Official had dinner with VTel CEO just before $5 million grant

Email records indicate that Karen Marshall, the state’s former broadband czar, had dinner with Michel Guité, the CEO of VTel one day before Marshall voted for final approval of a $5.07 million state grant for VTel.
http://vtdigger.org/2013/01/29/telecom-czar-had-dinner-with-vtel-ceo-the-day-before-5-million-grant-was-given-final-approval/

New emails released through a public records request indicate that Karen Marshall, the state’s former broadband czar, had dinner with Michel Guité, the CEO of VTel, and his daughter, Diane Guité, one day before Marshall voted for final approval of a $5.07 million state grant for VTel. State telecomm official had dinner with VTel CEO the day before $5 million grant was given final approval by Nat Rudarakanchana | January 29, 2013 VT Digger The emails, excerpted below, suggest that Marshall had an early dinner with the two Guités on Dec. 6 in Waterbury. On Dec. 7, the Vermont Telecommunications Authority’s (VTA) nine-member board, where Marshall served as a gubernatorial appointee, voted in a voice vote to add $70,000 to an April grant award worth $5 million, to Springfield’s Vermont Telephone Co. (VTel), Guité’s telecommunications firm. Karen Marshall dinner email (p. 1) Marshall joined VTel as the new president of the firm’s Data Network, in a decision announced on Jan. 8. VTel has received $8.5 million in state grant funds since Marshall joined VTA, according to Seven Days columnist Paul Heintz. VTel has also received $116 million in federal stimulus funds in 2010, to promote broadband expansion. Marshall didn’t respond to a request for comment by press time. Michel Guité, who testified before lawmakers on expanding cell phone coverage on Friday, confirmed the meeting to VTDigger, but said he’d called the meeting to allow Diane Guité to meet with key figures like Marshall, among others, in the Vermont telecommunications world. “I think on the 6th, I brought her [Diane] to Montpelier to meet with others. We met with Karen, met with the VTA, met with the DPS [Department of Public Safety]. We had three meetings in a sort of busy day, and then went home,” said Guité. “I wanted those people to meet my daughter, and let her know who they were, and who the personalities were, and that kind of stuff. So it wasn’t really an opportunity to discuss business as much as an opportunity to say: How do you do, and get her to meet the individuals,” said Guité. Asked whether he offered Marshall a job during the dinner or discussed employment with her, Guité replied: “I’m sure it didn’t happen.” Marshall has consistently said that job discussions began after her grant offer, starting with initial conversations on Dec. 12. VTDigger found no evidence of wrongdoing or unethical conduct in the documents. Rep. Sam Young, D-Glover, who is a member of the VTA board, told VTDigger that the VTA board had decided to take a revote on two grants to VTel, as a response to questions about potential conflicts of interest. The board revoted on the $5.07 million grant for the VTel cellular project approved in April and an Aug. 10 vote for a VTel broadband project grant of $1.35 million. The board votes passed with Young casting the only dissenting vote on the cell phone project. None of the board members opposed the broadband project. Young believes that this revoting remedy adequately deals with any potential conflicts of interest in the Marshall move, and he said his opposition was based on his failing to know enough about the project. “They had originally and were revoting on the merits of the project itself,” said Young. “The cellular project is really one of our only opportunities to expand cellular service in the state.” He added that the contract had plenty of safeguards to ensure VTel performed adequately, including a clause that made payment contingent upon delivery of the project. According to emails between the two Guités and Marshall, Guité also met with state regulators Jim Porter and Liz Miller on the same day as the meeting with Marshall on Dec. 6, and later with the VTA’s executive director, Chris Campbell. Porter is director of telecommunications with that agency, while Miller used to be the department’s commissioner. Guité told state lawmakers on Friday before the House Commerce and Economic Development committee that he’d discussed Marshall’s new job with her around Dec. 15, after the grant amendment happened, but only made a job offer on Dec. 31. “So almost as soon as I’d met Karen, I thought whoa, that’s the kind of person we need, to turn an old fashioned phone company into an organization that understands sales and outreach. … I thought as soon as I’d met her, gosh, wouldn’t she be great? … But I’ve been trying to recruit her and everybody for the last couple of years,” said Guité in testimony to lawmakers. Although Young believes in the merits of the two state-funded projects, he doesn’t approve of the way Marshall moved to VTel. “I don’t like the whole thing,” said Young. “I think that we should require a longer time period between leaving state government and moving to a private entity. … The fact that she’s going to a company where she has proprietary knowledge of all the competitors is a big deal.” “I don’t like any of this, but I actually think that what the VTA did today was the appropriate step. … Karen’s departure has happened, it’s over, and we’re moving on,” said Young. Below is all official email between Guité and Marshall, where their names or email addresses are in the to, from, or CC fields, from June 2012 until Jan. 2.