Guillaume de Ramel’s business record scrutinized

Guillaume De Ramel, a Democratic candidate for secretary of state, speaks during a debate on WPRI 12's Newsmakers.

PROVIDENCE, R.I. (WPRI) – Democrat Guillaume de Ramel’s campaign is sharing new details about the two businesses he incorporated in Rhode Island, following aggressive criticism from Nellie Gorbea, his rival in next week’s primary for secretary of state.

De Ramel, a wealthy 40-year-old Newport resident, had a double-digit lead in last month’s WPRI 12/Providence Journal poll, but more than half of Democratic primary voters said they remained undecided in the low-profile race. Gorbea has been raising questions about de Ramel’s business record in an effort to overcome his financial advantage in the race.

“My opponent has claimed 20 years of business experience as his primary qualification,” Gorbea said in a statement Thursday. “In reality, there is no public evidence to back up his claims. Rhode Islanders deserve an experienced secretary of state instead of someone who pretends to run businesses.”

Dave Hoffman, de Ramel’s campaign manager, lambasted Gorbea for her accusations. “Our opponent’s statements go beyond standard campaign rhetoric and they are an outright fabrication designed to mislead Rhode Islanders,” he said, calling her comments “the last page of the losing-campaign-playbook.”

The political back-and-forth has centered on two aviation-related business entities created in Rhode Island by de Ramel: Air Newport LLC, which he founded with his brother, Regis; and Newport Hangars LLC, where he is still managing partner.

Gorbea has suggested de Ramel created Newport Hangars primarily to reduce how much he pays in taxes to fly his personal plane, an allegation that Hoffman described as “absurd.”

Asked to describe his business experience in more detail while debating Gorbea on WPRI 12’s Newsmakers earlier this summer, de Ramel cited Newport Hangars.

“That’s a wonderful project that really brought a number of people here to Rhode Island that otherwise would have never come here but for this project … who are now spending money, buying houses, employing people, contractors, putting their kids in the school system here, buying groceries, et cetera,” he said.

Newport Hangars was incorporated to enter into a ground lease with the quasi-public R.I. Airport Corporation (RIAC) to build a new hangar system at the Newport State Airport. The project cost de Ramel and his partners more than $1 million, according to Hoffman. The hangar system stores de Ramel’s personal plane and eight other aircraft, he said.

Both Hoffman and David Martland, a local lawyer who is Newport Hangars’ registered agent, confirmed that the company has no employees. “No, there are no employees,” Martland told WPRI.com. “It’s just the folks that own the various hangars are members of the limited liability company that built the hangar.” Newport Hangars does not have a website.

Under the terms of Newport Hangars’ ground lease with RIAC, the company is required to pay the quasi-public agency 15% of its net income as a rent payment, according to a copy of the lease obtained by WPRI.com from RIAC. De Ramel did not report earning any income from Newport Hangars when he filed his R.I. Ethics Commission financial disclosure form for 2013. The lease also calls for RIAC to be given ownership of the hangars after 30 years.

“Newport Hangars employed many people during the construction of it,” Hoffman said. “It is successful in that there’s a building that you can see when you drive down the road that didn’t exist before Guillaume got involved. It took him a very long time to get this done.”

But Gorbea suggested the lack of immediate financial benefit to the state from the Newport Hangars project is a problem. “I am concerned when the state gives a financial break to a business owner who then makes no effort to run his business, earn a profit and pay the state back,” she said. Hoffman countered by noting RIAC will eventually own the hangars.

De Ramel has said frequently on the campaign trail that it took him roughly 13 years to secure a ground lease from RIAC to construct the new hangars. Meeting minutes show RIAC’s board voted to approve a lease with de Ramel on Dec. 21, 2011, after he was the only person who responded to the agency’s February 2010 request for interest in building the structures.

Newport Hangars was incorporated with the secretary of state’s office a week prior to the board’s vote – on Dec. 14, 2011 – by former House Speaker Gordon Fox, acting as the company’s lawyer. (Fox incorporated the company as “Newport Hangers,” an apparent misspelling of its name.) Hoffman declined to say how much de Ramel paid Fox for his work, or whether Fox got involved in discussions with RIAC about securing the ground lease.

About three months later – on March 29, 2012 – Newport Hangars filed paperwork changing its designated resident agent from Gordon Fox to Martland, the lawyer in Middletown. The company also corrected the spelling in its name from “Hangers” to “Hangars.” Hoffman said de Ramel first got Martland involved with the project in early February 2012.

The other Rhode Island business de Ramel’s campaign has credited him with creating is Air Newport, founded with his brother. Hoffman said de Ramel has not been involved with Air Newport since 2003, when he sold his stake in it. His brother, Regis, eventually sold the company but then bought it back earlier this year, Hoffman said.

“It’s a successful business in that it still exists,” Hoffman said. “Unsuccessful businesses fold all the time.”

“Guillaume has said time and time again, ‘I’ve started businesses in Rhode Island,’ which is true,” Hoffman added.

The incumbent secretary of state, Democrat A. Ralph Mollis, is barred by term limits from seeking a second term. De Ramel and Gorbea are facing off in the Sept. 9 Democratic primary. The winner will take on Republican John Carlevale in the November election.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

Walt Buteau contributed to this report.

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