I have been again looking for information on the amount of taxpayer money invested in government chartered private non-profit organizations, such as the SEGF (since 2014 known as The Maine Venture Fund), and once again I have come up with nothing.
These organizations are so dispersed and intertwined with one another that even if one can find mention of an occasional sum of money invested it is as if finding one little piece of a jig saw puzzle.
A few years ago I read The Non-Profit Economy by Burton Weisbrod. Weisbrod discussed three distinct economic sectors- government, private and non-profit. but I do not recall a mention of non-profit corporations which are charted by government legislatures. However there was a lengthy discussion about entities that have a for-profit part and a non-profit part, with instances found where all expenses would be allocated to the for-profit part of the entity, thereby reducing the tax burden of the for-profit part of the entity by attributing non-profit expenses to it.
In my attempts to discover where one might gain access to the amount of tax payer money invested in government chartered private non-profit organizations ( which appears to conflate all three sectors) , It occurred to me that by chartering the corporation as a private -non-profit corporation, it may be a way around the Freedom of Access to Information Act applicable to the government sector.
I looked up the Maine Freedom of Access To Information Act
Your Right to Know: The Maine Freedom of Access ActThe public’s right to information about government activities lies at the heart of a democratic government. The Maine Freedom of Access Act (“FOAA”) grants the people of this state a broad right of access to public records while protecting legitimate governmental interests and the privacy rights of individual citizens. The act also ensures the accountability of the government to the citizens of the state by requiring public access to the meetings of public bodies. Transparency and open decision-making are fundamental principles of the Maine Freedom of Access Act, and they are essential to ensuring continued trust and confidence in our government.
This act clearly applies to government agencies and so when the legislature charters a corporation by special act of legislation, in making that corporation a private corporation, it can conceivably protect it from the Freedom of Access to Information Act. The culture in Augusta seems to have established many ions ago that the constitution no longer governs its authority to charter corporations, for which the constitution makes no distinction between a for profit and non-profit corporation. It is often found that although the legislature charters corporations as private, they also maintain that management, or some aspect there of is to be appointed by the government. None of this makes snes to me but one has to view it from the perspective that the constitution has been willfully ignored from the get go and so the expectation of integrity from that point forward is incongruous. So my conclusion is that the quasi public, quasi, private, quasi non-profit, quasi profit, corporation is protected from transparency of operations by its designation as a private corporation, even as it is authorized to utilize tax payer funds for its own purposes.
I was first introduced to the SEGF when I un-characteristicly attended a pitch session for a small business investment opportunity at a JUICE conference. It was there I learned of the 10% taxpayer "roll-over" investment in the Small Enterprise Growth Fund(since 2014 known as The Maine Venture Fund) , which was repeated several times by the panel as if it were a stroke of sheer genius. Even as I was in my mode of mind that attempted to be open-minded about the event, I couldn't silence a loud bell in the back of my mind that went off at the mention of this. Later , when I looked for mention of the 10% investment in the charter for the SEGF, I did not locate it, but it was stated often enough at this event and also likely is in the ensuing email follow up conversation as well.
It was in that follow up dialogue that I learned that the reason I was rejected was because I didn't have a clear "exit strategy", which was needed to satisfy the other 90% investors who demanded such so that they can make a profit. The amount of the investment was so meager that it struck me as perposterous that it should include a plan to sell the business to realize a "pay out" in fact in that year of the stimulus funding I had taken the amount to be a grant, as the small amount involved makes sense only as a grant or a loan, and as it was billed as being given by an "anonymous" investor. Who in their right mind would go into an agreement based upon selling one's business for a pittance of an investment from someone who one knows nothing about? The entire process made no sense to me but that is a story for another day.
However it seems clear to me that there is something wrong with this picture and something wrong with the fact that information about what is really going on with an enterprise that has access to tax payer funding is so un-forth-coming. If the tax payer investment always rolls over, then, under usual expectaions, one might expect that that investment has grown- provided that the taxpayer shares in the profits as does the other 90%. If the investment always rolls over , then each time it rolls over, the amount of investment should have increased- with the exception of losing investments which might occasionally occur. In theory, that might mean that there would be only one initial taxpayer investment that would be growing as an investment as investments are expected to do. But there is no easily accessible information to support that theory. The other theory is that the tax payer keeps on investing in the SEGF every year. One even has to wonder if the legislature negotiates a sub-standard deal for the tax payer in order to make a juicier deal for the other 90%.
Does the tax payer cover all the overhead and salaries of the SEGF, - a private corporation? In that case, why isn't this a government agency? Or better yet , if the legislature wanted to support the existence of a private investment company in Maine, why not do so in the conventional manner of facilitating a start up loan?
If the taxpayer were to withdraw its investment today, would the taxpayer show a profit on the investment made?
These are all questions for which it is difficult to find answers .