State telecomm official had dinner with VTel CEO the day before $5 million grant was given final approval

ConnectVT's Karen Marshall. VTD/Josh Larkin

ConnectVT’s Karen Marshall. VTD/Josh Larkin

New emails released through a public records request indicate that Karen Marshall, the state’s former broadband czar, had dinner with Michel Guité, the CEO of VTel, and his daughter, Diane Guité, one day before Marshall voted for final approval of a $5.07 million state grant for VTel.

The emails, excerpted below, suggest that Marshall had an early dinner with the two Guités on Dec. 6 in Waterbury.

On Dec. 7, the Vermont Telecommunications Authority’s (VTA) nine-member board, where Marshall served as a gubernatorial appointee, voted in a voice vote to add $70,000 to an April grant award worth $5 million, to Springfield’s Vermont Telephone Co. (VTel), Guité’s telecommunications firm.

Marshall joined VTel as the new president of the firm’s Data Network, in a decision announced on Jan. 8.

VTel has received $8.5 million in state grant funds since Marshall joined VTA, according to Seven Days columnist Paul Heintz. VTel has also received $116 million in federal stimulus funds in 2010, to promote broadband expansion.

Marshall didn’t respond to a request for comment by press time. Michel Guité, who testified before lawmakers on expanding cell phone coverage on Friday, confirmed the meeting to VTDigger, but said he’d called the meeting to allow Diane Guité to meet with key figures like Marshall, among others, in the Vermont telecommunications world.

“I think on the 6th, I brought her [Diane] to Montpelier to meet with others. We met with Karen, met with the VTA, met with the DPS [Department of Public Service]. We had three meetings in a sort of busy day, and then went home,” said Guité.

“I wanted those people to meet my daughter, and let her know who they were, and who the personalities were, and that kind of stuff. So it wasn’t really an opportunity to discuss business as much as an opportunity to say: How do you do, and get her to meet the individuals,” said Guité.

Asked whether he offered Marshall a job during the dinner or discussed employment with her, Guité replied: “I’m sure it didn’t happen.”

Marshall has consistently said that job discussions began after her grant offer, starting with initial conversations on Dec. 12. VTDigger found no evidence of wrongdoing or unethical conduct in the documents.

Rep. Sam Young, D-Glover, who is a member of the VTA board, told VTDigger that the VTA board had decided to take a revote on two grants to VTel, as a response to questions about potential conflicts of interest. The board revoted on the $5.07 million grant for the VTel cellular project approved in April and an Aug. 10 vote for a VTel broadband project grant of $1.35 million.

The board votes passed with Young casting the only dissenting vote on the cell phone project. None of the board members opposed the broadband project. Young believes that this revoting remedy adequately deals with any potential conflicts of interest in the Marshall move, and he said his opposition was based on his failing to know enough about the project.

“They had originally and were revoting on the merits of the project itself,” said Young. “The cellular project is really one of our only opportunities to expand cellular service in the state.” He added that the contract had plenty of safeguards to ensure VTel performed adequately, including a clause that made payment contingent upon delivery of the project.

According to emails between the two Guités and Marshall, Guité also met with state regulators Jim Porter and Liz Miller on the same day as the meeting with Marshall on Dec. 6, and later with the VTA’s executive director, Chris Campbell. Porter is director of telecommunications for the Department of Public Service, while Miller used to be the department’s commissioner.

Guité told state lawmakers on Friday before the House Commerce and Economic Development committee that he’d discussed Marshall’s new job with her around Dec. 15, after the grant amendment happened, but only made a job offer on Dec. 31.

“So almost as soon as I’d met Karen, I thought whoa, that’s the kind of person we need, to turn an old fashioned phone company into an organization that understands sales and outreach. … I thought as soon as I’d met her, gosh, wouldn’t she be great? … But I’ve been trying to recruit her and everybody for the last couple of years,” said Guité in testimony to lawmakers.

Although Young believes in the merits of the two state-funded projects, he doesn’t approve of the way Marshall moved to VTel.

“I don’t like the whole thing,” said Young. “I think that we should require a longer time period between leaving state government and moving to a private entity. … The fact that she’s going to a company where she has proprietary knowledge of all the competitors is a big deal.”

“I don’t like any of this, but I actually think that what the VTA did today was the appropriate step. … Karen’s departure has happened, it’s over, and we’re moving on,” said Young.

Below is all official email between Guité and Marshall, where their names or email addresses are in the to, from, or CC fields, from June 2012 until Jan. 2.

Nat Rudarakanchana

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  • Justin Boland

    Awesome find, thank you for doing the digging.

  • rosemarie jackowski
  • Fred Woogmaster

    Impropriety? Semblance of impropriety? I don’t know enough to know for sure but I know that this circumstance looks bad. Boundaries have been extended so that impropriety has become institutionalized; even in bucolic Vermont. The slippery slope gets slicker and slicker. The semblance of impropriety has little meaning these days. Our Governor appears to believe that the revolving door between business and government is healthy. Maybe it is; but maybe it’s a diagnosable social disease ready for a cure. Thank you VTDigger for revealing this information.

  • Jim Barrett

    Does anyone think the state and these private companies are not in bed with each other on everything. These companies are doing everything they can to be on the INSIDE and do whatever the government dictates they do to maximize the grants, free money from the taxpayers. We have a sham going on right before our eyes and most don’t see it. Take the deal to rob 21 million from CVPS ratepayers and then the government deciding to pass the 21 million to everyone in the coverage area.

  • Randy Koch

    The Adm and Marshall have forgotten their lines! A prompter is needed whispering from the wings: “buccolic state. very small state. green. everybody knows everybody! must have best qualified from very small gene pool. law of averages. uniquely qualified. bound to happen from time to time. never thought of personal benefit. just doing job. interest of all Vermonters.”

  • Steve Raphael

    You need laws to specifically prevent this sort of thing. Most states have them. You cannot rely on the “everyone knows everyone” BS to prevent anything.

  • Mark Jeffries

    Can this be any more basic of an example of poor judgement? Brings into question all of Ms Marshall’s decisions while working for the administration. How can anyone in her position think that taking a job as the leader of the company where she just leveaged her positions with the state to advocate and direct significant grants, would not be a good idea? Hopefully the state and administration will not drag their feet and not demonstrate additional poor judgement by not taking serious action. I also hope all the press in Vermont will continue to investigate and push for answers.

  • Randy Koch

    The sad fact is that as with Obama and his Wall St backers, there has never been and never will be any sort of sanction for these clear conflicts of interest. Liz Miller, Lucy Leriche, etc all did the same without any consequences: certainly no prosecutions, nor even committee hearings, no legislation, no nothing. The sad fact is that those in a position to prevent potential future corruption are also in a position to profit from it. The Golden Dome as Golden Goose….

  • The same individual discussed in the article appeared at our (I’m the chair of the Newfane Selectboard) SB meeting on Jan.3 in her position as head of the state’s telecommunication authority (VTA). At that time, she argued forcefully that allowing the PSB to issue permits on cell towers even when the proposal specifically violated clauses of our local ordinance was not a matter of leapfrogging municipal input, but would, on the contrary, take municipal input very seriously. When I had a phone conference with the PSB’s Hearing Officer (with, by the way, the Cingular/AT&T legal representative invited by the officer as an active participant in the call), the Hearing Officer brushed off nearly all our municipal input as irrelevant to the PSB’s decision-making process.

    We urgently need cell coverage, but our local processes permit input into determining the location, etc. of the towers. The PSB process is a strict up/down, let the telecommunications companies do what they want or tell them to go away. The playing field is obviously not level. When the VTA spokesman shows up 4 days later as a high-level employee of the telecommunications firm, we see the same kind of crossover between government representation and business interest lobbying we see on a national level, that makes “democratic processes” more a parody than a reality.

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