Archive for the ‘Legal/Courts’ Category

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.

1SCOTUS ruling strikes blow to CT’s forced unionization scheme

As millions anxiously awaited the Supreme Court’s decision in Hobby Lobby v Sebelius (regarding the Affordable Care Act’s mandate that all employers provide contraception coverage despite religious objections) the Justices released their decision in another case that has quietly dealt a huge blow to public unions and to decisions made by Governor Malloy and the General Assembly.

In Harris v Quinn the Court ruled that home healthcare workers providing services to individuals who receive state or federal funding should not be required to pay dues to a union that represents public employees (mainly the SEIU and AFSCME). This precedent sends shots across the bow of public union advocates seeking to add to their political coffers by forcing anyone who operates near government money to pay some sort of union fee.

The details of this case should sound familiar to folks here in Connecticut. In 2011 Governor Malloy, via two Executive Orders, effectively forced individuals providing home daycare and home health care services similar to those in Harris to pay union dues, regardless of whether or not they wished to unionize. The logic behind this fiat being that since these employees, mainly mothers running daycare out of their homes and healthcare workers contracted by persons needing in-home care, often provide services for individuals who receive public money through Medicare, Medicaid etc. they should therefore be considered public employees.

Unions have tried this in numerous states claiming that these private employees are “free riding” on the collective bargaining efforts of local unions who are of course only seeking to ostensibly improve things for workers, society and the human condition. In reality anyone who follows the money can see that this is a strong arm tactic that enables unions swing the political pendulum in their favor by getting and keeping Democrats in office by expanding their donor base by force.

In response to Malloy’s Executive Orders a slew of lawsuits were filed against him in 2012. Among them was a suit filed by the Yankee Institute on behalf of Cathy Ludlum. Ms. Ludlum, who suffers from Spinal Muscle Atrophy, wished to prevent the twelve people she employed, who helped her with everything from running her business to eating, from being forced unwillingly into the SEIU.

At a personal level it was argued that this forced unionization scheme effectively changes the relationship between employer and employee. When a union attempts to inorganically force its way into this relationship the people who get pushed to the side are the ones that actually need care. Loyalty for the service providers is diverted from their employers, such as Ms. Ludlum, to their union bosses. It was also argued that Malloy’s actions intruded upon a constitutional authority reserved for the Legislature.

Unfortunately for Ms. Ludlum and her peers in 2012 the CT General Assembly, who could not pass up the opportunity for increased campaign support, passed a bill that concurred with Malloy’s executive actions. In late 2012 the State Superior Court ruled that the lawsuits against the actions were rendered moot by the passage of legislation.

Fast forward to Monday June 30, 2014 and it appears as if the suits filed against the Governor may have not been all in vain.

The SCOTUS ruling on the Harris case is extremely narrow and pertains to only home healthcare workers, preventing them from being considered state employees and therefore subject to forced unionization. However, it signals victory for those types of workers in CT like those employed by Cathy Ludlum who do not wish to pay union dues and will now be able to opt out.

While unions will react to this decision by saying it is anti-worker, anti-poor, anti-(insert sacred cow of the left here) those who truly understand the underbelly of union politics should take solace in the fact devious tactics used to expand union influence have been put on hold; for now. For every freedom loving individual the holding in Harris (and Hobby Lobby) represents just a little bit more decision making power returned to the hands of individuals. Such a nice Independence Day gift from SCOTUS!

Andrew is a Tax Consultant at Alternate Tax Solutions and a Summa Cum Laude graduate of CCSU.  

0Candidate treasurer pleads guilty to stealing from state-funded campaign

The 2010 campaign manager and treasurer for Rep. Douglas McCrory, D-Hartford, pleaded guilty Wednesday to second-degree larceny for stealing $3,854.07 from the campaign.

Tanzania Cooper, 43, of Bloomfield, pleaded guilty to a reduced charge under the Alford doctrine. Previously, she faced first- and sixth-degree larceny charges.

Judge Jason Lobo sentenced Cooper to two years of probation, two years of suspended jail time and to pay restitution.

Prosecutor Christopher Alexy from the Chief State’s Attorney’s Office said Cooper “appropriated for herself campaign funds provided by the state.”

McCrory’s campaign paid Cooper $6,600 as manager.

An Alford plea means the defendant disputes some of the facts alleged by the prosecution, but admits the state likely has enough evidence to convict.

According to the arrest warrant affidavit, Cooper said McCrory “had no knowledge” and “was not involved.”

“Cooper never denied using campaign funds for personal and other unauthorized reasons,” the affidavit said. “She disputed the amount.”

According to the affidavit, Cooper said the amount was “closer to $2,000.”

“Cooper also indicated that other campaign members were involved with the illegal use of campaign funds but would not provide any further details saying, ‘Everyone has families,’ ‘It’s already a mess, it’s embarrassing,’ and ‘It’s going to be a circus,’” the affidavit said.

The State Elections Enforcement Commission referred evidence Cooper embezzled about $4,600 to the Office of the Chief State’s Attorney in August, prompting an investigation.

According to the affidavit, about 23 debit card withdrawals appear on the campaign’s bank statements but not on its expense reports.

McCrory participated in the Citizens’ Election Program, which provides state grants to campaigns. On July 26, 2010, his campaign received $25,980 in public funds.

Three of Cooper’s alleged cash withdrawals occurred before that date, leading to the charge of sixth-degree larceny. According to the affidavit, at least 19 unauthorized debits diverted funds from the state grant, leading to the felony first-degree charge.

According to the affidavit, Shawn Council was the first treasurer for the McCrory campaign and Cooper took over that role after she left.

Inspector Matthew Schroeder, who conducted the investigation and wrote the affidavit, also found evidence of expenditures that were never received by the recipient reported by the campaign.

Aziel Brown, the campaign’s deputy treasurer, told Schroeder “he never attended any meetings or performed any tasks for the McCrory campaign in any capacity.”

Cooper admitted to falsely claiming to have paid Brown $450, which he never received, to cover up her withdrawals, according to the affidavit.

2Jepsen’s ebook win averages 86 cents per resident

Connecticut residents are beginning to receive settlement payments from ebook publishers thanks to the efforts of Attorney General George Jepsen and his peers across the country.

Nationally the settlement amounts to $166 million, with $3 million intended for Connecticut residents, or an average of 86 cents per person.

Five publishers that settled a price-fixing lawsuit will make the payments.

Apple, another defendant in the suit, did not settle. The company is appealing a Federal District Court ruling and awaits another trial to set the amount of damages.

Jepsen’s office issued a statement:

“I encourage Connecticut consumers who filed claims or are otherwise eligible for credits through these settlements to check their email or mail and their retailer accounts to take advantage of the refunds that will begin arriving this week,” said Attorney General Jepsen.
Account credits and checks will be based on the number of eligible eBooks purchased during the claims period – April 1, 2010, to May 21, 2012. Whether a consumer receives a credit or a check depends on the retailer through which the eBook was purchased and, in certain circumstances, whether a claim was properly filed. Eligible consumers should check their email for communications from their eBook retailer regarding account credits. Checks will be sent by mail to eligible consumers. For more information about the settlements, please visit www.ebookagsettlements.com.
 “Consumers are entitled to a fair, open and competitive marketplace, and consumers who have suffered as a consequence of violation of antitrust laws are entitled to compensation,” the Attorney General said, “At the upcoming damages trial, Connecticut – along with Texas and New York – will be leading the effort on behalf of our partner states to obtain substantial additional compensation for consumers as well as civil penalties for the state.”
Assistant Attorneys General Joseph Nielsen, Gary Becker and Richard Porter; Paralegal Specialist Holly MacDonald; and Assistant Attorney General Michael Cole, chief of the Antitrust and Government Program Fraud Department, are assisting the Attorney General in this matter.

2Charges against former Virginia governor offer insight into FBI investigation at state Capitol

The U.S. Supreme Court has restricted the meaning of honest services fraud since Gov. John Rowland pleaded guilty to that charge a decade ago, but the same law could be at issue in an FBI investigation of House Republicans.

George Gallo served as chief of staff under Minority Leader Larry Cafero, R-Norwalk, from 2007 until he resigned last month, acknowledging he was a person of interest in the investigation. No arrests have been made.

Cafero said the Republican caucus is “cooperating fully with the federal inquiry.”

The FBI appears to be focused on direct mail vendors used by Republican House candidates, including Direct Mail Systems of Florida and King Strategic Communications of Ohio.

“It kind of looks like a kickback case,” said Eric Jaso, a partner at Seeger Weiss and former federal prosecutor. He said investigators may also be looking for “a secret or undisclosed ownership interest.”

Jaso said it was unclear to him, based on press accounts, what federal law was violated. “It is very puzzling. You need a federal jurisdictional hook,” he said.

“It’s almost like a commercial bribery case,” Jaso said, explaining that commercial bribery is, for example, when an architect pays to be on a landlord’s list of approved contractors.

Norm Pattis of the Pattis Law Firm said authorities take cases involving public officials more seriously “because they involve violations of the public trust.”

Pattis said one defense approach is to look at whether the payments were “a commission” that came out of company profits or “are you rolling that extra cost” into what the client pays.

Honest Services Fraud

Honest services fraud is a form of mail or wire fraud. Pattis said one form of fraud involves false representations and so a defense strategy would be to ask, “Were the representations in fact false?”

“Sometimes in fraud cases there’s buyer’s remorse” rather than fraud, he said.

The problem some courts have had with honest services fraud, Jaso said, is that officials do not have “reasonable notice of what’s illegal.”

“Where does mere dishonesty end and a violation of federal law begin,” he said.

Although the federal courts from the Supreme Court down have reduced the scope of honest services fraud in recent years, federal prosecutors recently charged former Virginia Gov. Robert McDonnell and his wife with conspiracy to commit honest-services wire fraud and three counts of honest-services wire fraud.

Last month, federal prosecutors indicted a California state senator on 24 counts for allegedly taking bribes from a hospital owner and an FBI front. The charges include honest services fraud.

“The theory is that when a local or state official takes a bribe or a kickback, he or she defrauds the people of the state or locality of their right to that public official’s honest services,” the law firm Hodgson Russ wrote in an analysis of the McDonnell indictment.

The bribe or kickback does not have to violate state law, either. In Virginia, “laws apparently place no financial limit on the gifts a state or local official can receive,” according to Hodgson Russ, although there are disclosure requirements.

In order to avoid being unconstitutionally vague, the U.S. Supreme Court “limited the scope of the honest-services fraud statute to bribery and kickback schemes, as opposed to ‘undisclosed self-dealing by a public official or private employee,’” according to an analysis of Ring v. United States by the law firm Saul Ewing.

“In other words, when a lobbyist offers ‘things of value’ other than campaign contributions, the government can establish bribery, and therefore a violation of the honest-services fraud statute, without establishing an explicit agreement between the lobbyist and the public official,” according to the Saul Ewing analysis.

According to Hodgson Russ, honest services fraud “does not criminalize mere failures to disclose conflicts of interest.”

“As a practical matter, the law gave federal prosecutors the power to criminalize objectionable behavior, conflating the merely unethical with the intentionally criminal,” wrote David Rittgers, a lawyer and former legal policy analyst at the Cato Institute. “Behavior that was not illegal under state law (particularly state ethics requirements for public officials) became illegal under federal law.”

“This criminalized an employee lying to his employer, and as Justice Scalia pointed out, ‘would seemingly cover a salaried employee’s phoning in sick to go to a ball game,’” Rittgers said.

“Public corruption is already illegal. But unlike the existing federal bribery and kickback statutes, the ‘honest services’ fraud statute isn’t limited to lobbyists or those who do receive federal funds,” Rittgers continues. “Breach of a fiduciary duty between private actors falls within the statute when motivated by a bribe or kickback.”

Under Color of Official Right

The charges against the McDonnells also include conspiracy to obtain property under color of official right and obtaining property under color of official right.

According to the U.S. Supreme Court in Evans v. United States, under common law “extortion was an offense committed by a public official who took ‘by color of his office’ money that was not due to him for the performance of his official duties.”

“It can be said that ‘the coercive element is provided by the public office itself,’” according to the U.S. Department of Justice’s Criminal Resource Manual. “This theory of extortion under color of official right has resulted in the successful prosecution of a wide range of officials, including those serving on the federal, state and local levels.”

The manual also says a public official doesn’t have to have “actual authority” if it was “reasonable to believe” he or she had that power. For example, a “public official can extort money for permit beyond control of his office, so long as victim has a reasonable belief that he could affect issuance.”

“Some courts have held that private persons who are not themselves public officials can be convicted under this provision if they caused public officials to perform official acts in return for payments to the non-public official,” the manual says.

For example, the head of a local Republican Party was convicted for causing “public officials to induce a third party to pay out money.”

Private individuals who make such payments have also been charged under this statute.

The 7th U.S. Circuit Court of Appeals was not receptive to under color of official right charges against private individuals, saying “we believe that, as a general matter and with caveats as suggested here, proceeding against private citizens on an ‘official rights’ theory is inappropriate.”

In addition to federal laws against bribery, there is also a law prohibiting illegal gratuities. The difference between the two is that an illegal gratuity is offered after an official action rather than before.

1HealthBridge subpoenas Blumenthal, DeLauro, Jepsen and Malloy in RICO suit against union

The Connecticut nursing home company where striking workers became a political issue two years ago has subpoenaed several of the state’s top elected leaders, including Gov. Dannel Malloy and Attorney General George Jepsen.

HealthBridge, owner of eight Connecticut nursing homes, sued the unions striking at five of its locations in 2012 under the Racketeer Influenced and Corrupt Organizations Act, legislation originally intended to fight the mob.

Lawyers for the defendants in the suit – the New England Health Care Employers Union, also known as Service Employees International Union 1199NE, and United Healthcare Workers East, another SEIU affiliate – objected to the subpoenas in a Feb. 21 court filing.

HealthBridge subpoenaed Jepsen and Malloy’s office, plus both of their campaign committees, Sen. Richard Blumenthal, Rep. Rosa DeLauro, state Sen. John Fonfara and state Rep. Russ Morin.

All of the subpoenaed officials are Democrats.

“We have received the subpoenas and are reviewing them,” said Jaclyn Falkowski, a spokeswoman for Jepsen. “We have no further comment at this time.”

Leon Dayan of Bredhoff & Kaiser said in his objection the subpoenas are too broad especially for “this early phase of discovery, which is required to be limited in nature.”

According to Dayan’s objection, HealthBridge issued 92 document requests and 25 interrogatories.

“The depositions’ sole purpose appears to be the improper one of sending the message that if a union or other organization dares to exercise its First Amendment right to petition government officials in a manner that displeases Plaintiffs or their owner, not only will that organization be subject to a harassing lawsuit, but all the organization’s perceived political and other allies can expect to be harassed and have their costs driven up as well,” Dayan wrote.

“Absent intervention by this Court, sitting elected officials and their staffs will be forced to take time away from working for their constituents.”

Dayan also objected to HealthBridge’s efforts not to disclose the name of the former union organizer upon whose testimony the company is relying to make some of its claims.

The Blumenthal subpoena, included in Dayan’s objection, requests documents related to:

– HealthBridge’s application to close a Wethersfield nursing home,

alleged sabotage by striking workers,

– efforts to put HealthBridge nursing homes into receivership.

Jepsen recused himself from any investigations into union sabotage after joining strikers on the picket line.

Company contributions to union pension funds have long been part of the labor dispute at the five nursing homes, which declared bankruptcy last year.

Update: Now with link to objection.

1Should the State Library preserve legislative and judicial documents?

An old proposal would have brought the General Assembly and Judicial Branch under the State Library for the sake of preserving historical records and consistently maintaining government documents.

State Librarian Kendall Wiggin said Gov. M. Jodi Rell’s administration suggested the bill, S.B. 30, in 2010 and he took the lead on it.

“A lot of people told me it would be dead on arrival,” he said. “I try to think of myself as nonpolitical.” Wiggin said he has not pursued it with the administration of Gov. Dannel Malloy.

The bill would have required the two branches of government to follow document-preservation policies set in conjunction with the library. “It’s one of those things you have to carefully explain what it is you’re trying to do,” Wiggin said. “We never wanted to tell the other two branches what to do.”

Legislators and their staff members can delete an email and, since the Office of Legislative Management only archives a copy for 21 days, that document is destroyed within a month. Executive branch officials, from the governor down, must keep routine correspondence by email for at least two years and some documents even longer.

A request for emails from four legislators on a transparency task force demonstrated the lack of consistency in legislative emails.

“The public’s right to know is dependent upon a records management program that insures consistent policies and handling of public records as well as a transparent and accountable destruction process,” Wiggin said in his testimony supporting the bill.

The Judicial Branch testified against the bill saying it already has record-retention rules in place.

The procedures outlined by the library would mean there is always a record of destroyed documents, Wiggin explained. The agency would request permission to destroy documents. If the request followed the record-retention guidelines and the documents had no historical value, the library would approve it.

“It protects an agency as well,” he said. “It avoids any perception that they’re just throwing things away.”

The request and approval would be kept to demonstrate the integrity of the process. “They’re permanent. We never get rid of those.”

“It’s to everybody’s benefit to follow a process,” Wiggin said.

Agencies hold onto many documents longer than they are required to, according to Wiggin, but the library is willing to store and preserve documents of enduring value when agencies no longer want them on hand.

“We’re kind of like the file cabinet of last resort,” he said. “We take that burden for agencies.”

“Some legislative materials come here and have for some time,” Wiggin said, including paper copies of transcripts for all hearings.

He said it would be more difficult – “probably a lot harder” – to write a biography about a major legislative figure than a governor.

He said legislators “can do what they want” with their personal files.  “Some have donated them,” he said. “There’s no consistency with what happens to these files.”

“It wouldn’t be us dictating to them,” Wiggin said, referring to the old legislation. “It would create a uniform process.”

For example, the legislative email of former state Sen. Andrew McDonald was not preserved. Historians may be interested in his records because he went on to serve as Malloy’s general counsel and now on the Connecticut Supreme Court.

Wiggin said a governor’s papers have to go the state library and fortunately they do include correspondence with legislators. Such indirect methods of research prompt the library staff to think carefully about what to keep.

He said collaboration between the General Assembly, the Judicial Branch and the State Library would provide an opportunity to “figure out what really is important to keep for the historical record.”

“Some things transcend the boundaries of the three branches,” he said.

Wiggin said he hopes to work with the leadership of all three branches going forward. For example, he said the state will need to pursue a common document-management system as a long-term project.

0Warning 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.

0Ethics chief won’t confirm or deny existence of Donovan investigation; another legal battle wears on

Connecticut’s top ethics official “won’t confirm or deny” the existence of a confidential investigation into the scandal last year that tarnished the Congressional campaign of then-Speaker of the House Chris Donovan.

The two top aides on Donovan’s campaign received federal prison sentences for their role in a scheme that sought to kill a proposed tax on roll-your-own tobacco shops in return for campaign contributions.

Donovan, a Meriden Democrat, has not been charged with any wrongdoing. He lost in the 5th Congressional District’s primary and no longer serves in the General Assembly.

A number of individuals affiliated with the roll-your-own tobacco shops pleaded guilty to federal charges.

To date, the Federal Bureau of Investigation is responsible for all the charges related to the scandal. State prosecutors and other watchdogs have been quiet on these issues.

Meanwhile, the Office of State Ethics continues its attempts to conclude the case of Priscilla Dickman, a former medical technologist at the University of Connecticut Health Center.

In 2010, the Citizens’ Ethics Advisory Board, which hears cases brought by OSE and oversees the agency, fined Dickman $15,000.

Dickman, 57, of Coventry, said she would warn others to “never entertain challenging the Office of State Ethics or the CEAB with the incestuous relationship that exists” between them.

“There’s no justice or fairness in this process,” she said, explaining she hopes the General Assembly will fix the process.

Dickman continues to contest her fine and is seeking to reopen the case in Superior Court based on evidence she didn’t have at the time of her hearing.

Asked if the Dickman case was a distraction from the roll-your-own scandal, executive director of the Office of State Ethics Carol Carson said, “I can’t confirm the existence or non-existence of a confidential enforcement action.”

Before taking a case to a hearing before the CEAB, the ethics agency’s enforcement division has to hold a confidential probable cause hearing before a judge. If probable cause is found, the decision becomes public.

Carson said her agency’s main criteria is whether “we can prove the case.”

If at any point in the process a settlement is made, that becomes public, too.

Dickman was the first – and, to date, only – person to be formally tried by OSE at a hearing of the Citizens’ Ethics Advisory Board.

OSE has investigated other cases, but none have reached the level of a board hearing before settling or being dropped.

Dickman retired from the UConn Health Center in 2005. She was arrested on criminal workers’ compensation fraud charges in 2007 and soon after was notified of the ethics investigation into her conduct.

The state never proved its original claim of workers’ compensation fraud, but other charges took its place.

The ethics charges against Dickman centered on her use of her work computer at the UConn Health Center to conduct business transactions. The Office of State Ethics charged that Dickman sold jewelry and booked travel on her work computer and using her UConn email address.

The CEAB, which oversees the OSE and hears ethics cases, found Dickman broke the two different laws. One law prevents state employees from using their “office or position…to obtain financial gain” and the other makes anyone who gets “financial advantage” from such abuse liable for damages.

Dickman said she was never disciplined at work for being unproductive or misusing her computer. She said she retired in 2005 “never knowing I was being questioned” until years later when the ethics charges came up.

“On an occasional basis people would come to me and say, ‘Could you help me get a chain for my son?’” Dickman said, explaining the nature of her jewelry sales.

At least one of the witnesses who testified against Dickman at the ethics hearing admits she bought jewelry from her former colleague while at work.

Dickman characterizes her jewelry sales and travel booking as hobbies. She said things she did related to them at work happened while on break.

There were two forms of electronic communication she used at the health center, Dickman said. Mainly she used a secure system for communicating lab results, while email was used less frequently to receive things like general messages to health center employees or communicate with people outside her division.

It was the general email account – not the special system for patient information – that became an issue in the ethics case.

Dickman admits to using her UConn email account on breaks and remotely from a public library, but she doesn’t see how that means she “abused her position” as the statute requires.

In an ironic twist, OSE fined G. Kenneth Bernhard, the chairman of the ethics board who oversaw Dickman’s hearing, $3,500 for making campaign contributions while in that office, which is illegal.

Earlier, one of Dickman’s attorneys pointed out that Bernhard’s appointment was improper, forcing Rep. Larry Cafero, the Republican Minority Leader from Norwalk, to correct the error by reappointing him.

Dickman appealed the board’s decision to the superior and appellate courts, losing both times. The Connecticut Supreme Court declined to hear her case.

Since the Supreme Court’s decision, Dickman, representing herself, filed a motion to re-open the case based on new evidence she received since the original CEAB hearings in 2009 and 2010.

Judge Henry Cohn in New Britain instructed Dickman to bring the evidence to the CEAB and seek to open the case at that level. Dickman presented the evidence at the board’s August meeting.

Ethics enforcement officer T.J. Jones said Dickman was not following proper procedure.

The board voted not to reopen Dickman’s case, but it was unclear whether the board was dismissing Dickman’s request on a procedural basis – as Jones suggested – or based on the evidence.

Carson said the board voted at its September meeting to “affirm” its previous decision and clarify its intention. “The board gave her the time,” Carson said, notwithstanding Jones’ position. “She didn’t present any new evidence.”

According to Carson, Dickman is presenting evidence she had the opportunity to provide during her appeal process.

Dickman said OSE’s argument amounts to saying, “Ok, let’s burn that DNA,” because it wasn’t introduced properly in court. She will have a chance to make her arguments to Cohn at 2 p.m. Monday, Dec. 2, at New Britain Superior Court.

“I’m confident that it will be resolved,” Carson said. “Every legal authority that has reviewed the matter has agreed with the Office of State Ethics.”

Carson said her agency tries to be “fiscally responsive” but the number of times someone appeals is outside of its control. “We are always balancing the cost of enforcement,” she said.

Dickman said she could not settle the ethics case and admit wrongdoing because she feared doing so would influence the other cases against her. She said she expected somewhere along the way the judicial system or then-Attorney General Richard Blumenthal would step in to make things right.

A jury in Rockville Superior Court convicted Dickman of misdemeanor third-degree forgery for altering a probate document. Dickman admits to writing her name on the document.

Courts found that although Dickman did not financially benefit – or hurt anyone else – by altering the document, the conviction was valid.

After serving a brief jail sentence, Dickman filed a habeas appeal in an attempt to overturn the conviction, claiming the state improperly obtained the evidence against her. She lost that appeal, too.

A separate criminal trial in Hartford Superior Court found Dickman guilty of forging notes from doctors so she could return to work, making her case the exact opposite of the more-typical workers’ compensation fraud prosecutors originally charged her with.

Dickman has a long history with workers’ compensation – she is claiming the health center violated her rights in a separate case before the Workers’ Compensation Commission – dating back to the 1970s. For decades, Dickman says she worked essentially without incident under the arrangements her doctors set out to manage the fibromyalgia related to a past work injury.

In the early 2000s, she struggled to reach a new accommodation with the health center, negotiating in multiple rounds over what restrictions on her work would be acceptable. The health center wanted Dickman to stay at home and not work when her restrictions prevented her from being productive at the office, so Dickman tried to adjust the restrictions to a point acceptable to the health center.

Although her doctors claimed they would have signed the documents anyway, a jury convicted Dickman of four counts of felony second-degree forgery after deliberating for fewer than 20 minutes. She received five years of probation as a sentence.

Dickman often points out how others do things very similar to what she did without facing punishment. For example, auditors found widespread computer use for non-work purposes among her colleagues at the health center.

Perhaps her favorite example is an email she obtained after her board hearing. The email appears to show ethics enforcement officer Jones engaged in selling Girl Scout cookies to colleagues.

Carson said use of state computers for non-work purposes, like Facebook, are not ethics issues if there is no financial gain. “I don’t disagree with you that those are both of concern,” she said. “Some of these can be overlapping.”

Dickman was most recently charged with evidence tampering for allegedly altering evidence given to Jones during the ethics investigation. Last year, she pleaded guilty to interfering with an officer, a lesser charge.

“I was kind of proud of that, if I can interfere with that idiot,” Dickman said.

2Criminal justice computer system at “high risk for failure”

A new computer system intended to streamline Connecticut’s criminal justice system is at ”high risk for failure” according to a consultant report uncovered by state auditors and Attorney General George Jepsen.

The Auditors of Public Accounts and Jepsen reported their findings last week in a letter to the CJIS Governing Board, which has statutory authority to oversee the project. A whistleblower report prompted the investigation.

The letter warns of potential delays and cost overruns due to poor communication and management problems.

A report to the General Assembly on July 1 projected the Criminal Justice Information System would be completed in November 2014. A report by MTG Management Consultants issued just weeks later found that projection unlikely to be met.

In their letter the auditors and Jepsen said staff running the CJIS project did not share MTG’s report, a quarterly risk assessment, with the board.

“Central to each of these concerns is our conclusion that the quality of information provided to the board by CJIS staff has been consistently poor,” the letter says, adding there was “a failure by board to meaningfully engage” project staff.

A former chief of information technology for the state raised issues about the project’s leadership three years ago.