Vermont’s EB-5 Tragedy

There are many actors in the Jay Peak/Q-Burke tragedy playing out on our Northern Vermont stage.

The unfortunate investors whose investments were by law “at risk,” have been clearly deceived and may never see their promised green cards or any return on their investments. For some, the half-million-dollars will be missed but well worth the cost of entry to the U.S. for them and their families. Others will be badly hurt by the financial loss. Hopefully, the appointed “recovery attorney” will be able to recover some of their losses.

Then there are the business principals, Bill Stenger – liked by those who know him, including this observer – and the mysterious Ariel Quiros, whom few know. The stinging civil charges brought by Vermont’s Attorney General and the S.E.C. against the two are pervasive and well documented. Naiveté will not play as a defense, even as both are innocent until proven otherwise.

Watching politicians backpedaling furiously in the media is, to me, a most shameful charade. The scramble to distance themselves from the brewing scandal rather than acknowledging that their enthusiasm for basking in the “job creation” limelight overwhelmed their leadership obligations to regulate and monitor. Naiveté will be no defense here either.

No justice will be done until the regulators are as fully investigated as those being charged – including Governor Shumlin, his Secretary of Commerce and Community Development, Pat Moulton, and Commissioner Susan Donegan of the Department of Financial Regulation. It would have been refreshing for our politicians and executive branch heads to step forward and acknowledge that they mishandled the whole affair.

I have great respect for Senator Leahy but some three years ago I expressed grave doubts about the ethics underlying the EB-5 program. And now, the whole initiative is at risk nationally given the abuses here in Vermont and others in metropolitan areas where districts have been gerrymandered to allow developers to access EB-5 funds to build luxury high-rises near neighboring pockets of poverty to qualify for the program.

Sadly, perhaps the greatest losers are the Northern Vermonters who looked forward to a better way of life and more gainful employment opportunities. I grew up in Morrisville and Westmore and knew many people who were resilient and made their own way in a hardscrabble economy. And they will again.

But before the curtain comes down, the State should acknowledge an obligation to salvage as much economic opportunity as they can from the shambles they and those charged have wrought.

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