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Prosecutor says no charges on Vt. telecom probe

A Vermont prosecutor said Wednesday he won't pursue criminal charges against Burlington officials over their "mismanagement" of a troubled telecom provider kept afloat with $17 million in city funds, in violation of its operating license.
/ Source: The Associated Press

A Vermont prosecutor said Wednesday he won't pursue criminal charges against Burlington officials over their "mismanagement" of a troubled telecom provider kept afloat with $17 million in city funds, in violation of its operating license.

Though he called them ignorant, arrogant and guilty of bad judgment, Chittenden County State's Attorney T.J. Donovan said a six-month probe into municipally owned Burlington Telecom and its financing didn't yield enough evidence to file a misdemeanor neglect of duty charge against anyone involved.

Doing so would prolong the debacle, continue to paralyze city government and fail to deter future such behavior or get taxpayers their money back, Donovan said.

"It does not make sense to me to litigate this case over the next 18 months, to spend tens if not hundreds of thousands of dollars of the public's money, cause greater division within the city and disrupt the governance of the city, all with an uncertain outcome and no possibility of restitution of 17 million dollars," he said.

He didn't name any officials.

Burlington Mayor Bob Kiss, who has been widely criticized for his administration's handling of Burlington Telecom, welcomed the news. "I'm certainly pleased that the state's attorney made that determination. I didn't think a prosecution was warranted, and I'm glad he came to that conclusion," said Kiss, a Progressive in his second three-year term.

The telecom provider, which supplies telephone, cable TV and Internet service to about 4,000 homes and businesses in the state's largest city, has been plagued with financial problems almost since its inception.

Burlington Chief Administrative Officer Jonathan Leopold, who also was actively involved in the city's funding of Burlington Telecom and is a defendant in a civil suit filed by two taxpayers over the $17 million expenditure, didn't respond to a request for comment.

Leopold, who announced his retirement in April, steps down Thursday.

Donovan said he expected his decision would be unpopular, but that it was the right one. One city resident interviewed Wednesday on the Church Street Marketplace said he was disappointed there would be no criminal charges.

"The city's corrupt and someone should take the fall," said Ben Aleshire, a 24-year-old artist. "Seventeen million dollars is a lot of money. They totally mismanaged all of the funds."

City Councilor Kurt Wright, a frequent critic of Kiss' who has criticized his handling of Burlington Telecom, said he was neither surprised nor disappointed by the decision not to prosecute.

"I don't think any of us should've been sitting back saying, "Geez, I hope we see someone walking out of City Hall in handcuffs." So, no, I wasn't hoping for that to happen. What really I wanted to see was this concluded, one way or another, so we can move forward."

The decision capped an investigation in which more than 20 people were interviewed and thousands of pages of documents reviewed in an effort to determine whether there was criminal liability, said Donovan.

Donovan appointed a special prosecutor — former Chittenden County prosecutor Robert Simpson — to conduct the probe and also called in Addison County State's Attorney David Fenster, who determined that there weren't grounds to file a criminal charge of making false claims.

The telecom provider, which supplies telephone, cable TV and Internet service to about 4,000 homes and businesses in the state's largest city, has been plagued with financial problems almost since its inception.

The telecom was supposed to be a stand-alone entity that didn't use taxpayer money, but in 2009, Burlington told the Vermont Public Service Board that it had used $17 million in city funds in violation of its state license and failed to repay it within 60 days, as required by its state license.

The City Council wasn't told about the expenditure or that it violated the license until May 2009, according to the Burlington Free Press.

The city has since acknowledged that the spending was wrong, but Burlington Telecom hasn't been able to repay the city.

Last year, an audit commissioned by Vermont utility regulators found that Burlington Telecom had been violating its state license since it started operating in 2005.

Chittenden County Superior Court Judge Helen Toor is currently weighing a request to find the city in contempt for continuing to spend money on Burlington Telecom. The request was filed as part of a civil suit by residents Frederick Osier and Eugene Shaver to force repayment of the money.

Reached at his home Wednesday, Shaver, a 74-year-old IBM retiree, said he was undecided on whether criminal charges should be pursued.

"It does give the substance that there's nobody caring much about the taxpayer losing that much money," he said of Donovan's announcement.

In addition to the $17 million owed to the city, the telecommunications provider owes $33.5 million to lender CitiCapital for a lease purchase agreement on Burlington Telecom's equipment.