VTDigger is appealing to the Vermont Supreme Court as the news organization seeks records related to state oversight of a foreign investment program at the center of the largest fraud case in Vermont history.
The Vermont Journalism Trust, the nonprofit parent organization of VTDigger, filed a brief this week in the state’s highest court in its long-running legal battle over access to records related to the state-run EB-5 regional center.
The news outlet is seeking to enforce a provision of the state’s Public Records Act that requires a public body withholding a record to describe what it’s withholding and why.
“Without an adequate description of the documents and their content, neither (Vermont Journalism Trust) nor the Court can assess the propriety of withholdings here,” the trust’s lawyers wrote in the brief.
VTDigger is seeking to learn more about who in state government knew what and when as the developers of Jay Peak Resort and other projects in the Northeast Kingdom defrauded foreign investors over a 10-year period.
The state Agency of Commerce and Community Development ran the EB-5 regional center, which was responsible for approving and monitoring development projects. Agency officials also promoted the projects.
At issue before the high court is a lawsuit stemming from a public records request VTDigger filed in August 2020, which the commerce agency denied.
VTDigger is challenging the state’s assertion, which it has made since 2015, that it can continue to shield the documents from public view by invoking a Public Records Act exemption related to pending litigation.
The state is facing a civil lawsuit, known as Sutton v. State of Vermont, brought by Stowe attorney Russell Barr on behalf of a group of EB-5 investors who lost millions of dollars in the scandal. They have either been denied the permanent U.S. residency they had sought through the program or remain in legal limbo.
The latest appeal by VTDigger comes more than six years after state regulators and the U.S. Securities and Exchange Commission brought enforcement actions against former Jay Peak owner Ariel Quiros and resort president Bill Stenger.
Quiros, Stenger and advisor William Kelly have all since been indicted on federal criminal charges related to misusing funds they raised through the EB-5 program. They each reached plea deals with prosecutors and are all now in prison.
The Vermont Attorney General’s Office has provided some documents to VTDigger since it filed the lawsuit, but it maintains that others remain secret because they’re relevant to the ongoing litigation in Barr’s clients’ civil case.
Washington County Superior Judge Robert Mello issued a ruling in VTDigger’s case siding with the Attorney General’s Office, finding that the “only records being withheld in this case are those that were sought in discovery in the Sutton case but have not been produced under claim of attorney-client privilege.”
The Attorney General’s Office said in a statement Tuesday that it “will defend the Superior Court’s decision” and will file its response in court.
Lia Ernst, legal director for the ACLU of Vermont, which is working with the Vermont Journalism Trust in its lawsuit, said Tuesday that the issue appears clear and “entirely uncontroversial” despite the lower court’s ruling.
“I don’t know why we find ourselves having to take this to the Supreme Court, but here we are,” she said.