Archive for the ‘Features’ Category

3Connecticut 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.

0ATF 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.

2Norwalk 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.

0State awards another $10 million in stem-cell grants to the usual suspects

The state awarded another $10 million in stem-cell research grants Tuesday, but not a single private company benefited.

Like the $80 million awarded in the previous seven years, most of the money this year went to the University of Connecticut Health Center or Yale University.

The Jackson Laboratory for Genomic Medicine, already the recipient of $291 million in taxpayer largess, secured $1.1 million from this batch of stem-cell research funding.

In the history taxpayer funding of stem-cell research in Connecticut, only two private companies received grants totaling $2.4 million out of about $90 million, or less than 3 percent.

2IT audit reveals state may owe $5.2 million for 4,500 non-compliant software licenses

A review by an unnamed software company found 4,500 improper licenses on state computers, according to the Auditors of Public Accounts, a failure that could cost more than $5.2 million.

Auditors, reporting on the state’s former information technology agency now spread across multiple state agencies, suggested the development of a process for disposing of computers and software products. When state agency’s questioned the value of developing the policy considering its costs, the auditors pointed out the manufacturer’s review.

“This is an example of just one software compliance audit,” the auditors wrote. “It would appear, based on potential, future compliance audits and penalties that the benefits of a central software acquisition, management, use, deployment and disposal platform and policy would far outweigh the costs of development and implementation.”

Auditors also found:

– Errors in longevity payments. The agency overpaid at least three employees and underpaid one by more than $12,000 over a number of years.

– Improperly reported cases of misused state resources. One employee had to pay back the state for using a state cell phone for personal calls while another received a 30-day suspension for viewing pornography on state computers, but the agency didn’t report either case to auditors or the comptroller, as required by law.

0IRS has three-year-old, $50,000 tax lien against Sen. Fonfara’s Hartford home

The IRS has a $50,406.93 tax lien against the Hartford home of Democratic Sen. John Fonfara, chairman of the legislature’s finance, revenue and bonding committee which handles state tax policy.

The IRS filed a notice of tax lien in October 2011 with the Hartford City Clerk for unpaid personal income taxes in 2008 and 2009. No release of the lien was filed with the clerk as of Tuesday.

Fonfara’s spokesman did not respond to repeated requests for comment.

According to the IRS, tax liens remain in effect until the entire amount is paid off. If a person has made progress paying down their tax debt but hasn’t paid the full amount, there would be no change to the lien. Conversely, if a person has not made any payments, the amount owed could grow because of interest and penalties.

The lien on Fonfara’s 99 Montowese St. home breaks down the amount owed between the two years. The unpaid balance for 2008 was about $8,600. In 2009, the unpaid balance was a little less than $42,000.

The IRS took out an earlier lien against Fonfara at his 23 Fenwick St. address in 1997 for about $16,500. The lien was released within a month.

In addition to his salary as a state senator, Fonfara works in the billboard business.

Update: View the liens here, now with certain identifying information redacted.

1Will government unions spend millions on Connecticut politics again?

Connecticut’s public employee unions are big players in the state’s elections, spending millions on their political operations, which may affect 2014 races.

The unions are a highly-focused, highly-motivated interest group when it comes to state-level elections, because the candidates who win will sit directly across the table from them during contract negotiations.

It can be a difficult task to “follow the money” when it comes to unions and campaign spending, but by searching the state’s online database of campaign contributions expenditures, a clearer picture of how much public sector unions are spending on state-level campaigns emerges.

In the two years between the 2010 and 2012 state elections, the largest public sector unions – including the Service Employees International Union (SEIU); American Federation of State, County and Municipal Employees (AFSCME); American Federation of Teachers (AFT); and the Connecticut Education Association (CEA) – spent $834,968.51, on campaigns for state and local offices, the vast majority of it going to candidates or committees from the Democratic and Working Family parties.

The two years between the 2010 and 2012 state elections were tumultuous for state employees – it was during this time that they were in heated negotiations with Gov. Dan Malloy over a new contract.

Contributions to PACs and to candidates made up most of the $800,000-plus in spending, which was given primarily to elect state representatives and state senators since there were no statewide races in 2012.

Federal law requires unions to file disclosures on their political spending. The Department of Labor makes those disclosures available through an online database – unionreports.gov.

According to the disclosures filed with the Department of Labor, Connecticut’s public sector unions SEIU, AFT and AFSCME (none were found for the CEA) spent $4,286,949.85 on political activities in the years 2011-2013.

Anything unions do to support candidates for federal or state office is included in that amount – including political contributions or political activities like getting voters to the polls on election day.

0Agreement with parole officers restores nearly three years of expired time off

The Department of Correction agreed last year to restore nearly three years of expired time off for 40 parole officers, an average of 3.5 weeks each.

In 2011, auditors discovered an accounting glitch that allowed a small group of state employees to build up thousands of hours of extra time off. At least 40 parole officers kept compensatory time that should have expired.

The department fixed the error and time off started expiring for the parole officers. Their union negotiated the 2013 agreement to restore 5,800 of properly expired leave.

According to a list attached to the agreement, the Department of Correction reinstated time off ranging from half an hour for one parole officer to 688 hours – more than 17 weeks – for another.

In all, Connecticut owes its employees about $676 million for paid time off, down slightly from fiscal year 2012 when the value exceeded $700 million.

DOC had the parole officers in the wrong category. After auditors found the problem, DOC put the employees into the correct leave plan and opened negotiations with the union to determine how to handle the improperly-earned time off.

The department signed a March 2013 agreement with AFSCME Council 4 to resolve the issue by reinstating time off that expired between October 2012 and January 2013, which amounted to 147 weeks or nearly three years. The parole officers have three years to use the time off granted under the agreement.

DOC spokeswoman Karen Martucci said the agreement with the union set out to “address a discrepancy identified through an audit of the agency’s financial records.”

“Specifically, parole officers were entered into the payroll computer system coded into an incorrect leave plan, which wasn’t consistent with the compensatory time expiration language applicable to that job classification,” Martucci said. “The DOC and the union were in agreement to meet and discuss a fair resolution to the issue, which ultimately resulted in this signed contract.”

0Correctional supervisors at top of pay scale get ‘lump sum payments’

Connecticut’s longevity pay for state employees – $13.8 million in April – is no secret, but a small group of state employees also get “lump sum payments” equal to 2.5 percent of pay.

While longevity payments go to union state employees based on the length of their careers, lump sum payments go to about 100 correctional supervisors who have reached the peak of the pay scale.

The state makes the payments whenever the supervisors, members of the SEIU Local 2001 NP-8 bargaining unit, would otherwise be eligible for an annual increment in their pay.

Due to the payment code used to process the lump sum payments, it is not possible to precisely identify the total cost. However, all payments in the category – which includes certain other payments, too – to eligible employees add up to $184,058.

Two years ago, the legislature ended longevity pay for non-union state employees only to give them a raise of the same amount.

2VA in Connecticut avoids wait-time scandal but insects plague OR for 8 years; gives big raises

Federal healthcare facilities for veterans in Connecticut are facing their own problems, separate from an ongoing national wait-time scandal, with longstanding concerns over “intrusion of insects” in operating rooms and other cleanliness issues.

Meanwhile, some highly-compensated VA doctors received raises exceeding $30,000 last year.

The national scandal, compounded by revelations of employee bonuses while veterans suffered extended delays for appointments, led to the resignation of U.S. Department of Veterans Affairs Secretary Eric Shinseki last week.

VA employees in Connecticut received modest bonuses in recent years, but some doctors stand out for getting large raises last year.

Sixteen VA employees in Connecticut, all doctors, earned more than $300,000 last year, according to transparency website OpenTheBooks.com. Three of the 16 top-paid employees received large raises of more than 10 percent between 2012 and 2013.

Dr. Ashutosh Pathak received a $47,561 raise last year – going from a salary of $280,703 to $328,267 – or a 16.9 percent increase.

Dr. Steven Pfau received an increase of $36,923 (12.8 percent), while Dr. Albert Perrino received an increase of $33,295 (11.3 percent).

Pamela Redmond, spokeswoman for the VA in Connecticut, said the three doctors are “physicians in scarce medical specialties.”

“They include an interventional cardiologist, a radiologist and an anesthesiologist.  Salaries for these physicians were increased to remain competitive with compensation offered in the private sector,” Redmond said. “This increase was supported by regional independent salary survey data. The increases were reviewed and ultimately approved beyond the healthcare system at the VA regional level.”

Adam Andrzejewski, founder of OpenTheBooks.com, said high pay at the VA contrasts in many cases with poor service for veterans.

“Salary and bonus data at OpenTheBooks.com shows clear evidence that the bureaucracy served the bureaucracy, not veterans,” said Adam Andrzejewski, founder of OpenTheBooks.com. “During the last seven years, the national VA system spent $136 billion on salaries and hundreds of millions on bonuses and veterans still had trouble seeing a doctor. It’s not question of money, but a systemic leadership problem.”

Last month, the VA Office of Inspector General issued a scathing interim report focused on wait times in Phoenix. The VA in Connecticut has avoided problems with prolonged waits. However, in February, the same agency reported on insect problems and cleanliness in the operating room.

“Flying and crawling insects have been an ongoing problem in the OR for about 8 years,” the report says. Staff told inspectors insect problems are seasonal and some believed the overnight cleaning staff ate food in the OR, contributing to the problem.

Complaints from employees in an anonymous survey prompted the review of operating room cleanliness at the VA’s West Haven campus.

“Cleanliness of the OR could not be assured,” the report says, citing inadequate staff and poor oversight. “Although our findings substantiated an increased risk to patients and staff, we found no conclusive evidence that the environment of care deficiencies in the OR resulted in negative patient outcomes.”

“Staff reported that when they arrived for the first cases of the day, they often found indications that rooms had not been terminally cleaned the previous evening. For example, they would find debris and dust on the floor under furniture and equipment, indicating that the furniture and equipment had not been moved to accommodate terminal cleaning,” the report says. “Also, trash was not emptied, and restrooms were not clean.”

One overnight cleaning position remained vacant from January 2013 at least until inspectors visited last summer. The vacancy reduced the cleaning crew from three to two employees. Attendance problems also contributed to problems, with one in five members of the cleaning staff noting report to work “on an average workday.”

Facility managers said human resources “has not been responsive in filling vacancies.”

“The human resources manager confirmed that delays within his department were a contributing factor and that they recently had been resolved,” the report says.

According to OpenTheBooks.com, the top-paid human resources manager in West Haven – with a salary of about $130,000 – received a $5,000 bonus last year, the second-largest award in Connecticut last year.

“The report is a thorough and honest snapshot from an inspection that occurred in June 2013,” Connecticut VA officials said in a statement after the release of the report. “The IG report states that it found no evidence that the environment of care deficiencies in the OR resulted in negative patient outcomes.”

The same statement said the VA fixed many problems before inspectors left the facility.

A September 2013 report found “community showers or restrooms on three of five inpatient units inspected were not clean.” According to the report, management immediately responded to the concerns.

Other recent inspector general reports made minor recommendations without finding serious problems.