Third?

Jim Douglas finished third?

Take a look. There it is in black and white, In the latest political contribution reporting period, Douglas’s campaign raised $91,203.

That’s less than the $102,416 raised by State Sen. Doug Racine, who is one of the Democrats who wants Douglas’s job. It’s a lot less than the $190,737 raised by Secretary of State Deb Markowitz, who is another one.

Enough numbers. Numbers are booooring. In and of themselves, campaign finance reports are booooring. But sometimes there are stories behind the numbers. Sometimes there are even mysteries, which of course are not boring. This is one of those times.

We have here two questions and two mysteries. The questions apply to the Democrats, and we will get to them presently. The second mystery is really not so much a mystery as a secret, the secret of why campaign money is so important. It is a secret kept though the answer is in plain sight, but never discussed by the insiders, including political journalists.

We’ll defy the fraternity rules here, but thanks to the other mystery, it looks as though we won’t have time or space to do it today. So this will be a two-part exercise, to be completed Monday.

OK, let’s get to that first mystery: Does the (relatively) paltry Douglas report indicate that the governor might not seek a fifth term next year?

Probably not. It’s early. So early that there is still time for State Sen. Susan Bartlett, who says she is running but has raised no money, to become competitive. So early there is time for State Sen. Peter Shumlin, who has not yet said he is running, to announce his candidacy and get into the game.

So certainly there is plenty of time for Douglas to raise enough money by next year at this time to give him a huge financial advantage over whichever Democrat wins the primary (which won’t even have happened a year from now; it’s scheduled for September 14, 2010).

Douglas himself noted that the Democrats need more money earlier than he does, because Racine and Markowitz (at least) will be running against each other in that primary, while Douglas will be unopposed for the Republican nomination.

“They now have more money to beat each other up with,” he told the Barre/Montpelier Times-Argus.

So let’s beware the danger of over-interpretation. The danger in reading the tea leaves is that they may contain no message at all.

And yet….and yet…something seems out of kilter here. There is no doubt that had he really wanted to, Douglas could have raised much more. He has two overwhelming advantages: He’s the incumbent and he’s a Republican. Incumbents can always raise more money, and so can Republicans because, even in overwhelmingly Democratic Vermont, most of the overwhelmingly rich people are Republicans.

Conventional political wisdom holds that you take every advantage you can. Coming in with the biggest financial report gives you a few days of news coverage as being the top dog. Douglas could have raised $250,000 or even more, effectively sending a message to the Democrats saying ‘all right, children, you’ve had your fun. Here’s how we play in the big time.’

Not only is this conventional political wisdom; it is Jim Douglas’s method of operation. As a candidate, Douglas has been relentless. Even when he’s been 20 points ahead, his campaigns have attacked his opponents. Just think of the attack (deserved but unnecessary) on Gaye Symington last year after she refused to disclose her family’s financial information. For Douglas, passing up a chance to make himself look stronger than his opponents seems almost out of character.

But pass it up he did. It isn’t just that he didn’t raise that much money; it’s that he reported only 101 contributors. It’s as if he wasn’t trying.

So far, Douglas has not had a good year. Until this past spring, he had suffered but one political defeat in his life, failing to unseat U.S. Sen. Patrick Leahy in 1992. Since then he’s won every election he’s contested. As governor, he never got everything he wanted, but for six years he could block everything he didn’t want.

Now, after two of his vetoes were over-ridden, he faces a Legislature which not only has more Democrats, but shrewder and more aggressive Democratic leadership. He is also facing at least two more years of being governor when the state has no money. Generally speaking, being governor is fun when the governor can cut taxes and increase spending. Doing the opposite is clearly less fun.

It would hardly be surprising, then, if at least every now and then the words, “Why do I need this?” ran through this governor’s head. He’s just starting his year as head of the National Governor’s Association. Not a bad stage from which to take a final bow.

On the other hand, he’s only 58. And of the three candidates, only Douglas has spent money on actual politics (as opposed to logistics and organization) all year. Last month, according to his financial filing, he paid Public Opinion Strategies, the prominent Republican polling firm in Alexandria, Va., (creator of the famed “Harry and Louise “ads against the Clinton health care plan) $8,000 for “survey research.”

He’s also raising money. The same day he paid New Hampshire fundraising firm SCM Associations $4,000 for “fund-raising expenses.”

So he’s in the game. For now.

As to those questions about the Democrats. The first question is whether both Markowitz and Racine raised enough. They answer is yes. Obviously, raising more is better, but she didn’t raise that much more. Not enough to establish herself as a clear front-runner.

She has more cash on hand right now — $128,635 to roughly $82,000. But Racine, who didn’t start serious fund-raising until after the Legislative session ended, has enough in the bank, and has been raising money at a fast enough clip to be competitive.

But Markowitz had many more donors, almost all of whom can make more contributions to her campaign.

Another question is whether Markowitz was smart in trumpeting her fund-raising success on the liberal blog Daily Kos.

“I wanted to post a diary here to introduce myself and to announce the spectacular results of our first filing,” she wrote, before giving the web site’s millions of readers her campaign email address.

Smart, because it could help her raise more money and make her appear the established liberal favorite?

Or not-so-smart because it gives opponents, especially the Republicans, ammunition to attack her as being too far to the left, even for Vermont?

Actually, Daily Kos proprietor Marcos Moulitsas is less an ideologue than a pragmatic Democrat. But the web site’s strong stance against the Iraq war has linked it in the public mind with farther-left groups such as Moveon.org. Not that being strongly anti-war is a political liability in this state. But the blogosphere’s vibes have their negative connotations.

The biggest question of all, needless to say, is whether bringing in the most money assures ending up with the nomination, and then with winning the office. So far, Racine has done better than Markowitz at getting endorsements from legislators and other top Democrats. He has had the energy. She has the money.

Which is more important? Why? Why won’t anybody talk about it? Why is the importance of campaign money increasing in Vermont?

Tune in Monday.

Here, as promised yesterday, is a bonus Thursday posting, a column by veteran political reporter John Mashek. The News Guy himself will return tomorrow.

By John W. Mashek

WASHINGTON–Not even six months into the Obama administration and Republican  wannabes are already lining up to run against the president in 2112. If the economy does not improve by next year, Obama will be in trouble although the GOP”s potential field is hardly a potent one for now.

The lineup so far is: Mitt Romney, Mike Huckabee, Sarah Palin, Newt Gingrich, Haley Barbour  and Rep. Mike Pence of Indiana. There must be something in the water in Hoosierland. (My apologies to anyone I’ve missed.) Gov. Mark Sanford of South Carolina and Sen. John Ensign of Nevada were two other potential candidates but they had other things on their mind. Doubt we will see them in Iowa or New Hampshire any time soon as they reportedly try to repair their marriages. Their reputations are already ruined as holier than thou lawmakers.

Romney rates as the current favorite. He was the last man standing against John McCain in 2008 and Republicans admire those challengers who have been through the fire before. Those names include Richard Nixon, Ronald Reagan, George H. W. Bush and McCain. Romney has the money, the organization and the burning ambition to earn the favorite’s spot. After all he won election  as governor In Massachusetts a shining blue state. (Perhaps some Republicans would like to see one strand of Romney’s hair out of place in public but that is Mitt’s persona).

Huckabee ran in 2008 and got a bunch Southern votes. But the former governor of Arkansas goes overboard with his corn pone appeal and Republicans are already a regional party so why look to Dixie?

Palin’s surprise resignation as governor of Alaska only reinforced her strange brand of politics. While she has a host of right wing believers, Democrats must be praying that the GOP will nominate her. They would only have to weigh the votes, not count them. Gingrich, the former House speaker, has several strikes against him including unethical behavior while in office and cheating on two wives. Family values seem to escape the fellow from Georgia.

Barbour is a nice guy, but the Mississippi governor  is a former big time lobbyist in Washington and the state’s racist history isn’t helpful.  Fair or not, Barbour would have to deal from  the home state of Theodore Bilbo, Ross Barnett, Jim Eastland and other racists.

Further, the party’s leadership in Congress is charismatically challenged. Even Republicans in Congress are disappointed with them. In a National Journal magazine survey of GOP insiders, unnamed fellow party members were critical of the performances of Rep. John Boehner of Ohio, House minority leader and Sen. Mitch McConnell of Kentucky, the Senate minority leader.

Perhaps the name of Obama’s ultimate challenger is still a relative unknown. In the other party, Sen. Barak Obama of Illinois was a rookie senator when he announced his bid on a freezing winter day in Springfield. Journalists questioned his wisdom against a field of veterans, including then Sen. Hillary Rodham Clinton. Obama is now enjoying the view of the Rose Garden from the Oval Office.

(Mashek covered politics in Washington for four decades and is a long time friend of the vermontnewsguy.)

First, a couple of announcements:

1—There will be a bonus posting tomorrow (Thursday). For the first time, this will not be a posting written by the proprietor of this site, but the first of what will be occasional (quite rare, actually) guest columns.

Quite rare in part because few columnists will write for what the News Guy can pay them, a sum that can be counted on the fingers of no hands

This column will have nothing to do with Vermont, specifically, so the more parochial among you need not click in. But the assumption here is that most News Guy readers are interested in the national political situation, and few keep closer tabs on that than John Mashek, who has covered politics for, among others, the Boston Globe and U.S. News and World Report since roughly the Millard Fillmore administration.

Unlike some of us, he stayed in Washington, where he regularly schmoozes with the cognoscenti of both parties. For tomorrow he provides an early look at the Republican Presidential situation.

2—Friday’s post will examine the Vermont campaign finance reports which are due this (Wednesday) evening at 5PM. The results, then, will be in Thursday’s papers. But the belief here is that a day’s cogitation and reporting will allow for a more comprehensive analysis.

Now, getting down to the business, return with us to those thrilling days of 2007 when Verizon decided it didn’t want to be in the telephone business any more, at least not in these parts. So the telecommunications behemoth decided to sell its Northern New England land-line empire to a North Carolina company almost no one around here had ever heard of called Fair Point.

Fine, said the respectable corporate-media-government establishment (with a few caveats, but not many). Gov. Jim Douglas’s Administration, the Chamber of Commerce, the editorial page of the Burlington Free Press mostly thought that was a fine idea.

`There was some resistance on the part of the independent phone and Internet companies. But they weren’t opposing as much as negotiating, and in October of 2007 they got what they wanted from Fair Point and announced their support of the sale.

The only real opposition came from the International Brotherhood of Electrical Workers, which represented some 2,800 Verizon employees, and the Communications Workers of America, which represented about 300 call service workers. Backed by a few of the usual left-of-center gadflies, or busybodies as they are sometimes known, the unions argued that Fair Point was simply too small a company to take over as big an operation as the phone systems of Maine, New Hampshire, and Vermont.

Well, what did they know? Unions. Buncha grouches. Not surprisingly, the respectable corporate-media-government establishment prevailed, and the sale was approved by regulators in all three states.

Yesterday we learned that those grouches had been right all along. The Vermont Public Service Department, which had supported the sale, announced it was asking the Public Service Board to investigate whether Fair Point should be allowed to continue operating in the state.

But it’s worse than that. Officially, the Department merely asked for an investigation. But at least one senior official indicated strongly that he thought the investigation would conclude that Fair Point was not up to the job.

According to someone who was taking notes at yesterday’s PSB “workshop” meeting on Fair Point, Department lawyer Jim Porter said he thought it would “not be in the state’s best interests for (Fair Point) to continue to operate.

The note-taker was Ralph J. Montefusco of the Communications Workers of America, whose objectivity might be doubted. But in the first place, Montefusco, though he feels vindicated in his earlier contention that Fair Point was too small for its task, said he “takes no satisfaction” in having been right. He has a vested interest in the company’s success.

Besides, Fair Point Vermont spokeswoman Beth Fastiggi, said the company also believed that PSD officials were likely to argue that Fair Point should go.

None of this proves conclusively that Fair Point was too small to begin with. Even adding in that the company may have to file for bankruptcy and that it is trying to renegotiate the terms of (meaning it can’t pay) $500 million in loans doesn’t quite constitute absolute proof.

But when asked whether she thought recent events proved Fair Point had bitten off more than it could chew, Fastiggi would only say, “it’s really too early to tell that.”

The whole Verizon-Fair Point story is devilishly complicated and has never been fully explicated. It won’t be here, either, but here are a few interesting, possibly important – and, it seems, largely untold – pieces of the puzzle:

–Almost nobody was sorry to see Verizon go. Both Montefusco and Mike Spillane of IBEW Local 2326 said state officials were convinced the huge company would not make the investments needed to modernize telephone and Internet services. So regulators and business leaders were willing to consider almost any buyer, even one as small as Fair Point.

Not that they had much choice. No other company stepped forward and indicated any interest in buying those land lines.

–Fair Point was absorbing an operation with more than four times as many customers as it then had, raising the question of how it could possibly afford to pay the price.

It couldn’t. The transaction was subsidized.

By whom? By youm, by meem and by everyone else who pays taxes. Fair Point could afford the purchase because Verizon was willing to take the $2.4 billion price. And it took that price because it didn’t pay taxes on most of what it got. The deal is called a Reverse Morris Trust. Don’t ask who Morris was, why he went into reverse or whether you can trust him. But it’s a mechanism by which a big company can unload part of itself and not pay any taxes on the proceeds.

–The regulators did not lie down and let the companies walk all over them. Concerned that Fair Point would end up owing too much, they insisted that Verizon drop the price by several hundred million dollars. It did. But Fair Point still owes too much.

–The basic problem is both financial and technical. Verizon’s Northern New England operations had some 600 separate computer-based systems. Fair Point’s current operation has 60. For the transition, Fair Point relied on a Paris-based company called Capgemini.

According to Wikipiedia, Capgemini is “one of the world’s largest information technology, transformation and management… companies with a staff of over 91,000 operating in 36 countries.”

Pretty impressive, but in its work for Fair Point, ”the systems designed (by Capgemini) were not what we were expecting,” Fastiggi said.

That’s public relations talk for substandard.

In fairness to everyone involved, going from 600 systems to 60 is a prodigious undertaking, possibly beyond any company’s ability to manage in a year or so.

Shouldn’t somebody have figured that out before the sale was approved?

Fair Point is not failing at everything. Fastiggi claimed –and the union officials agreed –that high-speed DSL internet service is now available for more than three quarters of Vermont households.

But Mike Spillane of the IBEW said DSL is no longer enough. More advanced systems provide broader, faster, connections for sending and receiving film, graphics, audio, and other services that could help Vermonters develop thriving businesses.

Most other states don’t have much capacity for that kind of service, either, Spillane said, but many European countries do.

One day, let’s try to figure out what they’re doing that we’re not.