Investigators say up to $185k of Maine 'pike-paid gift cards redeemed for his personal use - Violette headed for jail?

April 16, 2011
By Peter Samuel

Paul Violette, former chief executive of the Maine Turnpike and an IBTTA president, now seems certain to face criminal charges, and could well be headed for jail. Investigators said yesterday at a hearing of the Legislature's Oversight Committee that only $15k of $200k of giftcards under Violette's control 2005 to 2009 were legitimately used for gifts, and they believe he used many of the remainder for his personal benefit on purchases unconnected with his job.

At the end of the day's hearing the committee voted unanimously to turn over the materials they'd assembled to the state attorney general's office for further investigation and possible prosecution. Committee co-chairman Senator Roger Katz (Republican, Augusta) said Violette had used the missing giftcards to live a lavish lifestyle at the expense of the public.

Katz tried to question Violette who was present on a subpoena at the proceedings, but Violette and his lawyer repeatedly asserted his 'fifth amendment' constitutional right to refuse to answer to avoid self-incrimination - another clear indication he himself believes he is likely to face criminal prosecution. Sitting with an attorney he spent much of his time with his head bowed, avoiding eye contact.

Obstruction of justice

Katz laid out in detail a case to the effect that Violette had  attempted to mislead the legislature's Office of Program Evaluation and Government Accountability investigators by claiming that $200k of gift cards went to "civic and community organizations." Katz' examples suggest that with rare exceptions the organizations named by Violette as recipients of the gifts deny getting them. Instead Violette used them himself.

The co-chairman detailed investigators' discovery that most of the cards could be traced to places which other records established were visited by Violette at the time.

Katz later called some of Violette's behavior "the actions of a thief."

Katz presented materials showing a pattern of Violette redeeming Turnpike-bought giftcards for personal benefit - citing $1,000 downpayment for a tuxedo at a clothing store, $1,500 for spa services, and a number of family weekends at Lucerne Inn in central Maine.

The Lucerne Inn visits do not appear to have had any connection to the Turnpike, but to have been purely personal and family affairs. Located on a lake about midway between Bar Harbor and Bangor, Maine, the Lucerne Inn is a mid-priced place - $89 to $179 offseason and vacation season $109 to $219/room/night. Dinner entrees are in the $22 to $29 range.

The oversight co-chairman said later that Violette's travel spending outside Maine on high end restaurants and hotels in New York and overseas, while extravagant, was legal because it was connected with his job at the Turnpike.

Beth Ashcroft director of the legislature's Office of Program Evaluation and Government Accountability (OPEGA) said it was difficult to determine exactly whether Violette's use of giftcards was legitimate or not when he was on business when there was no record of what had been bought with them.

Chief finance officer Libby says confronted Violette twice over gift certificates

Neil Libby chief financial officer said Violette's purchases of gift cards started small but grew steadily. He and the Turnpike treasurer Doug Davidson became worried about "the magnitude" of spending, and they had gone to Violette to confront him on the issue toward the end of 2005.

Violette had promised to restrain his use of giftcards, but didn't. About a year later Libby and another finance staffer again raised the issue with Violette.

The chief executive had the idea that gifts and big spending would "spread goodwill" towards the Turnpike Authority.

Roxanne Frenette, executive secretary to Violette since 1989 said her function was to screen calls, arrange functions and run an "employee benefit" program. On occasions she was a messenger delivering gift certificates after ordering and receiving them - on Violette's instructions.

Frenette said that the free spending by higher-ups generated resentment and "low morale" among the employees left out. An example she mentioned was a large $30,000 celebration at the Marriott hotel of the completion of the Turnpike's big widening project to which 250 people were invited - but not any employees except the very top staff. Word got around that there was also a smaller "private" party that cost $10k from which the workers were also excluded.

Bruce Pelletier, media relations officer said he knew nothing of the wide use of gift certificates by Violette until the OPEGA report. He knew only of two of $100 each given in 2005.

Board members say had no idea

Gerard Conley chairman of the board of the Turnpike Authority said he'd known nothing of the wide use of gift cards. He said of the news of $157k of gift certificates used by Violette that were reported by OPEGA director Beth Ashcroft: "She dropped that on me like a bomb."

The chairman of the Turnpike board's finance committee Lucien Gosellin said he thought travel by board members to toll industry conferences had been "appropriate" citing an IBTTA trip to Prague, Czech Republic in 2007 which he said had been very valuable because of what  they were able to learn at the conference.

But Gosellin agreed Violette's expenditures were often "extravagant." Fiduciary responsibility was assumed by Violette with "an insular management culture" and "absolute control from the top."

He said the attitude under Violette had been that they could do whatever they liked.

It was "difficult to change the culture" of extravagant spending, Gosellin said, so long as the chain of command from chief finance officer (CFO) and the staff attorney went through Violette. Only with the board decision since Violette's resignation to make the CFO and chief law officer report to the board was board supervision possible.

A number of witnesses said they had heard of Turnpike gift certificates, but few received them.

One witness, Bruce Van Note, a deputy commissioner at Maine DOT described having heard from co-workers of gift cards being given out at a Christmas party. He said he thought at the time that it was "odd."

BACKGROUND: Violette is a former state Democrat politician, who was chief executive of the Turnpike for 23 years until his resignation last month.

Lucerne Inn where Violette took family on Turnpike-purchased gift certificates:

http://www.lucerneinn.com/

TOLLROADSnews 2011-04-16

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