Cleaning Up the Turnpike
Can Peter Mills save the disgraced Maine Turnpike Authority?
- By: Colin Woodard
Image © Martyhaas/dreamstime.com
This past winter, state investigators revealed what many in Maine had long suspected: Operating outside the scrutiny of the people and their representatives, the Maine Turnpike Authority had become a nest of corruption.
Its longtime executive director, Paul Violette, had been spending motorists’ tolls on $630+ per-night hotel rooms at Las Vegas’ Bellagio and the Castle Hill Inn in Newport, Rhode Island, and some $160,000 in gift cards he couldn’t account for and didn’t wish to try, invoking his fifth amendment against self-incrimination when questioned on this point by a legislative committee. The coins we’d handed over to collectors at the York and Gardiner toll plazas had been squandered on a $31,000 party at the South Portland Marriott, $1,500 in spa services for Violette, and his $8,000 stay at the Hotel Palais de la Méditerranée in the southern French city of Nice. Board members whose job it was to oversee Violette had partaken in dropping $7,654 for lodging at the Park Hyatt in Chicago and $3,018 at Prague’s Hotel Esplanade, documents leaked to the Portland Press Herald revealed.
“It’s hard to understand what the board thought their role was in light of the red flags that were clearly visible to them,” says Senator Roger Katz (R-Augusta), who grilled Turnpike personnel as co-chair of the legislature’s government oversight committee. “A culture of entitlement was allowed to develop at the executive level, with the board not exercising the kind of fiduciary oversight of the director that they should have and the senior staff intimidated by him and not willing to speak up.”
The revelations in the report from the state’s Office of Program Evaluation & Government Accountability (OPEGA) have shaken the Authority to its foundations. Violette resigned in March and is the subject of a criminal investigation by the Attorney General. Gerard Conley Sr., stepped down as chair of the board, while vice-chair Lucien Gosselin of Lewiston left the board altogether after lawmakers shortened members’ tenure. Governor Paul LePage has put the agency on probation, threatening to merge it with the Department of Transportation (DOT) if the man he appointed as interim director, former Senator Peter Mills (R-Cornville), is unable to turn it around. Most important, perhaps, legislators passed changes redefining the Authority’s fiscal relationship with the public, ensuring spare change winds up with the DOT, not the Bellagio.
Will it be enough? Sources say there’s reason to be hopeful, not least because the imperious, ethically-challenged Violette has been replaced by the well-respected Mills, a man one politico described as honest and dedicated to a fault. Mills has introduced a suite of reforms intended to drive a stake through the Authority’s corrupted heart. But problems decades in the making can be difficult to fix, and some fear the agency will lurch back to form, undead-like, the moment the dreaded spotlight turns away.
“A lot of the Turnpike Authority’s problems came not just from Mr. Violette but from many of their staff and board members who are still there,” says Christian MilNeil of the Maine Alliance for Sustainable Transportation, who has battled the agency to fund expanded commuter bus service. “In a lot of ways, Violete is the fall guy, so I’d be skeptical of major changes so long as the old boy’s network is still around.”
Violette’s attorney, Peter DeTroy, said his client could not speak to the press on account of the ongoing criminal investigation. The Authority filed a suit against Violette July 19, claiming he misused nearly $500,000 in funds.
The legislature created the Maine Turnpike Authority back in 1941 for public good, charging it with building and maintaining one of the nation’s first superhighways, a controlled-access toll road that effectively became the only link between Maine and the rest of the Union.
Once it had collected enough tolls to pay for its construction — a milestone achieved in 1981 — it was to dissolve itself and turn the highway over to the DOT. Instead, the Democratic legislature decided to give it a second lease on life as a cash cow, with a quarter of its toll-driven operating revenue to be turned over to the DOT and the remainder used to operate, maintain, and expand the Turnpike itself. Mandated minimum contributions to the state were ratcheted up during the 1980s and early 1990s, resulting in tens of millions in revenue the perennially underfunded DOT used to keep up Maine’s sprawling 23,000-mile state-maintained road network.
“For a period of time, the Turnpike was a very important contributor and gave a large portion of its revenues to DOT,” says Mills. But starting in 1997 — the year the work started on the $135 million project to widen the turnpike — annual contributions to DOT dried up, as Turnpike officials took advantage of vaguely defined statutory terms that allowed them to make any surpluses disappear. The OPEGA study found that they were unlikely to ever return, so long as the laws remained unchanged. By this time, the Authority was under the control of Violette, a former Maine Senate majority leader, and overseen by a board chaired by his Democratic colleague, Conley, a past president of the Maine Senate.
Not long thereafter, Violette also became the head of the International Bridge, Tunnel, and Toll Road Authority, a global trade group with expensive tastes in meeting venues. “The tolling authorities in some other states and in Europe exist in a fiscal environment that is totally remote from anything we’re used to at, say, the Maine DOT,” says Mills, who believes Violette learned his bad habits during this time. “He got used to rubbing elbows with all these people, to being compensated for international travel, and he started getting sloppy. Personal expenses started being transferred through the company. He became tone deaf, financially.”
Violette was well-tuned politically, however, knowing just how to handle his former legislative colleagues on both the board and the State House, says Senator Dawn Hill (D-York), who spearheaded the effort to bring the Authority to account. “They were extremely adept at coming in before any committee and basically telling them they had it under control, that the roads were open and running, that they didn’t need any money from the state, and there was really nothing wrong,” she says. “Legislators started forgetting they had the authority to oversee it.”
The board was also complacent, and not just about the extravagant dinners they were treated to, or the tens of thousands in contributions the agency spent on lobbyists or gave to outside organizations like Maine Preservation, which Violette happened to serve on the board of. They failed to wonder at more serious issues, like the inappropriate relationship the Turnpike had cultivated with the massive Kansas City-based engineering conglomerate HNTB, which has simultaneously served as its consulting engineer and general design engineer since the agency’s creation. “In summary, HNTB would inspect the Turnpike annually and decide what work needed to be done” — a legally-binding power a consulting engineer wields on behalf of the bond holders — “and then be able to participate in dong that work as the design engineers,” says Senator Katz. “A high school freshman could understand that this was a huge conflict of interest, and how the board could let it go on for so long is difficult to understand.”
Conley excused the Authority in testimony given before Senator Katz’s committee after the OPEGA report’s release. The agency’s expenses were consistent with the culture of a “regulated private entity” that liked to “stay current,” “valued quality,” and “being a good corporate citizen,” he said, and “the costs associated with maintaining those tenets are far outweighed by the more efficient and economic delivery of services to our customers and the communities we serve.” (The Authority’s new $11-million headquarters building in Portland is named for him.)
“Part of the insulation from scrutiny can be attributed to the fact that we’ve basically had one-party rule in Maine for the past thirty years — and I don’t mean that as a criticism of the Democrats,” Katz says. “Frankly, if the Republicans had been in control for the past thirty years, who knows, we may have seen similar problems.”
In the end, it was the Authority’s arrogance that brought it down. A controversial $35-million plan to replace the toll booths in York with what some regard to be obsolete technology generated a firestorm of criticism in southern Maine. While Turnpike officials’ explanations held water [see “Phantom Tollbooth,” June 2010], their condescending and dismissive attitude at public hearings infuriated attendees and elected officials alike. Hill, who represents the area, says Violette wouldn’t so much as return her calls. “They didn’t care if you were a legislator or a citizen — they had created this fiefdom, this little kingdom, and they had a terrible attitude,” she said.
Spurned, Hill did some research that only made her angrier. Why was there never a surplus to transfer to DOT? Why was the agency exempted from Maine’s public records laws and its contracts with HNTB sealed for life? And when was the last time the state auditor had a look at its books? “When I first started raising my concerns, legislators said to me, ‘You don’t want to go there, you’ll get burnt,’ ” she recalls.
“ ‘They’re a big, powerful organization,’ I was told, ‘and anybody who has tried to open their doors and get a look at what was going on has suffered in some shape or form.’ ” Ultimately, Hill persevered, convincing the non-partisan government oversight committee and OPEGA to investigate. OPEGA’s report, released in January, credited the Authority with delivering a top-notch road system, but questioned its no-bid contracts, expense policies, restrictive definitions of “surplus,” and relationship with HNTB.
Mills, who took over in March, has cleaned things up considerably. Under his watch, the board has canceled its contracts with outside lobbyists, suspended donations to outside organizations, and recalled thirty-six of fifty-one corporate credit cards. HNTB’s near-monopoly on critical contracts will be rolled back in stages, with all engineering services procured on a competitive basis by 2013. Legislators passed a law requiring the Authority to allocate 5 percent of its operating revenue for DOT projects. “I can’t tell you how relieved people here are to be working in a different environment,” Mills says. “Before there was an atmosphere of not knowing if they were doing the right thing. Now everyone understands what the rules are, and that culturally we are a very close cousin to DOT, not General Motors.”
One reform he thinks would be ill-advised: merging the Authority with DOT. In such a scenario, he argues, not only would the Turnpike’s stellar bond rating be lost, the state’s rating would probably be as well once it added the Turnpike’s $400 million in outstanding debt to the $600 million it already owes in bonds. “You get up to a billion dollars in debt, and we might not be able to borrow money as cheaply,” he says. Even MilNeil thinks a merger would be a bad idea, as he also takes a dim view of DOT’s management.
MTA critics are remaining optimistic that it won’t come to that. “Mills has a huge task in front of him, but he’s taking it on personally and not handing the work off to others,” says Senator Hill. “I think there’s great hope for the direction the Turnpike is going.”
- By: Colin Woodard