Think about the implications of this. If all you have to do is make a complaint and the next day the headlines are ‘Someone is unethical,’ think about what’s going to happen to politics in Vermont…. It seems suspect to me that a powerful political organization makes a complaint during October of an election year.

– Vermont Governor Phil Scott, Republican, at press conference October 5

efore you start feeling sorry for the governor of Vermont, whose comment above is fundamentally deceitful, you should probably be aware that he is being criticized for an arrangement he created for his own benefit.  

Before he was elected governor in 2o16, Phil Scott had spent 30 years in the construction business. He was half-owner of Dubois Construction Inc., a family-owned and operated company that frequently does business with the state of Vermont (its web site features a picture of a Dubois project at the Vermont State Capitol). Once he was elected, Scott recognized the conflict of interest problem for a governor who owned a company doing business with the state.

Scott’s solution to the problem came in two parts. The first part was straightforward: he sold his share of the company for $2.5 million. The second part was trickier, since he financed the loan himself, lending the company the money with which to buy his share from him. As a result, Scott turned himself into a governor who received $75,000 in loan payments in 2017 from a company still tied to him financially and still doing business with the state. As governor, Scott appoints the officials who decide what contracts to sign with Dubois Construction. 

Scott made no secret of this arrangement, arguing that it was reasonable since he no longer had any operational role in Dubois Construction. 

In early 2017, the state entered into a $250,000 contract with Dubois Construction, lasting from June 15, 2017, to June 14, 2019, providing Site and Earthwork Services. There appear to be no allegations of impropriety relating to this 53-page contract. But the fact of a contract with Dubois was a change in circumstance and put the governor’s relationship with his company in a new context where he is now involved on both sides of a deal with the state.  

In January 2018, the Vermont Public Interest Research Group (VPIRG) filed an inquiry about Scott’s holding in Dubois with the Vermont State Ethics Commission, established by statute in 2017 by the Vermont Legislature, effective January 1, 2018:

There is created within the Executive Branch an independent commission named the State Ethics Commission to accept, review, make referrals regarding, and track complaints of alleged violations of governmental conduct regulated by law, of the Department of Human Resources Code of Ethics, and of the State's campaign finance law set forth in 17 V.S.A. chapter 61; to provide ethics training; and to issue guidance and advisory opinions regarding ethical conduct.

Governor Scott signed the bill into law on June 14, 2017, creating Vermont’s first-ever ethics commission, calling it “a positive step forward to demonstrate to Vermonters that its elected officials are committed to restoring … faith and trust across all three branches of state government.” Scott also said that the legislation was “an overdue step, as most other states have existing ethics commissions, disclosure laws and conflict-of-interest rules already in place.”  

The bill was a response to a 2015 study by the Center for Public Integrity in Washington that faulted Vermont’s approach to public ethics. As the Center reported it:

Vermont received a grade of F from the State Integrity Investigation and ranked 50th out of 50 states in the category of ethics enforcement because it previously had no ethics body of any sort, a rarity among the states. Vermont’s overall grade was D minus, ranking it 37th out of the 50 states.

VPIRG’s inquiry in January 2018 was the first to come before the Ethics Commission, which was entirely unready to deal with it. The inquiry asserted no violation of law or ethics code. There was no ethics code because the commission had not yet adopted one (even though the statute cited one). The commission adopted an ethics code on June 6, 2018. 

On August 31, VPIRG returned to the commission with a one-page request for an advisory opinion on the ethics of a Vermont governor holding a loan to a company doing business with state officials appointed by the governor. The governor said he had asked the commission if it had any questions for him: “I’d offered to come before them, offered any information they might need.” He said the commission did not respond. The commission has no authority to investigate, hold hearings, or take testimony. The governor submitted no documents to the commission. And the governor knew – or should have known – that the law he signed creating the commission gave it no authority to investigate anyone. Given the chance to accept a reality that doesn’t appear very terrible, the governor chose to obfuscate and deceive. What’s that about? 

On October 1, the commission issued its three-page Ethics Advisory Opinion 18-01 as provided by statute (above). The commission reached to, first, the obvious conclusion that the governor has a “perceived conflict of interest” because VPIRG in fact perceived it. The commission further concluded that the governor “has a conflict of interest because he is financially intertwined as a creditor, who has an ongoing financial interest in a company that contracts with the State, which the public official as governor is the chief executive officer.”

The advisory opinion doesn’t mention Scott by name, even though there’s no question that he’s the subject of the opinion. This creates a slightly surreal effect as the opinion concludes:  

All public officials are expected to comply with the State Code of Ethics: General Principles of Governmental Ethical Conduct. The State Ethics Commission strongly urges public officials to proactively seek ethics guidance from the State Ethics Commission on ways they can avoid and mitigate conflicts of interest.

The Ethics Commission advises all public officials to avoid conflict of interests by refraining from having any financial interest in or being a creditor to a company which contracts with the State of Vermont. Avoiding conflicts of interest or even the appearance of a conflict of interest is essential to building a rigorous organizational culture of ethical conduct at all levels of government.

That’s pretty bland advice and hard to argue with, unless you’re someone like President Trump, and then you may just as well ignore it anyway because you’re so far past being concerned about ethical or even lawful behavior, anything you say might be used against you. Vermont’s Governor Scott does not seem to have ethical problems of Trumpian dimension, nor is he accused of hiding anything or breaking any law. All that makes one wonder why his response is quintessentially Trumpian.

The governor claims that “all you have to do is make a complaint and the next day the headlines are ‘Someone is unethical’” – that’s patently false. The “complaint” began in January, was reiterated in August, and there were no headlines until October, and then they said he had a perceived conflict of interest problem – which has been obvious all along – not that he’s unethical. That judgment has yet to be made.

The governor then goes all conspiracy theory on the question: “It seems suspect to me that a powerful political organization makes a complaint during October of an election year …” If this isn’t a lie, then it’s a failure of integrity. The governor has only to read the primary documents to know that his problem has always been there, that his solution was self-dealing, that the VPIRG “complaint” was made in January and again in August. The governor is not the victim of a political dirty trick any more than Brett Kavanaugh. There was no dirty trick, there is only the governor’s unwillingness to accept the consequences of a situation he himself created. Instead of forthrightly addressing the reality he created, the governor chose to go paranoid and conspiratorial.

There is a standard provision in the current state contract with Dubois Construction that prohibits the company from giving “title or possession of anything of substantial value” to any officer or employee of the state, such as the governor. Dubois payment of $75,000 to the governor during 2017, while the contract was in effect, would appear to violate that standing rule. The commission noted that the question “is beyond the scope of this advisory opinion.” The commission has not assessed whether the contract provision has been breached, but has referred that question to the Vermont Attorney General.