AUGUSTA — Last month, the owner of the idled East Millinocket paper mill said it needed a change in state law to help restart the mill and rehire nearly 200 workers who were recently laid off.
Rep. Stephen Stanley, a Medway Democrat who represents East Millinocket, agreed to sponsor the necessary bill, eager to do anything he could to get the mill back on line and his constituents re-employed.
But Stanley isn’t just a lawmaker from the area. He’s also one of the laid-off paper mill workers, putting him in the delicate position of advocating for his constituents while also sponsoring legislation that could get him his job back.
In a recent interview at the State House, Stanley said he doesn’t think his role as sponsor of the bill, the original version of which caused controversy because it infringed upon a contract between two private companies, presents a conflict of interest.
In fact, he said, that was “the last thing on my mind.” His decision to sponsor the bill was “all about the people.”
“Crises happen and when you’re in these situations you have to do something,” he said. “Right now I represent 200 millworkers and I represent 8,700 people in East Millinocket, Millinocket and Medway. I’m trying to do the best I can for the community. Me? I don’t care about myself. I’m not in this for myself. I’m in it for the people. … When it’s not about people no more, it’s time for me to pack my bags and get out of this business.”
A COMMON CONCERN
The fact that a legislator is able to sponsor a bill that could ostensibly benefit him without raising eyebrows in Augusta offers a window into how conflicts of interest, real or perceived, are handled in the state’s capital.
“Conflicts of interest as a rule are ignored” in Augusta, said Harold Pachios, a partner at Portland law firm PretiFlaherty who has worked among state lawmakers since the 1970s.
Potential or perceived conflicts of interest are routinely, and sometimes necessarily, overlooked because Maine has a part-time, citizen legislature, which means lawmakers are also business owners and lawyers and doctors and teachers and employees of the state’s largest companies.
Situations in which lawmakers vote on legislation that could affect their private careers are “inevitable” in a citizen legislature, according to Jim Melcher, a professor of political science at the University of Maine at Farmington. “These things will come up over and over and over again.”
Stanley’s case is unique because his district, which represents East Millinocket, Medway and Millinocket, is so reliant on one employer, in this case New Hampshire-based private equity firm Cate Street Capital, which acquired the East Millinocket paper mill in 2011.
In theory, it could be argued that Stanley’s sponsorship poses a conflict, but “I certainly wouldn’t say it’s an open and shut case,” Melcher said.
Any lawmaker representing that district would be expected to do whatever he could to keep the mill open and the workers employed. If he didn’t, the argument could be made that the people in the district were not receiving adequate representation, Melcher said. In addition, if a lawmaker like Stanley balked at supporting the mill because of a perceived conflict, his hope for re-election would be greatly diminished, he said.
“I don’t see anyone representing that area – unless they’re a libertarian – doing anything different,” Melcher said.
Stanley’s sponsorship of L.D. 1792 – which would amend the state law governing the relationship between Cate Street and Brookfield Renewable Energy Partners, the mill’s electricity provider and owner of three hydroelectric dams on the Penobscot River that belonged to the original Great Northern Paper Co. – has thrust him into the center of a debate over how far lawmakers can reach into private business dealings to protect jobs.
The Legislature’s Energy, Utilities and Technology Committee voted unanimously March 26 to send the bill, substantially watered down from the original version drafted by Cate Street’s attorneys, to the full Legislature with a recommendation of “ought to pass.” The bill would make clear that Cate Street Capital could receive some of the revenues from the sale of electricity generated by the three dams.
HISTORY OF WORK, PUBLIC SERVICE
Stanley, 61, has worked at the East Millinocket paper mill since 1972, following in the footsteps of his father and grandfather before him. During his nearly 42 years at the mill, he’s been laid off three times, most recently in February, when Cate Street laid off him and 211 fellow employees and idled the mill because it claimed its wood and energy costs were too high. At the time, he was making $18 an hour as head loader, a position responsible for loading rolls of paper onto trucks at the mill.
He’s been in public service nearly as long as he’s worked in the mill, first as a union official, then as a town selectman in Medway. He was first elected to the Maine House of Representatives in 1996 with the 118th Legislature. He served three terms in the House before being elected to the Maine Senate with the 121st Legislature. He lost his Senate seat after one term because of redistricting, he said. He then spent several years as a county commissioner before again being elected to the House last year.
The three-town area of Millinocket, East Millinocket and Medway has experienced a significant economic downturn over the past few decades. In the 1980s, the original Great Northern Paper employed 4,800 people at two paper mills – one in Millinocket, which has been shuttered since 2011, and the other in East Millinocket – and in its woodland business, Stanley said. In January 2014, the new Great Northern Paper Co. employed roughly 250 workers.
“It used to be a utopia there,” said Stanley, who has thinning gray hair and a matching mustache. “Everyone was making good money, everyone had toys and this and that. Now all of a sudden it’s gone away and you’re 20 miles away from any town. It’s like a little island, basically.”
A stark example of the paper-making industry’s decline in the region can be seen in the percentage of personal income that came from the wood products manufacturing sector between 1970 and 2010. In the late 1970s, personal income from that sector was 15 percent of the total personal income in Penobscot County, which includes Bangor, according to a 2013 report by Headwaters Economics, which studied the region’s economy and potential impact of a national park in the region. In 2010, that percentage had dropped to 2 percent.
“The people in that area have sacrificed a lot for the mill to be there, and the workers have sacrificed an awful lot … because they don’t want the mill to shut down,” Stanley said. “It’s a one-horse town, and when the horse goes, like it’s gone three times, you see what happens.
“All we want to do is go to work and have a job,” he said.
Stanley’s sponsorship of L.D. 1792 has precedent. U.S. Rep. Mike Michaud, who was also a third-generation millworker at the East Millinocket paper mill, sponsored several bills during his time in the Maine Legislature that affected the mill. Peter Chandler, who has served as Michaud’s chief of staff since his time as Maine Senate president, said that as far as he knows, Michaud was never accused of a conflict of interest while in the Maine Legislature over his mill employment.
“Somebody in every family had someone who worked (at the mill),” Chandler said. “If you are not a champion for them, you’re probably not doing your job, sort of like if you represented Bath and did not support the shipyard.”
A CONFLICT BOUND TO HAPPEN
Most state legislatures in the country are part-time, citizen legislatures that require lawmakers, unless they’re independently wealthy, to have careers outside politics, according to Natalie Wood, program principal at the Center for Ethics and Government at the National Conference of State Legislatures. As a result, conflicts of interest are bound to arise. All states have their own definition of what constitutes a conflict of interest and their own process to allow lawmakers to recuse themselves from votes; there are no overarching policies used by everyone, Wood said.
“What we always say is conflicts of interest are not bad or wrong or unusual. It’s how public officials deal with them that really counts,” Wood said.
Maine law defines a conflict of interest as occurring when a legislator or a member of the legislator’s family “has or acquires a direct substantial personal financial interest, distinct from that of the general public, in an enterprise that would be financially benefited by proposed legislation.”
Maine’s ethics laws lay out the circumstances in which lawmakers may have a conflict of interest. The state also has the Maine Commission on Governmental Ethics and Election Practices, which advises legislators on potential conflicts of interest and also can launch investigations into legitimate complaints. However, Jonathan Wayne, the commission’s executive director, said his office “rarely” receives complaints.
Wayne said no complaints had been received concerning Stanley’s sponsorship of L.D. 1792 and he had not approached the commission for guidance.
Accusations of conflicts of interest do arise in Augusta, but usually only as a tactic to score political points. The most recent example is the group of Republican lawmakers who in February signed a petition claiming House Speaker Mark Eves should recuse himself from voting on a bill that would expand Medicaid because he works at Sweetser, a not-for-profit behavioral health care organization that receives Medicaid funding.
Eves sought guidance from the ethics commission, which advised him in a letter dated Feb. 25 that his employment at Sweetser did not create a conflict of interest “because of the broad effect of the proposed legislation on health care providers in Maine generally and the lack of any personal benefit to you.”
When asked if the commission has investigated a conflict-of-interest case that would be comparable to Stanley’s situation, Wayne reached back to 2006 when the Conservation Law Foundation argued that then-Rep. Thomas Saviello, who is now a state senator, should not be able to serve on the Legislature’s Natural Resources Committee because of his job as environmental manager at International Paper, which at the time owned the paper mills in Jay and Bucksport.
The commission’s opinion was that his “employment status by itself should not prohibit” him from serving on the committee, but it also noted that it did not consider his position on specific legislation in its decision. In its advisory opinion from March 2006, the commission addressed the “potential tension between a Legislator’s public duty and private employment” that exists in a citizen legislature and suggests that recusal should be considered in some cases.
Stacey Fitts, a former legislator from Pittsfield, faced accusations a few years ago that he had a conflict of interest when it came to his advocacy of legislation that supported the wind power industry because he worked at the time for Kleinschmidt, an engineering and regulatory consulting business that did some work in the wind power industry. Fitts, now regulatory manager for Summit Natural Gas of Maine, sat on the Committee on Veterans and Legal Affairs and said there were bills introduced nearly every legislative session to tighten the state’s ethics laws.
He thinks the arguments for tightening the laws are born from “a perception (of a problem) that isn’t real.”
While a citizen legislature creates tensions around real or perceived conflicts, its strength is that legislators have a tremendous amount of industry-specific knowledge, Fitts said, which the Legislature took into account when it created the ethics laws.
“There’s a limited institutional knowledge (in the Maine Legislature) and so people rely on the knowledge legislators bring to the table,” Fitts said. “You can’t then ask them to recuse themselves because of their expertise. That’s the nature of not being a professional legislature.”
Not even a staunch opponent of Stanley’s bill, Pachios at PretiFlaherty, believes a conflict exists in his case.
“He represents all those workers up there,” said Pachios, who represents Brookfield Renewable Energy Partners. “He doesn’t even know if he has a job as a result of this bill. The entity benefiting from the bill are the owners of the mill. This bill is drafted by and for the benefit of Cate Street, not Steve Stanley.”
Given the Millinocket region’s reliance on the mill, Pachios said any lawmaker elected from that district could potentially be accused of having a conflict.
“If you were in the Legislature and owned a restaurant in Millinocket, one could say it’s a conflict of interest,” Pachios said. “I don’t view any of those as conflicts of interest. I think Stanley is doing the job any Maine citizen would expect him to do.”
Whit Richardson can be contacted at 791-6463 or: