Heroin Distribution and Procurement Corruption: The Vermont Experience

"Do you know the difference between education and experience? Education is when you read the fine print; experience is what you get when you don't."  Pete Seeger 1919-2014
This month, the Governor of Vermont, Peter Schumlin, made a very brave "State of the State" address, admitting Vermont has a problem - opiates, heroin and meth.

Admitting you have a problem is the first step in Vermont's program.    Thinking "it's a city problem" and we don't need treatment centers is a big mistake.

Another big mistake?  Unlike neighboring states, Vermont has no "procurement law".   It has a representative at BGS on National Association of State Purchasing Officials (NASPO.org).   But when Vermont's administration of it's "E-waste" contract was questioned - not just by the lower and more qualified (per ANR, not in dispute) bidder (me), but by the Solid Waste Districts (customers), and Superior Court Justice (in an injunction) Vermont ANR's response was to quash the FOIA request, and use a "calendar tactic" (redirecting the injunction to Environmental Court, adding a 7 month delay).  (For a reporters coverage of curious contract language written outside of the RFP for CWST, see this article in Vermont Digger, complete with changed signature dates.  Also see Vermont's refusal of the Freedom of Information Act Request at bottom of this blog).

If Vermont thinks it doesn't need a procurement law, like Massachusetts Chapter 30B, it's travelling down the same path as the heroin denial of the past decade.

Yeah, I love my job, and I'm proud of my work, but I'll have other opportunities if ANR's staff's stated objective - to replace Good Point Recycling - is carried out.  And yes, ANR's program manager actually SAID that prior to the RFP being issued (which by itself should have warned the state it needs procurement training).  David Mears, her boss, actually referred to "procurement laws" in defending the state's contracting with Casella (strategically hostile to the Manufacturer Independent Plan, to the point of possible anti-trust and flow control).

It's not a great position to be in, waiving a bloody shirt, crying over a lost bid and hostile regulators.   Why did I do it?  I did it in response to the letter below, from the wife of a subcontractor.  The real loser is the working class.

Good Morning Robin,
I am Harry XXXXs wife, remember he works [nonprofit subcontractor]? I have taken this way out step to contact you because for 5 years now I have constantly had this thought that will not leave me alone that Harry should be working for you. As you probably know Harry at home created a program that can wipe and refurbish up to 50 computers at a time. Harry is also a Linux person, that is recognized around the world and becoming more popular every year. He installs Linux on PC'S that have a tag that is destroyed so Microsoft does not recognize it.
My thought Robin, if you and Harry could see a future in working together, Harry could refurbish your product here at our home. He would still work for XXXX, but in my heart I feel your business would be the best for Harry's
future. Harry is responsible, honest and quiet unless you get him going, then he can tell jokes like no one else, a team player.
I had hopes that you would have had more to do with [our nonprofit] I felt it would have been a good thing. Maybe you could stop in the store on XXX St. in XXX, Vermont, and just look around. No one knows I am writing you, XXX loves what he does and I have felt with your business mind, could be a winning partnership.
Thank you for your consideration on this matter.
Helen XXXX
9 South XXXX St.

Vermont's Heart

The Governor of Vermont, Peter Schumlin, wants environmental jobs, and wants R2 certification, and wants to wear a white hat.   But he knows he has a problem at the Agency of Natural Resources.   The Agency is protecting itself by using the very line of appeals to clog an Environmental Court docket, essentially shielding itself from bid challenges.

Was the legislature's intent really to say that "Any decision of the Secretary" should undergo Environmental Court review?  What if Deb Markowitz decided to distribute heroin?   It looks like she'd have seven months free time.

Below is my response to "Helen", the wife of the subcontractor.   The case I made to her was sent first to Agency of Natural Resources, then to BGS Procurement Office, then to legislators, then to Vermont Superior Court.    The Vermont AG's office participated in sending the case to Environmental Court limbo.  Helen's letter is not about heroin, it's about another problem - a non-transparent procurement system and lack of procurement law - which gives her no protection, no appeal, and gives Vermont a non-R2 collector, landfilled CRT glass, and 15 fewer jobs.

Dear Helen,

I have always been aware and interested in your husband's potential, and would like to be writing a different message.

Unfortunately, the State of Vermont Agency of Natural Resources has made a a decision to replace Good Point Recycling with a system which:

1) Costs the state more per pound
2) Landfills CRT glass
3) Does not process or repair or reuse ANY electronics inside the state of Vermont
4) Does not meet federal R2 "Responsible Recycling" Standards
5) Does not conform (in its procurement) to NASPO.org standards
6) Has 0 years of experience serving Vermont clients
7) Has less than half the experience of Good Point in doing any electronics recycling at all
8) Was found by Washington Superior Court to be worthy of civil court injunction 

Nevertheless, ANR selected to appeal the injunction to Environmental Court (adding 6-7 months and tens of thousands to our legal bills), and to limit outside manufacturers access to our independent plan, and to misinform them of several dates and costs involved in that plan.  This is despite ANR's own testimony that Good Point Recycling scored higher in its technical evaluation, and the lower cost of the contract under the injunction.

While I personally would like to stay in Vermont and keep growing this business to employ more people like your husband, all our potential investors have concluded that our only option is to cut back on payroll (we have already cut from $26,000 per week to 17K) and sell off our assets and leave the state.  We will complete this year's work, and remain open to the state either deciding to use our services (there is nothing keeping Casella from getting a quote from us) or to allow more manufacturers access to the information they need to use our services.

In short, heroin is not the only problem Vermont thought it was immune to.   There is strong evidence for suspicion of corruption, price fixing, conflict of interest, payola, mismanagement, etc. in public bidding laws in Vermont.  When we asked for a review of the state's practices, they blocked our FOIA request (for public access to the bid evaluations) and contested the continuation of our contract, even though the injunction (continuing past services) would have saved Manufacturerrs 11 cents per pound (about thirty percent), serviced more sites (85 instead of 52) and paid more to Vermont collectors (average 7 cents instead of 5 cents).

I've given up, have put Good Point Recycling's assets up for sale, and will be forced to cut payroll by another half in the next month.  I believe the execution of this procurement is so corrupt that it's a political liability to address it at the executive branch, they had the Vermont AG involved in reversing the injunction.  The only way forward is an appeal to federal investigators and national press.  Sadly, I have no illusion that those will save our jobs in Addison County or save my family the hundreds of thousands of personal investment we sunk into this Vermont recycling business.   

I am collecting letters like yours and other letters and testimony from people whose jobs have been lost in Vermont.   There are only about 30 blue collar jobs here, and the $2-3M per year we bring the state doesn't afford us the political access that companies who bid against us have.   Good luck to you and [Harry} and all the people at XXXX.  I suggest you send a copy of your letter to your state legislator.

Robin Ingenthron

Not to mention, Good Point, for 27 months, not only accepted deliveries from Vermont Collectors who used their own transporter, but paid them the transportation fee we negotiated in the ANR contract.  Casella won't even allow those deliveries from registered transporters.

Maybe it's crazy to fight City Hall.  But it would have been crazier to sign Cathy Jamieson's "Final Offer" - 30 cents a pound, 85 locations, no CRT landfill, mandatory R2, no guaranteed tonnage ($720,00) 85 sites, and the state dictating price paid to Collectors.  I didn't think any company would sign that Final Offer, and i was right, because Casella didn't sign it either.  Now David Mears is on the record saying his office's hands are tied by procurement law (and saying Good Point Recycling rejected boilerplate legal language, which a] I know as a former procurement official not to do, and b]... NO, Good Point did not even receive the language, it was negotiated with municipal non-profit NRRA.net, not Good Point).

It would have been crazy to tell our employees that they can't earn a living wage because I'd accepted Cathy Jamieson's final offer.  Cathy won't answer calls from the press, by the way.   Schumlin's Agency is in denial.  But they never offered the winning bidder anything close to the deal they offered Casella.  If you state something is a "final offer", and give the next vendor something completely different, conceding every point made of the first vendor... you get to have your picture in the news.

The Vermont e-cycles Team was selected and recognized at the 2012 Vermont Public Service Recognition ceremony held on May 7, 2012. Pictured here: Karen Knaebel, Kim Lutchko, Barb Schwendtner, Cathy Stacy, Cathy Jamieson, Matt Chapman. Photo courtesy Good Point Recycling.
Denial of Freedom of Information Act requests....

  If it's worth it just to stick it to me personally, that's kind of flattering.  Casella, the AG, Agency of Natural Resources, vs. Robin and Good Point Recycling.   Pete Seeger was kept from doing what he loved to do for 17 years.   I was just telling my kids about it last night, the eve before Pete's passing.

(This post was originally #2 of Psychological Urbanization, but I've cropped out the segments linking it to that theory.  But if you are a glutton for deep thought, go back and read part 1, and see why rural states need to learn the lessons of internet publicity).

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