We Told You So Dept: FairPoint layoffs were always part of the plan

Published in the Portland Phoenix

While FairPoint executives are saying that the 400 layoffs the company announced last week are related to "workload" and "competition," they're hoping everyone forgot that their business model — especially in northern New England — requires regular downsizing to have a prayer at success.

The North Carolina-based telecommunications company, which promised to create as many as 675 jobs starting in 2008 if it was allowed to buy Verizon's landline business in Maine, New Hampshire, and Vermont, is now getting rid of 375 jobs in those three states (and 25 jobs in other states FairPoint serves).

Back in 2007, the Portland Phoenix broke the story that FairPoint's business model contained several questionable assumptions, including that the price of gas for company vehicles would not increase for seven years, and that spending on employee salaries and benefits would stay flat as well. (See "FairPoint: No Raises For Seven Years," by Jeff Inglis, November 16, 2007.)

When that story came out, FairPoint's executive vice-president for corporate development, Walt Leach, called to clarify my initial assumption that FairPoint wasn't planning raises. Rather, he said, the company predicted that as many as four percent of its workforce would leave every year, and there were no plans to replace them. The savings from having fewer workers would provide enough money to give raises to those who stayed, Leach told me. (See "No Raises: It Gets Better," by Jeff Inglis, November 30, 2007.)

That's cold comfort for the 150 people whose jobs evaporated with less than a week's notice. Pete McLaughlin, of the International Brotherhood of Electrical Workers, the union representing all of the laid-off people, says FairPoint could have let them go the day of the announcement, but agreed to keep them on for a few days. Another 75 or 80 so-called "temporary" workers, hired by FairPoint to handle the transition from Verizon, hold what McLaughlin says the company calls "critical" positions. The temporary workers holding those jobs will stay on until permanent employees — another 150 of whom are also finding their jobs eliminated — are reassigned to take their places.

Temporary workers, who occupy roughly two-thirds of the jobs being eliminated, get no severance or other compensation for being let go. Adam Fisher, at the Maine Department of Labor, said his agency would be working with FairPoint to provide services such as career-center access and information about unemployment benefits and health-care coverage. McLaughlin said the AFL-CIO's "rapid-response" team is already involved helping workers prepare for their transitions.

The move has renewed criticism of FairPoint from labor sources. McLaughlin says many workers and organizers were quiet about problems they see within FairPoint before the layoffs were announced, in hopes that the company would find its way out of its struggles.

Now that it's clear FairPoint, which needed a federal court's protection to escape bankruptcy as a result of the terms of its 2008 purchase, remains in serious trouble, the critics are raising their voices once more.

"This company's been in a downward spiral," McLaughlin says, citing a "revolving door of leadership," and expressing concern that the company may never be able to emerge from its cash-flow problems.

He attributes many of the company's difficulties to the back-end management and maintenance computer system set up as part of the purchase. (Verizon refused to transfer its actual customer, technical support, and service-call database structures to FairPoint, requiring the new buyer to build its own system from the ground up to both accommodate Verizon's data and, FairPoint hoped, streamline the company's workflows.) McLaughlin says the new computer system still doesn't work efficiently, which means that the layoffs are getting rid of productive workers. "Everybody's busy . . . working overtime every day," he says. As the staff gets smaller, the workload will increase, and the inefficiencies will multiply.

McLaughlin's criticism raises significant concerns about FairPoint's ability to provide service at the level required by state regulators. Thomas Welch, chairman of the Maine Public Utilities Commission, told the Phoenix that the commission would be watching FairPoint carefully, and is prepared to issue penalties if the company fails to meet state-mandated standards for service performance.

Welch says FairPoint has been "struggling" since the takeover, and though he has seen "significantly better" outcomes this year than in the past, the company's still not where it needs to be, in terms of providing service and maintenance. He noted that LD 1466, a law passed in the most recent session of the Maine Legislature, has somewhat limited the PUC's ability to impose penalties, but hopes the remaining threat will keep FairPoint moving in the right direction. The key, he says, is to make sure "the customers don't get caught in the backwash."

FairPoint spokespeople Jeff Nevins and Meghan Woodlief did not return multiple phone calls seeking comment for this story.

Gubernatorial scorecard: Storm clouds

Published in the Portland Phoenix

We just weathered a storm that hit harder elsewhere than it did in Maine. Along a similar line, we're finding that the Tea Party-style allegations of government waste, welfare fraud, and excessive regulation are not quite as severe here as critics claim; whether they're more real in other places remains to be seen. In any case, here are the storms facing Governor Paul LePage in our eighth Gubernatorial Scorecard, in which we score LePage on political savvy, and on whether what he's trying to do is good policy. Note the running total.

ABSENT STORM | LePage recently hosted a delegation of officials from northwestern Russia, calling international exchange "mutually beneficial." He's right, but it's hard to envision a Democratic governor engaging in the same effort without allegations of cavorting with communists (the Russians' actual politics notwithstanding).
POLITICS • Shows LePage has total control over the extreme right-wing in Maine | 10/10
POLICY • Inclusive, culturally sensitive, historically conscious. Who'd'a thunk it? | 10/10

AID STORM | Even before Hurricane Irene made landfall farther south on the East Coast last week, LePage issued an emergency declaration, which allowed state agencies to use their money and personnel to help wherever it might be needed. That's what government is for, after all. But this is a man who wants all individuals to stand up for themselves, and who wants to cut state spending?
POLITICS • Shows LePage has total control over all of his political allies, not just the extremists | 8/10
POLICY • Obviously the right thing to do, unless you're on the (political) right | 10/10

BUDGET STORM | The latest LePage attack on government spending is called "zero-based budgeting," in which every state program is allegedly reviewed as if it were being proposed for the first time, and put through a rigorous cost-benefit analysis. Maybe it's new to Augusta, but towns claim to do this all the time.
POLITICS • Shifts blame for future budget cuts away from the governor | 10/10
POLICY • Remains to be seen whether cold analysis trumps political rhetoric | 5/10

WELFARE STORM | The administration has made a lot of noise about fighting welfare fraud, including announcing prosecutions and incarcerations, and proposing hiring more investigators to ferret out more abuse. But when a partisan activist released a carefully edited video purporting to show fraud, LePage backpedaled and said state staff simply need better training.
POLITICS • Clever effort to have it both ways: demonize waste, but protect those who are supposed to prevent it | 7/10
POLICY • If welfare fraud is too complex for partisan games, why play them himself? | 2/10

REGULATION STORM | LePage is now requiring all state agencies to run new and proposed rules past his office for vetting based on their impact on "job growth or creation." Given that many government rules restrict business practices for the sake of public interest (see: no dumping dioxin in rivers), this risks handing businesses license to trample the rest of us.
POLITICS • Government rules are a popular scapegoat | 8/10
POLICY • State agencies serve the public, not businesses. Balancing interests will be vital, and difficult. | 5/10

This month's total | Politics 43/50 | Policy 32/50 | Last month: Politics 43/50 | Policy 22/50 | Overall: Politics 274/400 | Policy 173/400

Marijuana Watch: Green light for Maine’s biggest dispensary company

Published in the Portland Phoenix

It'll be a while before Portlanders with doctor's orders for medical marijuana have a local dispensary, but Northeast Patients Group may open its first facility in Thomaston in the next couple of weeks.

NPG, which holds four of Maine's first eight dispensary licenses, is still embroiled in a legal battle with Berkeley Patients Group, its original financing partner (see "Keep Patients Waiting," by Deirdre Fulton, July 22) — a fight that now involves not just the original lawsuit, claiming breach of contract and other problems, but a countersuit seeking lots of money NPG claims BPG should have paid out but never did.

But NPG cleared a major hurdle resulting from its rift, getting state approval last week for its revised financing deal, backed now by former NBA player Cuttino Mobley and the California-based Farmacy Institute for Wellness.

A letter from Catherine Cobb, the Maine Department of Health and Human Services official in charge of medical-marijuana licensing, said the new deal was substantially similar to the previous arrangement with BPG, which had won state approval. Cobb noted that there was potential concern over NPG's ability to funnel "excessive profits" to the Farmacy Institute through paid consultants' fees, but said NPG's list of fees allayed those worries.

Where the Portland dispensary will go — and when it will open — remain to be seen, though NPG says it's shooting for October. Complicating issues abound (see "Smoke Local," by Deirdre Fulton, February 18 and "Where to Put the Pot," by Kegan Zema, June 11, 2010, for examples of economic and logistical concerns), and the Portland City Council has yet to weigh in.

Press Releases: Declare yourself

Published in the Portland Phoenix

The 8000-plus-word play-by-play of the raid that killed Osama bin Laden, written by freelancer Nicholas Schmidle and published in the New Yorker recently, is a fascinating read, with lots of juicy details (example: the plan was always to kill bin Laden, not capture him) delivered in the rapid-fire pace of a military thriller novel.

It has spawned a large set of after-the-fact writings too, speculating about how Schmidle got the information and how reliable it really is, given the bombshell revelation that Schmidle's account, written from the perspective of the Navy Seals who conducted the mission, was based on secondhand interviews and not a single interview with a Seal who participated in the raid.

Russ Baker of WhoWhatWhy, in a column republished on Salon, laid out the most detailed critique, noting contradictions in previous accounts by government officials (including President Obama's counterterrorism adviser, John O. Brennan, who was quoted by name in the New Yorker piece), questions about the lack of supporting evidence for the account, and shortcomings of logic within the piece itself that call its veracity into question.

New Yorker editor David Remnick has defended the piece, saying the sources are known to company executives and were fact-checked according to the magazine's standards.

The episode shows that we are in a new media-consumption environment, in which it is not just conspiracy theorists and backwoods kooks who are concerned about being manipulated by the media. The general public is rightly worried about both motivations and national security, and the only cure is transparency — a feature sorely lacking in that article.

Accusations have already flown about whether Schmidle (and the New Yorker, by extension) is being used by government officials, either to cheerlead for Obama's handling of the fight against terrorism, or to whitewash a mission muddied by legal and moral quandaries.

But over the weekend, another important issue became clear to me, during an extensive conversation with a friend's father. A long-retired captain in the US Navy, who worked both aboard ship and in the Pentagon, this man is a perceptive thinker with a lot of political and media savvy.

He had a large number of concerns about the reporter's role, and the New Yorker's, in publishing material that at least at one time was classified, and may still be. His concern along this line extended to pieces in other media that identified the attackers as a special-operations force called DevGru (formerly known as Seal Team 6), and went so far as to identify the town where many of those fighters live. He suggested, as have many others, that perhaps the Taliban's shooting down of a US special-operations helicopter, killing as many as 25 members of DevGru, may have been planned as revenge specifically because the unit was publicly identified.

I dove in, defending press freedom, arguing in favor of publication of government secrets, the better to monitor our democracy with.

As our conversation deepened, it emerged that he had fewer concerns about the reporting the New York Times had done on the Bush administration's warrantless-wiretapping program, which top White House staffers objected to on the grounds that any publicity at all would endanger national security.

What made the difference? The Times included in that package information about the government's objections, as well as the Times management's assessment of those concerns, and details of the action the paper took (withholding some details that editors agreed were dangerous to make public).

That type of straight talking was what was missing from the New Yorker's bin Laden raid piece.

It turns out that transparency isn't just for the government; if journalists want to be trusted by the public, we should take similar steps as those we propose public servants take.

Stonewalling - AG’s office: ‘If I had it, I wouldn’t give it to you’

Published in the Portland Phoenix

For someone whose government job is to handle media inquiries, Brenda Kielty, special assistant to and spokeswoman for Maine Attorney General William Schneider (a Republican), sure says some strange things on the record.

For example, when I was asking her how much taxpayer money the AG's office spent prosecuting fraud cases in Maine's welfare system, she told me her agency doesn't track attorneys' work by time spent on specific cases. When I asked why this government organization didn't use an extremely common business practice (private-sector attorneys bill in fractions of an hour as small as six minutes), she told me she was no longer going to help me.

And the information I had asked for? "Even if I did have it, I wouldn't give it to you," she said. "Because right now I don't like your tone." (It was quite obvious that it wasn't my calm tone she was objecting to, but rather the content of my questioning.)

I'd been taking notes through our conversation and double-checking things she said to me to make sure I got them right. So I wrote those two startling lines down and then read them back to her. "Excuse me, that's not a quote," she said, saying she would not cooperate with my inquiry into public expenditures "if you're going to be threatening to be putting my every word in print."

As I said, very strange for a person whose assigned job is to speak to the media. For his part, Schneider did not return calls seeking comment. As for the actual information we were seeking, we'll keep asking.