Bridgeport, Corporate Welfare, Ethics, Malloy, Mayor Bill Finch, Sarah Darer Littman Bridgeport, Connecticut Politics, Corporate Welfare, Ethics, Mayor Bill Finch, Sarah Darer Littman
As measured by the number of college graduates Connecticut is among the most educated states in the nation. As measured by per capital income Connecticut is wealthiest state in country, and if we were our own country we’d be one of the wealthiest and best educated countries in the world.
And yet there is a sickness that is increasingly evident in Connecticut politics. It takes the form of elected and appointed officials who display a level of arrogance, greed, entitlement, and what appears to be an growing level of outright corruption…in both political parties.
In Sarah Darer Littman’s latest MUST READ column entitled “The Environmental Racism of Bridgeport’s Carnival of Corruption” in this weekend’s CT Newsjunkie, Sarah Darer Littman shines the bright light of truth on a complex deal in which Bridgeport ’s political and corporate leaders are conspiring to move Bridgeport’s Harding High School on to a severely polluted superfund site in order to make room for Bridgeport Hospital’s expansion plans.
The political wheeling and dealing stretches from Bridgeport to Hartford and back again.
By the time their effort is over, the cost to Connecticut taxpayers will exceed $100 million or more, and that doesn’t even begin to count the cost to Bridgeport’s public school students, teachers and parents who are but pawns in the deceit that has become the hallmark of Connecticut’s political environment.
Sarah Darer Littman introduces her piece with the following,
If the window of government transparency in Connecticut has become foggy lately, in Bridgeport it’s turned into a funhouse mirror.
The latest to come from Mayor Bill Finch’s Carnival of Corruption was a vote Thursday evening to proceed with phase one of a deal to build a new Harding High School on 17.2 acres of a 78-acre brownfield site on Boston Avenue, currently owned by General Electric. This would enable Finch and his allies to sell the current Harding High site to Bridgeport Hospital.
According to federal law, a brownfield site refers to “real property, the expansion, redevelopment, or reuse of which may be complicated by the presence of a hazardous substance, pollutant, or contaminant.”
The aforementioned brownfield site is, according to a piece in the CT Post, “contaminated with lead, arsenic, petroleum hydrocarbons and volatile compounds.”
The U.S. Environmental Protection Agency offers helpful information about School Siting Guidelines, and why they are so important:
“Children, particularly younger children, are uniquely at risk from environmental hazards. They eat, drink and breathe more in proportion to their body size than adults. In addition, environmental contaminants may affect children disproportionately because their immune, respiratory and other systems are not fully developed, and their growing organs are more easily harmed. This means they are more at risk for exposure to harmful chemicals found outside where they play and in the environment where they spend most of their time — school and home.”
As might be expected, parents and those representing the community have concerns — especially since most of the process for this deal (like so much of what goes on in Bridgeport) has taken place behind closed doors. Indeed, in the minutes from the Bridgeport School Building Committee meeting on January 3, 2013, Finch Deputy Chief of Staff Ruben Felipe reports that GE asked the administration to keep their conversations confidential. Thus both the sunlight and the community were kept out. Helping to keep things under wraps was the fact that the School Building Committee failed to file their statutory notices with the town clerk’s office until February 2014, evidenced by this email from Frances Ortiz, assistant City Clerk.
There’s been some gob smacking chicanery involved, because, let’s face it, this wouldn’t be Bridgeport if there weren’t.
A petition to the City of Bridgeport Planning and Zoning Commission was filed in the name of the City of Bridgeport Board of Education (File 13-74). It was signed on Dec. 3, 2013, by John Eberle of Stantec Consulting Services and on Dec. 18, 2013, by Marian Whiteman, executive counsel for Transactions & Brownfields at General Electric.
On Jan. 13, 2014, Sauda Baraka, chair of the Bridgeport Board of Education (in whose name the Planning Petition was apparently being made) wrote to Melville T. Riley, Jr, the acting chair of the Planning and Zoning Commission, asking that the item not go forward with a public hearing for the application because the education board hadn’t voted to approve a site plan nor a special permit concerning that property. In what is a reflection of the incredibly sad state of affairs in Mayor Bill Finch’s Bridgeport, she was forced to ask the Planning Commission for copies of any application filed on the behalf of the Board of Education. How ridiculous is it that an elected Board of Education should have to ask another city body for copies of planning applications being filed in its name?
Probably as a result of Baraka’s letter, the planning application was withdrawn from the Jan. 13 meeting.
But by Jan. 16, the Finch administration was able to work magic with fairy dust — or White Out — and Lo! The exact same application with the exact same signatures (on the original you can see the correction fluid) and now guess what? It reads “City of Bridgeport School Building Committee”! Suggested new campaign slogan for Bill Finch: “If you can’t beat ‘em, erase them!”
And Sarah Darer Littman’s column goes on from there with some of the most disturbing elements of the story yet to come.
You can read her whole column at via the following link,
As you read the piece ask yourself, is this Connecticut our citizens deserve?
Corporate Welfare, Gubernatorial Election 2014, Human Services, Malloy Corporate Welfare, Gubernatorial Election 2014, Human Services, Malloy, Taxes
Newspaper headlines in today’s Stamford Advocate:
Street bonuses heat up January real estate market in Greenwich, Darien
Stamford homeless shelters over capacity
In 2013, the stock market hit “52 all-time record highs” and had its best year in 18 years. As a result, Greenwich realtors report the sales of high priced homes is booming. As one realtor put it, “Traditionally, the markets in Greenwich — and neighboring towns such as Darien — have seen significant booms in the early months of the year, after those working on Wall Street receive their bonus checks.”
Meanwhile, just a few miles down the road, the spokesperson for Inspirica, a Stamford based non-profit that runs a homeless shelter for women and supportive housing program for families reported, “We are over capacity…We’re working at 116 to 120 percent capacity. Because it’s so cold, we’re not going to turn people away.”
This is Connecticut, where Democratic Governor Malloy’s 2011 record tax increase disproportionately hit the middle class while those making over $1 million saw no increase in their income tax rate – at all! Malloy’s claim was that if we didn’t coddle the wealthy, they might leave and move to New York state, New York City or New Jersey (where tax rates are even higher).
This is Connecticut, where Democratic Governor Malloy’s “economic development” strategy consists of giving successful, multi-million dollar businesses scarce public funds while failing to provide state agencies and towns with the money they need to even maintain existing services, let alone address the ongoing and growing impact of the Great Recession.
A case in point: with much fanfare Democratic Governor Malloy gave Bridgewater Associates a publicly funded corporate welfare deal worth over $110 million dollars so that they could move their headquarters from Westport to Stamford. In 2012, Ray Dalio, Bridgewater Associates’ CEO was paid $2.3 billion (that is billion with a B) making him the highest paid CEO in the world.
At the same time Democratic Governor Malloy and the Connecticut General Assembly failed to provide sufficient funds or personnel to maintain the current level of services for most human service programs provided by the state of Connecticut, non-profit agencies or at the town level.
Put aside Malloy’s devastating initiatives that are undermining Connecticut public education system.
Forget that Malloy has left state government so understaffed that services aren’t being provided in a timely manner in many agencies.
Put aside the fact that Malloy instituted the deepest cuts in state history to Connecticut’s public colleges and universities, cuts that have forced tuition up and sifted even more of the burden of an undergraduate education onto the backs of Connecticut students and their families.
Forget that Malloy is proposing a mini election-year tax cut to try to persuade middle-income families to vote for him this November, despite the fact that Connecticut is facing a combined $3.2 billion budget deficit in the three years following the election.
When the truth is revealed, the fact is that Democratic Governor Malloy has helped push Connecticut so far off the right track that we can’t even see the path back to fairness, equity and economic stability.
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
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On Friday Governor Malloy and the State Bond Commission voted to give HOMESERVE USA, a Florida company, $9 million to help pay for their 9.4 mile move from downtown Stamford to Norwalk.
The taxpayer funded corporate welfare package includes a $3 million loan (forgivable if job targets are met), a $1 million grant and $5 million in Tax Credits.
The loan and grant are being put on the state’s credit card which means that taxpayers will have to pay those costs plus the interest associated with borrowing the funds.
The $5 million in tax credits is a cash giveaway despite the fact that Connecticut’s non-partisan Office of Fiscal Analysis projects that Connecticut will be facing a $1.1 billion budget deficit in the year after the next gubernatorial election (Fiscal Year 2016).
Governor Malloy’s rationale for the $9 million give-away of public funds was that, “HomeServe has been in business over ten years providing homeowners throughout North America with service plans that protect them from water, sewer, electrical, HVAC and other home emergencies. The state’s investment in support of HomeServe’s relocation will help foster further growth for the company and create good-paying jobs with good benefits for Connecticut residents. HomeServe is a company that continues to be a leader in this innovative segment of the service industry and we are pleased that they call Connecticut home.”
Malloy claims that the corporate welfare program will create 130 jobs or a $69,000 per job subsidy.
John McKinney, the Republican leader in the Connecticut State Senate, opposed the giveaway program noting in a press release that HomeServe is actually owned a company in the United Kingdom and that;
“HomeServe has been the subject of numerous government investigations both here and in its home country of the UK. These investigations, which have resulted in heavy fines, have involved allegations that HomeServe sent sales materials that (1) falsely appeared to be a bill from the consumer’s local utility, (2) contained logos designed to look like official state logos, (3) stated that consumers were at risk of losing current insurance coverage if they did not pay, and (4) misled consumers as to the types of repairs that they might be liable for and the scope of the coverage being offered.”
According to an article in CT Newsjunkie, HomeServe “has been fined and has been investigated by government agencies in the UK and states including Massachusetts, which fined the company $85,000, as well as Kentucky, and Ohio. The Better Business Bureau also has warned consumers of complaints against the company in various states across the country.”
Interestingly, “HomeServe declined to comment” for their CT Newsjunkie story.
When the Connecticut Post’s Ken Dixon asked Governor Malloy’s spokesman, Andrew Doba, about McKinney’s accusations, the response was typical and priceless.
Malloy’s spokesperson said;
“It’s after 5 p.m., so it must be time for more phony outrage from Senator McKinney. “It appears his only job creation strategy is to criticize everything the governor does and offer absolutely nothing of substance. Senator McKinney should explain to one of the new employees at HomeServe why he thinks they should not have a job.”
As an aside, while campaign contributions from HomeServe haven’t shown up yet in Connecticut, the company and its two top executives recently gave $1,000 to Doug Douglas, the Attorney General of Maryland who may be running for governor there and $500 to Peter F. Kilmartin, the Attorney General of Rhode Island. No word whether any HomeServe investigations are pending in either of those two states.
You can read more at CT Newsjunkie: http://www.ctnewsjunkie.com/archives/entry/bond_commission_approves_money_for_home_repair_company/ and at the Connecticut Post at: http://blog.ctnews.com/dixon/2013/12/12/mckinney-attacks-malloys-pick-for-state-funding-support-of-corporate-move-from-stamford-to-norwalk/.
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.
BNE Energy, Corporate Welfare, Energy policy, Environment, George Jepsen, Malloy, Raising Hale Corporate Welfare, Ethics, George Jepsen, Malloy
… Or, at the very least, make sure you have really, really good political connections.
Zachary Janowski, the investigative journalist for the Raising Hale Website, has authored another “must read” article. This one entitled “Environmental group sues state for going easy on wind-power company that cut down trees in state forest.”
According to Janowski;
“A conservation group is suing the state to force it to throw out a settlement between state officials and a wind-power company that clear-cut 2.5 acres of state forest.
The Berkshire-Litchfield Environmental Council is suing the Department of Energy and Environmental Protection and officials within that agency for settling out of court with the offender.
According to BLEC’s complaint, the 111 largest trees that were cut down are worth more than $1.1 million.
BLEC claims DEEP should have referred the issue to Attorney General George Jepsen instead of settling the matter. Since the case wasn’t handled in open court, BLEC claims, the consent decree is “null and void.”
BLEC asks the court to invalidate the agreement between DEEP and BNE and replace it with one that requires the company to restore the state forest to its “natural state.”
Jepsen, whose office is defending DEEP in court, said the agency “has broad statutory authority to resolve disputes about environmental matters through the use of consent decrees, as it did in this case.”
‘I will, therefore, vigorously defend the lawsuit which is without merit,’ Jepsen said”
The lawsuit is without merit?
Attorney General Jepsen can disagree with the suit, but to call it without merit is a bit much!
Why not just say that BNE is so well politically connected that state officials have made the practical decision to turn the other check and let BNE off the hook with a slap on the wrist.
Long time Wait, What? readers may vaguely remember a post about BNE and their political connections.
BNE Energy, Wind Farms, Occhiogrosso: A lesson on how modern government really works was a post that revealed that BNE Energy is incorporated in Delaware but owned by two Connecticut residents – Greg Zupkus, who serves as President and CEO and Paul Corey, who serves as BNE’s Chairman of the Board.
BNE has been trying to develop commercial wind projects in Prospect and Colebrook Connecticut.
The company has also received at least a half a million dollars in taxpayer-funded corporate welfare grants from the Malloy administration.
Paul J. Corey is well-known in Connecticut politics and government. During the Rowland years Corey served as the Executive Director of the Connecticut Department of Public Utility Control, the entity that oversees the development of energy policy in Connecticut. Corey also served as the Chairman of the Connecticut Lottery Corporation’s Board of Directors from January 2000 to December 2004.
Corey’s wife, Christine, was a high-ranking personal assistant to former Governor John Rowland. Together they gave Rowland the famous hot-tub that helped lead to the impeachment hearings and Rowland’s subsequent resignation and trip to federal prison.
After leaving public service Corey joined the law firm of Brown, Rudnick to work in their Public Utility Practice Group. Brown Rudnick, LLP presently does the lobbying and permitting work for BNE. The lead individual from Brown, Rudnick is Thomas Ritter, the former speaker of the Connecticut House of Representatives.
BNE Energy has also retained the services of the law firm of Pullman & Comley, the law firm where former State Senator Andrew McDonald worked before becoming Malloy’s Chief Counsel. McDonald now serves as a Justice on the Connecticut Supreme Court.
Since Malloy has become governor, Pullman & Comley has received hundreds of millions of dollars in state business and was retained by BNE to help the company get its wind projects approved by the Connecticut Siting Council.
And finally, BNE’s public relations and grassroots lobbying is conducted by none-other-than Roy Occhiogrosso and the Global Strategy Group. Occhiogrosso having previously served as Governor Malloy’s chief advisor.
Over the past two years alone, Ritter and the Occhogrosso’s Global Strategy Group have received over $200,000 in fees from BNE.
But the pièce de résistance is what happened to BNE after they illegally clear-cut down the two and half acres of pristine forest in one of Connecticut’s state parks.
And for that you need to read Zach Janowski’s piece, “Environmental group sues state for going easy on wind-power company that cut down trees in state forest.
The Janowski article link can be found here: http://www.raisinghale.com/2013/11/07/environmental-group-sues-state-easy-on-wind/ and the previous Wait, What? post on BNE energy is here: http://jonathanpelto.com/2013/01/08/bne-energy-wind-farms-occhiogrosso-a-lesson-on-how-modern-government-really-works/
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.”
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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