The demise of the Turnpike? Part two

Posted Wednesday, May 4, 2011 in Investigation

The demise of the Turnpike? Part two

by David Kaler

AUGUSTA – The first Maine regular session of the 115th Legislature in 1991 challenged the Maine Turnpike Authority's right to retain all the monies from tolls. The original state statute in 1947 gave the authority the right to hold and access all tolls derived from the Maine Turnpike. It was with that law that NO tax monies or bonded loans could be obligated to the state of Maine. It also stipulated that a board of directors be appointed by the governor and an executive director be hired by said board to serve as directed by the Board of Overseers. The salaries of the executive director, board members and employees of the MTA would be paid from all tolls, without any taxpayer money.

In short, paying a toll for using the turnpike instead of a state-operated surface road is, under the terms of the original statute, a user fee. The theory was that it should be no different from paying a greens fee at a golf course or paying for a ski-lift ticket. The user had the option not to use the turnpike, as long as a sufficient state road was available. In Southern Maine, that was generally Route 1 (slow and inconvenient, perhaps, but free); through the Portland area up to Brunswick and east to Lewiston, that was I-295 and I-116. There is even a way to get to Augusta through Gardiner and Hallowell that utilizes Route 220. After Augusta, the turnpike ends. Unlike some state-run toll highways in other states, there is no need for anyone to use the turnpike if one does not want to pay the tolls.

However, in 1991 the state was looking at the amount of money the MTA was bringing in and wondering how it could be used to supplement the Maine Department of Transportation’s own budget. The best way, according to the Democratic majority in the Appropriations and Financial Affairs Committee, was to somehow charge the MTA for the MDOT’s construction and maintenance of access and feeder roads to the turnpike in all the cities and towns that had access to the turnpike, from York to Augusta.

And so that is what they did. Between 1991 and 1997, the MTA paid MDOT $15 million. The bill also contained a provision that a certain amount of money must be expended for highway and bridge improvements (not just access roads and feeder roads) in any county that also contained turnpike mileage.

The bleeding of the Turnpike Authority took its financial toll (pun intended), and rates were raised in 1998, 2007 and 2009. The authority fended off attempts by the Legislature to cut tolls by participating in the E-ZPass system that was being used in many other states. Regular users of the turnpike could get a discount, though casual users could not. The MTA tried to hold the line on toll increases, even with increasing state demands, by issuing more and more bonds throughout the 2000s.

No oversight on spending

Many saw the authority as arrogant and secretive, and it turns out that they were probably, at least partially, right. In a report by Beth Ashcroft of OPEGA (Office of Program Evaluation and Government Accountability), several disturbing allegations were leveled at Paul Violette, long-time executive director of the turnpike. His credit card usage for travel and entertainment expenses was finally being scrutinized, after many years of a laissez-faire attitude by his board, and the results were not good. A lot of the spending appeared to be personal. More significant were the uses of gift cards, which the board thought were being used as goodwill gifts to nonprofits and other organizations in the turnpike service area. But many of the nonprofits who were supposed to have received the gift cards claimed they never received them. For example, a day-care center supposedly was given a gift card to purchase play equipment for the children. No equipment was purchased, because the owner of the center said she had never received a card.

The gift-card allegations proved very damaging. It turned out that many were used in European cities while Violette was visiting there with his family; it is clear that some malfeasance was going on. Violette resigned and recently appeared before the Government Oversight Committee to testify about the use of the cards. He declined to comment, citing his Fifth Amendment right not to incriminate himself.

During the hearing, the MTA's chief financial officer, Neil Libby, testified that Violette had no supervisor, and that Libby’s job was to make sure that there was money enough to pay the bills. He said he did bring to Violette’s attention in December 2005 that a “lot” of gift cards were being purchased, and he wanted Violette to be aware of the cost. Libby kept a copy of the letter he sent to Violette, but informed no one else.

The Senate chairman of the Government Oversight Committee, Roger Katz, R-Augusta, then asked a question about the OPEGA report. Katz, a long-time trial lawyer, asked about the purchase of 1,461 gift cards during the period 2000-2010 totaling $162,000. Libby said he was not aware of the total amount; his only responsibility was to pay the bills as presented.

The chairman of the board of the MTA, Gerald Conley, said he was unaware of the gift cards until the report by OPEGA was made available to him. 

Conrad Wasall, government liaison for the MTA, said that “less than ten percent of the gift cards went to the organization for which they were intended.” Wasall was even involved in the distribution of cards, and he, himself, had personally received one for “less than $500 on March 9.” Wasall said that he thought that Violette was attempting to spread good will, and make friends before they were needed.

What role should state play?

During the hearing, held on April 15, the Government Oversight Committee chairman asked for receipts from many places and referred to the missing funds as “the people’s money.” But are toll proceeds the “people’s money”? Maine statute says no.

Does the state have the right to question where MTA monies are spent? The OPEGA report cites 14 questions regarding spending by Violette for alleged personal use. However, there is no taxpayer funding involved, and the MTA is not under any Maine commission by state statute. Does the state have any legal interest in the possible malfeasance by a turnpike employee? Or should it be an issue between that employee and the board of directors?

Many questions still remain about the turnpike’s finances, and whether the state should be involved in them in any way. No taxpayer money was misappropriated, and the turnpike did not seem unable to carry on with its core mission, an efficient running of one of the state’s busiest highways. Should the state become more involved? The turnpike did raise tolls during the period in question – twice.  

The original concept of the Maine Turnpike had been viewed with skepticism and doubt. It was something that had never been tried: building a road with no federal or state taxpayer dollars. It has become one of the finest and best maintained highways in the United States. Would the turnpike be the highway it is under the wing of the MDOT? Or would it become just another road to "cold pack" as a fix?

Are there bad judgments that need addressing? Does the board of directors need to become more actively involved? Does MDOT need to become more actively involved? These are questions that need to be answered by the MTA. The Attorney General’s Office has been notified and all are awaiting its findings.

If the MTA is moved into the Maine Department of Transportation, will the dedicated toll revenue for I-95 and its feeder routes and access roads still function as a major commerce road, vital to the state’s economy? Or will toll dollars be siphoned off to pay for other necessary, but poorly funded, needs elsewhere in the state?

All of this remains to be seen. With a new director – Peter Mills – at the helm, changes are coming, one way or the other.

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