Corporate Welfare, Economic Development, Malloy, Stefan Pryor Corporate Welfare, Economic Development, Malloy, Stefan Pryor
“Pryor didn’t seem to care much for Connecticut’s children as education commissioner, so it stands to reason he wouldn’t hesitate to steal our jobs now that he is working in Rhode Island,” – Jonathan Pelto
As Neil Vigdor explains in the CT Post’s Former Malloy cabinet member recruits GE to Rhode Island;
A castoff from Gov. Dannel P. Malloy’s cabinet is coming back to haunt Connecticut with another reminder — or parting shot — that General Electric is the one that got away.
This time, to Rhode Island, where Malloy’s former education commissioner, Stefan Pryor, has played a key role in the recruitment of a new GE Digital venture to Providence.
Rhode Island leaders announced the deal Thursday, which includes an initial commitment of 100 jobs in return for $5.65 million in economic incentives.
Front and center was Pryor, the state’s commerce secretary.
It comes six months after Connecticut lost GE’s global headquarters to Boston, subjecting Malloy to intense criticism over the state’s business climate and retention efforts by his administration.
“We are excited to welcome this new GE Digital center to the Ocean State,” Pryor said. “GE is one of the world’s most important and innovative companies. This state-of-the-art center will bring high-wage advanced industry jobs to Rhode Island, enhancing the tech industry cluster that will ensure the state’s long-term economic success.”
A spokesman for Malloy declined to comment Thursday.
The vast majority of the 100 jobs will be new positions, according to a GE spokeswoman, who said the company did not put the digital venture out to bid when asked if Connecticut was in the running.
Rhode Island officials say the deal could yield hundreds of additional jobs.
GE still maintains a workforce of 4,000 employees in Connecticut, which Malloy’s defenders say has been overlooked in the relocation of the company’s headquarters.
But Malloy’s critics say that Pryor’s recruitment of GE Digital to Rhode Island, which had been in the running for the headquarters, adds insult to injury.
“It may cause an initial bruising to Governor Malloy as far as his feelings go,” said state Rep. John Frey, R-Ridgefield. “GE was so put off Governor Malloy’s presentation and dialogue last summer and fall that I sincerely doubt that they had any conversation with Connecticut about this opportunity.”
During his tenure as Connecticut’s education commissioner from 2011 to his 2014 resignation, Pryor had a rocky relationship with teacher unions and some education advocates over standardized testing and charter school expansion.
Some had publicly called for his ouster, including Jonathan Pelto, a former petition candidate for governor.
“Pryor didn’t seem to care much for Connecticut’s children as education commissioner, so it stands to reason he wouldn’t hesitate to steal our jobs now that he is working in Rhode Island,” Pelto said.
Bridgewater Associates, Corporate Welfare, Economic Development, Malloy, Ray Dalio Bridgewater Associates, Corporate Welfare, Economic Development, Malloy, Ray Dalio
Yesterday, CNBC reported that with more than $100 billion under its management, Ray Dalio’s Bridgewater Associates is once again the world’s largest hedge fund.
Tomorrow, Governor Dannel Malloy and his appointees on the Connecticut Bond Commission will approve a corporate welfare package for Bridgewater Associates that will cost taxpayers $22 million plus. The plus “part” is due to the fact that Malloy is actually borrowing the money to give to the giant hedge fund, meaning Connecticut taxpayers must pay back the money, along with the associated interest.
As for the entire debacle, long-time Wait, What? readers will remember that this is actually Plan B of Malloy’s effort to subsidize one of the most successful companies in the world.
The Connecticut Bond Commission agenda explains the latest version of the plan as follows:
These funds are requested to provide a grant-in-aid and loan, under the First Five Program, to Bridgewater Associates, LP to assist with expansion of its facilities in Westport, Wilton and Norwalk. The company will retain 1,402 jobs and create 750 new jobs. The loan will be provided at an interest rate of 1% for ten years with principal deferred for five years. The company will be eligible for loan forgiveness if it creates the 750 jobs and retains the existing jobs by the end of 2021. Also included are a $2 million grant to assist with training and a $3 million grant for installation of alternative energy systems.
As an aside, Dalio’s pay – last year – dropped to $1.6 billion, down from the $2.3 billion a year he collected a couple of years ago.
Things are tough all over… Malloy’s solution;
While middle class families across the state struggle with massive costs, such as student loans with rates of 8% or more, not to mention rising energy costs, as a result of Malloy’s economic development strategy, Connecticut taxpayer will be loaning one of the 1%’s most elite members with a $17 million dollar loan at 1% [go –figure] with no payments due for five years – and, should the company stick to its present business trajectory – they don’t have to pay back the loan at all. In addition to the $17 million, Dalio and his company will get $2 million to help subsidize their worker training program and $3 so that they can install some “alternative energy systems.”
Meanwhile, Connecticut’s state budget deficit is about $250 million and growing, The Malloy administration has laid off about 1,000 state employees in the last few weeks and Malloy’s new budget counts on his ability to ax as many as 3,000 more state employees in the coming couple of months.
Called by some, the Reverse Robin Hood Strategy, were in Connecticut we know it as Dannel Malloy’s approach to the advanced capitalist system, one in which taxpayers work extra hard so that their government can give money to successful businesses.
For those who want to know more about Malloy’s horrendous Bridgewater give-a-way program, some of the details can be found in previous Wait, What? posts on this issue.
Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund (8/19/2012)
Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO (1/11/2013)
Damn process gets in the way of the Bridgewater Associates corporate welfare give-a-way (10/2/2013)
“This is stealing from the poor and middle class to make a billionaire even richer” (Pelto, August 2012) (6/27/14)
To Hell with Connecticut’s Middle Class – Someone needs to subsidize the Billionaires (9/16/2015)
Oh, and as for the $2 million Connecticut taxpayers are giving to help Bridgewater Associates train their staff? Check out,
Bridgewater’s Co-CEO Once “Supervised Subordinates Stripping Off Articles Of Clothing And Setting Them On Fire During A Team-Building Exercise”
As long-time Dealbreaker readers know, we have been writing about the slightly unorthodox culture at Bridgewater Associates since 2010, when we received a spiral-bound copy of Principles, the hedge fund’s unofficial company handbook penned by founder Ray Dalio. At the time, it was surprising to learn of an asset management firm that explained its reasoning for why employees shouldn’t hesitate to identify and eliminate weak colleagues via a discussion about “a pack of hyenas [taking] down a young wildebeest”; told them that failing to confront a person about their shortcomings to their face made you “a slimy weasel”; pushed them to ask themselves if they’d “earned the right to have an opinion”; insisted that “firing people is not a big deal”; and quizzed them on all of the above and more.
Amazingly, though, the Westport-based hedge fund continues to surprise us with the new and innovative ways it conducts its business, many of which are on display in a Wall Street Journal article today, examining life under the Tao of Dalio..
Trustfalls…ON STEROIDS: “Mr. Jensen also cut a distinctive path as a manager. About three years ago, he supervised subordinates stripping off articles of clothing and setting them on fire during a team-building exercise at an official company retreat.
No doubt Ray Dalio and his company need the money more than we do.
Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
Known as “corporate welfare” to any reasonable person, Governor Dannel “Dan” Malloy’s economic development policies has been primarily geared toward picking winners and losers in the “free-enterprise system” by giving away large amounts of public funds to selected corporations in return for various promises to do something over the next ten years.
Literally hundreds of millions of dollars in scarce public funds have gone to extremely successful corporations.
Adding to the fiscal irresponsibility of Malloy’s policies is the fact that most of these funds have been charged to the state’s credit card meaning Connecticut taxpayers must not only pay the principal but the interest.
This, of course, comes on top of the fact that Connecticut’s debt ratio is already sky high compared to the other states in the country.
And to prove the foolhardy nature of this corporate welfare system, comes this breaking news from the Day newspaper of New London;
Sprague – The town’s largest taxpayer and employer, Fusion Paperboard, will be closing its Sprague facility in September and laying off about 140 employees, state Sen. Cathy Osten, the town’s first selectwoman, confirmed on Wednesday.
The news comes one year after Gov. Dannel P. Malloy and Osten welcomed news that the state Department of Economic and Community Development had approved a 10-year, 3 percent loan of $3 million to help Fusion expand operations, retain 147 jobs and create 20 new jobs with a $6 million improvement project.
On year after Malloy gives the company $6 million of our tax dollars, the company announces it will be closing down and laying off about 140 Connecticut residents.
File this one along with the other “great deals” that have gone belly-up….all while taxes increase and vital state services go unfunded.
Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto
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, 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.”