Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
If you are going to read one Wait, What? post this year —- this is the one to read:
“The [UTC] agreement, which requires legislation, does not require any borrowing or payments by the State of Connecticut.” Governor Dannel Malloy (2/26/2014).
It is safe to say that Governor Dannel Malloy, who often has trouble telling the whole truth, has never uttered a statement as misleading as his remark about the cost that the Malloy/United Technologies Corporation deal will have on Connecticut’s taxpayers.
Dannel Malloy has been Connecticut’s Governor for just over three years. Of all the financially irresponsible, absurd and counter-productive economic policies Malloy has proposed none are as outrageous, inappropriate or fiscally misleading as the farce that he has cooked up with UTC.
As more and more details about the Malloy/UTC deal come out, reporters, legislators, and the public will become increasingly aware of just how fiscally irresponsible this deal is for the taxpayers of Connecticut.
Here is the truth that has yet to be fully revealed,
The day AFTER Sikorsky, a UTC subsidiary, announced that it would be laying off 600 manufacturing workers in Connecticut, Governor Malloy and UTC‘s CEO announced that the incredibly successful, multi-billion dollar, multi-national corporation would make a $500 million investment in its research, training and corporate facilities in Connecticut, “in exchange for $400 million in tax relief over the next two decades.”
First, Sikorsky 600 workers will still be unemployed.
And second, Malloy’s statement that the deal “does not require any borrowing or payments by the State of Connecticut,” to UTC is so misleading as to be nothing short of an outright lie.
As reported by Keith Phaneuf in CT Mirror,
“Like many large corporations, UTC qualifies for various credits to reduce its corporate income tax bill. But regardless of how much in total credit values it has amassed, it cannot reduce its annual tax liability by more than 70 percent.”
This means that large Connecticut corporations can use various tax credits to drop their tax obligation to the state of Connecticut by up to 70 percent – that is – by maximizing the Connecticut Tax Code, UTC and other major companies only pay 30 percent of what they would otherwise be paying to the state.
Malloy’s proposal is to allow UTC to take unused tax credits to reduce their tax obligation ever further – well above the 70 percent level. In this case, UTC would reduce their tax payments to the state of Connecticut by an additional $400 million.
As Wait, What? readers know, according to the independent office of Fiscal Analysis, Connecticut faces budget deficits of at least $1 billion dollars year in each of the three years following this year’s election. Malloy has used budget gimmicks and pushed off obligations in order to make it appear the state has a surplus this year even though the cost will be huge deficits in upcoming years.
While the state of Connecticut will not be “borrowing $400 million” to give to UTC to underwrite their $500 million investment, Malloy’s plan is arguably even worse because the deal means UTC will be paying $400 LESS in state taxes.
The tax cuts for UTC mean $400 million less in tax revenue which means $400 million more in program cuts and/or $400 million more in tax increases for Connecticut’s middle class and small business taxpayers.
To put that cut in to perspective, Governor Malloy takes great pride in saying he has increased funding for Connecticut’s poorest school districts. Altogether, the thirty so-called Alliance Districts, have received about $30 million a year to help all of those students and schools.
And yet, Malloy is allowing one of the most successful corporations in the world to reduce it tax payments to the state by $400 million.
And while Malloy says the “investment” will lead to 1,500 new jobs, reading the agreement reveals that UTC can actually lay off even more Connecticut workers and still collect the corporate welfare that Malloy is pushing on them.
As Keith Phaneuf also reports in the CT Mirror, UTC “currently employs about 4,900 engineers and 14,100 individuals in total in East Hartford, with a gross payroll topping $1.53 billion.”
According to the agreement, UTC could actually drop its engineering workforce to 4,350 and its total employment to 12,450 before it loses all the benefits of this taxpayer give-away.
To repeat, UTC Sikorsky has already laid off 600 workers and UTC could lay off another 1,650 workers before it forfeits this deal.
Governor Malloy’s economic development plan has been fundamentally based on a strategy of corporate welfare. The Malloy/UTC deal not only continues that failed policy bur takes it to an unprecedented level of irresponsibility.
If that isn’t bad enough, what happens when other large corporations come forward and say they want to be able to use their “stranded” tax credits as well?
Using Malloy’s UTC agreement as a model, Connecticut’s biggest and most profitable companies would be able to cut their tax payments by $2.5 billion, there by destroying Connecticut State Government.
It is just a matter of time before Connecticut voters realize just how badly they have been ripped off by the Malloy/UTC farce of a deal.
Unfortunately some media outlets still haven’t caught on to what is included in this Malloy/UTC deal. Here are some of the stories so far.
CT Mirror: http://ctmirror.org/malloy-seeks-tax-relief-to-trigger-500m-expansion-for-utc/
CT Newsjunkie: http://www.ctnewsjunkie.com/archives/entry/state_uses_stranded_tax_credits_to_help_pratt_whitney_sikorsky/
CT Post: http://www.ctpost.com/default/article/UTC-deal-keeps-jobs-in-state-5271800.php
Waterbury Republican: http://www.rep-am.com/news/local/787344.txt
NBC Connecticut: http://www.nbcconnecticut.com/news/local/utc-united-technologies-pratt-whitney-sikorsky-malloy-247310861.html
Economic Development, Malloy, Mayor Pedro Segarra, Stefan Pryor, Teach for America Hartford, Jobs, Malloy, Mayor Pedro Segarra, Stefan Pryor, Teach for America
In an extraordinary statement about the fundamental lack of commitment to Connecticut citizens, the Hartford Board of Education will be meeting tomorrow, Tuesday, February 18, 2014 at 5:30 p.m. to authorize Superintendent Christina Kishimoto to extend the Hartford Board of Education’s contract with Teach for America, costing Connecticut and Hartford taxpayers an additional $650,940.
The taxpayer funds will be used to pay Teach for America a “finders-fee” to recruit up to 210 college graduates, none of whom will have gone through a college level teacher training program, to take teaching position in Hartford classrooms.
As the memo from Superintendent Kishimoto to the Hartford Board of Education explains;
“Teach for America recruits teachers from the top colleges and universities across the country. Each teacher, corps member, commits to teach for two years in one of 39 urban and rural regions across the United States. Teach for America’s mission is to recruit, select, train and support outstanding recent college graduates to serve as highly qualified and effective teachers in urban schools.”
TFA recruits are given five weeks of training, are paid the same rate as Hartford’s fully trained beginning teachers and the federal government will allow the TFA recruits to write-off their federal student loans for each year they teach.
Meanwhile, 136,500 Connecticut residents remain unemployed including many trained teachers who already hold Connecticut teacher certificates.
Furthermore, as a direct result of Governor Dannel Malloy’s policies, there are about 8,200 FEWER jobs in state and local government since he took office. Those jobs disappeared as a result of targeted budget cuts to various government programs, including education at the state and local level. Some of those lost jobs were held by teachers with valid Connecticut teaching certificates.
In addition, hundreds of new Connecticut residents have graduated over the past couple of years from the University of Connecticut, Connecticut State University and other Connecticut colleges and universities after completing four and five-year teacher preparation programs.
These students and their families have spent tens of thousands of dollars to prepare for a teaching career in Connecticut.
But rather than give unemployed teachers and the fully-trained recent graduates an opportunity to get a job and contribute to the well-being of their home state, the Hartford Board of Education, a committee that includes the Mayor of Hartford, may vote to pay Teach for America another $650,000 to recruit mostly out-of-state kids to move to Connecticut for a couple of years.
The notion that the Hartford Board of Education would even consider such an insult to Connecticut and its taxpayers is disturbing beyond words.
To date, Hartford, New Haven, Bridgeport,Windham, New London and other cities have already paid millions of taxpayer funds to Teach for America so that they can recruit and place inexperienced teachers in our state’s urban classrooms.
The fact that Governor Malloy and Education Commissioner Prior aren’t stepping in to put Connecticut citizens first is even more outrageous.
Once again, we are left to ask, are there any elected or appointed state or municipal officials who will stand up for Connecticut’s families?
The question is, will Governor Malloy, Commissioner Pryor or Hartford Mayor Pedro Segarra act before it is too late?
Or will they turn their backs on Connecticut citizens yet again?
Corporate Welfare, Economic Development, ESPN, Malloy Corporate Welfare, ESPN. Economic Development, Malloy
The New York Times had an incredible article yesterday about Governor Malloy’s decision to give tens of millions of dollars in taxpayer funded corporate welfare checks to the extraordinarily successful ESPN Company.
Malloy is hardly the first Connecticut governor to provide excessive corporate subsidies to “win over” ESPN, but he certainly gets the “award” for giving away the most public money.
Over the past decades, time and time again, Connecticut taxpayers have been informed by their elected officials that it was vitally important to divert scarce public resources away from paying for vital services in order to pay for various expenses incurred by ESPN.
Governor Malloy holds out these virtually unending corporate welfare payments as proof that his economic development strategies are sound and working.
Instead of the traditional belief that a successful capitalist system will create its own winners and losers, Malloy and previous governors have claimed that by using taxpayer funds to select who wins and who loses, government can hand pick the winners and thereby build a stronger economy.
As the New York Times explained in their latest expose;
Governor Malloy “arrived at ESPN’s expansive campus here to celebrate the groundbreaking of the sports media giant’s 19th building, a digital center that would be the new home of “Sports Center.” It was August 2011, and this was the third visit in a year by Gov. Dannel P. Malloy, whose first was about three weeks before his election….This time, Mr. Malloy brought a hard hat, a shovel and an incentive package for ESPN potentially worth $25 million.
ESPN is hardly needy. With nearly 100 million households paying about $5.54 a month for ESPN, regardless of whether they watch it, the network takes in more than $6 billion a year in subscriber fees alone. Still, ESPN has received about $260 million in state tax breaks and credits over the past 12 years, according to a New York Times analysis of public records. That includes $84.7 million in development tax credits because of a film and digital media program, as well as savings of about $15 million a year since the network successfully lobbied the state for a tax code change in 2000.”
Malloy told the New York Times, “After I was elected, this was one of the first companies that I came to…I made it clear that ESPN’s needs were not going to be ignored by my administration.”
Instead there were plenty of other things to be ignored.
For example, Malloy, who once supported the CCEJF v. Rell School Funding Lawsuit, but who now – along with Attorney General George Jepsen opposes it, knows that Connecticut’s public school funding formula is $2 billion dollars underfunded.
As it was Governor Malloy who has pushed through the deepest cuts in history to Connecticut’s public colleges and universities, leading to massive tuition increases and forcing some Connecticut students to drop out of college altogether.
And as Malloy has to appreciate, a day almost never goes by that we don’t hear more and more reports about state agencies that are failing to fulfill their legal responsibilities due to their lack of sufficient staffing.
But none of those problems have stopped Malloy for funneling hundreds of millions in corporate welfare checks to ESPN, a multibillion-dollar conglomerate, and other extremely successful companies.
Of course, while Connecticut taxpayers are shelling out the money, they aren’t getting many of the benefits associated with investing in a success company. Those benefits are accruing to the corporate executives and corporate shareholders of ESPN and companies like it.
Understandably ESPN, like many of these companies, take great pride in their economic success.
As an ESPN’s spokesman explained to the New York Times;
“Consistently since we launched, we’ve been a growth engine for economic development in central Connecticut…We’ve added employees on a consistent basis for 33 years in a state that in recent years hasn’t had as much success bringing companies that hire people here…Because we are visible and highly successful, the state can point to us as a company that loves being here and has flourished being in Connecticut.”
ESPN is extremely successful and deserves tremendous accolades but that hardly means Connecticut’s taxpayers should be shoveling more and more money into the company’s coffers.
And no one should fool themselves; these corporate welfare payments have been significant…
As the New York Times explains, Connecticut legislators have changed the corporate tax system a number of times to benefit ESPN and other media companies.
The cost to Connecticut taxpayers over the past seven years from the film tax break along has been over $450 million in lost state revenue. Of that amount, nearly $100 million has gone directly to ESPN. (Malloy proposed $50 million in new ECS School funding this year and called it a “major” initiative.”
Since ESPN doesn’t even pay enough in taxes to use all of their tax credits, the company “regularly sells the tax credit certificates to other entities in private transactions.”
Meaning that not only does Connecticut fail to collect the taxes from ESPN, but ESPN MAKES MONEY selling the tax credits to other company that then uses them to get out of paying their fair share in taxes.
And as the New York Times noted, “Such transfers are common and within the rules of the program.”
This list goes on and on. In fact, the New York Times story only scratches the surface.
When Governor Malloy proposed the largest tax increase in Connecticut history in 2011 the burden fell disproportionately on Connecticut’s middle income families. Those making over $1 million a year didn’t even see their income tax rates increase.
With policies like that, Connecticut’s wealthiest families pay about 6 percent of their total income in state and local taxes. Middle Class families pays about 10 percent of their income in state and local taxes and the State’s poorest residents pay about 12 percent of their income in state and local taxes.
And those figures don’t even count the more than $1 billion in corporate welfare payments that Malloy has given out to successful corporations….nearly all of which were charged to the state’s credit card.
The result of this spending spree on borrowed funds?
Connecticut residents will have to pay back all of the money plus the interest associated with borrowing those funds.
All so that Malloy could show up at groundbreakings like the one he attended at ESPN.
You can read the New York Times story at: http://www.nytimes.com/2013/12/27/sports/for-espn-millions-to-remain-in-connecticut.html?_r=1&adxnnl=1&seid=auto&smid=tw-nytmedia&pagewanted=1&adxnnlx=1388171681-7lC2pbJS5xAUNAuHJ6XQbg
Corporate Welfare, Economic Development, Economy, Gubernatorial Election 2014, Malloy, Presidential Election of 2016, Taxes, Will Rogers Corporate Welfare, Gubernatorial Election 2014, Malloy, Taxes, Will Rogers
“I was born on Nov. 4, which is Election Day. . . . My birthday has made more men and sent more back to honest work than any other days in the year.” – Will Rogers
There was a time in our nation’s history when one out of three Americans followed the writings of a single newspaper columnist. More than forty million Americans would read his pieces. Will Rogers wasn’t a radical or left-wing agitator, although he’d probably be labeled one if he was around today.
Will Rogers was a newspaper columnist, writer, humorist and cowboy. He was a folk hero and a truth-teller.
In early 1931, as the country collapsed under the weight of the Great Depression, Will Rogers wrote an article entitled “Let’s Give Every Man a Job That’s Out of Work!”
One could call it an eerily perceptive commentary on the Republican’s trickle-down economic theory or Governor Malloy’s belief that if we limit tax increase on the rich and just give out more corporate welfare, the economy will turnaround. (Wait, What? readers will recall that under Malloy’s $1.5 billion tax increase in 2011, the income group that DID NOT see any increase in their tax rate were those making more than $1 million-a-year).
Back in 1931 when it came to the issue of fair taxation, Will Roger’s wrote:
“Course the big man’s argument, and all the heavy Taxpayers’ alibi is that when you take too big a slice from a man as taxes it takes that much more out of his investments and might cut down on money being put into enterprises. But it didn’t work that way after the war, and during it why income taxes run as high as seventy percent on every dollar earned, and yet there was more money being made and put into things than there is now.”
“This is becoming the richest, and the poorest Country in the world. Why? Why, on account of an unequal distribution of the money.”
“Now that we got that settled all we have to do is get by Congress and see if the Republicans will vote a higher Income tax on the rich babies. It might not be a great plan, but it will DAM sure beat the one we got now.”
Speaking the truth was one of Will Roger’s many strong points.
And he was fearless when it came to that task.
In an October 18, 1931 national radio broadcast that became known as the “Bacon, Beans, and Limousines” speech, Rogers laid out the truth once again. (A video of the speech can be seen at: https://www.youtube.com/watch?v=kyfvamwM4Yo).
Rogers told the people of the United States;
“Now we read in the papers every day, and they get us all excited over one or a dozen different problems that’s supposed to be before this country. There’s not really but one problem before the whole country at this time… The only problem that confronts this country today is at least seven million people are out of work. That’s our only problem.”
“[We must] see that every man that wants to is able to work, is allowed to find a place to go to work, and also to arrange some way of getting more equal distribution of the wealth in the country.”
“You know, there’s not a one of us that has anything that these people that are without it now haven’t contributed to what we’ve got. I don’t suppose there is the most unemployed or the hungriest man in America that hasn’t contributed in some way to the wealth of every millionaire in America. It wasn’t the working class that brought this condition on at all—it was the big boys themselves who thought this financial drunk we were going through was going to last forever. They over-merged, and over-capitalized, and over-everything-else. That’s the fix that we’re in now.”
We need another Will Rogers now more than ever.
But in the end, if there is any chance of changing course, its rests in our hands … and it is called the gubernatorial election of 2014 and the national election of 2016.
Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
Consider it a tribute to Dannel Malloy’s version of American Capitalism…
You’ll find this cute little “feel good” story in this week’s Hartford Business Journal.
“Brewing Opportunity – Startup’s K-cup vending machine offers employers money-saving option” is an article about how an employee at the Connecticut Center for Advanced Technology in East Hartford got an idea for a new product when he was instructed to go out and purchase a Keurig coffee brewer for the company lunch room.
By 2015, the employee is hoping his company makes in excess of $1 million.
The employee got the idea that there was room in the marketplace for a machine that sold individual 10 gram, single-serve K-cups. The K-cup vending machine is undoubtedly helpful for those employers who refuse to provide their employees with free single-serve K-cups.
The article goes on to explain that this employee took his idea and went to a “Chinese manufacturer… because the firm produced a similarly designed product” and “China is also considered a lower cost production center.”
And today he is making money selling these machines.
And then comes the kicker…
To help the company get started, Governor Malloy’s Department of Economic Development gave the start-up company, KK Manufacturing, a $35,000 grant.
Meaning that Governor Malloy borrowed $35,000 on the taxpayer’s credit card and then gave it to the private company. Connecticut’s taxpayers will then have to pay back the $35,000, over the next twenty years, along with the additional hundreds of millions that Malloy has borrowed to give to other private companies.
In this case, the company’s owner said the grant was a huge help.
As the Hartford Business Journal article explains, “KK Manufacturing is now generating revenue. Striebel [the company’s owner] said he expects to be a ‘healthy six-figure company’ in 2014, and thinks there’s potential to breach the $1 million sales mark in 2015.
He’s going to hire his first sales and customer service employee in the next year — a pledge he made to get the state funding. He hopes there will be more to come.”
What a great commentary about “Modern American Capitalism.”
We’ve developed an economic system in which the government borrows money – that the taxpayers must pay back with interest – and gives it to private businesses so that they, in turn, can make money.
No disrespect intended for KK manufacturing, but can I have my share of my money back. I need it to pay my taxes.
You can read the article and see the new machine at: http://www.hartfordbusiness.com/article/20131028/PRINTEDITION/131029932
Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
With the help of $11.5 million in taxpayer funds, Governor Malloy proudly announced that he was able to convince The Navigators Group, Inc., an extremely profitable “international specialty insurance holding company with insurance company operations, underwriting management companies and operations at Lloyd’s of London” to move from Rye, New York to Stamford Connecticut.
According to the Malloy administration, the state of Connecticut will provide the private insurance company with a 10-year, $8 million forgivable loan at no interest. The Navigators Group will also receive a $3.5 million grant to help offset the $25 million relocation cost.
The company employs 87 people at the Stamford location, with an additional 35 across the state. If the company creates 200 jobs within the next five years it will not have to pay back the $8 million, no interest loan.
If it fails to create the jobs, the no-interest loan will have to be paid back.
Since the State of Connecticut is borrowing the $11.5 million to give to the Navigators Group, the actual cost to Connecticut’s taxpayers over the next 20 years will be in the range of $15 million. The amount of state debt per capita already places Connecticut as the most debt ridden state in the in the nation. While the average state debt per capita across the country is about $1,400, Connecticut’s state debt per capita amount is over $5,800.
According to official filings, the Navigators Group has been doing very well. Last year, the company’s net income was $63.8 million, up from $25.6 million in 2011.
The company’s net income per share had its best showing since 2007.
And the company’s operating earnings were $37.6 million, up from $19.1 million in 2011. The jump in earnings came despite net losses of $20.4 million as a result of Superstorm Sandy.
According to the company’s financial filings, Stanley Galanski, the President and Chief Executive Officer of NAVIGATORS GROUP INC, made $2,714,948 in 2012. Of this total, $725,000 was received as a salary, $372,000 was received as a bonus, $1,574,396 was awarded as stock and $43,552 came from other types of compensation.
Navigators Group Inc.’s other corporate officers include:
Stephen R. Coward: $856,933 in total compensation.
Ciro M. DeFalco: $1,004,503 in total compensation.
H. Clay Bassett Jr.: $1,028,407 in total compensation.
Vincent C. Tizzio: 1,854,513 in total compensation.
And for those who think using taxpayer funds to subsidize extremely successful business isn’t all it is cracked up to be, in what appeared to be a related announcement, “Navigators Group, in partnership with Cos Cob-based Kids In Crisis, announced it will be the title sponsor of the Navigators Stamford KIC IT Triathlon. The June event consists of a 1.5-kilometer swim in Long Island Sound, a 40K bicycle ride and a 10K run through Stamford.”
Corporate Welfare, Economic Development, Ethics, Malloy, Prosperity for Connecticut PAC Corporate Welfare, Economic Development, Ethics, Malloy, Prosperity for Connecticut PAC
Thanks to Governor Malloy’s corporate welfare program, Connecticut’s taxpayers provided a Connecticut company with a $100,000 loan and another $26,320 grant to pay for their move from Bloomfield to Hartford.
Malloy said the grant would help Connecticut’s jobless problem by retaining 11 jobs.
In a press release as the time, Governor Malloy explained, “Hybrid Insurance Agency LLC is a full-service, underwriting management and wholesale insurance brokerage firm. This is a fast-growing insurance group, beginning operations in March of 2010 in Windsor, a year later opening a satellite office in Columbus, Ohio, and a service operation in Kathmandu, Nepal. They currently have 11 employees in their headquarters and approximately 650 retail agents and brokers. A $100,000 loan and a $26,320 matching grant will go toward the relocation of the headquarters to Hartford. The project will retain 11 employees.”
Now the owner of Hybrid Insurance Agency reportedly works from home, most of the employees are apparently no longer employed and the company has defaulted on the loan that it received from Malloy’s economic development operation.
Hybrid Insurance is also is under investigation for allegedly failing to pass along $670,000 in premiums to two of the City of Hartford’s insurance carriers.
According to a story written by Hartford Courant columnist and blogger, Kevin Rennie, the Hartford Internal Audit Commission has been asked to investigate Adam Cloud, Hartford’s City Treasurer, “for what they called a possible conflict of interest involving Hybrid, which is at 30 Lewis St. — a building owned by Cloud, his brother Christopher and their father, Sanford “Sandy” Cloud Jr.”
Rennie reports that “Paula Altieri, the city school system’s chief financial officer, stated in a memorandum that Cloud’s office “moved” an insurance policy from one broker to Hybrid around February 2012 “without the need to compete.”
Meanwhile, Hybrid Insurance made an appearance earlier this year in a Wait, What? post when it was noted that the lobbyists for Hybrid Insurance were among those that attended the Prosperity for Connecticut Political Action Committee fundraiser in Hartford.
Prosperity for Connecticut is the PAC affiliated with Governor Malloy and that raised over $235,000 thanks to 15 fundraisers held over an 18 month period. Governor Malloy apparently attended all 15 fundraisers, with three held in Washington D.C., three in New York City and the rest in Connecticut.
Lt. Governor Nancy Wyman joined Malloy at the Hartford event which was targeted to raise donations from Connecticut lobbyists.
Hybrid Insurance has worked with the lobby firm of Camilliere, Cloud and Kennedy for the past two years, paying the lobbyists a total of $26,900. Christopher Cloud, Adam Cloud’s twin brother, is one of the partners and the lobby firm’s offices are located in the same building that “houses” Hybrid Insurance and is owned by the Cloud brothers and their father.
Today Hartford City Treasurer Adam Cloud had a letter to the editor in the Hartford Courant clarifying his role in the whole affair. Adam Cloud wrote;
“I would like to clarify some points made in recent articles about the Hartford treasurer’s office and Hybrid Insurance Group [Oct. 11, news, “Officials Call For Audit Of Treasurer”; Oct. 10, Kevin Rennie column, courantopinion.com, “Who's Got Hartford's Missing $669,997?”].
There are two insurance policies being discussed. First, the smaller pension fund policy was recommended by an insurance agency that had solicited a reduced-cost proposal from Hybrid. The bid was approved by the office of the corporation counsel and the pension commission, not our office.
As for the insurance coverage for the city and the schools, the selection of the insurance was made by an independent committee that neither I nor anyone in my staff was a member of. My office did not approve any business relationship between the city and Hybrid.
It is the finance department, which does not report to the treasurer’s office, that processes payments to vendors. When our office was notified that the carrier had not been paid by Hybrid, and the city could be in danger of an insurance coverage lapse, I engaged the finance department. In consultation with former city Finance Director Julio Molleda, we transferred the funds.
This is not an uncommon occurrence in managing the finances of a large city. It was my intent to protect the city from any potential financial dangers with no insurance.
The fact that Hybrid has an office in a building in which my family and I have an ownership interest had no bearing on this decision. Upon becoming treasurer, I relinquished any management responsibilities of this building.
Finally, it is important to note that in accordance with state law, at no time was the city uninsured. The city does not have to recoup the payment or make any additional payments; this is the carrier’s responsibility.
I strongly support the state Department of Insurance investigation of Hybrid and the city’s internal audit department’s review.
Adam Cloud, Hartford City Treasurer.
And lest it falls through the cracks, the only person who raised concerns about Malloy’s gift to Hybrid Insurance in the first place was Bloomfield’s State Representative who asked why state funds were being used to persuade a company to move from his district into Hartford.
At the time Baram said, “The loan program should primarily focus on growing small businesses in the local community where they are located… “I will be conveying my disappointment to the governor’s office, urging the Department of Economic and Community Development to award future loans and grants that will allow companies to remain local.”
Bridgewater Associates, Corporate Welfare, Economic Development, Malloy Bridgewater Associates, Corporate Welfare, Malloy
Bridgewater Associates is the gigantic hedge fund company that Governor Malloy is giving over $115 million dollars in public funds, as part of an effort to assist them in their move from Westport, Connecticut to Stamford, Connecticut.
For some, Bridgewater is better known as the company that paid its CEO a compensation package of $2.3 billion a year or two ago. (Yes, that is the letter b and not the letter m after the amount the company paid its CEO).
You can read more about the Bridgewater Associates Project here: Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO and here: Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund
But even when you try to give away $115 million to a successful billionaire financial giant little hurdles develop.
In this case, in order to implement this “economic development initiative,” an existing boatyard has to be moved to make room for Bridgewater’s new headquarters.
It turns out that the developer illegally demolished a 14-acre boatyard in preparation for the Bridgewater Associates project and now needs to find it a new home.
Building and Land Technology (BLT), the developer of the Bridgewater Associates project, had identified a parcel of land owned by the City of Stamford to build the new boatyard.
However, in the face of what appeared to be a pending negative vote yesterday by the Stamford Panning Board, BLT suddenly withdrew its application.
According to a story in the Westport News entitled, Bridgewater plan to relocate from Westport hits new snag, “Planning Board Chairwoman Theresa Dell said BLT General Counsel John Freeman asked to withdraw the proposed agreement at the beginning of Tuesday night’s regular meeting, where the board was expected to consider whether to approve the agreement.”
The BLT General Counsel wrote in an email, “To allow us time to consider and respond to the board’s comments, we have asked the administration to withdraw the application. This will provide us the opportunity to work with city officials to build greater consensus. Ultimately, this project will create new amenities for Stamford residents, boost the city’s economy and bolster the ongoing revitalization of the South End.”
READ: Help, need more time to line up the votes…
As the Westport News article explains, “The decision to withdraw the agreement erases two months of public hearings and fierce debate before the Planning Board over the agreement’s merits.”
The Westport News added, “In late August, more than 200 Stamford residents turned out to the first two public hearings on the proposed agreement, which would have granted the developer the right to use 2.5 acres of city land adjacent to 205 Magee Ave. The agreement needed the approval of that city’s Planning Board, Board of Finance and the Board of Representatives to move forward.
Under the agreement, in exchange for rights to include the land in a 6-acre boat yard facility, the developer would spend $5 million toward planning, design and completion of a new Stamford animal shelter and additional improvements to Czescik Marina to furnish up to 190 slips to city boaters, as well as landscaping improvements to Kosciuszko and Cummings parks.”
Supporters and opponents of Governor Malloy’s historic taxpayer-funded corporate welfare programs will want to read the full details of this latest development in the Bridgewater Associates story here: http://www.westport-news.com/news/article/Bridgewater-plan-to-relocate-from-Westport-hits-4861260.php
BassPro, Bridgeport, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch BassPro, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch
“Bass Pro often fails to deliver on its promise to be an economic development anchor and major tourist destination. Its stores attract shoppers but often do not produce sought-after economic benefits associated with major tourist destinations.” (Public Accountability Initiative 2010)
“The stores are billed as job generators by both companies when they are fishing for development dollars. But the firms’ economic benefits are minimal and costs to taxpayers are great.” (Franklin Center for Government & Public Integrity 2012)
This coming Friday, Governor Malloy’s State Bond Commission will authorize $31,000,000 in bonds to subsidize the construction of a Bass Bro “retail facility” at Steel Point Harbor in the City of Bridgeport. When the full bill for the principal and interest is paid off this taxpayer gift will cost the citizens of Connecticut in excess of $45 million.
The Governor’s promise to give Bass Pro public funds dates back to July 2012 when he attended a Bridgeport press conference with Bass Pro’s owner, Johnny Morris, to proudly proclaim, “This is about jobs, and it’s great news for the City of Bridgeport…Bass Pro will be a draw for people from throughout the region, one that will help revive the local economy.”
At the time, Mayor Bill Finch chimed in, “Today’s announcement marks a historic moment for the City of Bridgeport and SteelPointe Harbor. Bass Pro Shops’ investment in Bridgeport will create hundreds of jobs, generate new tax revenues and bring economic growth to the City. They are a proven brand that will generate interest and attract customers from throughout the region. Bass Pro Shops is committed to Bridgeport and we are proud to have them as a major anchor tenant at Steelpointe Harbor.”
The total cost of the proposed store is estimated at $68.5 million, but the $31 million in state subsidies doesn’t even count the cost of improvements and tax abatements that the City of Bridgeport will be providing Bass Pro.
Over the years, Bass Pro, a privately held company with at least $2.6 billion in annual revenue, has relied heavily on taxpayer subsidies to pay for the construction of its stores by suggesting that they will create hundreds of jobs and become major tourist attractions.
Last year, the Franklin Center for Government & Public Integrity, a major policy research organization, reported that “Bass Pro and its closest competitor, Cabela’s, received or were promised more than $2.2 billion from taxpayers over the prior 15 years.”
Of course, Bridgeport isn’t the only small city to fall for Brass Pro’s pitch that they can anchor a major revitalization effort. Just a few years ago it was Buffalo, with its population of 261,310 residents (nearly twice the size of Bridgeport), that was promising Bass Pro big money in return for the company opening up a store that would serve as the hook for the Erie Canal Harbor Development Corporation (ECHDC) plan to revitalize Buffalo’s waterfront. In that case, Bass Pro wanted $35 million in public subsidies.
At the time, the New York based Public Accountability Initiative (PAI) conducted a major study of the impact Bass Pro would have on Buffalo and the region.
The Key findings of the PAI study included;
- Bass Pro often fails to deliver on its promise to be an economic development anchor and major tourist destination. Its stores attract shoppers but often do not produce sought-after economic benefits associated with major tourist destinations.
- A Mesa, AZ development anchored by a Bass Pro has been described as a “ghost town” and “dead” and spurred the state to pass a ban on retail subsidies.
- A taxpayer-subsidized Harrisburg, PA Bass Pro is struggling to attract tenants to the mall it anchors, leading to lawsuits, stalled renovations, and increasing stigma. Though the Bass Pro was expected to hire 300-400 employees according to initial projections, it had hired only 101 employees three years after opening.
- A Bass Pro-anchored mall in Cincinnati, OH, is only 35% leased and has been described as “positively post-apocalyptic” and “pretty much on life support” by visitors.
- The Bakersfield, CA Bass Pro site – still in development – is home to a waterless ditch that was intended to serve as the store’s canal. The site has sat vacant for ten years.
- Bass Pro has gone on a building spree over the past ten years that significantly undermines its claims that each new store is a major tourist destination.
For more on the study in Buffalo check the following news clip: Study says Bass Pro won’t spur growth
Meanwhile, Buffalo never got their store…
A few months ago, Bass Pro founder Johnny Morris announced that Bass Pro would be opening up on the Canadian side of the border saying, “It’s an incredible opportunity for Bass Pro Shops to place our third Canadian store in this beautiful part of Southern Ontario.”
Thanks to Governor Malloy, here in Connecticut, the claim that Bass Pro is an “incredible opportunity” is getting this extremely successful private company $45 million of our money.
Bridgeport, Corporate Welfare, Economic Development, First Five, Kenneth Moales, Malloy, Mayor Bill Finch, TicketNetwork Bridgeport, Community Bank, Donald Vaccaro, Economic Development, First Five, Kenneth Moales Jr., Malloy, TicketNetwork
In an article entitled, “State Has First Bank Failure In A Decade, the Hartford Courant reported last night that, “The Community’s Bank, with its headquarters and one branch in Bridgeport, came under the receivership of the Federal Deposit Insurance Corp. late Friday afternoon amid mounting losses from commercial real estate loans.”
“Shocked and saddened” is what Bridgeport Mayor Bill Finch said in a statement, adding “…It is not clear how the state could allow this to happen.”
Not clear how the state could allow this to happen?
What Mayor Finch failed to reveal and the Hartford Courant didn’t report is that The Community Bank is one of the mortgage holders that Finch campaign treasurer and Bridgeport Board of Education Chairman, Kenneth Moales Jr, has failed to repay.
Since April of this year, Wait, What? readers have been learning about the massive financial problems facing Moales his church.
See: Is Bridgeport Board of Education Chairman Kenneth Moales, Jr.’s financial empire collapsing? (April 30), Wait, What? Bridgeport Board of Education scheduled to approve $1 million for Moales Daycare facilities despite foreclosure threat (May 13), Moales Empire Collapsing, Moales’ state funded childcare sites being foreclosed on (June 20), Update: Moales Empire Collapsing, foreclosure to take his state funded childcare sites, churches and apparently his residence. (June 21) News Update: More on financial problems facing Bridgeport Board of Ed. Chair Kenneth Moales, Jr. and his church (June 26).
As reported in those articles, in addition to the $8 million plus in principal and interest owed to Foundation Capital Resources, Inc., Moales and his church owe hundreds of thousands more to various contractors, the City of Bridgeport, the state of Connecticut and Community Bank of Bridgeport.
The Community Bank of Bridgeport loaned Moales and his family $175,000. As collateral for that loan, Moales used his mother‘s residence, which is owned by Moales’ church, as well as the full faith and credit of the church.
Despite benefiting from a $1 million dollar day-care contract his family “won” from the Malloy administration and raking in hundreds of thousands of dollars from his parishioners, Moales failed has consistently failed to make his mortgage payments. One of the entities Moales has refused to pay is The Community Bank in Bridgeport.
Although Moales hasn’t made his legally required payments, he has had the funds to drive fancy cars, wear expensive suits, go on long vacations and send his children to the costly Fairfield Day School, all while supporting Mayor Bill Finch, faux superintendent Paul Vallas and their combined efforts to privatize and run the Bridgeport School System into the ground.
According to the Hartford Courant,
“Chartered in 2001, The Community’s Bank was the state’s only minority-owned lender, and its finances had come under increased scrutiny from regulators since 2010.The traditional focus of minority-owned banks on urban, rather than suburban, areas, provided a major obstacle to building the bank, said state Banking Commissioner Howard F. Pitkin, who issued Friday’s order.’They found it difficult to grow,’ Pitkin said. “They never reached the point where they were making money.”
While Moales’ connection to the demise of Bridgeport’s Community Bank is noteworthy, the Hartford Courant story revealed an equally unsettling development.
The Courant is reporting that, “Late last month, an investor group filed an application with the state Department of Banking for approval to invest in the bank and become a minority shareholder. The group was led by TicketNetwork Chief Executive Donald Vaccaro. A spokeswoman for Vaccaro said late Friday that the effort was supported by U.S. Reps. Jim Himes and John Larson.”
“The cash infusion that I would have provided [would have] meant more loans for inner city development, fewer blighted properties, and more jobs for inner city folks,” Vaccaro said in a statement. “Instead of a rescue by me, closing the bank will cost the state and the federal government millions of dollars and cause a loss of many jobs in the city of Bridgeport.”
The Courant went on to report that “a banking department spokesman, declined to comment late Friday because the application is pending.”
But as Wait, What? readers may recall, TicketNetwork and Vaccaro have been in the news before. TicketNetwork was chosen by Governor Malloy to be his 2nd “First Five” corporate welfare recipient.
See: Shhh… over here… I got some tickets – “cheap”, State Gives Company Millions to Create Jobs – Claims it didn’t know about employee lawsuit…, Oh those crazy CEO’s (aka Our Tax Dollars at Work), First Five Company #2 – TicketNetwork – Takes the Fall, They’re BACK! TicketNetwork moves to “corner” the world market by controlling domain names ending with “.tickets”
Malloy choose TicketNetwork, the “online ticket exchange company” (whatever you do, don’t call them ticket scalpers), despite the fact that Vaccaro and TicketNetwork had a pending lawsuit against the president of the Bushnell.
At the time Malloy announced the multi-million dollar deal with TicketNetwork, Vaccaro and his company had a lawsuit pending against the Bushnell’s David Fay for slander because Fay had spoken at a Connecticut legislative hearing calling for stronger laws to protect consumers and artistic venue such as the Bushnell.
TicketNetwork went to court seeking damages and demanding a retraction because the Bushnell’s representative said that TicketNetwork was “a company that puts tickets to popular events on ‘hold’ and then attempts to sell those tickets to third parties at inflated prices.”
According to the CEO of TicketNetwork, “Mr. Fay’s slanderous comments were made in order to influence Connecticut legislation. That is reprehensible and subverts the whole legislative process.”
When Governor Malloy was asked about the whole controversy surrounding ticket re-sellers and whether the state’s taxpayers should be supporting such an industry, Malloy said “that is all part of the growing pains of this new emerging market.” Malloy went on to say “”There will be winners and losers in any emerging industry” and that the solution is to set up appropriate rules and then, “quite frankly, get out of the way.”
At the time, Malloy’s corporate give-a-way plan to Vaccarro’s company also overlooked a major sexual harassment lawsuit that was pending against Vaccaro and TicketNetwork.
However, despite spending more than $127,000 on lobbying fees, when Vaccaro later verbally abused a bouncer at a Hartford gathering and uttered a string of racial slurs, TicketNetwork was convinced to withdraw his “First Five” application.
The fact that Vaccaro now shows up with an application to invest in Bridgeport’s Community Bank while claiming his application has the support of Congressmen John Larson and Jim Himes is certainly worthy of some more investigation.
As is, of course, the notion that Bridgeport’s Mayor, Bill Finch, is “shocked” and says “It is not clear how the state could allow this to happen,” when the official record reflects the fact that it was at it was Kenneth Moales whose actions helped tank this local community bank.