Five years ago this week the Portland Phoenix published an exposé of the Maine Turnpike Authority executives' lavish lifestyle. We led off with a description of a $1342 MTA "management dinner" at Eve's at the Garden, a restaurant in the Portland Harbor Hotel, which featured a $295 bottle of Chateau Mouton Rothschild 1999.
This feast happened to be paid for by a consultant showing his "appreciation" to executive director Paul Violette, chief financial officer Neil Libby, government affairs manager Conrad Welzel, chief operations officer Peter Merfeld, and spokesman Daniel Paradee. But turnpike executives often put expensive meals on the agency tab. (See "E-ZPass on Ethics," by Lance Tapley, August 3, 2006.)
Because of allegations of substantial spending of toll payers' dollars for personal use, Violette resigned in disgrace this March subsequent to a legislative investigation and prior to a dramatic public hearing at which he refused to answer legislators' questions. Now he's the subject of a criminal probe by the attorney general.
But MTA excess was not limited to Violette. And many people around him heard or saw no evil — or didn't speak of it. So why is Violette so far the only person to publicly suffer the consequences of all the revelations? And why did a big course correction for the MTA only happen this year?
In 2006 the daily papers picked up the Phoenix story and played it big. Violette apologized to Governor John Baldacci. The agency was forced to adopt a code of ethics that required "sound accounting and reporting and effective financial management." The MTA's travel and meals policy was tightened. Managers and board members submitted to ethics seminars.
As a result of the scandal, too, the Legislature in 2007 passed a law requiring the state controller to ensure that all state agencies, including "independent" agencies like the MTA, comply with their code of ethics "as it applies to financial administration."
But excesses continued. The agency's documentation of employee spending continued to be "pretty weak," according to Beth Ashcroft, head of the legislative office staffing the recent investigation. According to legislative testimony, the outside auditor — Runyon Kersteen Ouellette — never brought up problems with employee spending, and neither had previous auditors (Albin, Randall & Bennett had the contract before RKO). The state controller's office never conducted an examination of the MTA.
And the board of directors? Longtime board member Lucien Gosselin, head of the audit subcommittee, told legislators the board was clueless and only learned of how Violette used agency funds because of the investigation.
But then, the board also had lived high on the hog — and continued to. For example, Gosselin, chairman Gerard Conley Sr., and another board member, Earl Adams, joined Violette and Libby at an international convention in Prague in 2007 that reportedly cost Turnpike toll payers around $25,000.
Board and staff members were taken care of on expensive tabs Violette and others racked up around the country. A few employees, including Welzel, have admitted receiving gift cards that Violette allegedly bought with MTA funds.
Libby's and finance director Douglas Davidson's main defense to charges of lack of oversight was a December 2005 meeting they had with Violette about his spending. Libby told legislators that Violette pledged to curtail his excesses. But his spending in 2006 notably began to decline only after the Phoenix's exposé. Libby and Davidson never told the board about their concerns.