Burlington is still working to dig out of the financial hole created when Burlington Telecom faltered during the Kiss administration. Current Mayor Miro Weinberger just inked a deal to settle debt with Citibank, but Burlington taxpayers are still out $17 million. And that's at the heart of a lawsuit in Burlington where former Mayor Bob Kiss took the stand Thursday.
Two taxpayers filed suit against the city's former chief administrative officer, Jonathan Leopold, shortly after the Burlington Telecom finance scandal broke, hoping to recover millions of dollars the city spent trying to save Burlington Telecom. At issue-- did Leopold intentionally deceive other city officials? Kiss was questioned for hours and defended his top aide.
The Burlington Telecom trial continued Thursday-- taxpayers versus Leopold over his decision to take $17 million from city coffers and use it to prop up Burlington Telecom.
Kiss was on the stand, answering questions about his knowledge and involvement. He said that back in 2007 when the loan was initially authorized, it was a tumultuous time in financing, similar to the Great Depression. But he believed saving Burlington Telecom was vital.
"It was a 21st century element for Burlington. And it was important, if we could, to actually implement that kind of a system," Kiss said.
Kiss testified that he and Leopold discussed Burlington Telecom often and he was fully aware that expenses were exceeding revenues-- that they needed to find a "cure." But Kiss denied he knew Leopold kept the City Council in the dark about moving $17 million from city coffers to BT.
Robert Hemley/Plaintiff's Attorney: In other words, you were not aware that Mr. Leopold had omitted from what he showed the City Council the capital expenditures for Burlington Telecom.
Bob Kiss: I don't have it identified personally that way.
Robert Hemley: What does that mean-- you don't have it identified personally that way? Do you know it or don't you know it?
Bob Kiss: I'm not aware of those details.
Leopold's use of taxpayer money was a violation of Condition 60, Burlington Telecom's operating license. When pressed on his actions once he learned of this violation, Kiss deflected to his legal team, headed by Bill Ellis.
Robert Hemley: Did you disclose to the Department of Public Service when you learned there was a violation of Condition 60 that there was a violation of Condition 60?
Bob Kiss: My understanding was that Bill Ellis had broached the subject with the Public Service Department. They didn't seem to respond immediately to that issue, so it was deferred.
The lawyers declined to comment on Kiss' testimony, but the trial is set to continue Monday, where former city attorney Bill Ellis will testify. Now if the taxpayers win their lawsuit, they say it would allow the city to recover some of the lost funds from their insurance company.