Obviously, Whit Richardson’s masterful dissection of the fleecing that Maine taxpayers took from the shady Louisiana financiers (Louisiana!) and their cronies at Cate Street Capital left a lot of folks in Augusta with egg on their faces (“Payday at the mill,” April 19 and 26).
Naturally, someone had to step up and try to put a positive spin on this debacle. George Gervais gave it a try in his April 30 column (“State development chief: Gains from tax credit program overlooked,” Page A9), assuming that most readers either did not read or did not understand Mr. Richardson’s detailed breakdown of the scheme.
For example, Mr. Gervais states that the Finance Authority of Maine “in fact obtained evidence that over $40 million … went toward many expenses falling in the category of operating capital, including millions in payroll and the purchase of raw materials (wood), all of which went into the Millinocket-area economy.”
That’s funny – Mr. Richardson appears to have accounted for all of the money that changed hands, and he would beg to differ.
They used $7.2 million to pay off existing debt, and the rest of the money (whoops, almost forgot the $1 million to $2 million for the brokers’ and lawyers’ fees) went to pay back the one-day loan. None of the money is unaccounted for, and none of it went into the mill.
The financiers invested $8 million, and we’re going to send them $16 million over the next five years. At its bankruptcy auction in December, the company’s assets were sold for $5.4 million. Over a thousand local creditors (including the towns of Millinocket and East Millinocket) were left holding the bag to the tune of $50 million.
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