Warning to campaigns: State list of banned contributors isn’t definitive

    The list of state contractors banned from contributing to political campaigns is the best effort of state agencies, but it isn’t definitive, a reality highlighted by the absence from the list of several companies with publicly-acknowledged state relationships.

    For example, six of the 11 First Five companies getting economic development assistance from the state are not on the Sept. 30 list of state contractors prohibited from contributing to a statewide campaign.

    The Department of Economic and Community Development, which administers First Five, did not respond to a request for comment.

    Over the summer, the Department of Transportation announced Stamford Manhattan Development Ventures as its preferred developer for a transit-oriented development project in Stamford, a relationship expected to include $35 million in state aid for parking garages.

    Yet Stamford Manhattan does not appear on the latest list of banned state contractors.

    A DOT spokesman said the agency is “researching the issue.”

    The list, administered by the State Elections Enforcement Commission, includes current and prospective state contractors, both legally-defined categories.

    “Whether or not you’re on the list is not the defining factor,” said Joshua Foley, an attorney and spokesman for SEEC.

    A contractor is defined as a company with a single contract worth at least $50,000 or a series of contracts worth $100,000 in a single year. The statute includes agreements for “a grant, loan or loan guarantee” in the definition of state contacts.

    Companies cannot make political donations in Connecticut, so the contractor ban prohibits principals of contractors – another term specified in the law – from contributing. The principals banned from donating include owners, certain executives, managers who negotiate with the state and directors (except when the contractor is a nonprofit).

    It is also illegal for certain family members of principals to contribute to campaigns.

    Foley said a campaign’s treasurer is liable if he or she accepts an illegal contribution, but there is protection when a contractor lies.

    State contractors have 30 days to fix an illegal contribution.

    Foley said a contractor who makes illegal contributions could have contracts voided and face a ban on future agreements with the state, plus civil penalties.

    SEEC uses the state’s Core-CT accounting database to identify active state contractors, according to Foley. He said SEEC then asks agencies to confirm the computer-generated list is correct.

    “That doesn’t mean people not on the list are not state contractors,” Foley said. “We do the best we can with our lists.”

    The list’s shortcomings appear to be linked to a more complex part of the law governing prospective state contractors.

    There are two ways for a company to become a prospective state contractor. If a company obtains a prequalification certificate to do work for the state, it is a prospective state contractor and therefore its principals cannot legally donate to campaigns.

    Companies also become prospective state contractors when they submit “a response to a state contract solicitation” such as a request for proposals or a loan or grant application.

    For example, if Acme Contracting submits a response to an RFP, Acme’s principals cannot donate to a campaign between its submission and when the state enters into the contract.

    SEEC relies on agencies to report prospective contractors of both types, according to Foley. He said prospective contractors – since by definition they don’t have a contract – won’t appear in Core-CT.

    The Department of Administrative Services, which plays a large role in state purchasing, electronically generates one list of prospective contractors because companies responding to its RFPs are typically prequalified, according to a spokesman.

    Connecticut’s contractor ban makes a distinction between which branch of government a company contracts with. If a company contracts with the executive branch, its principals cannot contribute to the statewide campaigns of constitutional officers.

    If a company contracts with the much smaller legislative branch, its principals cannot contribute to General Assembly candidates.

    However, an executive-branch contractor can give to legislative campaigns and vice versa.

    If a candidate participates in the Citizens’ Election Program, which uses government money to subsidize campaigns, neither category of state contractor can give to the campaign.

    Eleven companies are currently listed on the First Five website. Cigna, CareCentrix, Deloittte, Navigators and Pitney Bowes are on the prohibited list.

    Alexion, Bridgewater, Charter Communications, ESPN, NBC Sports and Sustainable Building Systems do not appear on the list of executive branch contractors.

    SEEC’s Foley said this could happen if the state is providing the companies with tax credits.

    Some companies that have agreements with the state also don’t appear on the list, although it is unclear if their agreements meet the definition of state contract. For example, Harbor Point Holding Company controls TL76 LLC, the recipient of $16 million in state grants and eligible for up to $9 million more, but it isn’t on the list of state contractors.

    The Strand/BRC Group LLC owns the property TL76 will develop using the state grant, but it isn’t on the list either.

    Foley said questions about corporate relationships like these are complex. “I can’t opine on that over the phone,” he said.

    According to Foley, a parent company can be a state contractor and have a subsidiary that isn’t, while a subsidiary can be a state contractor while its parent company isn’t.

    The Connecticut Democratic Party recently returned a $10,000 donation that may have fallen in this category.