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Connecticut taxpayers fund shorter CEO commutes

CEO Commute Bridgewater Cigna-01

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

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

Charter

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

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

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

Alexion

Charter will receive $6.5 million in taxpayer support.

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

Cigna could receive up to $71 million from taxpayers.

Navigators

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

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

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

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

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

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

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

FifthStreet-06-06

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

Graphics by Colby Pastre.

ATF undercover operation last year caught General Assembly clerk selling drugs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

State 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.

IT 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.