Attorney General William Tong announced Thursday that an investigation by the Connecticut Port Authority based on complaints from whistleblowers in 2019 is underway.
In coordination with the Auditors of Public Accounts, the lawmaking agency that audits other government agencies, Tong says attorneys at a whistleblower division, part of the Antitrust and Government Fraud division, are investigating potential violations of the law and the state code to check ethics.
Tong’s announcement is in response to a query by Republican Senate Chairman Pro Tempore Paul Formica and Republican Senate Chairman Kevin Kelly earlier this month following an investigation by the CPA based in part on new revelations of the $ 700,000 Seabury Capital signed a deal with the CPA in 2018.
Seabury was commissioned, among other things, to find an operator for the State Pier in New London. State Pier is a planned reconstruction project valued at US $ 157 million to US $ 200 million, jointly funded by the state and business partners Ørsted and Eversource. As part of the plan, the pier is to be expanded for the pre-assembly of wind turbines to support future offshore wind farms.
The payment to Seabury included a $ 523,500 success fee that was approved by the CPA on a settlement in 2020.
Tong said the deal with Seabury Capital was one of the issues raised during the auditor’s review of the whistleblower complaint.
“We are aware of the public allegations regarding the so-called ‘Success Fee’ paid to Seabury Capital and potential conflicts of interest and will investigate these allegations,” Tong wrote.
During an interview Thursday, Formica said he was pleased that the attorney general appeared to be taking the matter seriously. “Overall, I thank the Attorney General for his response to the letter and look forward to the results,” he said.
Formica has introduced two Connecticut Port Authority-related bills, one that would give the Mayor of New London a seat on the CPA board, and one that would allow New London to pay $ 400,000 annually in lieu of tax as the property is at State Pier is exempt from local taxes.
The Connecticut Port Authority issued a statement Thursday saying the CPA was “neither surprised nor alarmed” by the review. “The CPA is committed to full cooperation and timely response to requests for information,” the statement said.
Formica said he was also encouraged to see the attorney general have an interest in providing a legal opinion on how much authority the state contracting standards board has in reviewing contracts and procurements by the CPA.
The State Contracting Standards Board is currently reviewing several CPA contracts and arrangements and has questioned the extent to which its own authority extends. The group had raised questions about paying the CPA to Seabury earlier this month. Questions were then asked about a Seabury employee who was on the CPA board shortly before the contract was signed.
David Kooris, CPA’s chief executive officer, said following the CPA’s vote to pay $ 523,500 in 2020, the payments to Seabury were based on the CPA’s agreement with port operator Gateway and its commitment to capital improvements of $ 30 million on Pier and also related to the capital contribution committed by Ørsted and Eversource. The partners have committed $ 77.5 million for the State Pier project.
Kooris said the payment was a negotiated solution as Seabury advocated a higher fee. He also recently said that former CPA member who works for Seabury, Henry Juan III, was not on the board when the recruitment recommendation was made and that he did not represent his employer before the board.
The Connecticut Port Authority came under fire in 2019 following a whistleblower complaint and state audit that uncovered expenses and issues, including a lack of basic accounting practices and oversight. The audit led to a change in leadership positions and hearings that ended with government oversight.
Former North Haven Republican Senate chairman Len Fasano filed a request for an investigation by the Attorney General in 2019.
According to Tong, whistleblower complaints and all matters relating to “corruption, unethical practices, violations of government laws or regulations, mismanagement or gross waste of money in quasi-public entities” are the responsibility of the auditors, not the attorney general.
He said “in this exceptional situation” his office offered assistance to both the Bureau of Politics and Management and the state auditors at the time. His office review began when the auditor completed the review.
“We take this matter seriously as we process all whistleblower complaints forwarded by the auditor and we continue to exercise our legal authority to review all related matters within our remit. In addition, we will continue to work with our partners across the state government to review the quasi-public actions as we are faithful to all of our mandatory duties. I will take whatever measures I have authority to enforce and will make claims that are supported by facts and laws. We share the same goal of restoring public confidence in CPA and look forward to working with you, ”said Tong.
The Connecticut Port Authority stated in its statement: “Since the summer of 2019, whistleblowers, state auditors, and members of the public and press have become aware of several operational deficiencies.”
In September 2019, the CPA conducted a Memorandum of Understanding with the State Office of Politics and Management providing for the OPM to oversee all financial decisions made by the CPA and to monitor and manage the CPA’s tax, organizational and administrative practices and activities assess and make recommendations and assist in implementing the necessary improvements in organizational and business practices of the CPA. “
“After 18 months of working closely with OPM, the Administrative Services Department and other supporting agencies, we are confident that the board and staff have taken the necessary steps to address any policy, procedure and training gaps and that we are uncontroversial to position success, “said the CPA in its statement.