[D]emocrats are now joining Republican Bruce Lisman in raising questions about how rival Phil Scott can divorce himself from his construction business if he’s elected governor.
Scott is a co-owner of DuBois Construction, which has done millions of dollars of state contract work since he was elected lieutenant governor in 2010.
He said Wednesday that he was working with a law firm to set up a “blind trust” that would put a “firewall” between him and his company.
“It’s all set up and ready to go,” Scott said of the legal arrangement.
Scott said he hired the Burlington law firm Primmer Piper Eggleston & Cramer to set up the blind trust to remove him from any decision-making authority and prevent him from accruing profits while he’s in office but allow him to retain his ownership stake.
“I would not profit from the business in any capacity. I would be totally separate during the time I’m in office,” Scott said at a news conference Wednesday.
He said he was not sure if any other governors had used a similar arrangement, adding that the law firm had found “boilerplate-type language” used at the federal level by ambassadors and possibly members of Congress to comply with federal law.
“They just did some research when we first contacted them and went through some different templates and thought this one was appropriate,” Scott said of the work by his attorneys.
The lieutenant governor said he would release the language of the arrangement sometime after the Aug. 9 primary against Lisman but did not specify exactly when.
During an interview with VTDigger in July 2015, retired Middlebury College political science professor Eric Davis recommended Scott use the word “firewall” to describe how he would distance himself from DuBois Construction if elected governor.
Scott appears to have taken that advice to heart, using the term twice Wednesday — once at his news conference and once during a Vermont Public Radio debate — to characterize the effect of the legal arrangement he’s developing.
During that debate Lisman said he didn’t believe a blind trust would go far enough to resolve a conflict of interest created by Scott’s ownership stake in the company, saying Scott’s potential appointees would still know about his role with DuBois Construction.
Lisman dismissed Scott’s proposal to set up a blind trust and said the vast majority of states “and most developed countries” do not allow a company owned by a chief executive to do business with the state.
Lisman said Scott has to either sell his ownership interest or require DuBois Construction to forgo bidding on any state contracts. He said Scott’s ownership interest would not be allowed under Vermont’s current ethics requirements in the executive branch, which prohibit an official from profiting from doing business with the state.
Matt Dunne, a Democratic candidate for governor, said in a meeting at VTDigger that Scott’s proposal amounted to a “20/20 trust” since the business would be openly seeking state contracts and it would be clear how many contracts it received.
The Democratic Party weighed in Tuesday, asking Scott to further explain how the trust would work and said what he’s announced so far does not allay its concern about a conflict of interest.
“That’s not a blind trust,” the party said in a statement. “Scott would still be completely aware of where his private profits were coming from and which policies could increase them while he collects a state salary.” The party also asked how Scott would stop staff from trying to steer contracts to his business.
A blind trust is commonly defined as a financial arrangement in which an individual puts investments under control of another individual who makes decisions without the trust holder’s approval or knowledge. In this case, because the process is public, Scott could know which contracts his company was seeking and which had been approved.
Scott’s campaign spokesperson blasted back on the questions raised by Lisman and the Democratic Party.
In a statement, Brittney Wilson said Scott’s office has had no involvement in the state contract procurement process and that a Lisman ad criticizing Scott was a “calculated lie” and “intended to smear the reputation of a family business and a public servant.”
Wilson said the politics of Lisman’s attack “is especially apparent when coming from a Wall Street executive whose companies drove America to its knees — and bankrupted millions of working families — while he pocketed millions in cash. Now Lisman is using his dirty Wall Street money to mislead Vermonters.”
Vermont is one of three states where lawmakers are not required to disclose personal financial interests or companies they have an interest in. A proposal to create a state ethics panel, which would deal with questions like Scott’s ownership in DuBois Construction, died in the Legislature this year.
