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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.


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