Archive for the ‘Topics’ Category

0Complaint targets state rep’s PAC for inadequate disclosure

A complaint alleges that a political action committee run by a Democratic state representative failed to disclose its activity properly, including last-minute contributions to town party committees right before the 2013 municipal election.

After Donna Hemmann, a Republican member of the Wethersfield Town Council, filed the complaint with the State Elections Enforcement Commission in May, the PAC filed amended reports to disclose two $500 donations to the Wethersfield Democratic Town Committee made on Oct. 21 and Nov. 5, 2013.

Rep. Russ Morin, D-Wethersfield, controls the Pro-Progressive Energetic Leaders PAC, also known as Pro-PEL. Morin did not respond to requests for comment for this article. Outside of the legislature, Morin works for Connecticut Employees Union Independent, one of the state employee unions and an SEIU local. His PAC draws considerable support from unions.

The Wethersfield DTC did properly report the contributions, which is how Hemmann learned about them.

Pro-PEL’s amended report also disclosed other October donations that weren’t previously reported, including $500 for the Berlin Democratic Town Committee.

Hemmann also questioned how the committee raised $3,455 at a fundraiser that cost only $25, saying the “return on investment defies credibility.”

SEEC scheduled the complaint, 2014-058, for discussion during executive session on Oct. 14.

2Soros maxes out to Connecticut Democrats while banned contractors continue to give

The Connecticut Democratic Party raised nearly $350,000 in individual contributions to its federal account last month, including thousands from state contractors.

The party reported its latest haul to the Federal Elections Commission a week ago. Although state contractors and recipients of state aid are banned from donating to candidates or political parties, they can legally give to a party’s federal account. Democrats drew attention to the practice recently by using the federal account money to support the reelection of Gov. Dannel Malloy, prompting Republicans to sue.

Donors associated with the state contractor HAKS Engineers gave another $20,000 to the Connecticut Democrats last month, bringing their total contributions since last year to $70,000.

Other notable donors include:

Update: John T. Moore, CEO of the Marwood Group, gave $10,000 to the Democratic Party’s federal account last month. His colleague at Marwood, Ted Kennedy Jr., is running for state senate in Branford. Kennedy’s Republican opponent, Bruce Wilson Jr., recently filed a complaint accusing him of using the state party to make contributions over the legal limit.

1Democratic Party uses state contractor money to support Malloy

The Connecticut Democratic Party asked federal regulators earlier this month for permission to use a stockpile of cash from state contractors to support the reelection of Gov. Dannel Malloy, but rather than wait for a response the party began mailing advertisements using the money.

Since at least 2013, the state Democratic Party has used its federal account to collect donations from state contractors who are banned from giving directly to candidates or the party’s state account. The Federal Elections Commission has not ruled on the party’s request to use the money to influence a state election.

In many states, federal rules are stricter than state rules making it unlikely parties would use federal money for state candidates. However, in Connecticut the federal rules are more permissive in the sense that they don’t prevent state contractors from making contributions.

The ban includes owners and top decision makers at companies that have state contracts or receive state aid.

The most prominent example of this conundrum was Northeast Utilities CEO Thomas May, who solicited donations from his employees to support Malloy’s reelection through the federal account. At the time, it was thought the federal account could not directly help Malloy, but with the latest request to the FEC the link became clearer.

State law does allow parties to indirectly transfer federal account money to the state account by routing it through a national party committee.

The Democratic Party, through its federal account, has raised money from numerous state contractors and recipients of state aid, contributors who can’t give to the same party’s state account. The ban was put in place after Republican ex-Gov. John Rowland resigned and pleaded guilty to a federal corruption charge.

A number of employees at Northeast Utilities donated a year ago after the company’s CEO sent his controversial email. Employees of DOT contractor HAKS Engineers gave the party $45,000 last year and another $10,000 this year. Some of those donations may have been solicited at an event attended by Malloy. Leaders of a joint venture selected by DOT for a $500 million project in Stamford last year gave the party nearly $100,000 in donations since the agency made its decision – and while it negotiated a final agreement.

At least two medical marijuana dispensaries gave to the Democratic Party’s federal account. The Board of Regents chairman appointed by Malloy gave the maximum gift of $10,000 right before his appointment and again this year – as did his wife. One former donor to the Republican Party cynically redirected his support to the Democratic Party’s federal account after Malloy’s election; one of his companies went on to receive $6 million in borrowed state money.

The party also raised money from affordable housing developers, First Five companies, Mystic Aquarium and other recipients of state aid.

0Brookfield Board of Education confirms termination of superintendent

The Brookfield Board of Education unanimously voted Thursday to terminate Superintendent Anthony Bivona, confirming a decision the board originally made in May.

The same board that fired Bivona earlier this year sat in judgment of him during a multi-part hearing that stretched on for months.

The board fired Bivona, who led the district for seven years, after auditors discovered the district had been using a gimmick to balance its budget. Bivona’s longtime business manager, Art Colley, resigned under scrutiny earlier this year.

The audit found that $1.3 million in school district bills had been pushed into the subsequent fiscal year. The town approved a supplemental appropriation of more than $1.1 million to bring the school district’s budget back into balance.

Bivona claimed throughout the hearing process he didn’t know what Colley was doing. The board’s attorney claimed Bivona should have known and the board agreed with his conclusion. Bivona’s attorney argued political pressure led to the firing making it arbitrary and illegal.

0MDC liens property owned by Mayor Segarra’s husband for unpaid water bills

The Metropolitan District Commission has placed a lien for more than $2,000 in unpaid water bills on condos owned by Hartford Mayor Pedro Segarra’s husband, Charlie Ortiz.

Ortiz owns a number of properties in the city, including five of the units at 57 John St. where the MDC placed the $2,418 lien.

A spokeswoman for the mayor did not respond to requests for comment.

According to an attorney for the MDC, the lien is on all six units but each unit owes one-sixth the amount. The MDC will release the liens on each unit if its owner pays a proportionate share of the unpaid fees, plus a $26 release fee.

Rising MDC bills has become an issue for some South End residents, says Hyacinth Yennie, chairwoman of the Maple Avenue Revitalization Group.

Yennie said MDC bills have gone up, in some cases more than double, and they “are going out in a threatening way.”

She said one woman with a $900 bill told the MDC she couldn’t pay it all at once. “She was told, ‘No, you better send it all.’”

Carmen Duhaney, a South End resident, said her MDC bill went up from $210 per quarter to more than $400 per quarter. “It’s not affordable,” she said.

“Customer service was very nasty to her,” Yennie said. “They’re like pitbulls.”

Yennie said it’s also important to have oversight of the MDC. “There is no accountability when it comes to spending our money,” she said, explaining voters approved an $800 million MDC project in 2012. “We knew we were going to have to pay, but we didn’t know at what cost.”

“The plan is to have a meeting with the mayor,” Yennie said. “He’s so into this stupid stadium, I’m not sure I can get a word in.”

4Teachers’ 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.

0Audit: 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.

1New 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.

0Election 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.

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.