Out-of-state developer, donor gets another $1.3 million; total support $43 million

A Norwalk affordable-housing project received another $1.3 million in state support, bringing total government support to more than $43 million for a project with an out-of-state developer.

Boston-based Trinity Financial is leading the $110 million Washington Village redevelopment.

Patrick Lee, a co-founder and executive vice president of the company, gave $7,500 to the Connecticut Democratic Party’s federal account since 2013. State law would prohibit Lee, as a beneficiary of state funding, from making donations to candidates for state office or to the state party’s account to benefit those candidates. However, recipients of state funding and state contractors can give to the same party’s federal account.

The latest batch of funding is $1.3 million for brownfield remediation. Previously, the project received:

  • $30 million from the U.S. Department of Housing and Urban Development’s Choice Neighborhoods Initiative, which hopes to convert affordable housing into mixed-income housing.
  • $9.8 million from the state Department of Housing, passing through federal money intended for the Superstorm Sandy recovery.
  • $1.89 million as a low-income housing tax credit.

In November 2013, the party received thousands in donations from others with affordable-housing business, also through its federal account.

Teachers’ union official with state appointment describes herself online as a proud “union thug”

AFT Union Thug highlightA Connecticut teachers’ union official who holds an appointed position in state government calls herself a “union thug and proud of it” on her Twitter page.

Jean Morningstar is second vice president of the American Federation of Teachers Connecticut. Gov. Dannel Malloy appointed her to serve on the State Contracting Standards Board last year.

A recent tweet included a picture of Morningstar posing with Malloy.

After a fight over education reform including proposed changes to teacher tenure, Malloy and AFT have grown close again.

Malloy and AFT national President Randi Weingarten are expected Friday to tour schools together in Meriden and New Haven.

Last month, Malloy appointed Erin Benham, one of 22 AFT Connecticut vice presidents, to the State Board of Education.

In 2012, Malloy appointed Sharon Palmer, then president of AFT Connecticut, to serve as labor commissioner.

Audit: Bridgeport Housing Authority rents too affordable, undercharged tenants millions since 2004

Federal auditors found the Bridgeport Housing Authority improperly set rental rates for more than 150 tenants, causing the authority to forego millions in revenue that it could have reinvested in its properties.

The U.S. Department of Housing and Urban Development Inspector General, following up on a previous report that faulted the authority for offering employees “Cadillac” health insurance, said the authority, also known as Park City Communities, has not updated its flat rent since 2004.

Since the cost of housing has risen since 2004, the authority should have updated its flat rents, according to the report released last month.

Auditors said they couldn’t precisely estimate how much revenue the authority lost, but said it was at least “millions.”

In the most recent year, the authority missed out on about $600,000 because it undercharged 161 tenants an average of $300 per month.

According to the audit, new staff at the authority are implementing its recommendations, including updated flat rents.

The report also raised two issues related to unreported conflicts of interest.

Authority officials failed to disclose an apparent conflict of interest when they contracted with a director’s family member to perform work for the authority’s federal programs. After discussing the issue, the executive director took corrective action and terminated the contract.

The authority also had a longstanding contract with an individual who later became an elected official and thus had a HUD-defined conflict of interest. However, officials did not inform HUD or obtain the required approval. After discussing the issue, authority officials agreed to request the waiver, and HUD officials indicated that they were inclined to approve a waiver for this individual to run an after-school program.

Malloy hosted 200 last year for St. Patrick’s Day bash

A peek inside the Governor’s Residence shows how Dannel Malloy has dealt with the joys and sorrows of being Connecticut’s chief executive.

Some parties were catered, others canceled.

On the joyous side, Malloy hosted a St. Patrick’s Day party for 200 people in 2013, according to documents obtained from the state agency that manages the Governor’s Residence.

After the Newtown school shootings Malloy canceled five holiday receptions.

Among the canceled events was a Dec. 20, 2012, press reception for 100 expected to cost $3,450, according to the documents from the Department of Administrative Services, emails spanning December 2012 to April 2013.

The administration rescheduled some of the canceled events for early 2013, but the documents don’t provide a clear picture of how the rescheduled events match up with the canceled ones.

According to the documents, taxpayers paid for six catered events totaling about $15,000 at the residence during the five-month period with most of that going toward the $6,900 St. Patrick’s Day party.

The March 16 St. Patrick’s Day party cost $30 per person, plus a 15 percent service charge.

On Jan. 10, 2013, Malloy had a “formal sit-down dinner” for eight catered by Russell’s Creative Global Cuisine. The menu included a romaine, fennel and blood orange salad with pomegranate vinaigrette; braised beef short ribs with green peppercorn demi-glace; and warm apple crisp. The dinner, including four extra orders of short ribs, cost $654.47.

Malloy hosted local elected officials for a breakfast on Feb. 6. Mary’s Catering charged $265.50 for 25 people. Another event for local officials on Feb. 26, also handled by Mary’s Catering, cost $1,239 for 75 people.

A Feb. 7 luncheon for commissioners catered by Russell’s Creative Global Cuisine cost $3,584.72.

Culinary Accents catered a cocktail party for “inner-city clergy” on Feb. 15 for $2,625.

Two outgoing members of Malloy’s staff, Roy Occhiogrosso and Andrew McDonald, paid for catered events at the residence. Occhiogrosso, who left the Governor’s Office at the end of 2012 to return to the communications firm Global Strategy Group, paid for a Jan. 11 event at the residence. McDondald, Malloy’s general counsel until he became a justice on the Connecticut Supreme Court in January 2013, paid for an event on Feb. 20.

Did Occhiogrosso and McDonald pay for their own farewell parties? The Governor’s Office declined to provide any context about the events, but it appears they may have.

The residence also frequently hosts charitable events. At one April event, according to the emails, a catering worker helped himself to some of Malloy’s personal ice cream and wine.

McKinney’s law licensed suspended for past decade, owes client security fund more than $1,300

Sen. John McKinney, the Republican minority leader from Fairfield and a candidate for governor, owes $1,330 to the mandatory fund lawyers pay into to protect clients and his license has been under suspension since 2003.

“I have not engaged in the practice of law nor held myself out to be a practicing attorney since I left the private practice of law at Cummings & Lockwood over ten years ago,” McKinney said in a statement. “This is consistent with my annual ethics statements filed since that time. As such, this issue is moot. I am currently in the process of formally submitting retirement papers with the Statewide Grievance Committee to clear this administrative error.”

McKinney faces former Ambassador Tom Foley in the Aug. 12 Republican primary for a chance to take on Democratic Gov. Dannel Malloy in November.

Active lawyers in Connecticut are required to pay an annual fee to the client security fund, currently $75. The fund reimburses clients for losses caused by a dishonest attorney.

To avoid paying the fee while not practicing, an attorney can file paperwork to retire, effectively putting one’s license on hold. If a retired attorney wants to begin practicing again, the retirement is revocable.

If a lawyer fails to pay the fee, the Statewide Grievance Committee administratively suspends his or her license. Although it is illegal to practice law with a suspended license, the SGC will reinstate licenses when it receives all overdue fees. The SGC also handles complaints against attorneys.

Malloy, also an attorney, has no record of discipline or suspensions, according to the SGC website.

The SGC first suspended McKinney in July 2003. The SGC also suspended McKinney in 2007, 2008, 2009, 2010, 2011, 2012, 2013 and, last month, 2014. Starting with fees for 2006, the SGC started automatically suspending attorneys for each fee missed. Suspensions are made for missing the prior year’s fee, so the 2014 suspension is for missing payment of the 2013 fee.

Attorneys paying overdue fees must pay a reinstatement fee of $75. Including the restatement fee, McKinney owes $1,330. He didn’t pay $75 in 2002, 2003 or 2004. Between 2005 and 2012, he didn’t pay $110 eight times. He owed $75 for 2013 and another $75 for 2014, although he has not been suspended yet for missing that payment, according to a clerk for the client security fund.

New Democratic Party landlord gets bond commission funding for another property

The new landlord for the Connecticut Democratic Party received bond commission funds last week to renovate a different property totaling $320,000.

The Capital Region Development Authority will lend the money to 360 Main Street Associates at 3 percent interest for 20 years with a balloon payment in year three.

According to the bond commission agenda, CRDA funding will “assist in conversion of underperforming commercial space into 20 units of housing, including 16 micro units.”

The Connecticut Democratic Party recently moved to 30 Arbor Street. The property owner, 30 Arbor Street LLC, is controlled by Carlos Mouta, according to the Secretary of the State’s online database.

Mouta also controls 360 Main Street Associates according to the same database.

On May 23, according to party filings with the Federal Elections Commission, the Democrats paid $1,420 to 30 Arbor Street LLC for rent.

On June 12, the party made two rent payments to the same entity: $2,334.75 and $994.

Election regulator says contractor donations to state parties can be “problematic”

New legal advice from the agency that regulates Connecticut elections suggests that state contractors using a common workaround to give money to state political parties could be violating the law in certain scenarios.

Previous advice from the State Elections Enforcement Commission, in the form of an opinion of counsel provided to the Connecticut Democratic Party in 2007, suggested the party “expressly state that it is soliciting funds only for its federal account,” with the word “federal” underlined, “to avoid the appearance of violating the ban against soliciting prohibited contributions.”

New advice issued earlier this month outlines an even more cautious view from the agency suggesting some prominent examples of executives of companies with close ties to the state, including Northeast Utilities CEO Thomas May, may have violated state campaign finance laws by donating to the Democratic Party’s federal account with the intent of supporting candidates for state office.

May’s solicitation, first reported by The Courant, asked his employees to give to the party’s federal account and “to join me in financially supporting Connecticut’s Governor Dannel P. Malloy.”

State parties are allowed to keep two separate accounts, one to support candidates for state and local office and another for federal candidates.

The ethics and contracting reforms enacted following the resignation and imprisonment of former Gov. John Rowland made it illegal for state contractors to donate to candidates.

The state contractor ban also prevents them from contributing to a party’s state account. The ban does not apply to candidates for federal office or to a party’s federal account.

Parties are allowed to transfer funds from their federal account to the state account, using the national party as an intermediary, and then to provide direct support for candidates for state office, significantly weakening the ban and obscuring the connections between contractors and the politicians they support.

Even without directly transferring funds, the party accounts are accounting devices with little practical distinction. Parties pay some of their employees with money from both accounts. If an employee paid partially by each account solicits a state contractor to donate to the party, which account is doing the solicitation?

In a July 2, 2014, opinion of counsel, SEEC’s lowest level of legal advice, the agency expanded on its previous advice to the Democratic Party, this time to the principal of a state contractor, William Ducci. According to the Federal Elections Commission website, Ducci has donated to a number of Republican candidates for federal office.

“The short answer to your question is that Connecticut law does not prevent a Connecticut state contractor from contributing to the federal account of the state party committee, to the maximum extent allowed by federal law,” wrote Shannon Clark Kief, SEEC’s legal compliance director. “There would be scenarios where such a contribution would be problematic, for example, if the contribution was solicited for the benefit of Connecticut (non-federal) candidates and that money was later used to make expenditures for that purpose.”

“Such expenditures, if coordinated with the state party committee’s state account, might be considered disguised contributions from the state contractor to the state party committee’s state account. Such contributions would be impermissible for a state contractor to make,” Clark Kief continued. “It is illegal for any person to, directly or indirectly, pay, give, contribute or promise any money or other valuable thing to defray the cost of any campaign or election to any committee, other than to a campaign treasurer. If the contribution was made to the federal account of the state party to defray the cost of a Connecticut candidate’s campaign, that too would be impermissible.”

SEEC spokesman Joshua Foley said “the basic answers are the same” although the law has changed in the time between the two opinions. “It’s more nuanced,” Foley said. “Our thinking on it, I guess, got more refined.”

Ducci, of Ducci Electrical, asked SEEC whether he could contribute to a state party’s federal account without negatively affecting his company’s state contracts.

“Frankly, after waiting all these months, I am very disappointed,” Ducci said. “I asked a very specific question as to whether or not I could contribute, and what I received was a five page ‘Opinion of Counsel.’ What I had hoped for was an answer to my question.”

“The opinion includes several different vague and highly subjective caveats, including who solicited the contribution, what purpose it was solicited for, what the money is ultimately spent on, and which political candidate the money ultimately goes to help, any one of which could make the contribution illegal,” Ducci said. “Bear in mind that most if not all of these are out of my control.”

”I’m not a lawyer, I’m a contractor.  I was trying to do the right thing by asking for a straight answer before making a contribution, but I can’t seem to get one,” Ducci said.

Because of the ambiguity, Ducci said, contractors might get away with giving to the party in power, “but it sure sounds pretty threatening if you are contributing to the other camp.”’

Donors to the Democratic Party’s federal account include:

Employees of companies involved in a joint venture selected by the Department of Transportation to manage a $500 million development in Stamford gave nearly $100,000 since DOT made the decision.

A former Republican-party donor gave almost $6,000 since the election of Gov. Dannel Malloy in 2010, while one of his companies received $4.3 million from the state bond commission and another got $18.2 million of contracts and subcontracts from DOT since 2011.

Two employees of Mystic Aquarium, a beneficiary of state funding, donated $6,000 in January, as have First Five companies, developers of affordable housing and other companies receiving state assistance.

Employees of another DOT contractor, HAKS Engineers, gave $45,000 in November possibly at a fundraiser attended by Malloy and have continued to give this year.

Connecticut taxpayers fund shorter CEO commutes

CEO Commute Bridgewater Cigna-01

The First Five, Connecticut’s signature economic development program under Gov. Dannel Malloy, prompted five CEOs to move their companies. In return, they got taxpayer funding – and a shorter commute to work.

Last month, a plan to move the hedge fund Bridgewater Associates, one of the world’s largest, from Westport to Stamford at a cost of $115 million in taxpayer money fell through.

Charter

The move would have reduced the commute for its billionaire founder Ray Dalio by two thirds. Instead of driving about 45 minutes from Greenwich to Westport, Dalio would drive only 15 minutes to Stamford, according to estimates based on Google Maps.

In some cases, the move was drastic. Charter Communications moved its headquarters from Town & Country, Four other First Five/Next Five deals still in place will move the company headquarters and keep the same CEO. In each case, the office moved closer to the CEO.

Missouri, to Stamford. For CEO Thomas Rutledge, who already lived in New Canaan, the new location is 990 miles closer to his home.

Alexion

Charter will receive $6.5 million in taxpayer support.

“Our CEO has had an office here and in Philadelphia for years, and still does,” said company spokesman Joe Mondy. “Cigna has offices in 30 nations and jurisdictions around the globe. Our decision to designate our flagship Connecticut offices as our corporate headquarters is all about the opportunity to leverage the highly educated, experienced and talented labor pool our state offers, so that our businesses may grow and flourish here and around the world.”Cigna CEO David Cordani saved himself some travel time by moving the company’s headquarters from Philadelphia to Bloomfield. Cordani’s Simsbury home is about 210 miles closer to the Connecticut site.

Cigna could receive up to $71 million from taxpayers.

Navigators

Spokesmen for Malloy’s office and the Department of Economic and Community Development, which coordinates First Five incentives, did not respond to a request for comment.

The pharmaceutical company Alexion plans to move from Cheshire to New Haven next year in return for $51 million in state assistance. CEO Leonard Bell will cut his commute from Woodbridge in half, from about 30 minutes to 15.

The insurer Navigators Group will receive $11.5 million to move from Rye Brook, N.Y., to Stamford. CEO Stanley Galanski will reduce his commute by a third, shaving about 15 minutes off his commute from Ridgefield.

CEOs in the First Five/Next Five program aren’t the only ones shortening their commutes. Fifth Street Finance received a $5 million forgivable loan from DECD to move from White Plains, N.Y., to Greenwich.

CEO Leonard Tannenbaum cut his commute from Greenwich in half, from about 30 minutes to 15. Fifth Street spokesman James Velgot said the shorter commute was unrelated to Fifth Street’s move.

“Len believes in the state, and wants to help it succeed in the long run,” Velgot said.

Another company, Sustainable Building Systems, was planned as a new joint venture so it did not have a previous location. In any case, the company has had trouble getting started. TicketNetwork withdrew from the First Five program after its CEO was arrested.Some companies in the First Five/Next Five program, like ESPN and Pitney Bowes, did not relocate, instead expanding in an existing location. Other companies changed CEOs around the time of the move, including NBC Sports and CareCentrix. The accounting firm Deloitte did not move its headquarters to Connecticut, but did expand its presence.

FifthStreet-06-06

The Bridgewater move fell apart because of a land use dispute between the project developer, Building and Land Technology, and city officials. Even though the deal fell through, BLT still gets at least $16 million from the state – as much as $2.50 for each $1 invested – to complete the environmental remediation of the property.

Graphics by Colby Pastre.

ATF undercover operation last year caught General Assembly clerk selling drugs

Jonathan McDonald worked as a clerk for the General Assembly last year when he allegedly sold cocaine to undercover federal agents at an East Hartford strip club.

McDonald, 28, worked as a manager and disc jockey at Kahoots on Main Street in East Hartford. The club has been closed since police arrested him and a co-worker, Renaldo Byrd.

Byrd, 39, of Hartford, pleaded guilty to a conspiracy charge in September and was sentenced to one year in jail. The club has been closed since the arrests, but the owner is fighting to reopen.

East Hartford Police, working with the Bureau of Alcohol, Tobacco, Firearms and Explosives, arrested McDonald on May 21, a month after he stopped working at the Capitol, but he began selling drugs to undercover agents while still on the state payroll.

McDonald is scheduled to appear in Manchester Superior Court Wednesday facing two counts of possession with intent to sell, two counts possession with intent to sell within 1,500 feet of a daycare and one count conspiracy to sell narcotics.

In a letter to the judge, McDonald said he successfully completed two treatment programs and, at the time of writing, was drug-free for more than five months. “After I complete whatever consequences are handed down for my deplorable actions, it will be the last that any court system ever hears of me,” he wrote.

A Waterbury native, McDonald worked as assistant commerce committee clerk from Jan. 9 to April 12, 2013, earning about $7,600. Assistant clerks at the Capitol only work while the General Assembly is in session and not always for the entire session.

Previously, McDonald worked on the reelection campaign of Rep. Jeffrey Berger, D-Waterbury. Berger said he hired McDonald to work on the campaign when he returned from college and then recommended him for the clerk job based on his performance.

“His father, Brian, has been a friend of mine for life,” Berger said. “He had this temporary addiction and he spiraled out of control.”

Berger said McDonald was one of eight people he recommended to the House Democrats for a clerk position.

According to the arrest warrant affidavits, complaints in February 2013 prompted the ATF investigation in cooperation with local police. “Undercover operations were conducted, revealing that several employees are either aware and/or involved in the distribution of narcotics and prostitution,” an affidavits says.

According to arrest warrant affidavits, Byrd supplied McDonald with some cocaine he sold to undercover ATF agents and McDonald told the agents Byrd could also get them firearms.

When an undercover ATF special agent asked McDonald about President Barack Obama’s visit to Hartford, McDonald said he was outside the Capitol during the president’s visit “smoking a ‘blunt’” or marijuana cigarette, according to an affidavit.

McDonald approached one officer patrolling the Kahoots parking lot in an unmarked car and told the officer he was the manager of the club and that he worked for the commerce committee at the Capitol. Later, he told undercover agents that he would “approach police officers with cocaine on his person, and not worry about it because the police think he is doing his job.”

The undercover agents also attempted to buy an AR-15 from McDonald who claimed his source showed him “a photograph of a military-style AR-15 with a scope, flashlight and banana clip.”

Berger wrote a letter to the court to “strongly recommend that the Court see in its wisdom to grant relief to Jon.”

In his own letter to the judge, McDonald said he hid an addiction to painkillers while working at the Capitol. He said working at Kahoots introduced him to cocaine.

“My use spiraled out of control, but I was never selling drugs for profit. I acquired cocaine for those officers so that I could do some of it for free,” McDonald wrote. “I have never fired, never mind held a gun in my life.  All of the time I was involved with those officers I was intimidated and way out of my depth. It is a great point of shame for me that I was able to even speak of guns after seeing the parents of the Sandy Hook victims at the Capitol during last year’s session.”

Update: This article was updated to clarify the role of assistant clerks, a temporary or sessional position. 

Update: The Manchester Journal-Inquirer reports McDonald pleaded guilty and received a sentence of 13 months in jail and three years of probation.

Norwalk housing project gets millions from taxpayers while Boston-based developer gives to Dems

Connecticut’s oldest public-housing project, Washington Village in Norwalk, has received tens of millions in taxpayer money recently, including $30 million in federal funding this week, while a top leader of the developer in charge of the $110 million project has been contributing regularly to the Connecticut Democratic Party.

Sens. Richard Blumenthal and Chris Murphy along with Rep. Jim Himes, who represents Norwalk, celebrated the grant from the Department of Housing and Urban Development Monday.

The funding is part of HUD’s Choice Neighborhoods Initiative, which hopes to convert affordable housing into mixed-income housing.

On Tuesday, Gov. Dannel Malloy and state Housing Commissioner Evonne Klein announced $9.8 million in additional federal funding passed through Connecticut’s new Department of Housing. HUD awarded Connecticut a total of $31 million for disaster recovery from Superstorm Sandy.

Previously, Washington Village received a $1.89 million low-income housing tax credit.

Boston-based Trinity Financial will redevelop Washington Village with the Norwalk Housing Authority and the Norwalk Redevelopment Agency.

Patrick Lee, a co-founder and executive vice president of the company, donated $7,500 to the Connecticut Democratic Party in the past year.

In 2013, Lee donated $2,500 on July 18 and again on Aug. 1.

HUD announced the availability of Choice Neighborhoods funding on June 13, 2013, and the deadline for applications was Aug. 12.

Malloy first announced the $9.8 million in disaster funding on April 11.

Lee donated another $2,500 on April 23. He made all of his donations to the party’s federal account. As a top executive at a company that receives state assistance, Lee would be ineligible to give to the party’s state account.

In November 2013, the party received thousands in donations from others with affordable-housing business, also through its federal account.