Corporate Accountability Is Not a Priority in Rhode Island

When writing the headline for this piece, I initially went with: “Corporate Accountability Is an Afterthought in Rhode Island.”

But I quickly realized that would be a little misleading to readers, as the word “afterthought” implies a person, or group of people, actually starts thinking of something at some point. And I don’t get the impression our governor and her administration ever became too concerned about holding accountable the corporations that have leaned on taxpayers for years.

Take for instance the case of Navy contractor General Dynamics-Electric Boat and its use of jobs training funding in Rhode Island. Continue reading

General Dynamics and the Undermining of Democracy in Rhode Island and Connecticut

If you’re a Connecticut resident who was caught off guard last week by Democratic Gov. Dannel Malloy’s announcement of an $83-million subsidy package to U.S. Navy contractor General Dynamics-Electric Boat, don’t worry—you weren’t alone.

That’s because, while Malloy’s self-described “historic long-term partnership” with Electric Boat had been in the works for months, the giveaway to cover infrastructure expansion and workforce development costs at Electric Boat’s Groton shipyard was virtually impossible for the public to follow and weigh in on in any meaningful way.

From what the public could see, it all started in January when Sen. Cathy Osten (D-Sprague) announced her plan to introduce a bill offering $100-million to Electric Boat for facility expansion, and another $50-million for employee training. A placeholder for the “Act Concerning Funding For Submarine Jobs and Opportunities” was posted online with zero details and then never updated. Continue reading

Matt Brown Says General Dynamics is ‘Strong-Arming Rhode Island Taxpayers,’ and the State Needs to Move Beyond Its Military Economy

When I heard Matt Brown was considering a run for Rhode Island governor, the first thing that struck me was how he’s spent the last decade since leaving office as secretary of state: founding and then running Global Zero, an organization dedicated to the elimination of nuclear weapons worldwide by 2030. That work was certainly in direct contrast to a key focus of the state’s Congressional Delegation, which has thrown its political capital into development of a new class of nuclear-armed, ballistic missile submarines to be built at local Navy contractor General Dynamics-Electric Boat at the cost of up to $104-billion to U.S. taxpayers. Gov. Gina Raimondo, Brown’s opponent in this year’s Democratic primary, has also latched onto EB’s good fortune, dedicating more than $4-million in government funds to train the company’s workforce, labeling it one of the top jobs opportunities for the state.

I spoke to Brown by phone earlier this week, touching on his thoughts about nuclear weapons and Rhode Island’s role in producing them. The conversation evolved into a discussion on corporate power and the role of government in recent decades in enabling the most inequitable economic climate in America since the Gilded Age. As Brown sees it, his campaign will be about educating the public on these challenges with truthful and robust debate. The former founder of Rhode Island’s City Year school improvement program, Brown says his view of economic development distinguishes him from Raimondo, a former venture capitalist who has largely built her jobs growth plan around corporate subsidies and tax incentives—or what Brown characterizes as “giveaways.”

Below is an edited and condensed version of our conversation.                                                                                           Continue reading

In Four Years, Taxpayers Spent $18-Million On Medicaid Assistance For Workers at Rhode Island Companies Receiving Millions in Economic Development Tax ‘Incentives’

Between the state’s 2014 and 2017 fiscal years, Rhode Island allocated $18-million through its Medicaid-funded Rite Care and Rite Share medical assistance programs to employees working at companies that simultaneously received more than $114-million in state subsidies designed to spur job growth and workforce development.

CVS Health topped the list for total Rite Care and Rite Share expenses, as well as total tax incentives received. According to Rhode Island Unified Economic Development Reports, CVS employees and their dependents utilized $5.7-million in medical assistance during the four-year period in which the Woonsocket-based company also received $63-million in tax benefits.

Since 2008, CVS has received more state subsidies than any other business: $175-million of the nearly $350-million disclosed in the Division of Taxation’s annual reports on tax credits and incentives.

The second and third highest totals for Medicaid-funded benefits were at jewelry maker Tiffany & Company, and submarine builder Electric Boat, with employees and their dependents receiving $4.5-million and $3-million in government-funded health insurance benefits, respectively. Continue reading

Connecticut’s General Dynamics Giveaway and Its ‘Astroturf’ Supporters

The term “astroturfing” comes to mind when reading recent testimony given in favor of a bill under consideration in Connecticut, titled, “An Act Establishing the Apprenticeship Connecticut Initiative,” a proposal with a seemingly well-intentioned name and an obscured agenda: to handout government money to the highly lucrative defense contractor General Dynamics-Electric Boat.

The Trojan Horse here—the bill, among other “investments,” would result in the allocation of $100-million in state grants to fund infrastructure projects at the submarine maker’s Groton shipyard—is not lost on skeptical and genuinely grassroots organizations such as the Connecticut Association of Smaller Manufacturers, which said taxpayers have reason to “fear the complexity of this bill is masking a hidden agenda.”

“The Federal government pays submarine manufacturers billions of dollars to deliver and service their products and these manufacturers can well afford their own capital spending,” the organization said in written testimony recorded April 2. “During a time of fiscal distress, this is an insult to the Connecticut taxpayer. Imagine what we could accomplish if we gave our technical highs schools a $100M grant.”

The organization concluded: [T]he deck seems heavily stacked toward large corporations.”

But you’d never get that sense from reading testimony given by the innocently titled Connecticut Center for Advanced Technology, which never mentions Electric Boat by name or the $100-million grant to subsidize “acquisition of lands, buildings, machinery, equipment or any combination thereof.” Continue reading

The Myth of General Dynamics-Electric Boat and Its ‘Middle Class Jobs’

The author Joan Didion famously wrote, “We tell ourselves stories in order to live.”

In Rhode Island and Connecticut, we tell ourselves myths about Electric Boat in order to justify building war machines.

There are the obvious myths: that a fleet of nuclear-armed submarines costing upwards of $104-billion will be a force for peace in the world; that executives at parent company General Dynamics gobbling up millions of dollars in compensation each year on the taxpayer dime are “patriotic”; and that some other community will build these weapons systems anyway if Southern New England doesn’t—so why shouldn’t we?

The fourth myth, which might be the most rich, is that the top brass at General Dynamics-Electric Boat actually care about our community, that they’re people committed to providing us with “good middle class jobs,” the kind of “blue collar” work that still provides an income you can raise a family on. Continue reading

Bath Police Chief Denies Freedom of Access Request, Citing Terrorism Exemption

Bath Police Chief Michael Field has denied a Maine Freedom of Access Act Request seeking communications between his police department and security personnel at Navy contractor Bath Iron Works regarding the policing of protests at the company’s shipyard.

Field cited an exemption in the law, which allows law enforcement authorities to block public access to documents related to the “purpose of preventing or preparing for acts of terrorism.”

“This is in response to your e-mail to me and my Administrative Assistant sent March 7, 2018 with regard to written communication between the Bath Police Department and the Bath Iron Works regarding policing of protests at the Shipyard, from January 1, 2016 to the present,” Field wrote in a letter to this reporter, dated March 12.

“The document relating to the planning and communications between the Bath Police Department and the Bath Iron Works were related to security planning and procedures and risk assessment,” he continued. “As such, these are not public records and are exempted under the provisions of 1 M.R.S. Section 402(3)(L).” Continue reading

Bill to Extend Bath Iron Works Tax Deal Cuts Minimum Investment Requirement and Expands Definition of Qualified Expenses

When enacted into law in 1997, the original 20-year, $60-million tax deal from the state of Maine to General Dynamics subsidiary Bath Iron Works was intended to subsidize the cost of a shipyard “modernization” the company said would position it to be a viable and competitive business for decades.

It required the company invest at least $200-million in its facility and allowed for a $3-million annual tax credit to defray the costs incurred from planning, design, engineering, construction, demolition, remodeling, repair, and other expenditures related to the infrastructure project.

But newly proposed legislation to extend the credit, made available online for the first time this week, requires the company to invest only half the amount mandated in the original act and expands the definition of a “qualified investment,” potentially allowing the company to claim reimbursement on employee training. Continue reading

In Maine, a History of Bold Claims and Vague Commitments From General Dynamics

When he gave his keynote address before the Chamber of Commerce of the Greater Portland Region in September 1997, then General Dynamics CEO Nicholas D. Chabraja had reason to celebrate.

It’d been two years since his company, annually among the nation’s largest defense contractors, had acquired local shipyard Bath Iron Works, and not long since it secured a $194-million megadeal with the state of Maine and the city of Bath to subsidize a massive infrastructure “modernization” at its newly acquired facility.

Chabraja decided to thank the more than 700 people gathered at the Holiday Inn By The Bay, as the Portland Press Herald reported, for the apparent role their community played in assuring the viability of a major Maine employer for decades to come.

“A great old shipyard that got its start in the 19th century will have all the support necessary to be a formidable shipbuilder well into the 21st century,” Chabraja, who stepped down as CEO in 2009, said, according to the paper. “In support of BIW, you’ve put your money on the people of Maine—and on a shipyard that will now be around for another hundred years.”

But, little more than 20 years on, officials at General Dynamics are no longer so sanguine. They’re back at the negotiating table, saying the company needs an extension of a key $60-million tax credit component of the 1997 deal in order to remain competitive with a rival shipbuilder in Mississippi.

Continue reading

Extending Bath Iron Works Tax Deal Would Ignore State Consultant’s Review

As some Maine lawmakers and defense contractor General Dynamics see it, the state needs to continue its Shipbuilding Facility Credit, due to expire this year, if it wants to maintain the competitiveness of subsidiary Bath Iron Works and a crucial part of the state’s economy.

But, if Maine were to keep the multi million-dollar-a-year program going without first making substantial revisions to what some call an obvious sweetheart deal, it would be going against the advice of the very consulting firm it hired to evaluate its tax incentive programs. Continue reading