Burlington Democrats may be the ones who get burned as a result of smoking out their biggest adversary in the administration of Burlington Mayor Bob Kiss: Chief Administration Officer Jonathan Leopold.

By an 8-6 vote at 1:15 Tuesday morning, the city council passed a resolution urging Mayor Kiss to put Leopold on paid leave pending an audit of Burlington Telecom finances.

Voting in favor were six Democrats and the two Republicans on the council. Voting against were the three Progressives, two independents and one Democrat, Councilor Russ Ellis (D-Ward 4).

The resolution came after weeks of public debate about whether Leopold et al. acted inappropriately by floating Burlington Telecom $17 million from the city’s checkbook without repaying it within 60 days, a condition of BT’s license to do business.

Democrats believe Leopold acted willfully and tried to hide the violations from the council, possibly for political reasons.

“It’s a violation of the public trust,” said Councilor Joan Shannon (D-Ward 5), a sponsor of the resolution. She laid the responsibility at Leopold’s feet.

Not all councilors see it that way.

“This is government at its worse,” said Marissa Caldwell (P-Ward 3), who, along with several other councilors, say the CAO briefed them extensively in May about BT’s violations. In other words, the council is not an innocent bystander; it’s complicit.

Leopold said at least a dozen people knew about the use of the pooled cash to support BT, and it was reflected in the city’s annual budget. “This is a partisan witch hunt. If I wanted to hide something, why would I put it in the budget? I’m not going to be scapegoated because you can’t read a budget,” he told councilors in an emotional retort during the meeting, which started Monday night and ended in the wee hours of Tuesday morning.

City attorneys said they advised the administration last November to bring the violation to the attention of the Public Service Board. The administration agreed to do so, but only at which point it could offer a financing remedy. That remedy never materialized.

Leopold, for his part, has apologized for not telling the council sooner. He’s also copped to making impenetrable financial presentations.

Questions remain about how BT spent the $17 million and what city funds were tapped to make the cash float happen. An audit of BT’s finances and operations, also approved by the council, could clear up some of them.

In the meantime, Kiss said he has no intention of adhering to the council’s nonbinding resolution. Only he can decide if Leopold is put on leave or to restrict his duties. “Jonathan is very bright and very effective,” said Kiss. “I do believe this is about politics.”

If so, it’s becoming a common pattern among council Democrats.

Just a year ago, Democrats and Republicans rallied for a beleaguered waterfront manager, who hacked into employee email accounts and then lied about it, just to excoriate Leopold and his assistant Ben Pacy. The turmoil that ensued nearly tore the Parks & Recreation Department apart.

Democrats seem to think it will take nothing less than a scorched-earth policy to put them back into the mayor’s office after nearly 30 years of exile: burning the city down to “save” it.

Too Small to Succeed?

The Burlington City Council resolution approved Tuesday morning also contains a provision banning CAO Leopold from letting BT borrow more money from the city’s so-called “cash pool.”

Councilors Mary Kehoe (D-Ward 6) said she was OK with that, even if it “imperils Burlington Telecom just a little.” Or, “if it means we don’t do any more hookups,” added Shannon.

That’s music to Comcast’s ears.

If BT fails and its assets go up for sale, Comcast could get the network for pennies on the dollar. Queen City residents would be stuck with a network they built but don’t own. What a deal.

Keeping taxpayer money away from BT, along with the 60-day repayment requirement, were provisions put forth by Republicans — first in the House and later through Gov. Jim Douglas. Their goal was to preserve “competitive neutrality,” as they called it, so municipal telecom companies wouldn’t have an unfair advantage over mega-billion-dollar companies such as FairPoint, Adelphia and Comcast.

Turns out FairPoint and Adelphia found ways to declare bankruptcy all by themselves.

Fiber Fallout

As a result of the Burlington Telecom controversy, the Public Service Department is taking a closer look at other municipal telecom proposals in Vermont.

Now under scrutiny is White River Junction-based ValleyNet, which hopes to provide fiber optic services similar to Burlington Telecom’s in the Upper Valley. Rutland and Montpelier are seeking the same services from ValleyNet. Burlington turned down both towns in 2007.

ValleyNet’s chief and lead consultant is Tim Nulty, BT’s first general manager, who left in 2007 after a falling out with Kiss and Leopold.

Small world.

Public Service Commissioner David O’Brien is asking for additional financial material from ValleyNet, including the complete application it submitted to receive $65 million in federal stimulus funding, said Nulty. The department is currently reviewing ValleyNet’s application for a certificate of public good.

The Rutland Redevelopment Authority, which is trying to set up a similar municipal network in Rutland City and nine surrounding towns, hasn’t yet applied for a CPG.

RRA Director Tom Macauley tells “Fair Game” that, despite the concerns raised by Burlington Telecom, the Rutland venture is different and won’t risk taxpayer money.

“It’s not possible for the same thing to happen here because we’re not asking taxpayers to put in any ongoing money,” said Macauley.

Same goes for ValleyNet, said Nulty.

Another reason it can’t happen? Since Burlington Telecom was granted its CPG, the legislature amended state law to ban municipalities from getting directly involved in the telecommunications biz. Why? Gee, lemme guess: competitive neutrality.

Or, maybe they just want to leave broadband expansion to the likes of FairPoint. Good call.

Conflicting Reports

The Vermont Democratic Party is in the midst of reviewing its finances, a process that should be complete by mid-November when the party will vote on its new slate of officers.

Lamoille County Democrats called for an audit earlier this year after one of its members — Ed Frye of Stowe — stepped down as the party’s treasurer, said John Burgess, a Lamoille County Dem and member of the party’s executive committee.

“Lamoille County has noted for about year a discrepancy in the numbers between what we were being told on the state committee and what was being filed for state and federal agencies,” Burgess told “Fair Game.”

Burgess said no one believes anyone has stolen money from the party’s till.

Robert Dempsey, the party’s executive director, said a review of the party’s finances is underway, and there are likely to be several changes proposed to the party’s top officers.

“We are ironing our finances to make sure that our records were accurate in the past,” said Dempsey. “And we want to take a more professional approach to how we manage the internal operations of the party.”

In short, he said, the party needs to professionalize some functions that have largely been volunteer positions, such as treasurer.

Sounds like a wise investment.

Working Class Heroes

Think it’s too early to kick off the 2010 election campaign?

Sen. Bernie Sanders (I) is already gearing up for 2012. That’s right. Two-thousand-twelve, when Vermont’s lone seat in the U.S. House and a U.S. Senate seat will be up for grabs.

Sanders is hosting two fundraisers later this month, in Brattleboro and Montpelier, with popular progressive commentator Jim Hightower. The events cost $10 a pop and will benefit Sanders’ reelection campaign.

The event is billed as a discussion with the pair on how to “build a progressive grassroots movement to defeat the big-money interests that dominate the economic and political life of our country.”

No offense, but doesn’t that sound like every Sanders event?

Hightower said he hears the same refrain as he talks to progressives around the country: the apparent willingness of Pres. Barack Obama to side with corporate interests.

“The lesson we’re learning, and relearning, as … we learned in the Clinton years, is that we can’t just elect someone and sit back in the Lazy-Boy and do 12-ounce elbow bends,” said Hightower. “We can cluck our tongues and wag our fingers, or we can do what democracy requires and get in the face of power and be more forceful with the guy we elected.”

All is not lost, though, said Hightower. The political stars, he noted, appear to be aligned for sweeping change — change not seen since Pres. Lyndon B. Johnson was in office.

“Now that Obama’s in there, we need to back him up when he’s right and buck him up when he’s wrong,” said Hightower. “Change is also possible. Yet, we’re not getting it. Because that possibility exists, though, it makes it incumbent on us to push hard, because you don’t get many chances in life to make the change.”

Hightower said that progressives have been in this position before — pushing for change with a like-minded president.

“Now is not the time to be pusillanimous,” he declared.

Pusillanimous: not sure that works on a bumper sticker.

Got a news tip? Email Shay at [email protected]

Click here to follow Shay on Twitter.