Updated: Attorney general declares warden land deal illegal, plans to void it - knox.VillageSoup.com
Augusta?? The Governor?s Office released a statement July 11 declaring that the attorney general has found the sale of state-owned property to the Maine State Prison warden to be illegal. The AG?s office is declaring the transaction void.
Prison Warden Patricia Barnhart and Sheehan Gallagher paid $175,000 to the state to buy a Ship Street Circle parcel that includes three houses and more than five acres of property extending down to the St. George River, according to Maine Bureau of General Services Acting Director Betty Lamoreau.
In addition, the Thomaston Planning Board meeting scheduled for July 12 to look at the warden?s proposed subdivision of the property has been postponed, according to a town office spokesperson.
Gov. Paul LePage issued a statement Monday regarding a recent opinion from Attorney General William Schneider. The opinion involves the purported sale of real estate to a state employee and a subsequent lease back to the state of a building located on the property.
In a July 8 letter to Department of Administrative and Financial Services Commissioner Sawin Millett and Patricia Barnhart, Attorney General Schneider wrote,??Because Ms. Barnhart is employed by the State as the Warden of the Maine State Prison and was so employed during the time period in which this transaction took place, it is my opinion that the Contract, Release Deed, and Lease and Memorandum of Lease are void under the terms of title 17, section 3104 of the Maine Revised Statutes.?
?No trustee, superintendent, treasurer or other person holding a place of trust in any state office or public institution of the state shall be pecuniarily interested directly or indirectly in any contracts made in behalf of the state or of the institution in which he holds such place of trust, and any contract made in violation hereof is void,? the statute states, according to the letter.
?We suggest that the parties and their counsel meet as soon as possible to discuss the process for unwinding this matter,? Schneider wrote in the letter.
The attorney general first became aware of the land deal Friday, July 8, according to Brenda Kielty, special assistant to the attorney general. She said the attorney general had no prior involvement.
The real estate transaction involving property located at 22, 26 and 30 Ship Street Circle in Thomaston began in the fall of 2010 under the previous administration and was consummated through the Department of Administrative and Financial Services in June 2011.
Under the direction of the 124th Legislature, the fiscal year 2010/2011 budget was to be balanced, in part, by booking $1.5 million in anticipated revenue from the sale of a list of state-owned properties, which included the Ship Street Circle properties in Thomaston.
LePage was informed about the sale last week and had no prior knowledge of the deal, according to the statement. Upon review of the details the governor issued an executive order immediately. The order establishes that the Department of Administrative and Financial Services will create internal policy guidance for sales of state-owned real estate.
?While it is disconcerting that questions about this sale were not raised during this process, I am confident the measures I am taking now will prevent similar situations from occurring in the future,? said LePage.
?The people?s business is to be done openly and Mainers must be able to trust the process in which state business is conducted,? LePage said.
The executive order is as follows:
An Order Increasing Oversight Over Sales of State-Owned Real Estate
WHEREAS, the State of Maine owns real estate that may not be in active state use;
WHEREAS, the sale of these properties will allow them to be put to higher and better uses;
WHEREAS, it is the duty of State Government to ensure that such sales are conducted in a fair and open manner; and
WHEREAS, prior sales practices have provided insufficient oversight;
NOW, THEREFORE, I, Paul R. LePage, Governor of the State of Maine, hereby order as follows:
1. The Department of Administrative and Financial Services shall establish internal policy guidance for sales of state-owned real estate. Such policy shall include, at a minimum, the following controls:
1. A reasonable period of public notice for all properties to be sold, to be advertised according to customary real estate sales practices;
2. An Affidavit by prospective purchasers that such purchaser is not in violation of
17 M.R.S.A. ? 3104;
1. A review of any proposed sales by the Office of the Attorney General;
2. A review of any proposed sales by a committee of Department directors, to include the submission of an evaluation report to the Commissioner; and
3. A signed statement by a person with experience in real estate transactions that the proposed sale price is commercially-reasonable.
2. The Department of Administrative and Financial Services shall immediately suspend all pending real estate sales until a review substantially similar to the policy outlined in Paragraph 1 is conducted. The Department may proceed to closing each sale only upon the express approval of the Commissioner.
The effective date of this Executive Order is July 11, 2011.
Thomaston planning board meeting postponed
Barnhart and Gallagher had proposed a seven-lot subdivision on Ship Street Circle, according to previous comments by Town Code Enforcement Officer Peter Surek.
The project was scheduled to go before the planning board at its July 12 meeting, but the meeting was postponed, the town office confirmed July 11.
Surek said an engineer representing Barnhart and Gallagher contacted the town office on the afternoon of July 11 to postpone the meeting.
Attorney General?s office mentioned in documents
According to documents and emails released by the Maine Bureau of General Services, officials did raise questions about the sale during the negotiations and talked about contacting the Attorney General?s office.
The discussion of Barnhart buying the property started with an email Sept. 2, 2010, from Denise Lord, formerly of the Maine Department of Corrections, to Chip Gavin, former director of the Maine Bureau of General Services.
?The warden asked if there was a possibility that she might purchase the house she is living in currently,? Lord wrote. ??Is it possible that BGS could consider this? Not sure if there are any prohibitions or concerns about this and will respect your decision.?
In the same email, Lord noted that the Department of Corrections would like to keep the use of one of the Ship Street Circle homes as temporary housing for newly hired staff.
The prison has been providing the warden with housing as has been the tradition. However, state officials say the state is not obligated by the warden?s contract to provide her with housing.
In the deal, the state and Barnhart agreed to a sale price on the property of $175,000 with a four-year lease back to the state to use one of the three houses on Ship Street Circle for $1 per year.
Discussions of the deal took place Jan. 31 with an email from Jonathan Leahy, an associate broker with CBRE/The Boulos Company, to Director William Leet of the Division of Leased Space.
?Patti [Barnhart] is happy to provide the facility rent-free for four years, but if the DOC [Department of Corrections] requests a renewal for a fifth year, she would expect a market rent,? Leahy wrote. ?She would like to continue having the lawn/plowing/trash handled by the state. Currently it is handled by a prisoner work program. Is it possible for this to continue? She has requested that the state pay 1/3 of the annual real estate taxes once due.?
?I believe we can accommodate all of the requests of the buyer excluding the payment of 1/3 of the annual real estate taxes,? Leet wrote Feb. 8.
As part of the final agreement, inmate work crews provide mowing and landscaping work on the property, remove trash and clear snow, Lamoreau and Department of Corrections Associate Commissioner Jody Breton confirmed July 6.
?I am not sure if it is legal for us to provide those services without owning or leasing the property,? Leet wrote in an email March 1.
?I have been trying to get an answer from the AG?s Office,? he wrote March 9. ?Corrections and BGS are OK with it; we just need to be sure it?s appropriate and legal.?
Kielty said she asked around at the Attorney General?s office July 11 and cannot find any reference in its emails or records to the land deal. She also noted that of the employees she talked to, none had any memory of any calls or discussions of the issue.
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