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

Sunday, April 16, 2017

A Scary Possibility for Maine- Total Dominance by the Public Private Hegemony

As our political season looks toward the next election we are hearing rumors. Tea Party Corporatist,  Governor LePage will run for Maine US Senate and Susan Collins will run for Maine Governor.

Susan Collins has remained popular by bringing home the federal bacon to the state. Federal corporatism dollars feeds state corporatism.

Today at the federal level of government, the ultimate public-private relationship is being installed., Mara Lago, looks more like a castle than a government building and is being  abundantly used  as another White House.  Democrats Princess Ivanka and Prince Jared  are installed in the West Wing,in violation of US anti-nepotism code,and enabled with national security clearance. Meanwhile the Trump and Kushner families retain ownership of their private enterprises.

A frightening thought indeed.

This chapter from Public Private Relationships and the New Owners of The Means of Productionon is about the Angus King Years. It was a time when  Maine State Inc locked in its claims to intellectual property rights and the Legislature chartered two new corporations to further the transference of public wealth to private hands.



Under the leadership of Governor Angus King, the Legislature took control of Maine’s educational system partnering with a federal government program offering the ever-coveted federal dollars. The Department of Education was merged with the Department of Labor to train workers for the Legislature’s targeted sector.

#8 of the Ten Planks of Communism. Equal liability of all to labor. Establishment of industrial armies, especially for agriculture. [1]

Today we can substitute “especially for agriculture” with “especially for new technology” or in Maine’s case, “especially for the Legislature’s targeted sector”.

At the same time the Legislature created two new public-private corporations The Small Enterprise Growth Fund, now renamed as The Maine Venture Fund, and the Maine Technology Institute.

 In 1995, the Maine Legislature created a legislative joint steering committee [2] Through the committee, the Legislature granted itself jurisdiction over education in Maine. The steering committee was authorized to conduct research and analysis on education in Maine beginning with public preschool and continuing through the university system and to be involved with every organization in the Maine associated with any form of public education.

In 1997, The Department of Education and the Department of Labor became joint administrators of The Workforce Investment Act, a program funded by funded by the federal government. [3]


The Small Enterprise Growth Fund (The Maine Venture Fund)


The following analysis is presented as a citizen layman’s analysis and interpretation of the statutory language which created the Small Enterprise Growth Fund and the Maine Technology Institute.

In 1995, Title 10: Chapter 13 The Small Enterprise Growth Fund (now called Maine Venture Fund) was established: [4]

In 2009, I attended an economic networking event in which a panel of Maine Venture Fund executives and local bankers promoted the Small Enterprise Growth Fund, as the Maine Venture Fund was then called. Funding appropriated by the FAME corporation for the Maine Venture fund was described by the panel as an arrangement in which private investors invest nine dollars for every one dollar invested by taxpayers. The entire panel, one after the other, exclaimed how wonderful it is that the tax payer investment keeps on rolling over to reinvest in the Maine Venture Fund.

Title 10: Chapter 13 The Small Enterprise Growth Fund

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 words of the statute do not identify the source of “funds for disbursements”, going to “businesses in the state”. On the public side of the partnership, the primary source of the funds are bonds approved by the Maine voters and then redistributed by the FAME corporation. When analyzed for what this paragraph says, the primary function of the Small Enterprise Growth Fund is to accumulate and distribute capital funding. The funds can come from any source including Maine and federal taxpayers. The funds are then re-distributed directly to private businesses located in Maine.

The event I attended was a competition for an award. Based on the modest amount of the award and because the benefactor was anonymous, I interpreted the award as a grant but later learned the award was structured as an investment which required the contestants to have an exit strategy insuring a profit to be made by private investors.  The exit strategy was easily satisfied by saying these few simple words: “As an exit strategy I will sell the business”. This statement was required to qualify for an award so modest as to be more appropriate for a loan or a grant.

The Board of the Maine Venture Fund is a Sovereign Corporation (serving as an instrumentality of the state)
According to statute, the corporate board of the Maine Venture Fund is entitled to be compensated only for expenses 
       
§384. BOARD 1. Establishment: membership There is established as a body corporate and politic and a public instrumentality of the State the Small Enterprise Growth Board, which consists of 11 members appointed by the Governor
4. Compensation: Members are entitled to compensation in accordance with Title 5, chapter 379.[5] [ 1995, c. 699, §3 (NEW).] [6]Title 5 Chapter 379 §12002-B.
COMPENSATION OF BOARD MEMBERS: Members of boards shall be paid a legislative per diem, another specified daily rate of compensation, a salary, expenses only or no compensation, as established for each board in sections 12004-A to 12004-L. ….located in §12004-F. Bonding and financing organization [7]
The statute authorizes the board to create numerous funds each with their own terms of agreement as negotiated by the board. Some side funds may be structured as a roll over fund (no exit strategy) which reinvests any returns negotiated by the board back into the fund. This is the type of fund into which Maine taxpayer’s funds are invested as the public partner in the public-private relationship

3-A. Program funds "Program funds" means the Small Enterprise Growth Fund and any side funds created by the board. (emphasis added)\
Side funds have individually crafted terms of agreement determined at the exclusive discretion of the board:

5. Side fund. "Side fund" means a fund other than the Small Enterprise Growth Fund administered by the board that is invested as determined by the board
The Small Enterprise Growth Fund is the name of the revolving fund into which public money is deposited to or by the FAME corporation: In the definition section, “the fund” is identified as meaning the Small Enterprise Growth Fund, as the public revolving fund, exclusive of the private side finds. Today the publicly used name for the whole public-private entity is the Maine Venture Fund, but the name has not been changed in the statute.
Program Funds Established1.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. [ 1995, c. 699, §3 (NEW).]
1-A.Creation of side funds. The board may create one or more side funds for placement of certain funds received by the board. A side fund may be structured as a revolving fund in addition to the Small Enterprise Growth Fund or as a fund in which the investor will have funds drawn and returned over an agreed time period. [ 2009, c. 475, §4 (NEW) .]
The statutory definitions for Title 10: Chapter 13 The Small Enterprise Growth Fund state that “fund” means the Small Enterprise Growth Fund and “Program Funds” means the Small Enterprise Growth Fund and the side funds:

§382. DEFINITIONS As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. [1995, c. 699, §3 (NEW).]
1. Board "Board" means the Small Enterprise Growth Board. [ 1995, c. 699, §3 (NEW) .]
2. Fund. "Fund" means the Small Enterprise Growth Fund. [ 1995, c. 699, §3 (NEW) .]
3. Program. "Program" means the Small Enterprise Growth Program, which encompasses the Small Enterprise Growth Fund and any side fund created by the board. [ 2009, c. 475, §1 (AMD) .]
3-A. Program funds. "Program funds" means the Small Enterprise Growth Fund and any side funds created by the board. [ 2009, c. 475, §2 (NEW) .]
4. Qualifying small business. "Qualifying small business" means, for the purpose of an initial disbursement by the board under section 388, a business employing 50 or fewer employees or having gross sales not exceeding $5,000,000 within the most recent 12 months for which financial statements are available. For the purpose of a subsequent disbursement, "qualifying small business" means a business to which the board has previously made a disbursement and that, in the judgment of the board, evidences continued potential for high growth. [ 2001, c. 541, §1 (AMD) .] (emphasis added)
5. Side fund. "Side fund" means a fund other than the Small Enterprise Growth Fund administered by the board that is invested as determined by the board. [ 2009, c. 475, §3 (NEW) .] SECTION HISTORY 1995, c. 699, §3 (NEW). 1999, c. 504, §2 (AMD). 2001, c. 541, §1 (AMD). 2009, c. 475, §§1-3 (AMD).

On a careful read, the restrictions governing a qualified business apply only to an initial investment made by the Maine Venture Fund. Thereafter, the only qualifying restriction is that the business previously received funding via the Maine Venture Fund. After the initial public-private funding there is no cap on the size of the business qualified to be subsidized by taxpayers via funds redistributed by the FAME corporation to the Maine Venture Fund.

Other funds administered by the Maine Venture Fund are not included as part of the Small Enterprise Growth Fund. They are simply referred to as “side funds”. Side funds are defined only in the fact that they are not included in the Small Enterprise Growth Fund (the fund).

Coming up in this story is the rewrite of the Seed Capital Tax Credit as “The Expanded and Improved Seed Capital Tax Credit’. A subtle change from the word “entity” to the word “private”, in the revised statute, grants special status to the Maine Venture Fund in its chameleon identity as a public private corporation. The Expanded and Improved Seed Capital Tax Credit states that a private investment fund may elect to be treated as NOT a private investment fund for the purposes of the Seed Capital Tax Credit. This allows for all program funds within the Maine Venture fund to be treated as public for the purposes of the Seed Capital Tax Credit. The public-private entity can wear which ever face is most advantageous in any given circumstance.

Side funds may include an arrangement to have the funds returned within a specified time frame. Funds invested with guaranteed returns are loans. Investments involve a risk of losses relative to the return anticipated to be higher than interest rates associated with loans. The language of the statue associates an investor with a guaranteed return. This is either a poorly written statute or exploitative policy. The language may be intended to mean that the investor will invest funds in anticipation of gain and accepting a risk of loss, within a limited and specified period of time- but the language of the statute does not reflect those conditions.
1-A. Creation of side funds The board may create one or more side funds for placement of certain funds received by the board. A side fund may be structured as a revolving fund in addition to the Small Enterprise Growth Fund or as a fund in which the investor will have funds drawn and returned over an agreed time period.

The text of the statute does not identify from whom the board receives funds which are vaguely identified as “certain funds”. Appropriations (The taxpayer’s investment-) received from the FAME corporation and profits from state capitalism can be used to pay the administrative costs of the Maine Venture Fund, which hosts public and private funds. Program funds are inclusive of side funds which can also be used for administrative costs. However, the percentages of public and private funds used to pay for administrative costs is unspecified permitting the entire administrative costs to be covered by taxpayers via the revolving public fund.

2 Administrative expenses Costs and expenses of maintaining and servicing program funds and administering the Small Enterprise Growth Program established by this chapter may be paid out of amounts in the program funds. [8]
3 Management fees The board may charge and accept management fees for management of money placed in program funds other than money placed directly by the State.

Rule 3 says that the board may charge management fees for money placed in program funds by private investors. Remember that the term “program funds” is defined as including the Small Enterprise Growth Fund (rollover public fund) and the side fund in Definition 3-A. In §383. Program:1, The term, "the Small Enterprise Growth Fund" is used as a signifier for the revolving public fund, alone. The same revolving public fund is identified by the term “Fund” in Definition 2.

What is the purpose of such confusing signifiers? The only apparent answer is that when using the term “The Small Enterprise Growth Fund” meaning “program funds”, one can occlude the fact of the side funds, by the definition given in §383. Program Funds: 1. This is consistent with the chameleon by design character of public-private relationships, which are sometimes called shadow government.

There are also two terms signifying the entirety of the funds. They are “Program Funds’ and “Title 10: Chapter 13 Small Enterprise Growth Fund’. The definition for the Small Enterprise Growth Fund in its incarnation as the revolving public fund, identified in §383. Program Funds: 1, states that it consists of funds coming from the FAME corporation and the Pine Tree Zone fund, which are public funds. This is followed by the phrase “and any funds received from repayment, interest, royalties, equities or other interests in business enterprises, products or services”. The latter phrasing establishes the governing political philosophy of Maine as state corporatism.

The board may charge management fees for the private funds, as if to say the private funds are a separate enterprise, begging the question, why are they incorporated into the program funds? The most obvious answer is to take advantage of the chameleon character of public-private relationships which enables changing identities as a matter of convenience.

Rule 2 speaks of administrative expenses used for servicing the “Small Enterprise Growth Program”. The use of the term “Small Enterprise Growth Program” as opposed to “Small Enterprise Growth Fund”, “Fund” or “Program funds”, is unspecified in the statutory definitions. What is the point of defining statutory terms, if the authors of the statute use undefined terms?

According to §12004-F. Bonding and financing organization[9] the members of the board are compensated for expenses only, Title 10: Chapter 13 Small Enterprise Growth Fund (now called Maine Venture Fund) says that the board can charge management fees for side funds, listed separately from administrative costs. Despite apparent contradictions, there are no definitions provided for administrative costs and management fees. There is a management team in addition to board members but the statute does not provide a definition to distinguish the management team from board members who are also managers. It takes some detective work to get through the maze of references in the statute to clarify the terms under which the board is enabled to profit from its interaction in the Maine Venture Fund.

Under §390. Conflicts of interest is written the following:
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 be disclosed to the board in writing. [1995, c. 699, §3 (NEW).] (emphasis added)
InTitle 5, section 18 subsection 1, paragraph B "Executive employee" has the same meaning as set forth in section 19, subsection 1, paragraph D.
Section 19, subsection 1, paragraph D. "Executive employee" means an appointed executive employee or an elected executive employee. [1979, c. 734,§2(NEW).]
Title 17 §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 pecuniary 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).]
Title 5, section 18, subsection 1, paragraph B, which defines executive employees, does not have standing except for the purposes of Title 5, section 18.

Title 17, section 3104, which says any person holding a position of public trust may not profit thereby does not apply to any of those defined as executive employees by Title 5, section 18, subsection 1, paragraph B! The wording can be interpreted to mean that conflicts of interest applies only to the substrate and does not apply at the executive level.

If it can be substantiated that there is no direct involvement in the decision-making process, any member of the board, and each employee, contractor, agent or other representative of the board can be an investor in a project and can profit from projects undertaken by the Maine Venture Fund. As Title 5, section 18, subsection 1, paragraph B states that Title 17, section 3104: Conflicts of Interest, does not apply.

Rule 4 states that the board may assign ownership to side funds and negotiate the terms of agreement.
4. Agreements. The board may enter into an agreement or contract with a 3rd party for investment in a side fund. The board may allocate ownership in a side fund through the agreement. The board may also repay money received and return profits according to terms in the agreement. The board may create a formula or terms for the sharing of profits on a side fund in the agreement.
The board can act as independent agents charging their own management fees for private funds and be paid as an administrative expense out of program funds.[10] The taxpayer investment has no exit. always rolling over to reinvest in the fund which likely means that taxpayers cover all administrative and overhead costs of the public private investment corporation. The managers of the fund have a ready made pool of investors from past and present board members. The identity of the investors is protected by tax privacy laws.

The FAME corporation distributes public funds to the Maine Venture Fund. The charter for the FAME corporation deems that the private benefit is incidental to the public benefit. Other than a hypothetical trickle down effect in the general economy, there is no public benefit, only a public cost. A trickle down effect is an incidental benefit. The company in which the investment is made and the investors receive direct benefits but the FAME statute has literally declared that those receiving direct appropriations of public money are benefiting only incidentally from the trickle down effect created by their private use of public money.

The Small Enterprise Growth Fund[11] is not only a violation of Article IV Part Third Section 14 of the Maine Constitution in the act of chartering a corporation by special act of legislation. but also in the fact that written into its legislative charter is a decree that general laws regarding conflicts of interest do not apply. Article IV Part Third Section 14 of the Maine Constitution specifically states that all corporations however formed are subject to general laws.

The Maine Venture Fund is a private investment corporation nested in a public investment corporation.

Rule #5 says that profits of the side fund “retained by the board” must be contributed to the fund. The board makes all the rules for side funds and can rule out any profits from being retained by the board
5. Profits The profits on a side fund retained by the board must be contributed to the fund [ 2009, c. 475, §4 (NEW).
In a research paper, titled Evaluation of Maine's Public Investment in Research and Development [12]published by the University of South Carolina in 2001, IntelliCare, a company which received investment funds, says of the SEGF (Maine Venture Fund) “They wanted equity deals with debt risk,”, which delayed negotiations for a year until the SEGF eased up on its terms.

It is not the Maine Venture Fund which is incorporated by special act of legislation but the board of the Maine Venture Fund

§384. BOARD 1. Establishment; membership. There is established as a body corporate and politic and a public instrumentality of the State the Small Enterprise Growth Board, which consists of 11 members appointed by the Governor as follows:

§392. Governmental functionThe board shall administer and exercise the authority granted to it by this chapter. The carrying out of its powers and duties is considered the performance of an essential governmental function.
§389. Cooperation and coordinationThe University of Maine System, the Small Business Development Center Program, the Maine World Trade Association and the Maine Science and Technology Foundation shall provide such support and assistance as the board may request, within the expertise of each. [1995, c. 699, §3 (NEW).]
 The Maine Venture Fund Board is a reincarnation of the Maine Capital Corporation. Both corporations were chartered as taxpayer subsidized private investment companies. When Governor Longley's advisory board said, “To help correct this situation, it is appropriate to use the profit motive of private investors to achieve additional economic development in the State” it means, that in their view it is appropriate to appropriate tax payer money for the benefit of private profit motives. The Fame Corporation then inverted the Maine constitutional philosophy as:
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).]

Maine Technology Institute


In 1999, The Maine Technology Institute was established by the Legislature as a non-profit corporation with public and charitable purposes

§15302. Maine Technology Institute

[13]1 Establishment The Maine Technology Institute, as established in section 12004-G, subsection 33-D, is a nonprofit corporation with public and charitable purposes. The duties, activities and operations of the institute are within the provisions of the federal Internal Revenue Code, Section 501(c)(3).[ 1999, c. 401, Pt. AAA, §3 (NEW).]
The statutory charter states that the duties, activities and operations of the institute are within the provisions of the federal Internal Revenue Code, Section 501(c)(3).[14]
2;Purpose The institute, through a public and private partnership, shall encourage, promote, stimulate and support research and development activity leading to the commercialization of new products and services in the State's technology-intensive industrial sectors to enhance the competitive position of those sectors and increase the likelihood that one or more of the sectors will support clusters of industrial activity and to create new jobs for Maine people. The institute is one element of the State's economic development strategy and will contribute to the long-term development of a state wide research, development and product deployment infrastructure. [ 1999, c. 401, Pt. AAA, §3 (NEW).]

It may be that the federal government accepts a non-profit organization which takes public money and redistributes it as grants to private for-profit industry as a charitable organization. However, the charter of MTI Corporation by the special act of the Maine Legislature is prohibited by the Maine Constitution. Article IV Part Third, Section 14 for reason that it is not serving a municipal purpose and the object of the MTI corporation can be achieved in the private sector under general laws. [15] Additionally, the use of public funds to benefit special interests reasonably violates the object of government given in the Maine Constitution, to serve the common welfare.

Exempt Purposes - Internal Revenue Code Section 501(c)(3)
The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.  The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.Page Last Reviewed or Updated: 12-Apr-2017

The Maine Technology Institute is an expansion of the role and size of government. Such a function can be served by a private charitable organization or private for profit company. That said, I have never run across a private charitable organization with a non-profit purpose of developing products for the commercial market. The statute identifies MTI’s purpose as an IRS approved 501(c)(3) purpose. The thought that it might have been specially approved by the IRS because MTI is a state corporation is disturbing one in which the IRS is complicit in the institutionalization of state corporatism in the USA. Crowd funding financing can be implemented for the commercialization of products. Crowd funding is a form of public funding which relies on individual and voluntary consent. Redistribution of wealth by government is a form of crowdfunding which is mandated over individual consent. There is no doubt that the object of MTI, which is the financing of innovative technology research and commercialization, can be done another way than chartering a corporation by special act legislation and using that institution to distribute public funds to private benefactors.

Ownership of Intellectual Property Rights Codified in Maine Technology Institute Charter.


Under §15303-A. Maine Technology Capacity Fund, ownership of intellectual property rights is granted to the board: [17]

2.Organization.The board has all the powers and authority, not explicitly prohibited by law, necessary or convenient to carry out and effectuate the functions, duties and responsibilities of the fund, including, but not limited to:
G. Owning intellectual property, licensing intellectual property and negotiating for and collecting royalty rights or otherwise realizing a return on investment made under the fund and all programs of the institute when appropriate in order to promote the interests and investments of the State in furthering science and technology; and [2003, c. 20, Pt. RR, §7 (NEW); 2003, c. 20, Pt. RR, §18 (AFF).]

In Speculating that MTI was granted a special non-profit purpose because it is a government corporation, MTI becomes consistent with Article IV Part Third Section 14 of the Maine Constitution. regarding an object of the corporation which cannot be achieved another way. However, issues remain pursuant to Article IV Part Third Section 14 and its mandate that all corporations, however formed are subject to general laws. The board of MTI is incorporated and authorized to own intellectual property rights and to make a profit, while serving as an instrument of the state. This arguably violates the same general law as does the Maine Venture Fund: Conflicts of Interest:

Title 17 §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 pecuniary 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).]

Under the Organization of the Board, the Legislature grants the MTI Board wide range in determining its functions:
2.Organization. The board has all the powers and authority, not explicitly prohibited by law, necessary or convenient to carry out and effectuate the functions, duties and responsibilities of the fund, including, but not limited to:...
Currently MTI’s only function is to grant matching funds, limiting its benefits to the upper crust of the Maine economy and challenging its status as a public charity
The Maine Technology Institute:
§15308. General conditions; dissolutionThe institute shall operate as a nonprofit organization consistent with its composition and broad public purposes. ...[1999, c. 401, Pt. AAA, §3 (NEW).
The fact that the only function of MTI is as a matching fund going to companies already significantly financed takes it out of the realm that benefits the “broad public” and places it firmly into the realm of special interests benefiting only the upper crust of the Maine economy.

The Maine Made program is a Maine government program which serves companies and individuals developing products for the commercial market.

It is here worth repeating the original rational used to justify the institutionalization of Maine’s corporate state. The Governor’s Task Force report of 1976[18] recommended that two complimentary corporations be chartered by the Legislature, The Maine Capital Corporation and the Maine Development Corporation. The statute chartering the Maine Capital Corporation[19] included the following rationalization:



The Legislature finds that one of the limiting factors on the beneficial economic development of the State is the limited availability of capital for the long-term needs of Maine businesses and entrepreneurs. In particular, the lack of equity capital to finance new business ventures and the expansion or recapitalization of existing businesses is critical. This lack of equity capital may prevent worthwhile businesses from being established; it may also force businesses to use debt capital where equity capital would be more appropriate. This creates debt service demands which a new or expanding venture may not be able to meet successfully, causing the venture to fail because of the lack of availability of the appropriate kind of capital.
 This impediment to the development and expansion of viable Maine businesses affects all the people of Maine adversely and is one factor resulting in existing conditions of unemployment, underemployment, low per capital income and resource underutilization. By restraining economic development, it sustains burdensome pressures on State Government to provide services to those citizens who are unable to provide for themselves.
To help correct this situation, it is appropriate to use the profit motive of private investors to achieve additional economic development in the State. This can be accomplished by establishing an investment corporation to provide equity capital for Maine businesses and by establishing limited tax credits for investors in the corporation to encourage the formation and use of private capital for the critical public purpose of maintaining and strengthening the state's economy.

Since the 1970’s inflation has soared and the middle class has suffered as the gap between the haves and the have nots has continually widened in Maine and in the USA. The wealth redistribution sectors have expanded
in the forms of state capitalism and private foundations. New developments in capitalization include fiscal sponsorship in which corporations with 501(c)(3) status can sponsor projects where in the non-profit purpose of sponsor and the sponsored project are a match.


The Maine Made Program and MTI have a common purpose of developing products for the commercial market. Both are instruments of the state but only one is non-profit corporation and only one can serve as a fiscal sponsor for the other.

MTI does not currently offer fiscal sponsorship which would justify the charter’s claim that MTI serves a “broad public purpose” and is a public, as opposed to a special interest, charity. Is the reason that MTI does not collaborate with the Maine Made program attributable to the boards authority to own intellectual property rights and to make a profit? The high-tech industry offers the possibility of boundless profits, possibly going into the billions. Other Maine Made products are not perceived as having profit making potential competitive with the new tech industries.

The drawback for the public with new tech industries is that technology development is reported to be progressing towards almost total automation. Beyond that, global low cost labor markets are more economically viable. Much of what is promoted as “job creation” in Maine is restricted to the production of prototypes. With the Advanced Manufacturing Center at the University of Maine using student labor to produce prototypes, it has an unfair advantage over the private sector economy competing for the same jobs.

 One might ask what are the terms of the public investment in MTI and what is the authority which authorizes that public funds may be used for such a purpose? If it is an investment, what is the return on investment for the public as opposed to the profits made by private corporations receiving public investments or Maine State Inc, which arranges for its own stream of income from high end payroll taxes ?

The founders of Maine’s re distributive economic development policies justified their theories by the existence of burdensome pressures on State Government to provide services to those citizens who are unable to provide for themselves. That burden has only increased alongside corporate welfare as both systems lean on a vanishing middle class for their subsidies. By that measure alone, central management of Maine’s economy, instituted under the Longley administration has been an abject failure. The measure of true economic development success is a simple one, a flourishing middle sector.

Charge for University of Maine Patent Services Included Percentage of Royalties (repealed) In 1999

Under Duties of the Institute C. [20]it is stated that "MTI shall collaborate with the University of Maine System on the development and annual update of …. a technology plan that integrates private sector commercialization in the targeted technologies with university-sponsored research and development;”

The University of Maine has a policy governing rights to ownership of intellectual property and is linked to every corporation in the state corporate network. The State is setup to profit should any lucrative products emerge from research The State and private corporations do not share their profits with the public, nor should they, but neither should they be using public funds to capitalize their investments.

§1921. Maine Patent Program was codified into law  [21] under a program marketed as helping students learn about patenting. The University of Maine included in its charges for that service “a reasonable percentage of the royalties for any successful innovation patented through the program.”
2.Applicant's costs and duties. An applicant accepted by the program shall pay the costs of the patent search and opinion and for patent prosecution if the final product is manufactured or licensed out of state. An applicant shall pay to the program a reasonable percentage of the royalties for any successful innovation patented through the program. [1999, c. 731, Pt. WWW, §1(NEW)
The reasonable percentage is zero. Services should be charged as services and not as royalties on authorship and invention.The program was repealed in 2014. The University continues to claim rights to intellectual property of independent authorship

In 2004, the University of Maine instituted its own policy regarding the ownership of intellectual property rights. As with §1921. Maine Patent Program, it slipped in inordinate claims to ownership of intellectual property rights of uncompensated users of university facilities. 

Under §15303-A. Maine Technology Capacity Fund, ownership of intellectual property rights is granted to the board: [22]
G. Owning intellectual property, licensing intellectual property and negotiating for and collecting royalty rights or otherwise realizing a return on investment made under the fund and all programs of the institute when appropriate in order to promote the interests and investments of the State in furthering science and technology; and [2003, c. 20, Pt. RR, §7 (NEW); 2003, c. 20, Pt. RR, §18 (AFF).]
H Protecting all proprietary information contained in proposals, contracts and grants or any other legal agreement only when such information is likely to involve patentable material that loses its protectable nature when presented in a public forum. [2003, c.20, Pt. RR, §7 (NEW); 2003, c. 20, Pt. RR, §18 (AFF).]
The board may own intellectual property rights and other wise realize a return on investment made under the fund etc., to protect the interests and investments of the state in furthering science and technology. The sentence identifies the “investment of the state” as being realized in “furthering science and technology”- not in realizing a financial return. If the state, in this case the Maine Technology Institute, were to realize a financial return on investments made under the fund, then the investments would be a for-profit business activity and not a non-profit charitable grant giving activity. The board however can own intellectual property rights, which puts the board, and not the public, in the position of realizing a financial profit in the process of conducting the activities of the public charitable non-profit corporation. This is clear in the fact that the board is assigned the rights of intellectual property ownership. If the intellectual property rights were owned by MTI, then the corporation would be self-funding and would not require continual solicitations from the public in the form of “job creation bonds”. It would also be communism.

Instead we are looking at a fascist political philosophy, one in which private ownership is allowed in a system in which everything orbits around the state in its wealth redistribution capacity. The state does not serve  the interests of the majority of the people (“quantity’ meaning “public’, in Mussolini’s terminology), instead the state serves the interests of its own definition of “quality”, dividing the economy into a “targeted sector” and beasts of burden, creating “quality jobs” defined by the highest wages and best benefits in the state, made possible by tax payer subsidization by the public (quantity) for their own benefit as so deemed by the state Legislature in partnership with private boards, aka public private relationships .aka public private hegemony, aka oligarchy.

Fascism is therefore opposed to that form of democracy which equates a nation to the majority, lowering it to the level of the largest number; but it is the purest form of  democracy if the nation be considered as it should be from the point of view of quality rather than quantity, as an idea, the mightiest because the most ethical, the most coherent, the truest, expressing itself in a people as the conscience and will of the few, if not, indeed, of one, and ending to express itself in the conscience and the will of the mass, of the whole group ethnically molded by natural and historical conditions into a nation, advancing, as one conscience and one will, along the selfsame line of development and spiritual formation. Not a race, nor a geographically defined region, but a people, historically perpetuating itself; a multitude unified by an idea and imbued with the will to live, the will to power, self-consciousness, personality MussoliniThe Doctrine of Fascism[23]

Maine Technology Institute: §15307. Prohibited interests of officers, directors and employees [24]  There in is this definition which may lead to some confusion related to the Board of Director’s rights to own intellectual property:

An officer, director or employee of the institute or a spouse or dependent child of any of those individuals may not receive any direct personal benefit from the activities of the institute in assisting any private entity. .... This prohibition does not extend to corporators who are not officers or directors of the institute. [1999, c. 401, Pt. AAA, §3 (NEW).]  [18]§15308. General conditions; dissolutionThe institute shall operate as a nonprofit organization consistent with its composition and broad public purposes. ...[1999, c. 401, Pt. AAA, §3 (NEW).]
1. Net earnings of institute No part of the net earnings of the institute may benefit any member, officer, director or employee except that the institute may pay reasonable compensation for services rendered and otherwise hold, manage and dispose of its property in furtherance of the purposes of the institute.
Based on the definition of Board of Directorswhich says its identifier is shortened to “board”, the “directors” in the second section are different than the Board of Directors. The “directors” are identified on the Maine Technology Institute website[25] as “staff”. The costs of compensating the staff is part of administration expenditures. The “directors” on the staff cannot profit through the activities of the Maine Technology Institute where as “the board” (of directors) can profit through royalties and ownership of intellectual property rights.

§15302. Maine Technology Institute[26] establishes the public corporate identity of the Maine Technology Institute'

1 Establishment The Maine Technology Institute, as established in section 12004-G, subsection 33-D, is a nonprofit corporation with public and charitable purposes. The duties, activities and operations of the institute are within the provisions of the federal Internal Revenue Code, Section 501(c)(3).[ 1999, c. 401, Pt. AAA, §3 (NEW).]
2 identifies that its purpose is to work through public private relationships and that developing “product deployment infrastructure” as if product deployment infrastructure is a government or charitable function:
2 Purpose The institute, through a public and private partnership, shall encourage, promote, stimulate and support research and development activity leading to the commercialization of new products and services in the State's technology-intensive industrial sectors to enhance the competitive position of those sectors and increase the likelihood that one or more of the sectors will support clusters of industrial activity and to create new jobs for Maine people. The institute is one element of the State's economic development strategy and will contribute to the long-term development of a state wide research, development and product deployment infrastructure. [ 1999, c. 401, Pt. AAA, §3 (NEW).]
3. identifies that MTI is governed by the board.
3 Board of Directors of the Maine Technology Institute:
The institute is governed and all of its powers exercised by a board of directors, referred to in this chapter as the "board," consisting of 13 voting members and 2 nonvoting members.

Underlying Political Philosophy at Work:

MTI is a public non-profit corporation working through public private relationships. The governing board appears to be private, working as an independent contractor for the public non-profit charity. This assumption is consistent with measures published for classifying independent contractors found on nolo.com [27].The statute assigns intellectual ownership rights to the board rather than the Institute.
If the statute were to assign the right to ownership of intellectual property to the Institute as opposed to the board, the political philosophy embedded in this statute would be consistent with that of Communism which holds that all property is collectively owned and therefore anything anyone creates is collectively owned by society:

Communist Philosophy: This theory, that all property is owned collectively, stipulates that everything a person creates and owns is also collectively shared with everyone else.  The core principle behind the concept of public ownership is that every person is a product of society.  Because each human is a product of society, anything he or she produces is also a product of society by translation.  Therefore, anything that a is produced should be owned by the society itself because no one person has solely produced it.  Communist theorist Mick Brooks stipulates that, "creation is seldom only the result of individual genius. We all incorporate the advances of others as building blocks in our own thought without even considering it. That is how humanity advances.”  These ideas refer specifically to property laws and how making property public will fundamentally alter society in a positive way. Views on specifically intellectual property seem to follow in the same vein. Public Goods and Intellectual Property Rights published on Stanford University [28]

In the case that ownership of intellectual property rights is assigned to the Institute- a public non-profit corporation, the institute would be using public money to invest in the development of new products for the commercial market and then claiming ownership of the intellectual rights on those investments in the name of the public. Although this would not be consistent with American individualism and American free enterprise, one could at least say the public would be getting a measurable return on the use of the fruit of its labor as investment capital in what would then amount to a partially or completely publicly owned enterprise.

Public Charities

Public charities generally derive their funding or support primarily from the general public, receiving grants from individuals, government, and private foundations. Although some public charities engage in grant making activities, most conduct direct service or other tax-exempt activities. A private foundation, on the other hand, usually derives its principal fund from a single source, such as an individual, family, or corporation, and more often than not is a grant maker. A private foundation does not solicit funds from the public. Grantspace.org [29]

The Maine Legislature is ever innovative in reinventing the structure and purpose of economic sectors. The Maine Technology Institute as a charitable non-profit corporation does not directly solicit funds from the public. It is funded by public funds using the popular sales rubric, “job creation”. Bonds frequently name the Maine Technology Institute as one of the direct recipients of public bond funding. The Institute then redistributes the public money as grants to private for-profit enterprises to develop products for the commercial market.

Although information on the Institute’s activities is said to be available to the public in compliance with Freedom of Information Access, the statute also states that information can be kept private at the discretion of the institute or other party:

2. Proceedings; records; confidentiality.  The proceedings of the board and the records of the institute are public for the purposes of Title 1, chapter 13, except that the following records are designated as confidential for purposes of Title 1, section 402, subsection 3, paragraph A:
C. A record that the person, including the institute, to whom the record belongs or pertains has requested be designated confidential and that the institute has determined contains proprietary information, trade secrets or commercial or financial information, the release of which could be competitively harmful to the submitter of the information, could impair the institute's ability in the future to obtain similar necessary information solely through the voluntary provision of such information and could affect other institute interests, such as program effectiveness and compliance;
[2001, c. 562, §2 (NEW).][30]

University of Maine Statement Governing Patents and Copyrights

In 2002, the University of Maine published Statement of Policy Governing Patents and Copyrights [31] The terms are defined primarily as they apply to faculty members but a few small paragraphs declare that the same rules apply to students and non-compensated individuals. It is reasonable to say that if a student takes part in a project undertaken by the University, the University owns the property rights. When the modifier “and/or” is included, the condition that if one merely makes significant use of University resources, the University can claim intellectual property rights over the user’s authorship. The student is not a paid employee of the University and is apt to reasonably believe that attending classes extends the right to use of University resources. The explanation of the policy is specifically stated in terms of compensated individuals leaving the policies as it applies to students and non-compensated individuals open to interpretation.
IV. APPLICABILITY This policy, as amended from time to time, shall be deemed a part of the conditions of employment for every employee of the University, and a part of the conditions of enrollment and attendance at the University by students. It is also the policy of the University that, by participating in a sponsored project and/or by making significant use of University Resources and/or by participating in teaching, research, or service projects, individuals (including non-compensated individuals) accept the principles of ownership of Intellectual Property as stated in this policy, unless an exception is approved in writing by the Intellectual Property Office.
The term “research project” can mean almost anything. The term “non-compensated individuals” can mean any one including those using the public-privately owned TechPlace,[32] TechPlace targets start-up companies. Each TechPlace is required to be associated with the Maine educational system, wherein the state’s ownership of intellectual copyrights is secured.

The stipulation that the use of University resources alone is enough for the University to claim ownership of intellectual property is repeated in section titled Copyrightable Works in which the state assigns itself the role of the adjudicator which arbitrarily determines whether there was more than an incidental use of University resources by the author, and rightful owner in a free enterprise system.
(iv) In the judgment of the Intellectual Property Office and the cognizant University administrator(s), the author(s) or creator(s) of the Copyrightable Work made more than Incidental Use of University Resources.

The rules pertaining to students and non-compensated individuals are not given titles with sections of their own but are just thrown in with the rules for paid employees of the University system- like an afterthought- but one with disproportionate consequential ramifications.


Duties of a State Charity?


Maine Technology Institute
§15303. Duties of institute:  Fiscal duties include the disbursement of funds through laboratories. Other duties include the accounting, evaluation and monitoring of all activities of the institute and all programs funded in whole or in part by grants from the institute. The institute may fund necessary precursors to commercialization of products and services, including the development of new technologies and processes, the development of product concepts and the manufacture of prototypes. [24][ 1999, c. 401, Pt. AAA, §3 (NEW).]

The duties of the Maine Technology Corporation are functions appropriate to the private sector. MTI does not perform an essential government function. It performs a superfluous government function.
The Maine Technology Institute operates under the authority of the DECD corporation. The executives of DECD corporation have made their opinion known that the DECD corporation exists to serve private business interests and rejects responsibility for showing that there is a public benefit in the programs it implements. The DECD Corporation governs most of Maine’s corporate state network and sets the tone for the entire corporate culture which is nested within it.


Accepting contributions from any source


MTI like other subsidiary corporations of Maine State Inc. can accept contributions from any source:

 3.Authorized activities. The board may:
A   Receive and accept from any source allocations, appropriations, grants or contributions of money to be held, used or applied to carry out this sub chapter, subject to the conditions upon which the grants and contributions may be made, including, but not limited to, appropriations, allocations, grants or gifts from any federal agency or governmental subdivision or the State and its agencies. The amounts of the revenues generated by the investment of money contained in the fund may be used to pay the institute's operating expenses associated with the operation of the fund; and [RR2007, c. 1, §2 (COR).]
B   Engage in matching grants activities, including, but not limited to, federal, private and foundation awards for technology extension, science and technology development and technology commercialization activities that require state funding matches and are considered consistent with the purposes of the fund. Focus areas for investment include, but are not limited to, targeted technologies as defined in section 15301. [2003, c. 20, Pt. RR, §7 (NEW); 2003, c. 20, Pt. RR, §18 (AFF).]




[1] http://www.libertyzone.com/Communist-Manifesto-Planks.html
[2] Part 1:GENERAL  PROVISIONS   S10. Education Research Institute http://www.mainelegislature.org/legis/statutes/20-A/title20-Asec10.html
[3] http://www.mainelegislature.org/legis/statutes/26/title26sec2006.html
[4] http://www.mainelegislature.org/legis/Statutes/10/title10ch13.pdf
[5] http://www.mainelegislature.org/legis/statutes/5/title5ch379.pdf
[6] http://www.mainelegislature.org/legis/Statutes/10/title10ch13.pdf
[8] Remember that “program funds” means the Small Enterprise Growth Fund and the side funds. The Small Enterprise Growth Fund is the depository for public funds. Side funds come from other sources. 107http://legislature.maine.gov/legis/statutes/5/title5sec12004-F.html
[9] http://legislature.maine.gov/legis/statutes/5/title5sec12004-F.html
[10] 2. Administrative expenses
[11] Today going by the name of The Maine Venture Fund
[12] http://s3.amazonaws.com/zanran_storage/www.kenan flagler.unc.edu/ContentPages/16883137.pdf
[13] http://www.mainelegislature.org/legis/statutes/5/title5sec15302.html
[14] http://www.mainelegislature.org/legis/statutes/5/title5sec15302.html
[15] 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.
[16] https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3
[17] http://legislature.maine.gov/legis/statutes/5/title5sec15303-A.html
[18] Governor’s Task Force for Economic Redevelopment-1976
[19]http://www.preservingtheamericanpoliticalphilosophy.com/1977_PL_c531_Maine%20Capital_Corporation.pdf
[20] http://www.mainelegislature.org/legis/statutes/5/title5sec15303.html

[21] http://www.mainelegislature.org/legis/statutes/10/title10sec1921.html
[22] http://legislature.maine.gov/legis/statutes/5/title5sec15303-A.html
[23]http://www.worldfuturefund.org/wffmaster/Reading/Germany/mussolini.htm
[25] http://www.mainetechnology.org/who-is-mti/staff/
[26] http://www.mainelegislature.org/legis/statutes/5/title5sec15302.html

[27] http://www.nolo.com/legal-encyclopedia/independent-contractor-or-employee-government-decision-29681.html
[28] https://cs.stanford.edu/people/eroberts/cs181/projects/communism-computing-china/intelproperty.html
[29] http://grantspace.org/tools/knowledge-base/Funding-Resources/Foundations/private-foundations-vs-public-charities
[30] http://legislature.maine.gov/legis/statutes/5/title5sec15302-A.html
[31] http://www.maine.edu/pdf/intellectualproperty.pdf
[32] http://techplacemaine.us/