NRCM Urges Lawmakers to Close Loophole in Election Laws Exploited by HQ
NRCM news release
July 30, 2020 (Augusta, ME) – Over the past six months, the foreign government-owned corporation Hydro-Quebec has dramatically escalated its political campaign to interfere with the citizen-initiated referendum to block Central Maine Power’s (CMP) controversial corridor proposal.
A new analysis by the Natural Resources Council of Maine (NRCM) detailed below shows the extent to which Hydro-Quebec, a so-called “Crown Corporation” owned by the Province of Quebec, is using record-breaking campaign spending and unprecedented political tactics to exploit a loophole in Maine ethics law that lawmakers were attempting to close before the pandemic caused the Legislature to abruptly adjourn in March.
“Maine has never witnessed such brazen efforts by an agent of a foreign government, in this case a foreign government-owned utility, to meddle in Maine’s elections,” said NRCM Advocacy Director Pete Didisheim. “The breadth and depth of Hydro-Quebec’s campaign activities should raise alarm bells for anyone protecting our election process from foreign government interference.”
NRCM’s analysis reveals the scope of Hydro-Quebec’s extensive political campaign to persuade Maine voters to support a project that would bring $12.4 billion in profit to Hydro-Quebec, and billions in dividends to the Quebec government and residents of Quebec. Hydro-Quebec’s campaign activities in Maine include:
- Failure to provide accurate, legal campaign reporting;
- Record-breaking campaign spending and campaign finance violations;
- Relentless print advertising in Maine’s newspapers, totaling 54 full-page and 32 half-page ads since January – more than any other political entity;
- Misuse of images of Baxter State Park and Acadia National Park in order to mislead Maine voters;
- Attempts to hide foreign government ownership after red flags were raised about foreign government meddling in Maine’s elections; and
- Hiring Forbes-Tate, an expensive DC-based lobbying firm, with a three-figure contract to ramp up Hydro-Quebec’s campaign as the controversy about its questionable campaign activity intensified.
Yesterday, Forbes Tate filed with the U.S. Department of Justice, as required by the Foreign Agents Registration Act, the public opinion survey that it is using in Maine on behalf of Hydro-Quebec to develop campaign messages aimed at manipulating the opinion of Maine voters. The survey demonstrates that Hydro-Quebec’s primary goal is to identify whatever message it can come up with that might begin to alter the overwhelming opposition by Maine people of the CMP corridor.
Twenty-five Maine towns have voted to rescind their support or oppose the CMP corridor. Polling last year showed that 65 percent of Mainers oppose the project, with opposition in Franklin and Somerset Counties exceeding 80 percent. Both Franklin and Somerset County Commissions voted to oppose the project. Two of Maine’s largest labor unions oppose the project, and the Sportsman’s Alliance of Maine withdrew support.
In response to Hydro-Quebec’s aggressive campaign activities, NRCM called on Maine lawmakers to immediately enact legislation (LD 2136) to close the loophole in state election law that is being exploited by Hydro-Quebec in order to protect the integrity of the November election. NRCM recommends that the original bill be amended to focus exclusively on prohibiting election activity in Maine by foreign government-owned corporations like Hydro-Quebec.
“No Maine lawmaker should be comfortable knowing that the Quebec government, indirectly through its ownership of Hydro-Quebec, is spending millions of dollars here in Maine to influence Maine voters,” said Didisheim. “The time has come to shut down Hydro-Quebec’s interference in Maine elections. The Legislature should close the loophole in Maine law that Hydro-Quebec is exploiting as no foreign government-owned corporation has ever done before.”
“In 2018, Canada enacted a new election law that prohibits foreign entities from spending funds to influence elections, yet the Canadian government in Quebec is now seeking to influence this November’s election here in Maine. This is just plain wrong,” said Didisheim.
Analysis: Hydro-Quebec Exploiting Loophole in Maine Election Law with Extensive and Aggressive Political Campaign Activity
Hydro-Quebec is directly tied to the Government of Quebec
As a Crown Corporation, Hydro-Quebec is unlike any entity that has attempted to directly influence Maine voters in the past. Established by the Government of Quebec in 1944, Hydro-Quebec is a state-owned enterprise that provides billions of dollars annually to the Province of Quebec. In 2018, Hydro-Quebec paid $2.4 billion in dividends to Quebec, its sole shareholder. The financial interests of Hydro-Quebec and the Province of Quebec are deeply intertwined. As explained in Investopedia: A crown corporation is established and regulated by the government. This is the opposite of private companies, which are privately owned, structured, and operated to serve the owners of the company. Quebec commercially owns Hydro-Quebec, and the corporation is operated to serve the interests of the people of Quebec as determined by the government.
Hydro-Quebec is exploiting a loophole in Maine ethics law
Hydro-Quebec is prohibited by Maine ethics laws from contributing to candidate elections, but unlike many other states Maine law has a loophole that does not currently prohibit foreign government-owned corporations like Hydro-Quebec from attempting to influence the outcome of referendums. Although representatives of Hydro-Quebec refused to testify under oath in Maine to answer questions about the CMP corridor project, including unsubstantiated and dubious claims about the project’s benefits for the climate, Hydro-Quebec’s top legal counsel rushed to the Maine State House to testify on March 17, against LD 2136, a bill aimed at closing this loophole.
Hydro-Quebec is on track to break spending records to influence Maine voters
As of July 1, 2020, the Hydro-Quebec Maine Partnership ballot measure committee had spent $6.25 million to defeat the CMP corridor referendum, with four months until the election. (CMP reported $10.63 million in spending.) Hydro-Quebec alone is on track to exceed by Election Day the record of $9.4 million spent in 2017 by out-of-state companies promoting construction of a casino in York County.
Hydro-Quebec has violated campaign spending reporting requirements
In January 2020, Hydro-Quebec admitted to breaking state ethics laws by spending $100,000 to influence Maine voters without registering with the Ethics Commission. Hydro-Quebec was fined $35,000, the second-largest campaign violation fine in Maine history.
Hydro-Quebec is trying to hide foreign government ownership
As Hydro-Quebec’s efforts to exploit a loophole in Maine ethics law received media attention, the company attempted to deceive Mainers into thinking that Hydro-Quebec was based in Connecticut.
- The January 15, 2020, spending report for Hydro-Quebec Maine Partnership (for the reporting period 11/21/2019 to 12/31/2019) lists an address for Hydro-Quebec Maine Partnership (HQMP) as 75 boulevard Rene-Levesque Ouest, Montreal, Quebec, Canada. This is Hydro-Quebec’s headquarters building. The report also lists HQMP’s Treasurer, Jean Lapointe, as being located at the Montreal address, and maintains her Montreal-based email.
- Faced with criticism about a foreign government-owned company attempting to influence a Maine election, HQMP’s Treasurer, Jean Lapointe, submitted an amended report with the Maine Ethics Commission changing the address of HQMP to 225 Asylum St., 27th Floor, Hartford, Connecticut, the location of HQ Energy Services. The Treasurer’s address remained in Montreal.
- Hydro-Quebec’s print ads in Maine newspapers in January 2020 all listed the HQ Headquarters’ Montreal, Quebec address, but by February 25, 2020, the ads started listing Hartford, CT as the address.
Hydro-Quebec is funding a relentless, expensive print ad campaign
Since January 14, 2020, Hydro-Quebec has financed a continuous stream of print ads in Maine’s leading newspapers. In the Portland Press Herald, Bangor Daily News, Kennebec Journal, and Morning Sentinel, Hydro-Quebec has placed a combined total of 54 full-page ads and 32 half-page ads (from 1/14/20 through 7/28/20) – far more than any candidate, business, or any other entity. Hydro-Quebec spent an estimated $330,000 on these print ads.
Hydro-Quebec is running deceptive, manipulative ads
Example 1: On February 28, Hydro-Quebec was criticized for running a two-page ad in Maine newspapers that intentionally misled Mainers to believe that Baxter State Park was partnering with Hydro-Quebec in support of the CMP corridor project. In a strongly worded protest, the President of Friends of Baxter State Park wrote: “To use Baxter State Park as part of a campaign to build a transmission line through the Maine woods is exactly the type of outside interference that Gov. Baxter feared.” Hydro-Quebec issued a statement, but no apology.
Example 2: On April 14, Hydro-Quebec started running another manipulative ad intended to mislead Mainers into connecting another iconic outdoor location with the CMP corridor project. This ad featured an image of Jordan Pond and The Bubbles at Acadia National Park, falsely implying that Acadia National Park is partnering with Hydro-Quebec.
Example 3: On June 2, Hydro-Quebec started running yet another intentionally manipulative print ad in Maine’s major newspapers using a fossil fuel power plant image that clearly is not located anywhere in New England. The ad features multiple smokestacks belching clouds of black pollution, with the word DIRTY in red across the picture, adjacent to a picture of hydropower and the word CLEAN. Such blatant sources of pollution have long since been shut down in New England, yet Hydro-Quebec wants Mainers to think the corridor project is necessary to make these pollution sources go away.
Hydro-Quebec’s failures to provide accurate, legally required reports continue
Since November 2019, Hydro-Quebec has spent $222,470 on campaign services from a firm named Blaze, which it reports on all filings with the Maine Ethics Commission as being located at 76 Spring Street, Charleston, South Carolina. However, Blaze of Charleston, South Carolina, advertises as “a multifamily investment firm focused on owning and operating institutional rental housing communities.”
The actual firm hired by Hydro-Quebec is a different entity located in Maine. On April 27, 2020, a Yarmouth-based marketing firm Blaze Partners registered with the U.S. Department of Justice that it was representing Hydro-Quebec, pursuant to the Foreign Agents Registration Act, and disclosed that it began working for Hydro-Quebec in November 2019. Whether inadvertent or intentional, all Hydro-Quebec campaign reports with the Maine Ethics Commission need to be corrected.
These false filings belie Hydro-Quebec’s claim, following the $35,000 fine by the Ethics Commission, that its campaign committee “has taken every measure to make sure that it is tracking and recording information in such a way that it can disclose information to the Commission in a timely manner and has, in fact, made timely, subsequent disclosures under the Commission’s rules.”
Hydro-Quebec consultant Blaze Partners failed to report to Justice Department
Because Hydro-Quebec is a foreign government-owned corporation attempting to influence an election in the United States, its U.S.-based consultants are required to register pursuant to the Foreign Agents Registration Act (FARA). Specifically, FARA “mandates that you must register before acting as an agent of a foreign principal. Under Section 612(a) of FARA, parties must file a registration statement within 10 days of having agreed to act as an agent of a foreign principal.”
According to the FARA website: “The penalty for a willful violation of FARA is imprisonment for not more than five years, a fine of up to $250,000, or both.” Blaze Partners began working for Hydro-Quebec Maine Partnership in November 2019, but didn’t register with the Justice Department pursuant to FARA until April 27, 2020. This appears to be a FARA violation. The Blaze Partners registration states that “Hydro-Quebec is considered a ‘Crown Corporation’ in that the Government of Quebec is the sole shareholder,” and says, “Blaze Partners provides regular and ongoing counsel on strategies that will allow for a positive outcome on this ballot question when it comes to vote in November 2020.”
Hydro-Quebec is escalating its campaign with D.C.-based firm
In a move suggesting that Hydro-Quebec will spend whatever it takes to force a project onto Maine voters that they don’t want, the Hydro-Quebec Maine Partnership has hired one of the nation’s priciest campaign consulting firms.
On July 7, the D.C.-based consulting firm Forbes Tate registered with the U.S. Department of Justice, pursuant to FARA, that it has been retained for “research, surveys, polling, and message development.” The contract is worth $329,000 and will include the following deliverables:
- 35 30-minute in-depth interviews (due on or about July 20; $30,000);
- 25 in-depth interviews (on or about Sept. 20; $24,000);
- Social & traditional media Insights benchmark (due on or about July 9; $13,000);
- Maximum of five social/traditional media follow-up reports (biweekly, beginning Sept. 1; $3,000 per report);
- Benchmark poll (on or about July 31; $41,000);
- Data enhancement and targeting analysis (on or about July 31; $11,000);
- Maximum of five tracking surveys (biweekly, beginning Sept. 1; $31,000 per report); and
- Ad tracking for a maximum of four months (weekly reports; $7,500 per month).
On July 29, Forbes Tate filed with the U.S. Department of Justice a copy of the public opinion survey it is using in Maine to identify the messages that will then be featured in Hydro-Quebec’s newspaper, television, and digital ad campaign against the CMP corridor referendum.
Forbes Tate is run by founding partners Jefferey Forbes and Daniel Tate who both served in the White House as assistants to President Bill Clinton.