Case Closed: Feds Drop Investigation of Burlington Telecom | News | Seven Days | Vermont's Independent Voice

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Case Closed: Feds Drop Investigation of Burlington Telecom


In a terse, three-sentence statement the U.S. Attorney's office announced today that it was "closing its investigation into possible violations of federal law by Burlington Telecom and related entities and individuals."

In the statement, U.S. Attorney Tristram Coffin said the investigation had "produced insufficient evidence to file criminal charges, and therefore the investigation would be closed."

The office offered no further comment.

No surprises here, as Coffin intimated to Seven Days two weeks ago that he might break tradition and make a public announcement if his office wasn't bringing charges. Breaking that traditional code of silence about federal investigations signaled that the feds were likely leaning against prosecution.

When asked by Seven Days if he might issue a release if they didn't bring charges, given the high-profile nature of BT's case and the concerns that unending investigations could hamper its talks with financiers, Coffin offered this rare public concession for a federal prosecutor: “We typically don’t, but there are times when we might make a decision to do otherwise. This might be one of those times.”

Coffin made that statement shortly after Chittenden County State's Attorney T.J. Donovan and Addison County State's Attorney David Fenster declined to prosecute BT and city officials on a variety state charges. State's attorney Bob Simpson led the investigation for Donovan and it's unclear whether Simpson recommended the state bring misdemeanor charges for "neglect of duty" against unnamed city officials.

A civil suit brought against BT officials and Chief Administrative Officer Jonathan Leopold is still pending.

At the end of June, BT's attorney told state regulators that the muni telecom has two “letters of intent” — one from a financial investor, one from an out-of-state, independent telephone company — to help address BT’s woes. An in-state telecom firm remains interested but has not made a formal offer.

BT is seeking permission from the Vermont Public Service Board to finish wiring its network throughout the Queen City based on how much cash it has on hand — not how much it can borrow.

An August 2009 audit found that BT’s services reached all but 3297 — or 20 percent — of the city’s addresses. Of those, about 1355 addresses are located on private rights-of-way. BT is asking the PSB for a green light to reach the remaining 1942 addresses. BT plans to spend more than $500,000 on capital investments this year — up more than $200,000 from last year — to hook up new customers.

BT is also seeking PSB approval to exempt the utility from having to reimburse the city several hundred thousand dollars it spent on financial advisers Dorman & Fawcett to renegotiate the city’s $33.5 million lease-purchase deal with CitiCapital.

The city has not heard from CitiCapital since February. The city terminated its lease with CitiCapital last fall. The financier hasn't yet made any moves to repossess BT's equipment — or file a lawsuit — to recoup its losses.