Throughout his campaign for the state's top job, Lt. Gov. Phil Scott and his allies have made much of his experience as a small-business owner. In one recent television ad funded by the Republican Governors Association, Scott highlighted the importance of a "handshake" deal.

"That means something here in Vermont," the Republican nominee said in the spot.

But Scott hasn't always made good on his own business commitments. Early in his career, according to documents obtained by Seven Days, the lieutenant governor was forced to surrender a nightclub business after failing to make payments to the previous owner for more than 10 months.

Scott eventually settled with the former owner, Montpelier renovator Alan Goldman, but not before Goldman sued and accused him of demonstrating a "complete lack of respect."

"You have failed and now owe me a lot of money," Goldman wrote Scott at the time.

The lieutenant governor's brief dalliance with the nightclub industry, which took place two decades ago, has not previously been reported. In an interview Monday, Scott acknowledged the failure and called it an important "lesson in life."

"It somewhat builds your foundation and gives you understanding of what people are going through when they struggle in business," he said.

In August 1996, Scott and two business partners bought a partially constructed Montpelier nightclub from Goldman for $89,250, according to court documents. The buyers, who also included Dave and Ellen Moody, agreed to pay Goldman $1,886 per month for five years.

After taking over the River Street venue, Scott and the Moodys changed its name from Emerald City Nightclub to Legends Nightclub and turned it into a sports bar with an auto-racing theme. Scott, a late-model champion at Barre's Thunder Road SpeedBowl, knew Dave Moody through the latter's work as a track announcer.

"He had this vision of some sort of place that would have some nostalgic kind of racing theme to it. I was interested — as an investor," Scott said.

Their plan quickly went south. According to Scott, his partners soon divorced, and Dave Moody filed for personal bankruptcy. Moody, who now works as a commentator for the Motor Racing Network in North Carolina, declined to comment.

"He somewhat walked away," Scott said. "There was this business, which at that point was struggling with some debt. I went in and tried to run the business for a bit."

According to a letter Goldman sent Scott in September 1997, the new owners started missing payments in June of that year and stopped paying entirely in August. In January 1998, Scott's cousin and construction business partner, Don Dubois, bought out the Moodys and assumed their share of the debt. That April, Goldman sent Scott one final letter.

"I have waited too long for you to cure your many months of delinquent payments," he wrote, calling it "absolutely the last straw." Goldman demanded that Scott surrender the nightclub and warned him against liquidating its assets, writing that doing so would amount to "a criminal offense, for which I will absolutely press charges if anything is missing."

When Goldman filed suit the next month in Washington Superior Court, his lawyer alleged that Scott had "denied entry and repossession" to Goldman on the day his client sent the April letter. A judge ordered law enforcement to seize the property, pending resolution of the suit, explaining that there was "a reasonable likelihood" that Goldman would prevail.

Court documents suggest that the parties reached a settlement in September 1998, though the terms were not disclosed. According to Scott and Goldman, it entailed selling the club to a third party and paying Goldman in full.

"In the end, we made good on our agreement," Scott said, "and nobody was hurt."

Despite his harsh words at the time, Goldman now says that he harbors no ill will toward the lieutenant governor.

"We worked very hard to work it out. Mr. Scott was an absolute gentleman. He made me 100 percent whole," he said. "That was a long time ago. We moved on. And to be honest with you, I'm a staunch Phil Scott supporter, and I'm gonna vote for him."

Family Matters

Sen. Patrick Leahy (D-Vt.) on Monday defended his daughter's work as a lobbyist for the film industry, which has contributed hundreds of thousands of dollars to his reelection campaign.

"When you have family members who want to earn a living to support their family, they should be able to," he told Seven Days.

Alicia Leahy Jackson has worked for the Motion Picture Association of America since August 2011 and has served as its director of government affairs for the past 20 months. But until VTDigger.org's Jasper Craven uncovered the connection in a story published Sunday, it was largely unknown in Vermont.

Federal law prohibits senators' immediate family members from lobbying an office-holding relative, but it permits them to lobby other lawmakers. According to disclosure forms, Jackson has personally lobbied Congress on copyright issues, which fall under the jurisdiction of the Senate Judiciary Committee. Leahy serves as the panel's ranking member.

Jackson did not respond to requests for comment this week. A spokesman for the MPAA, Chris Ortman, said in a written statement that Jackson "does not, has not and will not lobby Sen. Leahy's office, staff or the Senate Judiciary Committee."

In Monday's interview, Leahy bristled at the suggestion that Jackson shouldn't lobby the senator's peers. He said the two never discuss her work and that he had "no idea" what bills she supported. He added that he occasionally finds himself at odds with the MPAA.

"Considering the number of things I've opposed, she's probably not being promoted for me," he said.

But if Leahy's so tough on the movie industry, why is he one of its biggest beneficiaries?

According to data collected by the Center for Responsive Politics, Leahy and his political action committee have accepted five-figure campaign contributions this election cycle from all six MPAA members: Universal/Comcast ($71,950), Paramount Pictures/National Amusements ($71,900), Walt Disney ($43,500), 21st Century Fox ($38,200), Warner Brothers/Time Warner ($30,000) and Sony ($26,600).

The MPAA itself has donated $2,500 to Leahy's reelection campaign, even as Jackson has served as its lobbyist.

"I've had contributions from the MPAA long before she worked for them," Leahy explained.

That's true. The organization gave him $4,900 during his last reelection campaign, in 2010.

Asked Monday whether he would release all communications between his office and the MPAA, Leahy declined.

"If anybody wants to release correspondence from me, they're free to," he said. "I'm not going to go back through and selectively find correspondence done with anybody — like, for example, the dairy producers in Vermont or you name it."

Leahy provided a similar response last April when reporters asked for correspondence between him and alleged EB-5 fraudsters Ariel Quiros and Bill Stenger.

According to the senator, his relationship with his lobbyist-daughter is "a matter of public record." But, in fact, Jackson is not required to disclose that she is related to the senator — and there is no way for her to do so.

Pressed on the point, Leahy explained why he believed the relationship was clear: "Her name is Alicia. Leahy. Jackson."

Ah, that distinguished Irish name!

According to the Center for Responsive Politics, at least 11 other Leahys have registered as federal lobbyists in recent years. But according to the senator's spokesman, David Carle, only one of them is related: Alicia's brother, Kevin Leahy, a former Downs Rachlin Martin attorney, who registered briefly in 2004 to lobby on behalf of Stowe businessman Johannes Von Trapp.

Following publication of the VTDigger story, Leahy's Republican opponent, Scott Milne, called the situation "a case study in how the system is rigged to benefit career politicians like Pat Leahy and their special-interest friends." He said that, if elected, he would introduce a measure known as the "Leahy Rule" to ban senatorial relatives from lobbying any member of Congress or federal agency.

Leahy himself sounded disinclined to support such a proposal.

"So you're saying they should be excluded from jobs that require all kinds of public scrutiny, reporting, that they're qualified for, because a member of their family is in the Congress?" he asked. "That's a pretty interesting concept."

Leahy added, "I'd love to see the law. Have him send me a copy."

Who's in Charge?

Speaking of lobbyists, Democratic gubernatorial nominee Sue Minter has hired former KSE Partners staffer Elliott Bent as her spokesman.

Bent himself never registered as a lobbyist during his eight years at the Montpelier firm, but he worked for those who did: He says he started under now-retired lobbyist Bob Sherman, who has since established a super PAC backing Minter; Bent later worked under lobbyist Kevin Ellis, who has also left the firm.

"The KSE folks know Sue very well. They were looking for a communications director, and I think my name just kept coming up," Bent said.

The new flack went through an unusual hiring process. He was interviewed not only by Minter and her campaign manager, Molly Ritner, but by Emily's List and the Democratic Governors Association — two Washington, D.C., organizations that appear to be playing a major role running Minter's campaign.

Emily's List did not respond to a request for comment. DGA spokesman Jared Leopold, who conducted the interview, called his involvement standard practice.

"The decision on hiring is always up to the campaign," he said.

Bent is hardly the only one with lobbying ties working for a gubernatorial bid. His counterpart on the Scott campaign, spokesman Ethan Latour, previously worked as a registered lobbyist for the Montpelier firm MMR.

Even more scandalous? Latour once interned for Gov. Peter Shumlin.

Media Notes

If the pending sale of the Rutland Herald is completed on schedule this week, the new owners will have a shell of a newspaper on their hands.

In recent weeks, the Herald has seen a mass exodus. Sources say that reporters Lola Duffort, Kathleen Phalen Tomaselli, Dan Colton and paginator Stephanie Smith have all left or are leaving. Vermont Press Bureau reporter Josh O'Gorman departed in July. And managing online editor Patty Minichiello resigned last month after news editor Alan Keays was fired for documenting the paper's troubles.

On Monday, staff photographer Anthony Edwards got the ax for complaining that he had not been reimbursed for expenses — for the second time in a month.

"I don't know how they expect to run a business when they can't even treat their employees with a little bit of respect by paying the bills," he told Seven Days.

Later that day, editor-in-chief Rob Mitchell informed his staff that, in connection with the paper's sale, publisher and CEO Catherine Nelson "has decided to leave the company and is retiring."

Last one out, turn off the lights.