Mike Michaud, MFPC Board meeting, 6‐5‐2014 I like to start by talking briefly about the campaign. The question I get asked quite often is, “Why are you going to give up a safe seat in Congress to come back to run for governor?” A lot of people think it’s because Congress is dysfunctional, which it is, but I really do love my job, what I’m doing in Washington. It was a very difficult decision for me to come back and decided to run for governor. But I love the state of Maine more. I was born and raised in the Katahdin region. I plan on retiring in the region and for those of you who might not know, I grew up in Medway, went to work at Great Northern Paper Company. My dad worked there for 43 years, my grandfather before him for 40 years and I worked there for over 29 years. So I know how important the forest products industry is to the state of Maine. I’ve worked with a lot of you over the years in the Maine Legislature, when I was on the Energy and Natural Resources Committee. So a lot of you know my background on issues important to your industry. I’m very concerned with where we’re heading as a state under the current leadership of this governor. And part of it gets right back to stability. We can look at some of the problems that I’ve seen over the past 3½ years. Yes, this governor did balance the budget. Every governor has to balance the budget. But what he did do was those huge tax cuts outside the budget cycle that caused a structural gap. And that’s where the problem comes in, is when they deal with those structural gaps when that budget comes due. You saw what happened the last time around the eliminated municipal revenue sharing, shifted the costs to unfunded liability, back on the municipalities, changed the BETR program. That causes a lot of uncertainty, not only for state government ,but for county governments, local governments, as well as businesses. I’ve talked to the folks at Verso, the fact that they changed the BETR program after you had a company invest millions of dollars into the company based on the program being the way it was. That’s wrong. Because I do know when you look at companies not only are you competing with one another, you’re also competing within the same corporate structure for those capital dollars and you’ve got to have that certainty there. So as governor I’d definitely be focusing on the structural gap issue. The only way you’re going to solve that problem is through a constitutional amendment. So if there are any programs, whether it’s tax cuts or spending programs and it’s worthwhile doing, then pay for it. And the only way you’re going to force that to happen is through a constitutional amendment. So I’m focused on moving that forward. The other area when you talk about bringing stability to the budgetary process is the fact that during good times, people tend to spend for programs, whether it’s at the Legislature or the municipal level. Then during the down times that’s when they have to cut dramatically. As governor what I want to do is look at what our overall spending is, what we’re getting for revenues and what the spending is. And actually hold the state budget below what the actual revenues are. The reason I want to hold them below it and set that money aside, still collect it but set it aside, is that when there’s a downturn in the economy you’re going to fold that back into the budget so it helps smooth out the problems, so you don’t have to raise taxes or cut programs dramatically to smooth it out. For those of you who have been around for a while, you might say, “Well there’s already a rainy day fund.” Well unlike the rainy day fund, that money that I want to hold off the top is use it for one‐time expenditures, such as road infrastructure. One‐ time items so that when you fold it back into the budget process during that downturn in the economy it will not have any negative effects. That will bring budget stability back to the state government, but also the county government and local government. It will help businesses as well, whether it’s the BETR program or other programs that are out there. It will help that stability process. The other area when you look at running for governor, I’m the only candidate running for governor that actually has a proven track record of being able to work across the aisle. This governor clearly doesn’t have it. The independent says he wants to do it. But I’m the only one that actually does have that proven track record. During my tenure in the Maine Legislature, especially during my last year when we had 17 Democrats, 17 Republicans and one independent. A lot of people thought that was a nightmare, where depending on who would be sick on any given day would determine who was in the majority. But it worked out well. And the reason that it worked out well was the fact that Rick Bennett and I, we actually sat down and came up with a power‐sharing agreement. What made the biggest difference was the fact that in order to speed up the process, I suggested to Rick Bennett that we just have a chairs meeting, because half the chairs were Republicans, half the chairs were Democrats. That should speed up the process and it did. Every day we had Republicans and Democrats meet in my office, go over the legislative calendar in an informal way. It did speed up the process, but the second thing that it did was build up trust and an open line of communication.

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That’s what’s missing today, both in Augusta and in Washington. And that’s something we need to get back. All you have to do is look at the number of vetoes that this governor issued during his tenure – more than any other governor. And the fact that he doesn’t know how to work with this Legislature, whether it’s Democrats or Republicans. So I intend to reach out to Republicans and Independents and Democrats to really work together, focusing on the issues. And those are the same things that I carried with me in Congress, on the Veterans Affairs Committee and the Transportation Committee. And a lot of the stuff I’ve done at the federal level, whether it’s creating the Paper Caucus – that’s a bipartisan caucus to focus on paper industry issues – dealing with state tax as it relates to woodlot owners or what have you. Those are all done in a bipartisan way. And it can be done. You don’t have to give up your beliefs in order to get something done. There’s John Cashwell here, remember when we actually did the Forest Practices Act? That wasn’t an easy task, but it was a task that we were able to move forward by getting people together. It took a lot of work, but we were able to get it done. When you look at the experience at the federal level over the last 12 years, there are a lot of opportunities. Maine is a very poor state but we can tap into some of the federal programs that actually would help Maine’s overall budget. And on Day 1 I intend to introduce legislation to expand access to health care for the 70,000 Mainers. You might say, “Well why are you talking to us about that?” Well, by expanding access to 70,000 Mainers that need that health care it actually will save Maine over $600 million over a 10‐year time frame. Hospitals will receive an additional $348 million over that same time frame. The reason why you save that money is because the enhanced reimbursement rate under the Affordable Care Act. That was one provision I held out until the end, a bunch of us, until we got that enhanced reimbursement rate. So we actually can cover 70,000 Mainers who do not have health care coverage, but Maine will also get that enhanced reimbursement rate. By covering those 70,000 Mainers it actually will help hold down the cost of health care. Having negotiated the contract at the mill, if you were a mill employee and went to the hospital, you were paying more than someone else because of the cost shifting that’s occurring. We have the oldest population in the country per capita, Number 1 in Medicare, Number 2 in Medicaid, second from the bottom on reimbursement rates. So in order to make up the difference, if you go to a hospital you’re paying more than someone else because of that cost shifting that’s occurring. So that’s why this expansion under the Affordable Care Act is crucial if we’re going to help hold down the costs. And when you look at the exchanges, some other states – Maine is not one of them – but some other states are adopting their own exchanges for health care and they’re doing it unique to their own states. Even the Republican governors who are opposed to the Affordable Care Act have come around to not only expand access under the Medicaid program but they’re doing their own exchanges within their states, because they realize that’s the only way to hold down the costs. If you look at those states that actually have established their own exchanges, they’re seeing those health care premium costs go down. And it’s happening in Maine too. I’m not sure about your individual businesses, but it’s different depending on the businesses. I met with the Passamaquoddy Tribe in D.C. on some Native American issues and the interesting thing was – I just asked them out of the clear blue sky how the Affordable Care Act was affecting them because I know they hire employees. And they said that they saved $400,000 a year with better coverage. I was really intrigued with the fact that they saved that much and when the Penobscot Nation came in I asked them the same question because they hire employees as well. And they saved about $275,000 with better coverage. So utilizing what we have at the federal level will definitely help the state’s overall budget and hold down the costs. But there are also a lot of opportunities here in Maine when you look at utilizing the federal level – and I’ll get back to the state level in a minute. The trade agreement that’s being negotiated right now with the European Union, which probably will go through because if you look at the environment and the standard of living in Europe compared to the United States, it’s very similar. So how are we going to benefit from that? Well, if you look at where Europe’s at when compared to the United States and you look at shipping lanes, Maine is perfectly situated. We have three ports here in the State of Maine – Portland, Searsport and Eastport. Eastport is the deepest port on the East Coast that doesn’t have to be dredged. So there’s a lot of opportunity to actually have Maine shipping products into the state and out of the state to get to California. The problem with Eastport is that in Washington County you need that rail and what I’ve proposed is that the state build that rail system for two reasons. 1. You can utilize the Maine Army National Guard as a training project to build it, so you get the free labor, free equipment. One thing that can’t use their money for is materials, but you’ve got other federal dollars you can utilize for that.

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So that’s one advantage of the state owning that. The second advantage is because under interstate commerce, the state can’t control when you look at rail. Having been in shipping, I know some of you folks in the paper industry know this as well, particularly the short line rails, whether it’s Montreal‐Maine Atlantic is the worst or Pan Am, the reliability of rail is not there. When you look at when the state took the line from Millinocket to Madawaska, actually the customer satisfaction improved, because Irving is operating that line right now. So there are a lot of opportunities to tap into at the federal level that would really benefit the State of Maine – health care being one of them. And it’s not only the Medicaid issue, it’s the Medicare issue. If Maine were at the Boston market rate for Medicare, just for hospitals alone that’s an additional $168 million – just for hospitals alone if we got the same rate that they receive in Boston as well as Burlington Vermont and New Hampshire. So those are some of the areas on the health care. For infrastructure needs here in Maine, when you look at what’s happening in the mills and other businesses, natural gas – the problem is right now we’re at the end of the pipeline. We definitely need more gas. I’ve already talked to Gov. Patrick in Massachusetts. I know the governors came up with an agreement for more gas into Maine, but what I believe we really need is a two‐pipeline solution for that gas. One way of getting information back to Gov. Patrick, because they’ll have to approve it in their state as far as what capacity we really need here in the State of Maine with natural gas. That has a big impact on businesses and how we deal with what’s happening here in Maine. I’ve seen it not only at Lincoln but at other mills around Maine if they had more capacity it would actually help them out to hold down the costs of transportation in other areas. Both during my tenure in the Maine Legislature as well as in Congress we had to build out infrastructure needs. And one way to do that, we’ve done it in the state, is through bonding. That’s another flaw with our current governor is the fact that once voters have approved bonds, he’s held those bonds up. And when you look at bonding, the way that situation works is you issue more bonds and you retire bonds. It’s just like a circle. And on average over the last 13 years, Maine has been issuing about $100 million a year in bonding. We have to put a 10‐year plan in place for all our infrastructure. It’s more than just rail and ports, it’s our highway system and our broadband system. So I’m committed and I actually have a 10‐year plan for bonding $100 million a year, so that brings that stability to the process. And once again, if you know what to expect then you can count on it and it’s actually cheaper to do it. Hopefully we’ll be able to get the highway bill through Congress to move forward so we know what the federal share of that might be. Another area is forestry. Actually I got the nickname when I was in the Maine Legislature as Ranger Rick because I think all too often when you look at what’s happening in the Legislature because of health and human services, the natural resource‐based departments usually take the short end of the stick. And I’m sure former Commissioner Lovaglio realizes that. So I’ve always been a strong supporter of our natural resource‐based industry and departments to make sure they have the resources to be able to address the problems that they’re currently facing and the problems that will be coming down the road. When you look at the spruce budworm epidemic that we had a number of years ago, it’s coming back and we definitely have to get ahead of it and part of that is to educate the public. The outrage at all the clearcuts up in the county was primarily because of the spruce budworm. So we have to get ahead of that game this time around and make sure that the state has the resources to move forward in that regard. And speaking about land, we’ll definitely be restoring the landowner relations in the department of Inland Fisheries and Wildlife, which as you know has been cut. We definitely would be restoring a strong connection between landowner relationships and state government. That has been lacking and I would definitely want to bring that right into the commissioner’s office as well so that they’ll have that direct connection. I mentioned briefly the BETR program. When you look at investing in Maine, companies have to make a tough decision. I do know because of what this governor did with the BETR program, that some companies in the State of Maine were not too happy with the change in that particular program. And that’s something we’d definitely have to move forward and address. The last thing as it relates to issues – you’re probably saying, well he hasn’t said anything about taxes. Well, I think we have to have a government that works and before we deal with the revenue side you have to make sure that we have the responsible, efficient, effective government we need. So it’s premature to say, “We’re going to need X amount of dollars for taxes,” until we actually find a way of doing things differently here in state government. And there are different ways of doing things to actually hold down the costs and really make government more efficient and effective. In doing so as governor, I’m definitely going to pick the best and the brightest in the new administration, to really focus on how we can do things differently, how we can improve the economy here in the state of Maine and do it in a way that’s collaborative. During my tenure in the Legislature, whether it was the Forest Practices Act, the Timber Identification Law or the complicated bills that we’ve dealt with, I’ve always been able to sit down with the diversity in the Legislature, not only with legislators but

3 also with interest groups and really focus on the issue and how to move something forward. So it’s great to have all these ideas, but unless you’re able to implement them it’s another problem. That’s why when you look at the three of us who are running for governor, I’m the only one that actually does have that proven track record of being able to work across the aisle to get things done and move things forward in a positive direction. Because Maine does have so much opportunity here to grow and expand. You just need a governor who believes in the state of Maine and who is willing to make those tough decisions and think outside the box about how we can do things differently to improve the economy that we have here in the state. With that I’ll turn it over to you. Peter Triandafillou, Huber Resources: Mike, I appreciate your long‐time support of our industry, but moving to a broader perspective under your administration what initiatives do you plan to undertake to improve Maine’s overall economy and attract new businesses here? Michaud: Actually if you look at small businesses, and small businesses are the backbone of Maine’s economy, if Maine was to grow at just the national average that’s 31,000 jobs here in the state of Maine. And how do you do that? Well, several things. One is I will definitely be looking at the regulatory process and seeing where we can smooth out the problems there. But also create an office of – a Maine Domestic Trade Office. One of the problems I see within small businesses is they don’t have the resources to be able to market their products or find ways of doing things. With a Maine Domestic Trade Office, you’ll be able to do that. A good example for instance and I’ve got this list, I haven’t had a chance to decipher it yet, but the U.S. Department of Transportation, under the Buy America provision, if they can’t buy something made in America they can go overseas to buy it. So I got the list of all the waivers that they’ve given out. If they can make it in China, there’s no reason why they can’t make it in Maine. So that’s an area that a Maine Domestic Trade Office would be able to help connect that. But even within Maine, I met with a business owner in Ellsworth who needed a company that made airplane parts that had the AS91000 certified and he was actually going outside the state. I said, “You don’t have to go outside the state.” So I hooked him up with the University of Maine at Orono, Tim Weldon actually had a list of those companies in Maine that were AS91000 certified and they hooked up. So those are opportunities where we can actually grow businesses here in the state of Maine. Another strength Maine has is we do have the oldest population in the country per capita, but we also have the youngest population per capita in the nation as far as farmers. There’s no reason why Maine cannot be the food basket for New England. There are a lot of opportunities here, not only the farming jobs but also the processing facilities. For instance, I was able to get a quarter million in grant money to help out the Northern Girl, a food processing facility in Van Buren Maine. Farmers bring their produce there and they actually sell it to the Portland School Department. So there’s another area where Maine actually can be the food basket for New England. Outside of that if you look at different types of technology, I’ve already had a conversation with Tony Principi who’s the former secretary of Veterans Affairs but he’s also involved with Pfizer, the drug industry, and you look at what we have here in the state of Maine – Bigelow lab, Jackson Lab, MDI, all the research and development that’s occurring – there’s a lot of opportunities to actually partner up, whether it’s with the drug industry or Google – actually one of the top individuals in Google is from Biddeford Maine originally. And so there is a lot of opportunity to grow the economy in Maine. You just need a governor who’s willing to go out there and do it. And these are some things that I think we can definitely tap into and as far as the paper industry, I think the paper industry is still going to be a big component of Maine’s jobs and the economy. As governor, I’ll sit down with all the CEOs of all the paper companies and actually put forth a plan. Listen to what they have to say about what the problems are, why they’re not investing in the state of Maine and try to get them to invest more here. In the state of Maine. With a governor who understands the industry and is willing to sit down with the industry, hopefully we’ll be able to get some of that capital investment from the companies we already have here in Maine. John Cashwell, BBC Land LLC: Mike, in 2012 the Maine Legislature passed a new Mining Act and they had to adopt regulations. The Maine Board of Environmental Protection went through an eight‐month process to adopt rules and they have to go before the Legislature. So the new governor will have to address the regulations. My question is, do you support that Mining Act and those mining regs? Michaud: I’d have to look at it first and I haven’t had a chance to look at it. So it would be premature for me to say. I feel strongly whether you look at environmental regulations or any other regulations that we make it easy and it’s understandable

4 and we’re actually able to implement it. I’m concerned about the long drawn‐out process whether it’s the permitting process – I like the permit by rule type of process – but on that subject, John, I’d have to look at it before I say yes or no specifically. But I do believe that we have to have balance. When I ran for the Maine Legislature when I was 24 years old, it was because of the environment, but I also realized you have to have a balance between jobs and the economy and environmental. We can have that balance. We can meet that balance. It might take a little work to do it, but I have no doubt that we can have a fair balance there. I’m willing to sit down and talk with you about that as well. Ron Lovaglio, forestry consultant: Mike, first I’d like to say thank you for your leadership over many years on truck weights. That really has been a big help. Secondly, it’s always easy to contract yourself with the other party’s governor. But my question would be, how would your administration differ from Gov. Baldacci’s administration. Michaud: They would differ tremendously. Because I’m the type of individual who does think out side the box. And with my experience, not only in the Maine Legislature on Appropriations, I’ve been president of the Senate and now a member of Congress. I want a Maine I can be proud of and as governor, I don’t plan to be running for any more offices. Quite frankly, this is going to be it. So I want to position Maine not only for the next five, 10, 15 years, but 20 and 30 years down the road. To think long‐term, have that vision long‐term, of how to reform Maine. And in order to do that, I want to bring people into my administration that can think outside the box, that’s creative, finding creative ways of doing things. I don’t want to go back to the old way. And you’re absolutely right. This governor is easy to hit on just because of some of the stuff he’s said. But it’s one thing to hit on him, it’s another thing to actually get beyond that and move forward with a proactive agenda. If you look at my Maine Made plan, it does think long‐term and it’s realistic, too, when you look at the fact that we can move Maine forward, increase small businesses, make Maine the food basket for New England, actually get into different areas with biotech and all that. But think long term. And I want the best and the brightest in this administration, either from within the state or outside the state, to really move Maine forward in a positive direction. That requires me to sit down and actually talk to a lot of individuals, matter of fact I’m trying to set up a meeting with Christine Lagarde, she’s the head of the International Monetary Fund. Why her? She knows what’s happening around the world by her very position there, but she actually has a connection to Maine. She worked for Congressman Bill Cohen, when he was a congressman because he hired her to interpret a lot of the letters he was getting from the St. John Valley – they were all in French. So I’ll be reaching out to a lot of different individuals to bring the best and the brightest into state government and to really set us up long term. Because there really is a lot of opportunities that we have here in Maine. Unfortunately it’s always been that narrow vision that we’ve always been thinking about. It doesn’t have to be that way if we look longer term. And you can save a lot more money by investing longer term. And it will require, as I mentioned, it’s not only state and federal dollars, but outside money. I’ve been working actually with Saudi Arabia to try to get them interested in what we’re doing here in Maine at the university. They’ve actually sent a couple of their princes over to see what we’re doing in Maine. And the two areas that they’re really interested in are the offshore wind, because of the windmills being made of wood composites, and the bridge in a backpack. Now here’s where Maine has the technology and the Saudis have the money and hopefully we can connect that and have that that strong partnership utilizing their money to help us out as a state. The good news is actually that the new ambassador to Saudi Arabia is actually a former chancellor – Joe Westfall. So there is a lot of opportunity in Maine to actually utilize outside resources, so hopefully we’ll be able to move forward. In the truck weight, when you’re looking for truck weight, I know the rail is industry is very glad I’m running for governor to get me out of Congress, but they shouldn’t be too happy because as governor, as you know, we have a 20‐year pilot program on truck weights and as governor, sitting down with the other governors around the country, I want to get them involved on the whole national truck weight issue. This issue is not just a Maine issue – yes, we got a reprieve for 20 years, but I think we ought to have a national system when you look at that higher truck weight. It’s the right thing to do to increase that weight limit on the interstates that can sustain it. So as governor I intend to not only focus on Maine issues but also to focus on issues that will help Maine’s economy grow by getting the other governors involved in some of the national policies that’s going on, whether it’s truck weight, whether it’s energy, natural gas, pipeline extension of what have you. 5

Steve Hall, Re‐Energy: Congressman Michaud, with regard to energy, for example, the EPA just released their carbon reduction policy. Have you had an opportunity to look at that and what the impact would be on Maine. And secondly, with regard to renewable energy in Maine and all our natural resources, do you have a vision on how we might be able to take advantage of that opportunity that policy presents. Michaud: Yes, I think that there is definitely a lot of opportunity when you look at that recent policy. When you look at Maine, when you look at green energy, this is an area – it’s actually part of my Maine made plan – where I think we actually can – it’s my goal to reduce the dependency on home heating oil by 50 percent by the year 2030. And the way to do that is through green energy, whether it’s offshore wind, whether it’s solar power, whether it’s tidal power. So there are a lot of opportunities in Maine to get into the green energy area. Biomass, geothermal, which we haven’t even begun to tap into. When you look at also weatherization and conservation programs. I was talking with someone actually a couple of years ago, when you look at insulation, rather than fiberglass insulation, they actually were using wood and the pulping machine that actually makes the energy, the R factor actually was higher than the fiberglass. When you look at all the mills that are idle, there’s a lot of opportunity there as well. So definitely green energy and as I mentioned earlier when you look at Saudi Arabia, the offshore wind project that they’re very interested in. We also have the Japanese interested in the tidal power in Washington County. Because of the earmark, I was able to get, Maine is the first state in the country to be hooked up to the grid with tidal power. The only I required that they do is make it here in Maine and hire the folks in Maine. The Japanese are very interested in that. They’ve actually come over here several times to look at that type of technology. So I think that decision will definitely be helpful. I’m not sure Congress will be able to pass a so‐called cap and trade bill, which I supported a number of years ago when it came up in the House. Actually Maine landowners would have benefitted tremendously – Don’t hold me to this number but I think it was almost $300 million a year. Because what we did with the cap and trade bill that passed the house a number of years ago, but failed in the Senate, we actually dovetailed that with the REGI program that was passed here at the state level. We actually compounded the benefit that has here for the state with that federal program. Had it passed, but it failed over on the Senate side. And while I think of it, before I forget, getting back to what I said about working to get things done, you can accomplish a lot more, one of the things that individuals are surprised at, where I am coming back to run for governor, Nora Todd who was my legislative director had left, but actually I reached out to Jane Calderwood, who is actually from Maine. She’s the former chief of staff of Olympia Snowe. So she’s working for me now. So needless to say, that raises a lot of eyebrows when people come in and see Jane working for me, when she used to work for Sen. Snowe. But it gets back to Ron’s questions of hiring the best and the brightest to work for the administration, to move forward. Steve Schley, Pingree Associates: You talked about how business needs stability and I appreciate your leadership on the Benishek–Michaud letter that is intended to maintain stability on the forest taxation rules at the U.S. Congress level. And you also mentioned the governor’s vetoes, and as an industry we see one of his vetoes in particular as having been particularly beneficial and important to the state and we’d be curious how you’d react. There was a bill to completely roll back the workers comp provisions that have kept the state on a relatively even keep since the mid 1990s. The bill was going to take us back, essentially to the early to mid 1990s. You were there at the time, I remember. How would you have reacted and what would be your position as governor now, show that kind of workers comp reform rollback come up again? Michaud: Well, I’ll address the veto. One of the problems that while you might agree with that view that the governor had, it shows his inability to work with the Legislature. And I get asked that question a lot – well would you veto this bill or veto that bill? Well, in a lot of cases I probably wouldn’t have to veto it because I would work with the Legislature to be able to solve a problem without doing the vetoes. And having worked under a Republican governor, an Independent governor and Democratic governor, we always had our differences but we were able to work together. And we worked with the administration to be able to solve the problems so you won’t have to do the vetoes. It’s unfortunate that they all occur. So that’s on the veto. On the workers comp, I’m interested in moving forward. I know a lot of people think we’re going to go back to the old days. I’m not interested in going back to the old days. Whether or not the workers comp system is working today or whether there are ways we could improve on it, I’m interested in improving on the workers comp system, if there are ways that it could be improved. So as far as rolling back to where it was before, the answer is no. I’m not interested in that. I’m interested in moving forward. And I’d be willing to sit down with anyone to talk about is this system working; if not, what are some of the problems with the system and how can we improve on that system.

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Roberta Scruggs, MFPC: Do you have a view on the merged Agriculture, Conservation and Forestry Department? Where would you go with it? Michaud: That one there, I’ll be interested to hear what you have to say as far as how it hasn’t been working. I probably would have done it differently because I think any time you merge more and more departments together, you lose focus. And when you look at our natural resource based industries, we definitely have to have that focus. So I’m not going in there on Day one and say, “All right we’re going to split in back up.” I’d be interested in seeing how it’s been working and in other ways that we can do it a little bit differently. But that’s where I’d actually be interested in focusing on where – from you folks – where it needs improvement on. Roberta Scruggs: How do you think the state could help forestry? What would be your vision of what could happen? I think stability, Number one. When you look at whether it’s the tree growth tax, or property tax and you look at the stability, and that’s why I focused upfront, all the stuff I talked about on the budget, how to bring stability to the budgetary process. And when you look at promoting forestry and what we have, I did pick up the book here (Maine’s Forest Economy) but I haven’t had a chance to read it yet, so if you have any suggestions in here. But to make sure that – I think some of the big problems that we’re going to be facing in the forestry area will be the spruce budworm again and how do we get ahead of the game as it relates to that. When you look at workforce training and development, how can we make sure we have a workforce that’s available out there to work in the forests. How can we help when you look at biomass – I’m very supportive of biomass – and just focus on the bigger economic aspect. There are a lot of folks who I don’t think really realize the impact that the forest industry and the paper industry has in the state of Maine. A comment I hear a lot is that it’s dying, it’s a dying industry and it’s not. It’s changed. And how do we change, when you look at sustainable forestry and move forward in a positive direction. So if there are any specific areas that we should be focusing on in the state, I’d be interested in hearing the specifics. Roberta Scruggs: Patrick has a lot of stuff and you might want to take a look at it, but one of his things has been the manufacturing component and the movement to bring it back to this country, which might be helpful to us. Michaud: Absolutely and that’s why I created the House trade working group, where we focused on the trade deals, what had happened when you look at China, for instance, manipulating their currency on coated paper. We were actually able to get that turned around. So manufacturing is key. And that’s an area that I’ve been butting heads with the current administration. Is to make sure that we have a level playing field. You look at what happened in Canada with the Port Hoxbury subsidy, that that mill received up in Canada. I don’t want to mention the mills here in Maine because I don’t want to scare off their customer base, but that has had an impact on mills here in Maine. It’s very hard to compete when companies here in this country have to compete against manufacturers outside of the United States that are getting a subsidy from their government. When you look at the subsidy in that regard, it’s about $300 million plus and that’s unfair. So I’m constantly focusing on making sure that whatever trade deals are out there, that they’re enforced, but also making sure the new ones that are coming down the pike, that it treats manufacturing here in this country – equal, level, playing field. The biggest one that’s coming up is the Trans‐Pacific Trade Partnership. That affects about 20 percent of the economy worldwide. That has to be done right and the big concern that I have with that trade deal is currency manipulation. Because when you look at the environmental regulations and you look at labor laws in some of these countries, whether it’s China or Vietnam, they’re way down here compared to the United States. But the fact that the government can actually manipulate their currency that gives them a 20 percent advantage right off the top, that’s wrong. I was able to get 230 members of the House of Representatives – bipartisan group – to sign a letter to the president encouraging him to focus on currency manipulation, specifically as it relates to that trade deal. And the Senate actually got 60 senators to do the same thing, over on the Senate side. What’s really disappointing is the fact that the United States trade representative said they haven’t even brought it up yet. So those are some areas. We can deal with the energy issues, environmental issues, regulations, whatever, but if you look at that currency manipulation that definitely makes it very hard for companies within United States to compete. Jim Robbins, Robbins Lumber: If we’re going to have manufacturing, we’re also going to have to have low‐energy costs, so I’d like to know what your stance is on the Keystone pipeline and what we could do to get cheaper energy in the state of Maine. Michaud: As long as it meets the environmental regulations and I know the administration is working on that Keystone pipeline. As far as Maine specific, it’s that natural gas pipeline that I’ve already talked to Gov. Patrick about and how we can get that pipeline extended to Maine.

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It’s going to take a while, but by the time they build it, any of these things, it’s not going to be immediate. It’s going to be a while before you can build that infrastructure, so when you look at green energy, that’s great, but it’s going to take a while for the offshore wind and the tidal power to really move forward. I think the interim solution for us here in Maine is the natural gas pipeline and hopefully we’ll be able to get that done sooner than later. But it does require us working with the other states. Because we are at the end of the pipeline as it relates to that. Jim Robbins: What do you think about power from Quebec hydro? Michaud: Actually I think the biggest mistake that the Public Utility Commission ever made was to deny that access a number of years ago when Hydro Quebec was actually willing to come down here to the State of Maine. At that point in time I made it clear that that was a biggest mistake to deny Hydro Quebec from coming down here. But I think what we have to look at when we look at energy, yes hydro Quebec, if we can get it from Canada, a friendly company. But I’d just soon be as energy independent as possible here. But in order to get there we have to have something in the interim, whether it’s natural gas or hydro Quebec or other opportunities. Steve Schley: You mentioned Katahdin being your home base, as you look at the economic situation there now, what direction would you head in as governor? What would your leadership be for that region to improve the situation there? Michaud: I think you have to – energy is one, because that’s an issue. We’re actually trying to get the natural gas pipeline up there, but I wasn’t able to hold on. But also to think outside the box. And when you look at the needs at the federal government level, all the data mills that are going to be needed, particularly with the Department of Defense and the Department of Veterans Affairs. That they’re actually in the process of looking at increasing the capacity for that computer system. And when you look at where a lot of those data mills are located, they’re along the riverbanks. And when you look at where the mills are in Maine, they’re on the rivers. So I think there’s an opportunity there to actually try to get some of the data mills here in Maine, whether it’s in the Katahdin region or not. Number one. Another area that I mentioned is weatherization. There’s a lot of opportunities here, particularly using pulp for the insulation. What they need is a pulp mill and a lot of them are shut down here in Maine. So that’s another opportunity as it relates to that. Infrastructure – we need broadband. A lot of the new types of businesses, they need that infrastructure that’s available and we don’t have it throughout the state of Maine. That probably will require some regulation changes, as far as the last mile is concerned, but we have to build that infrastructure out. It’s going to require new investments. We’ve done the three‐ring binder, it’s actually been pretty good for Maine, but still it hasn’t done a lot. And one of the areas, when you get back to energy, I met with the energy czar at the White House , because every year the delegation is always fighting, not just this administration but the previous administration, that kept cutting LIHEAP funding. And if you look at the budget document under this administration anyway, they said the reason they’re cutting the funding is because 62 percent of the homes are heated with natural gas, low electric rates, therefore we don’t need all that LIHEAP funding . Well those are national statistics. They’re not Maine specific. And one of the things I suggested to them is if you truly want to cut it, then you’ve got to help states like Maine –we have the oldest housing stock in the country, 75 percent of the homes heated with oil – help them get off that. And we’re actually looking forward to having them put an infusion of money in Maine, through probably the Efficiency Maine program. For several reasons, they’re already in existence and they’ve actually been doing some of this stuff and Efficiency Maine has been very helpful working with the industry as well, manufacturing industries, to help them do things more efficiently within their industry as far as energy. So hopefully we’ll be able to convince them to put more money into Efficiency Maine to help out, whether it’s manufacturing or individuals, to get off that heating oil. Joel Swanton, Forest Resources Association: Mike one of our challenges is having access to a qualified labor work force, both in the woods and in the mills. Our population is shrinking and we’re all getting older. What would your administration be able to do to work with the forest products industry to ensure we have access to good qualified workers, particularly in some of the more remote areas of the state? Michaud: Well, first of all I’d restore the governor’s training initiative funding, which was eliminated. And the reason why I’d want to restore that, because if you look at other federal training dollars, usually you have to go through a specific program. The governor’s training initiative is flexible so you’re able actually to utilize those funds for what you need to utilize them for.

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What I’d focus on, if you look at the paper industry, for instance, I know at our mill and it’s probably consistent with other mills, the average age is 54 years old. And that’s an area where we actually will be needing a new work force out there. So to start early and to get into schools as well. One of the problems I see is people think that manufacturing is dying, is going out, and this starts back in the schools because when students go to the guidance counselor they want to send them off to the university, but manufacturing is – there’s nothing wrong with manufacturing. I think we actually have to promote manufacturing as a state and say, “Yes there are good jobs and actually talk about the good jobs that are out there.” But the governor’s training initiative is one area I’d definitely want to restore and working with the industry to find out where those needs are. But also in higher ed. I think we could have a better coordination among higher ed whether it’s the community college or the university to actually get them focused on what’s the job skillset needs that are out there. To have them focus on that and also to get them to think –I know the community college is doing some of this now – is to think outside the box and have their programs extend during summertime as well as different hours so people can actually be retooled and retrained for different jobs that are out there. But to get that workforce, actually this dovetails, because as I deal with issues quite often I hear about waste, fraud and abuse in the system, is to have a better coordination between the department of Labor, Health and Human Services, as far as those who are getting unemployment benefits or getting state assistance. And pairing those individuals up to the jobs that are available out there. And get them trained so they can take those jobs that are out there and that’s available. Jim Robbins: It seems to me that part of the problem, Mike, is that a lot of these young people today don’t want a job. It really pains me to drive around the state and see that they’ve increased the welfare so much in this state that who we compete with for labor a lot of the time now is the welfare department. And what’s really happening is we’ve become an Appalachia and I’m seeing this become a welfare state and there are so many people. We need to get them back to having a work ethic. And we’ve also got labor laws that discourages ‐ ‐ you can’t hire young people any more and by the time they get to 16 or 18 years old, they’ve forgotten how to learn how to work. I’m sure you started working at a very young age and developed a work ethic, but young people don’t seem to do that today. And I think the welfare system is encouraging that and I wonder how you’d turn that around? Michaud: I know the governor has talked a lot about that lately, but the governor had a Republican House, Republican Senate and he was governor and he didn’t do anything about it. So putting that aside, matter of fact I just did a press conference at the state house earlier today because there is a lot of rhetoric that’s going on about welfare. Actually one of the things that I’m proposing is that an Office of Inspector General to focus just on the department of Health and Human Services. You say, well why create another office? Well what you can is utilize the folks that are already within the Department of health and human services, the department of audit and the department of attorney general to help with the office of inspector general, that’s separate from the governor’s office, separate from the department of health and human services. And that’s what their focus is – waste, fraud and abuse, not only within those individuals who are getting those benefits but also the waste, fraud and abuse that’s occurring in mismanagement from the department itself, which are millions of dollars that are being wasted because of mismanagement. The office of inspector general, because we have that at the federal level, and that’s what their focus is. You want experts there that know the programs, be able to keep the governor informed, let the department know when they’re not doing right and the Legislature. So that office will be separate, so it keeps the politics out of it, number one. As far as the programs and how do we get people off, there are two ways of getting them off. One is to kick them off, like this governor is doing. Or to help them to get off and they way that you help them to get off is actually, if you have a married couple and they have three kids or whatever, and they’re getting food stamps, TANF funding, fuel assistance and there’s a job that’s available, but that job doesn’t pay enough. So if they take that job, then they’ll lose their benefits for their kids. What are the going to do? They’re not going to take that job. The system encourages them to stay on the system and we have to overhaul that system. So the way to do that is you actually have a tiered system that they take that job. They’ll probably lose some of their benefits, but they won’t lose all their benefits. But encourage them to take that job. And that’s what I mentioned earlier about having a better coordination effort among the department of labor, human services and those who are getting unemployment benefits or state assistance. So if you’re let’s say in East Millinocket and you’re getting state or local assistance, but there’s a job available here, then you take that job. The training, that’s why the governor’s training initiative is so crucial, you train them so they can do that job. 9

Likewise on unemployment. You know the system. You file that you’ve checked three employers and you say they’re not hiring. Well you know and I know what happens – they put the same three employers down every week. So here’s the situation where you say, all right there are X jobs in this community, you’re getting unemployment, you train to be able to take that job and match them up. There has to be a more proactive way of doing it. And that’s something as governor that I definitely will be doing. But the first step is to establish an office of inspector general to deal with health and human services. Health and Human Services spends over $3.4 billion a year between state and federal dollars. It’s the most complex agency in state government because you deal with dual eligible Medicare, Medicaid and the complexity is such that legislators can’t even get their hands around it and not expect them to because it’s a part‐time Legislature. So by having the office of inspector general, that’s their focus just on health and human services, I think will go a long way to help streamline the efficiencies within the department, but also we have to look at changing the system the way it is today to encourage people to get off. And you can do it by looking at the tiered system approach and having better coordination between those who are getting benefits and where those jobs are. And that’s something that I definitely will be focusing on. Terry Walters, Pleasant River Lumber: One very contentious bill last session was arming rangers. This organization opposed that. What are your thoughts on that? Michaud: I know there was a study done on that and I can’t remember the legislator’s name in Skowhegan – Jeff McCabe actually said that there was a study done. I haven’t had a chance to look at that study. I’ve asked for the study to look at where we might go in that regard. I know it’s a controversial issue, but that’s something I’ll definitely be looking at. I don’t have a position as of today. Jim Robbins: What about the drug problem? Michaud: When you look at jobs, if you look at what’s happening and the reason you do have a drug problem is a lot of people are unemployed. And that actually increases when you look at break‐ins and what’s happening out there. So whether it’s a welfare program or dealing with drug problems, I think a job is the way out. There definitely do have to be better ways of connecting people who are getting these services and a job and the drug issue is another area there as well. Peter Triandafillou: This organization has had strong opposition to a national park. I was wondering what is your position on that? Michaud: Well as you know, I’ve been opposed to that all along. And one of the things that I’ve always said is the first step is actually to look at – do an economic analysis of it. When you look at the federal government, they decided whether the land meets the criteria to be a national park. They don’t look at the economic analysis of it. I think you have to have an independent analysis of whether that will benefit the region to move forward. And I know that’s always been a huge issue and there’s a lot of people who are adamantly opposed to it and in support of it. Well nothing is going to happen in this Congress. And the reason I say that is if you look at – Congresswoman Pingree and I have a bill in about 13 islands off the coast of Maine being managed as a wildlife refuge. The chamber of commerce, businesses, everyone supports it and we can’t even get that bill – we’ve even had a hearing on it – and we can’t get it through Congress. So if you can’t get a bill through Congress that everyone supports, you’re definitely not going to get one through that there’s a lot of local opposition to. But having said that, I do know that Lucas St. Clair ahs been doing a lot of work to try to get the regions to get behind it and he’s actually had been able to get some support from local folks. I know he’s continued to try to do that because that’s going to have to be the first step – to get local buy‐in. When you look at the national park, a lot has been said about it, but a lot of the concerns are not valid. For instance, I know boundary lines, people say here’s the boundary line on the park and the concern is there would have to be a buffer zone on someone else’s land. No. If you say in the legislation that this is the boundary line, it is the boundary line. You don’t have to worry about a buffer zone. So it depends on how the legislation is crafted. But nothing is going to happen at the federal level in that regard. Even if the Maine delegation were 100 percent behind nothing will happen because what they’ll look at is whether or not the community that’s directly involved or affected support it. And clearly that’s not the case. So the economic analysis has to be done first, I think. Roberta Scruggs: Where are you in the election? Michaud: This race is a two‐way race, between Gov. LePage and myself. I feel really good about where we’re at in this election. If you look at this election compared to last time, I know Eliot thinks that he came close last time around and he can do it this

10 time around, there’s no pathway to victory for Eliot to win this race. Here’s why. If you look at what happened the last time around, that November there were five candidates – all five were pretty much unknown. Going into the November election there was a huge uncertainty because a lot of the candidates were unknown. And what happened was three weeks before the election when a poll came out that showed Libby Mitchell was tanking, there was a huge shift among Democrat and independent voters to vote for Eliot. Not because they really believe in him, but because they didn’t want the Republican candidate to win. So he did come close. This time around that’s not going to happen. If you look at the three of us, we’re all pretty much known entities. Eliot has the least name recognition, but he still has 85 percent. So he’s a known entity. So the uncertainty is very very small. Number one. The second big difference is the Democatic candidate last time around never had a base. I’ve got a very strong base in the second congressional district, which is harder for a democrat to win. Now I won last time around by 15‐16 percent. So I start off with a very strong base. Another big difference is at the end of that Democratic primary when there were five candidates in that race, they were not able to – there were still a lot of hard feelings and they were not able to bring together before November. I’m unopposed, so I don’t’ have to worry about being able to bring people together. The other big difference is yes we’re getting endorsed by a lot of the traditional endorsements that democrats get, but also we’re getting endorsements that democrats don’t traditionally get. We’ve already go the firefighters. The police, the Maine state troopers’ endorsement. So we’re getting a lot of the endorsements that we normally don’t get. So I feel really good where we’re at. Then you look at the bigger picture, what about outside money? Well last time the Democrat governors association never really played in Maine. This time around we’re one of the top races in the country. There are 36 governor’s races in the county and the bulk of them are Republican governors. So while their resources are focused on keeping those incumbents in the race. Look at Maine, Pennsylvania Maine are at the bottom of the list because the governors in both states. So yes, they probably will get some money, how much? Who knows. So I feel really good about where we’re at, we’re leading in all the polls. We’re not going to take anything for granted we’re just going to keep working extremely hard. The other question I get asked is whether Eliot is going to drop out. Well that’s totally up to him. But I can tell you this that about one third of his support is very soft and the reason I know it’s very soft is because some of the people I called up to support my candidacy committed to Eliot before I jumped into the race. And they told me that come summertime they’re going to look and if it looks like he’s not going to win, then they’ll let him know that they are jumping ship. So the polls are one way to determine how someone is doing, the second is are they able to raise money. Since I jumped in the race last, late, we have been able to out raise them both since December, over a million dollars. But what’s more important was where our contributions came form . 87 percent came from individuals, of which 82 percent were individuals in the State of Maine. And all of that 63 percent of the 82 percent came from the first congressional district. So we do have that broad support throughout the whole state of famine. So I feel really good with where we’re at. We’re just going to keep running a very positive campaign, a campaign that’s focused on talking about the issues, about brining in a new administration. Yes it’s easy to complain about our current governor, but it doesn’t do any good to complain unless you have a new direction. And as governor, as I mentioned, I’m going to bring the best and the brightest into my administration to look long‐term, about how we starting planning for the people of the state of Maine. And do it in a way that’s fiscally responsible. Being a blue dog democrat, we have to have a budget that’s fiscally responsible. We’ve got to bring stability and the way to do that at the beginning is to actually have a budget that’s stable so you don’t have these huge ups and downs. Because by doing that it not only causes problems throughout government but business too. So I feel really good with where we’re at and I hope we’ll have your support going forward.

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