"We call it a creative sandbox for the company,"said Brian Dubie.
Sandboxes get all kinds of uses, just ask the neighborhood cats.
So let’s take a look at a corporation Brian Dubie has invited into what he calls his “creative sandbox” (Vermont):
TerreStar, not exactly a shining example of a stable, ethical corporation, but one example of the out-of-state businesses Dubie chooses to import to Vermont.
In August of this year, short of funds and verging on bankruptcy, TerreStar Corp engaged a financial restructuring firm. Not many Vermonters will have heard of TerreStar Corp (integrated satellite and terrestrial telecommunications systems) of Reston VA. However it was promoted and actively boosted by Brian Dubie as a savior for the Northeast Kingdom (NEK) cellular communication problems. He learned of TerreStar and helped the company extensively in his roles as Lt. Governor, chairman of the Aerospace States Association, and as head of the Vermont Chamber of Commerce sponsored Vermont Aerospace Association (VAA).
After Dubie aided the NASDAQ traded company in accessing transmission frequency rights they agreed to pilot its groundbreaking service in Vermont. Specifically how access to these rights was accomplished isn’t clear.
It didn’t go unnoticed by TerresStar’s
chairman who said Vermont officials are so enthused about the satellite plan that they're drumming up interest among other state governments, which face their own sets of issues around getting broadband access to some of their citizens and workforces.
In the
Fall of 2007 (shortly before being turned down for a position in the FAA) Dubie, in his capacity as chair of the ASA, flew to California to tour Loral space systems facilities. He met with executives to discuss easing homeland security related export control issues. The connection between these export controls (meant to keep terrorists from getting hold of weapons technologies) and the satellite were not mentioned or explained. This was all in preparation for a March 2008 mock Capitol Hill hearing dealing with issue.
As part of the visit he viewed the TerreStar satellite under construction. His travel on behalf of the ASA is normally paid by Vermont as part of his Lt.Gov. duties. Dubie’s chief of staff described this as a thank-you tour of sorts for the successful development of TerresStar’s satellite. TerresStar’s president later singled out Dubie specifically for those efforts as ASA chair.
Frequent flyer miles or just thanks?
In 2009 TerreStar paid for Dubie’s flight to Karou, French Guiana
, to view the launch of the Arianne rocket carrying the satellite. The Times Argus wrote it up, but no reporter asked who paid for Dubie’s flight.
Troubles at TerreStar Bankruptcy or similar problems may have been in the cards (or stars?) for TerreStar Corp from the start. Its executives, and its former parent corporation Motient, have a lengthy history of questionable business practices.
In 2005, an institutional shareholder lawsuit described TerresStar’s corporate culture
this way:
"Unfortunately, what TerreStar fails to acknowledge in its self-description is how its tattered past of mismanagement and poor execution, alleged Board self-dealings and conflicts of interest, and governance failures resulted in a stock price that has fallen steadily since February of 2005."
Two company officials the
brother of the acting chairman and the
former chairman of the board (
and here) are known to be under investigation or have been convicted of multiple counts of fraud, racketeering, money laundering and other crimes.
The shareholder lawsuit continues:
the operation was run by “a group of hand-picked insiders, which includes other sitting directors, executive management and affiliated consultants and industry service providers,”
What did Dubie know? It isn’t known whether Dubie knew this history when he was flown in to Kourou, French Guiana to watch the rocket launch. He mentioned a technological risk and weighed engineering questions raised by analysts against $1 billion worth of investments from what he referred to as
"people who think this thing is going to work."
Does he think investor’s money can overcome any problems?
Dubie said "This is hopefully going to result in people up in Newport having cell capability."
But contrary to that glowing prediction, the only immediate benefit of the 15 year life span satellite would be some first responders - if the system works at all - and only after that might others in the NEK see any potential improvement in cell service. In addition TerreStar won’t market cell and broadband service directly to consumers; instead it will sell the technology to other providers.
Given the history of those involved with TerreStar, the first question he could have asked was: what are the chances of success? Sadly, we may be on the verge of learning the answer: in 2010 TerreStar is teetering on the verge of bankruptcy.Who may have benefited from Dubie's dual role boosterism as Vermont’s Lt.Gov. and VAA head for the Chamber of Commerce? How much time was taken from his Vermont Lt. Governor duties by literally being flown around the nation and the world lending assistance to promote a test project for this rogues’ gallery of corporate executives running a soon to be bankrupt corporation? What kinds of question would an effective leader have asked from the start?
Dubie’s question:
"I asked them, 'what's in this for you?'" said Vermont Lt. Gov. Brian Dubie.
"They said, 'we are going to launch a billion-dollar satellite, and when we turn this thing on, we're going to need a place to use it.'"
TerresStar’s “promise”:
"The value proposition is to eventually use a wholesale model, where we can leverage the assets to allow existing customers to sell new features (in the future),"chief marketing officer Doug Sobieski
GMD was unable to reach Mr. Soboieski to ask him whether the executives of TerreStar Corp considered Vermont's Republican Lt. Governor to be a
"leveraged asset" or a
"new feature." Perhaps that is question for Vermont voters.
Also posted on
Green Mountain Daily