The Ati-thesis , Marxism


"By that definition, a state capitalist country is one where the government controls the economy and essentially acts like a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production.[3] Friedrich Engels, in Socialism: Utopian and Scientific, argues that state capitalism would be the final stage of capitalism consisting of ownership and management of large-scale production and communication by the bourgeois state.[4]"

Quoted from Wikepedia

Saturday, June 30, 2012

My Encounter With Big Government INC.



TWEET THIS  http://goo.gl/D8m3J2



In 2009 I attended a competition for what I thought was a small business grant, but later I found was "an investment". I made this mistake in part because I learned of it through the Maine Art Commission which had been sending announcements all year about the availability of stimulus grants - but when one opened the link, it was inevitably and exclusively for non-profits. When The Maine Arts Commission announced a competition for small business investment from "an anonymous donor" I assumed it was a grant for a variety of reasons, including that it was for a very modest amount and that the source was anonymous. I wasn't paying much attention to those details as I had never entered such a competition before and there was a lot to processing taking place in a short amount of time. As later became apparent the "anonymous donor" was F, an investment corporation chartered by the Maine legislature to serve as an "instrumentality of the state"


Throughout the entire process brevity was required, from filling out the initial application to presenting an "elevator pitch" which means pitching a business idea in no more than five or ten minutes. According to the thinking of government economic developers, if a plan is good , one can present it in five minutes.  The "guidelines" for the "elevator pitch" advised talking about one's vision and so I did- but only as context


I was surprised when the response from Mr John Burns was "excellent" and even more surprised when the question that he asked was to explain more about my vision in the two minutes that remained in the allotted time . I didn't see how I could say much more than I already said unless I said a great deal more and clearly there was no time for that.

Despite Mr Burn's enthusiastic response, I was not the one he selected as a semi-finalist from his group. That would be someone whose idea was for an "organic running tee shirt". He had a better "exit strategy" than I. He said that he would just sell his business to his competition, which I thought, was likely Nike or Adidas, companies notorious for producng their product in China which happens to be one of the most polluted countries on earth. Sure, I'd buy an organic tee-shirt made in China. Why not?

As was revealed in the follow up correspondence, when Mr John Burns said "excellent !". he was not talking about the mold making project. he was talking about my vision. His written comments were something to the effect that I had the mold-making aspects all worked out but I hadn't presented a good plan for my vision, which is because a vision is an idea or a concept  that pre-exists a plan- and of course because it is ludicrous to suppose that one could achieve the larger scope of the vision with such a small investment. Mr Burns also said that I did not have an "exit strategy", which further conversation revealed means a plan to sell the business so that the high growth investors can make a profit. This is true. I did not have an exit strategy because it has nothing to do with my motivations, which is to preserve the ceramic life style for future generations. Andersen Studio has always been committed to being made in America. Chances are if one sells the business to high growth investors, production will be outsourced to China or which ever is the country du jour with the "cheapest" labor. This is what has happened to the pottery  industry in Great Briton.

Of course this sort of misunderstanding and cross purposes is part and parcel of trying to present an idea in five minutes. I think Mr Burns was listening for that one thing- how will the high growth investor make his profit? Where is the "exit strategy?, which to my ears has little to do with "creating jobs" which is how the government justifies "appropriating" from unknowing taxpayers, what amounts to 10% of the SEGF"s investment capital, which the legislation/charter states will be used to cover administration costs. My idea is not only about creating jobs but preserving a meaningful working lifestyle, which provides an opportunity for those involved to develop an income of their own making. Two things that my father told me that left a long lasting impression are that our business creates jobs and that if one wants to be content, make one's self part of something larger than one's self. A ceramic slip-casting studio does both.



The experience just described stimulated my investigation into the legislation that has been written by Maine legislatures over the last thirty or so years, which became this blog. The fact that The SEGF was described by The Maine Arts Commission as an "anonymous donor" is emblematic of the SEGF's unique position in the state of Maine's network of corporate instrumentalities of the state. Of all the corporations that the Maine State legislature has chartered, none is more secretive than the Small Enterprise Growth Fund (since 2014 known as the Maine Venture Fund). and one of the most closely guarded secrets is the identity of the high growth investors and any details about the deals that are negotiated with those investors. I  know from the speeches made at the conference described above, and from reading the legislative charter, that the tax payer capitalizes 10% of the SEGF's "fund" - that the taxpayer investment always "rolls over' to re-invest in "the fund" in the manner of an investment in a non-profit corporation -but nothing is known about those who capitalize the other 90% of That SEGF's fund or the profits that they make.

The SEGf was signed into law by Angus King, a current contender for Olympia Snowe's Senate seat. Despite the fact that Articles IV part Third, Sections 13 of the Maine State constitution, requires the state  legislature to establish general laws governing corporations and that Artcle 14 states that all corporations however formed are subject to general laws, one will not find the SEGF or any of the other corporate instrumentalities of the state in a name search at the Bureau of Corporations, which operates under the Secretary of State. Our current Secretary of State is Charlie Summers, another contender for Olympia Snowe's seat.

I sent an email inquiry addressed to Charlie Summers in his capacity as Secretary Of State asking if the network of corporate state instrumentalities is being governed by general law as set out in the Maine State Constitution.

I was given various answers- first, yes , then no, and then a reference to all the special statutes written for that special network of corporations. I will provide more information on those, later on. Although I mentioned the SEGF, the Maine Development Foundation, The Loring Authority, and the Midcoast Regional Redevelopment Foundation only as instances of the entire network, my inquiry was treated as asking  only about those specific corporations and not about the entire network.

Eventually I was sent the latest annual report of the SEGF, which does not contain any information additional to what is on their website. This partly suggests that the SEGF is subject to general corporate laws. Seemingly, The SEGF files an annual report containing the  minimal required information with the Secretary Of State - but in that the SEGF is not listed in a corporate name search on the Bureau Of Corporations website, one must make a special request to even know that they have filed an annual report with the Bureau and so the SEGF is being given "special" treatment. Given that the annual report was not immediately supplied in response to my request, there remains a question as to whether the Bureau of Corporations might have contacted the SEGF and obtained the "annual report" at that time to satisfy my inquiry. Although I framed my inquiry in the context of  the constitution, the response was references to statutes, as if to say that the Maine State Constitution is superseded by Statutory law

General" laws are laws that apply to all alike. "Special" laws require "special acts of legislation", which the Maine State Constitution prohibits as a means of chartering a corporations with an exception for "municipal purposes". It is reasonable to argue that the intention of Article IV part Third Section 14 of the  Maine State Constitution is to prohibit the legislature from chartering corporations as instrumentalities of the state.

To my knowledge there is no general provision in corporate laws that permits corporations to make use of tax payer dollars. If there is a legitimate business reason for secrecy protecting the identiy of the investors in the SEGF and the deals the board strikes with them, then that should be reason enough to prohibit the use of taxpayer doallars by the SEGF capital investment company. Where taxpayer dollars are involved , it is fair to demand a reasonable degree of transparency. Even the language used in the legislative charter which informs us that tax payer dollars are involved is cloaked. Nowhere does it identify that amount as 10% of the capitol funds available to the SEGF. I only know that because it was repeatedly stated by the panel at the Juice conference, which included members of the board of the SEGF.


10 §383. PROGRAM FUNDS ESTABLISHED
1. Creation of fund. There is established the Small Enterprise Growth Fund, which is a revolving fund used to provide funding for disbursements to qualifying small businesses in the State seeking to pursue an eligible project. The fund must be deposited with and maintained and administered by the Finance Authority of Maine and consists of appropriations provided for that purpose, interest accrued on the fund balance, funds received by the board to be applied to the fund, all funds remaining in the Pine Tree Partnership Fund and any funds received from repayment, interest, royalties, equities or other interests in business enterprises, products or services. The fund is a nonlapsing fund.

FAME ( Finance Authority of Maine) is another member of the Corporate Instrumentality of the State Network.

In the special legislation chartering FAME one finds this enlightening philosophy
"The authority will serve a public purpose and perform an essential governmental function in the exercise of the powers and duties conferred upon it by this chapter. Any benefits accruing to private individuals or associations, as a result of the activities of the authority, are deemed by the Legislature to be incidental to the public purposes to be achieved by the implementation of this chapter. [1985, c. 344, §5 (AMD).] [1985, c. 344, §5 (AMD).] From the charter for the Finance Authority of Maine
Patchwork that together with this from the legislative charter for the SEGF:
10 §390. CONFLICTS OF INTEREST
Notwithstanding Title 5, section 18, subsection 1, paragraph B, each member of the board, and each employee, contractor, agent or other representative of the board is deemed an "executive employee" solely for purposes of Title 5, section 18, and for no other purpose. Title 17, section 3104 does not apply to any of those representatives. If a member does not participate in an action or deliberation with respect to a particular project, that member is presumed not to have personally and substantially participated in a decision of the board with respect to that project. Every interest of a board member in any matter before the board must bedisclosed to the board in writing. [1995, c. 699, §3 (NEW).]

This section is somewaht confusing since I cannot locat a section 18 in Title Five found HERE
.
However I did locate Title 17, section 3104



3104. Conflicts of interest; purchases by the State
No trustee, superintendent, treasurer or other person holding a place of trust in any state office or public institution of the State shall be pecuniarily interested directly or indirectly in any contracts made in behalf of the State or of the institution in which he holds such place of trust, and any contract made in violation hereof is void. This section shall not apply to purchases of the State by the Governor under authority of Title 1, section 814. [1975, c. 771, §164 (AMD).]
With a provional and loose interpretation of the law it sounds like "each member of the board, and each employee, contractor, agent or other representative of the board" can personally benefit from the activities of the SEGf as long as they are not present at the deliberations. This would produce a need for secrecy at the SEGF but I say provisionally because I do not know what is in Title Five and Section 18 and loosely in regards to the interpretation of " If a member does not participate in an action or deliberation with respect to a particular project".

However it certanly raises specualtions when one reads that it is writ into the special legislaton chartering the SEGF that the board and associations are exempt from Title 17 , section 3104 of the Maine statues. This charter  is not just a special act of legislation it is an extra special specialty act of legislation, and bears repeating, that it was isgned into law by Angus King.


Other References




IRS Defintion of "An Essential Government Function"


Internal Revenue Code section 7871(e) states that "for the purposes of this section, the term 'essential governmental function' shall not include any function which is not customarily performed by State and local governments with general taxing powers". The financing of certain types of public projects such as roads, water and sewer facilities, government buildings, as well as police and emergency services clearly fall into this category.

Object of Government in the Preamble to the Maine State Constitution
Objects of government. We the people of Maine, in order to establish justice, insure tranquility, provide for our mutual defense, promote our common welfare, and secure to ourselves and our posterity the blessings of liberty, acknowledging with grateful hearts the goodness of the Sovereign Ruler of the Universe in affording us an opportunity, so favorable to the design; and, imploring God's aid and direction in its accomplishment, do agree to form ourselves into a free and independent State, by the style and title of the State of Maine and do ordain and establish the following Constitution for the government of the same.


Other Posts about The SEGF


 LD1- A Transference of the Power of Taxation?
This post was written in May, shortly after Governor Baldacci signed it in April. I maintained a link to the legislation on my blog, which I frequently referenced. Around about November, I clicked on the link and it opened to a completely different text which said the bill had been amended by striking out everything  and replacing all with an entirely different text. In the original version , the authority was the SEGF, in the new version, the authority is FAME. The original version is now called the "original paper text"

I inquired at the Legislature's library about when teh bill was amended and I was told it was amended before it was passed into law.

Wednesday, June 27, 2012

Networking Kickstarter to Kickstart A Network

Introducing my new blog Andersen Studio's Kickstarter Diaries, in which I write about my vision of an Andersen Studio's United Ceramic Designer Craftsmen of America.

Today I published the second post which is called Networking Kickstarter to Kickstart a Network. Kickstarter is a way to raise capital for Arts and Foods projects which is inclusive of both the private sector and the non-profit sector.


I hope that if you like the concept, which if successful will create jobs in the private sector, and that if you like it , you will share it. This blog is being published before we launch a kickstarter project in order to nurture a support base, which is the key to kickstarter success.


Tuesday, June 12, 2012

Maine's Hidden Network of Corporate Instrumentalities of The State


The Maine State Constitution: Article IV, Part Third: Legislative Powers


Section 13. Special legislation. The Legislature shall, from time to time, provide, as far as practicable, by general laws, for all matters usually appertaining to special or private legislation.
 Section 14. Corporations, formed under general laws. Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained; and, however formed, they shall forever be subject to the general laws of the State.


As one can see, The Maine State Constitution prohibits the legislature from chartering corporations as instrumentalities of the state. The only exception to the prohibition against chartering corporations by special act of legislation is for a municipal purpose and in the case where the objects of incorporation cannot be done otherwise, which is the rarest of exceptions.

By standard legal definitions a municipality is local governance and separate and distinct from state governance. An instrumentality of the state cannot be interpreted as serving a municipal purpose. If it was the constitutional intent to provide for corporate instrumentalities of the state, which are so prolific in Maine's economic landscape today, the exception for an instrumentality of the state would reasonably have been provided in the constitution in a manner similar to the exception for municipal corporations.

Sections 13 and 14, as quoted above, were added to the Maine State Constitution in 1876 around about twenty five years after Marx and Engels published The Communist Manifesto . It is reasonable to speculate that the intent was to prevent the legislature from creating corporate instrumentalities of the state which in their nature constitute a governmental system, as advocated by Marx, where in the state controls the means of production ( capital), The proliferation of corporate instrumentalities of the state that exist in Maine today each have a "fund" associated with them whose purpose is to concentrate capital which will be managed and controlled by the state, but often makes its way to benefit special private interests.

The constitutional amendment prohibiting the chartering of corporations by special act of legislation was a public vote expressing the public intent (purpose). The statutes chartering corporations by special act of legislation to serve as "instrumentalities of the state" are simply created by the legislature and signed into law by governors and deemed as serving the "public purpose". That "public purpose" is written, passed and voted upon by the public as it stands in Article IV, Part Third, Sections 13 and 14 of the Maine State constitution.

The private interest beneficiaries are deemed to be only incidental to the "public purposes" in the charter of yet another corporate instrumentality of the state which has these words in its charter:

"The authority will serve a public purpose and perform an essential governmental function in the exercise of the powers and duties conferred upon it by this chapter. Any benefits accruing to private individuals or associations, as a result of the activities of the authority, are deemed by the Legislature to be incidental to the public purposes to be achieved by the implementation of this chapter. [1985, c. 344, §5 (AMD).] [1985, c. 344, §5 (AMD).]  From the charter for the Finance Authority of Maine

Not said is the other side of the coin - which is

Any disadvantages accruing to private individuals or associations, as a result of the activities of the authority, are deemed by the Legislature to be incidental to the public purposes to be achieved by the implementation of this chapter. 

Thus the legislature deems that some will be taxed without being represented and others represented without being taxed but this is incidental the the legislature's ideology of what serves the "public purposes". Some will get investment capital through the means of the corporate instrumentalities of the state, while their competitors will not, and that too is just "incidental" to the "public purpose" as so deemed by the legislature of Maine as it operated above and beyond the rule of law as written in the Maine State constitution.

I submit that the way that the legislature is interpreting "public purposes" can be interpreted as "collective purposes" which is not the same meaning as the words "common welfare" found in the preamble to the Maine State constitution.

    Preamble to the Maine State Constitution

  Objects of government. We the people of Maine, in order to establish justice, insure tranquility, provide for our mutual defense, promote our common welfare, and secure to ourselves and our posterity the blessings of liberty, acknowledging with grateful hearts the goodness of the Sovereign Ruler of the Universe in affording us an opportunity, so favorable to the design; and, imploring God's aid and direction in its accomplishment, do agree to form ourselves into a free and independent State, by the style and title of the State of Maine and do ordain and establish the following Constitution for the government of the same.
The difference between the ideology that has constructed the massive network of corporate instrumentalities of the state and the words in the Maine State constitution is whether one prioritizes alleged "collective purposes" or prioritizes individual freedom and responsibility. "Common welfare" implies that there are individuals who all share something in common, where as "public purpose" as deemed to be so by our legislature, governor , and other officers of the state, has prioritized what is deemed to be the "public purpose" over any advantages or disadvantages that are realized at the individual level  as we see above in the words from the special legislation that chartered the Finance Authority Of Maine. In so doing- the "Public purpose' is inconsistent with the  meaning signified by "common welfare".

Today in Maine there exists a deeply entrenched network of corporate instrumentalities of the state. None of the corporations in this network are to be found listed at The Bureau of Corporations but are stashed away in the legislature's library. One can request to receive copies of the annual reports. I have recently received two such requests. The 2011 Annual report for the Loring Development Authority Of Maine  and the 2006 Annual Report for the Small Enterprise Growth Fund, which was the most recent on file.

Article IV, Part Third , Section 14 states that corporations, however formed, shall forever be subject to the general laws of the state.

General laws governing corporations require that an annual report be filed with the secretary of state on an annual basis. Companies that do not file the annual report on a timely basis are charged a late fee. The requirements to be in the annual report are minimal but inclusive of an up to date record of The Board of Directors.

The latest annual report filed for the SEGF is year 2006. I do not know if the SEGF was charged a late fee. There are no operating expenses listed in the annual report that I received from the legislative library. There is also no information about the SEGF's investment resources. The annual report reads more like a public relations brochure than anything else. Unlike other annual reports for corporate instrumentalities of the state that I have viewed (Loring and the MRRA) , there is no financial report.- not illegal but clearly secretive.

It was in 2009 when I attended a Juice conference and was sitting in the audience when the entire board of the SEGF told us that the SEGF is funded 10% by the taxpayer and that the taxpayer investment functions as an investment in a non-profit organization ( their exact words were a "roll over investment) which has distinctly different terms of agreement than the other 90% "high growth" investors who expect to make a profit, which was made perfectly clear by the prioritized importance placed on the "exit strategy". It is reasonable to speculate that the taxpayer funds the overhead including the salaries of this government chartered investment corporation- which clearly gives the SEGF an advantage over competing investment corporations that are not funded by the Maine state taxpayer- but that is just "incidental" to the public purpose. The taxpayer investors never know what deals are negotiated with their "high growth investor" counterparts- but once again- that is just "incidental" to the public purpose, even though in this case one of the groups of individual investors is the public.

A comparison between the board members listed in the 2006 annual report and the board members listed on the current website for the SEGF shows that none of the names listed in the latest (2006) annual report  can be found on the current board of directors listing.
The Bureau of Corporations website states: The Division files all originating documents, amendments and cancellations relating to business and nonprofit corporations, limited partnerships, limited liability companies, limited liability partnerships and reviews proposed entity names against those on file for availability prior to filing; files over 73,000 annual reports disclosing officer information for all entities on file; assesses penalties for late filing of annual reports; and administratively dissolves or revokes entities which fail to file annual reports, pay penalties, maintain a contact person or do not maintain workers’ compensation insurance.
 The SEGF was created by the legislature in 1995 and signed into law in 1996 during the Angus King administration. Rick Bennett was Senate president in 1996
 
The Maine Development Foundation is one of the earliest corporate instrumentalities of the state. It was chartered in 1978 as a "body politic" and an instrumentality of the state
 The Maine Development Foundation Charter  states The foundation shall exist as a not-for-profit corporation with a public purpose, and the exercise by the foundation of the powers conferred by this chapter shall be deemed and held to be an essential governmental function. [1977, c. 548, §1 (NEW).]
It is my view that the legislature deems the corporate instrumentalities of the state, which it  charters so prolifically, to be "essential government functions" in a weak attempt to satisfy the "cant be done any other way" exception to the constitutional prohibition against chartering corporations by special acts of legislation- raising the question if these corporate instrumentalities of the state are so "essential" - how did the state of Maine manage for over a hundred and fifty years without them? and if the intent of the constitution is to allow the legislature to create a massive network of corporate instrumentalities of the state , then why does the constitution prohibit the legislature from chartering corporations by special act of legislation with only one exception which can be used on such a prolific basis without raising challenges to constitutionality- that exception being "municipal purposes" ?

A search The Maine Development Foundation in the search for corporate names at the Bureau of Corporations comes up with nothing.

I have sent an email to the director of the Bureau of Corporations and asked if there are any corporations that exist in Maine that are not listed at the Bureau of Corporations. I have not received an immediate response to my email sent to the director of the bureau.

Charlie Summers, currently running for US Senate is the current Secretary of State which operates the Bureau of Corporations. Surely Mr Summers know that there exist an entire network of corporations in this state that are not listed and apparently not governed by The Bureau of Corporations, which is the authority that administers general corporate laws- but like other secretary of States before him, he is willing to look the other way, to serve the "public purpose", I suppose- not the one voted in by the public- but the one so deemed by our legislature- operating above and beyond the constitution of Maine as so agreed upon by the public.