gordon@gmail.com.

The three-member regulatory body decided that the economic development benefits of the project had so much potential that they could approve it while imposing enough conditions to protect utility customers.

In its decision, the PUC went against the recommendations of its own experienced staff and all of the parties to the case, other than the applicants.  Those parties, including the Maine Public Advocate, represented utility customers and the Northern Maine Independent System Administrator, the neutral body responsible for maintaining electric reliability in northern Maine.

According to a report by the Maine Center for Public Interest Reporting, a principal focus of the PUC decision was the potential the new entity would have for creating jobs in Maine, perhaps more than any other development now on the horizon.  Though Maine’s unemployment rate is well below the national level, job creation remains near the top of voters’ concerns.

That the PUC should give economic considerations great weight while finding that its conditions were sufficient to provide consumer protection reflects a broad view of its mandate.

Maine law gives the Commission the mission “to ensure safe, reasonable and adequate service and to ensure that the rates of public utilities are just and reasonable to customers and public utilities.”  There is nothing explicit in its legal mission about job creation.

In fact, most courts and regulatory bodies have limited functions.  While regulators apply powers assigned to them by legislative bodies, elected legislatures normally exercise obvious policy functions such as adopting economic development measures.

However, the limits on impartial bodies are gradually being lifted.  In addition to the traditional regulatory mandate, Maine law also tells the PUC to decide “consistent with the public interest.”

Does “the public interest” include only utility-related matters or does it include the broad range of public policy?  The answer comes from the regulators themselves.  If the broader interpretation applies, then the PUC could consider job creation, as it did.

In fact, the Commission sought to make both of its mandates mesh, by stressing that it would impose strict conditions on the new operation.  But its own professional staff, in a 74-page recommendation, said that it would be impossible to impose tough enough conditions to protect customers.

For the Commission to enforce many of the proposed conditions, its staff will have to continually  monitor how the new entity operates.  Such a watchdog role is not often used.  Utility regulatory bodies usually rely on required reports from utilities and others rather than actively keeping watch themselves.  The PUC’s relatively small staff specializing in electric matters will find itself with an expanded set of responsibilities.

The concern about customer protection is based on the plan for the project to develop a significant amount of new wind power.  Both Maine law and national policy strongly favor the development of renewable energy sources to cut the need for imported oil and to reduce greenhouse gases.

But the development of renewable sources like wind often costs more than the continued use of traditional fuels like oil and coal.  If it were less costly, developers would need no incentives.

Its higher cost is why some federal stimulus money and tax breaks go to support development of renewable sources.

When this assistance proves insufficient, utility customers pay higher rates to support the development costs for both new generation and the transmission lines needed to bring the power to market.  Instead of the added cost being supported by tax dollars, it is paid in rates by what amounts to user fees.

Consumer advocates protest these higher rates, especially in states like Maine that already have among the highest electric rates in the country.  Should conditions designed to protect customers fail to fully control rates, it is usually impossible to roll back approved deals that caused the higher rates.

The PUC decision to authorize Emera, which owns electric transmission grids, to also own generation is allowed because the company will use an affiliate that would be legally insulated from its utility business under the Commission’s conditions.  Maine law prevents wires companies from directly owning generation without the use of an affiliate, because of the concern that they might favor their own power supply even if more costly than alternatives.

While the Commission believes that this decision will not allow such favoritism, this may not be the end of the story.  Emera has openly sought to change Maine law so that it can directly own generation.

Gordon L. Weil is a contributing writer at the Maine Center for Public Interest Reporting (pinetreewatchdog.org). He is an author and publisher and was also a correspondent for the Washington Post and a columnist for the Financial Times. He was Maine’s first Public Advocate, serving in 1981-82. He may be contacted at Weil.Gordon@gmail.com

That won’t happen again.

A bill to require disclosure of state contracts with legislators and executive branch officials has sailed to approval through the House and the Senate.

The bill, L.D. 1806, now awaits the signature of Gov. Paul LePage, who said Thursday he will sign it.

“It is reasonable to ask our elected leaders to disclose who is paying them. It is good for the health of our democracy and the people of Maine,” said LePage.

“This will increase trust in the system and ensure that people have the opportunity to take appropriate action and make decisions accordingly.”

LePage proposed the bill after a January investigation by the Maine Center for Public Interest Reporting revealed that organizations run by top legislators or the family members of executive branch officials had received $235 million in state contracts between 2003 and 2010.

Maine Statehouse Photo John Christie

In some cases, lawmakers served on the committees that controlled the spending that went to their organizations.

But the spending was never disclosed to the public in state ethics filings.

Sen. Kevin Raye, R-Perry, the senate president, was the lead sponsor of LePage’s bill. He said Thursday that the bill’s passage “means a greater degree of transparency” for citizens, who will be able to spot potential legislative conflicts of interests.

“They can be more confident that they’re aware of the circumstances surrounding individual legislators and their votes in the legislature,” said Raye.

Nathaniel Heller, head of Global Integrity, which co-sponsored a 50-state ethics-in-government study that recently gave Maine an “F,” said, the bill’s passage “is an important step in the right direction when it comes to advancing transparency and accountability in Maine’s government. It’s encouraging to see the governor and other political leaders respond to reporting about governance challenges in the state by adopting specific, evidence-based reforms.

“In an era of limited budgets, it’s especially crucial for Maine’s citizens to know that every dollar spent by their government is being spent wisely,” Heller said.

Current law requires that legislators or high-level state employees report state purchases of goods or services worth more than $1,000 only if they were purchased directly from the individual legislator or family member, not from a corporation or entity for which the legislator or family member works.

For example, $98 million in state contracts went to Portland’s Shalom House between 2003 and 2010. At that time, Sen. Joseph Brannigan, D-Portland, was executive director of Shalom House. He was also chair of the Appropriations and Health and Human Services committees. He was not required to disclose those payments from the state because they went to the organization he ran, not to him directly.

The new law will require legislators, executive branch officials and constitutional officers, such as the attorney general and secretary of state, to report if organizations they or family members were affiliated with — as owners or management-level employees — were paid more than $10,000 annually by the state. LePage’s original bill had proposed a $1,000 reporting trigger, but lawmakers amended that to the higher number.

Rep. Michael Carey, D-Lewiston, Photo Maine.gov

Rep. Michael Carey, D-Lewiston proposed an additional amendment, which was adopted, requiring that lawmakers and executive branch officials report income above $2,000 to a corporation of which they are majority owner, even if the lawmaker or official isn’t paid by the corporation.

“If that entity is making money, just the fact that you’re choosing not to pay yourself doesn’t mean that you don’t have to report where that money comes from,” said Carey.

Carey said he proposed the amendment after state Treasurer Bruce Poliquin failed to report almost $10,000 in dues paid to the Popham Beach Club, which he owns. Poliquin later amended his disclosure form to reflect the payments.

The legislation closes another loophole that has allowed lawmakers and high-level executive branch officials to avoid disclosing their income during their last year working in state government. If the disclosure form filing deadline fell after they left office or state employment, they could simply ignore the requirement.

“The public will now have access to the officials’ financial information for their last year in office,” said Jonathan Wayne, executive director of the Maine Commission on Governmental Ethics and Election Practices.

Naomi Schalit and John Christie are senior reporters at the Maine Center for Public Interest Reporting, a nonprofit, nonpartisan news service based in Hallowell. Email:mainecenter@gmail.com. Web: pinetreewatchdog.org.

All three members of the Public Utilities Commission voted for a complex series of transactions among First Wind, Bangor Hydro and Maine Public Service and their parent, Nova Scotia-based Emera, Inc., and Ontario-based Algonquin Power and Utilities Corp.

The commissioners said the economic benefit of such investment was substantial, that any potential harm from the deal could be mitigated by PUC-imposed conditions and that the deal helped meet the ambitious goals of Maine’s 2008 Wind Power Act. Maine currently has 205 commercial wind turbines that can produce 400 megawatts of electricity. Tuesday’s deal could pave the way for construction of turbines producing an additional 1,200 megawatts.

Paul Gaynor, First Wind CEO, signs one of the blades for a turbine erected in the Stetson Wind project expansion. Photo: Gabor Degre, BDN

“I’m not sure it would be sound policy for the commission to turn down a several hundred million dollar investment on the ground,” said Commission Chairman Thomas Welch.

“The magnitude of this investment in Maine is seldom seen and even less so in renewable, clean development,” said Commissioner David Littell.

“The Emera transactions meet a number of public policy goals which encourage the development of investment in wind energy projects,” said Commissioner Vendean Vafiades.

Tuesday’s deliberations, which included statements from each of the commissioners and multiple conditions proposed for the deal, will be distilled into a so-called “order.” That order will provide the written detail of the commission’s decision, and once issued, can be appealed to the state’s highest court.

The deal originally proposed that First Wind, Emera Inc. and Algonquin Power and Utilities Corp. would jointly build and operate wind energy projects in the Maine and elsewhere in the Northeast. After a failed bid to go public in 2010, which left First Wind cash-hungry, the deal is a way for the Boston-based company to continue building wind towers across Maine and the region, as well as a way for Emera and Algonquin to reach new energy consumers in the U.S.

Legal filings estimate the worth of the deal at the “high end” as $880 million.

Algonquin subsequently pulled out of the portion of the deal to invest in First Wind’s holdings, but remained a partner with Emera in related plans to expand into the Northeast energy markets.

This separate deal allows Emera to invest in Algonquin, and both companies will then buy, or invest in, energy companies in the US and Canada, according to Sasha Irving, Emera’s spokeswoman. The companies in press releases have described the deal as the pursuit of “specific strategic investments of mutual benefit.”

Algonquin has said its plans include “investment opportunities relating to unregulated renewable generation, small electric utilities and gas distribution utilities.” One of Algonquin’s businesses is already in the process of acquiring New Hampshire’s Granite State Electric Company.

Emera has described plans to invest in “opportunities related to regulated renewable projects within its service territories and large electric utilities.”

Tuesday’s decision stands in contrast to the January recommendation of PUC staff that commissioners reject the deal because “the risk of harm to ratepayers exceeds the benefits.”

In a draft decision, staff wrote that the deal posed unacceptable potential for hikes in electricity prices “even if conditions intended to mitigate the risk of harm to ratepayers were imposed.”

Several other parties also objected to the deal in filings over the last year with the commission.

Small electricity generators were joined in their objections by industrial energy users such as Verso, Huhtamaki and Madison Paper and the Maine Public Advocate, which represents the interests of utility customers. Some of them, like PUC staff, argued that electricity rates would rise; others said the plan would violate the state’s Restructuring Act of 2000, which prohibits utilities from owning both transmission and generation because it was seen as anti-competitive and contributing to high electricity prices.

Anthony Buxton, attorney for the industrial energy users who protested the deal, said Tuesday that the commissioners had hurt Maine’s energy consumers.

“The irony is that at a period when the competitive market is working very well, we have taken the risk of impairing the competitive market by allowing the vertical integration of utilities,” said Buxton. “We did away with that in 2000 and got a very competitive market — and now it will be at risk.”

“I agree that there are risks associated with the transactions,” said Vafiades, “but have determined the benefits are significant.”

Those risks, commissioners said, could be dealt with by imposing a number of conditions on the deal.

“There are a lot of them, probably 30, maybe more,” said Welch, following the meeting.

One set of conditions, said Welch, would ensure that the companies did not favor their newly affiliated partners over lower-priced transmitters and distributors of power, thus costing customers more. Other conditions would limit employees of the affiliated companies from moving back and forth between companies, carrying information that they would normally be prevented from sharing.

Then, said Welch, “you want to have a healthy utility so they can do the things you rely on them to do.” So the PUC will impose conditions “that insulate both Bangor Hydro and Maine Public Service from any financial problems that Emera might have as a result of this transaction.”

Emera spokeswoman Sasha Irving said Tuesday, “We’re very pleased the three commissioners agreed unanimously that this is a positive transaction for the state of Maine and we look forward to receiving the final written order and we’ll review it at that time.”

First Wind’s CEO Paul Gaynor thanked the commissioners for their approval. “The partnership will drive further growth of well-sited and well-run wind energy projects in the Northeast,” Gaynor said.

The Maine Center for Public Interest Reporting is a nonprofit, non-partisan news service based in Hallowell. Web: pinetreewatchdog.org. Email: mainecenter@gmail.com.

Maine leaders are taking the second route – vowing to do something about the failing grade the state got last month in a 50-state study of the laws and practices that could prevent corruption.

Both the Republican governor and the Democratic leader of the House, among others, said the state needs to take steps to improve laws requiring transparency and accountability in the executive, legislative and judicial branches.

Gov. Paul LePage said he has already introduced a bill that “seeks to improve the current disclosure requirements of Legislators and certain executive employees. This is the direction we need to move in to improve Maine’s grade. It’s clear that many states struggle with this issue. However, it is an issue that I will continue to work on improving on behalf of the Maine taxpayer.”

State Rep. Emily Cain said it may make “sense to have some kind of a bipartisan task force that would be able to look at this between now and November that would mostly focus on feedback from the public and experts.”

Rep. Emily Cain, photo John Clarke Russ, BDN

Maine ranked 46th in the “State Integrity Investigation” by three nonpartisan, national and international journalism and good government groups.

The score was based on research into 330 indicators in 14 categories, from procurement to campaign disclosure to lobbying.

No state got an A, leading the groups to conclude, “statehouses remain ripe for self dealing and corruption,” according to an earlier report by the Maine Center for Public  Interest Reporting.

Maine got an F in nine of the 14 categories, including executive accountability, public access to information, civil service management, pension fund management, the insurance commission, legislative accountability, lobbying disclosure, ethics enforcement and redistricting.

The state got a D+ in judicial accountability and political financing and a C- in the budget process and procurement. It got one A: in internal auditing.

Peter Pitegoff, is dean of the University of Maine Law School and was also a member of the legislature’s 2006 ethics advisory committee.

“Maine’s weak assessment in the national state integrity study is not an indication of corruption in state government, but it can serve as a catalyst for constructive change in the regulatory regime for government officials and institutions,” Pitegoff said. “ We would do well to undertake a closer examination of what is on the books and what ought to be, and to be explicit about assuring public integrity.”

Shenna Bellows, executive director of the American Civil Liberties Union of Maine, said the report “demonstrates the need for comprehensive reforms to our accountability and transparency laws. The legislature and the governor are currently trying to have it both ways, by reforming some aspects of the system, but taking a serious step backward in other areas.

“For example,” she said,  “the governor is seeking a vague exemption from Maine’s right-to-know laws to further hide from public view the work of his office, this is exactly the wrong direction given the recent national report.”

She said her group identifies projects it will work on with other organizations over the summer and expects the transparency problems highlighted on the study to be “a number one priority.”

Barbara McDade, president of Maine’s League of Woman Voters, said, “the League would really like to study these things and see the best way to go.”

Was McDade surprised at Maine’s bad grade? “Yes, I think I was,” she said. “I still have faith in our government. I know people in other states that don‘t have faith in their government anymore … I think there probably have been problems that we don’t know about, but by and large, Maine works.”

She said one area the League believes may need changing is the way the state selects constitutional officers, such as treasurer and attorney general. Currently, they are elected by the legislature. She said that means the public has no role in their selection, nor do citizens have detailed information about the candidates for constitutional offices, another example of a lack of full transparency.

She also agreed with the study’s criticism that the state lacked a “revolving door” policy – one that would limit or even prohibit state officials going directly from their state jobs to an industry they regulated.

“It’s just unseemly,” McDade said.

Rep. Cain said she was prompted to look into the study by her father, who heard about it through news reports.

“He said, ‘You’re failing. What is this corruption that is going on in Maine?’ “

The report isn’t about corruption – it’s about laws that could prevent corruption. Cain said she and her father cleared that up and ever since, “It’s been a topic of daily conversation” between them.

She said a previous effort to reform ethics in Maine didn’t succeed, but she said this may be different because the new study is deeper, wider and more scientific in its approach.

Cain said, ‘This is an opportunity to have a different kind of conversation when you’re looking at consistent data across 50 states.”

The Maine Center for Public Interest Reporting is a nonprofit, non-partisan news service based in Hallowell. Web: pinetreewatchdog.org. Email: mainecenter@gmail.com. The Center contributed the research about Maine to the national study.