Corporate Welfare, Malloy Corporate Welfare, Malloy
At yesterday’s State Bond Commission meeting, Governor Dannel Malloy’s plan to give $1 million in taxpayer funds to the private equity company MC Credit Partners so they could move to Stamford sailed through despite the fact that days earlier Malloy announced more than $100 million in deep budget cuts to a variety of vital services as part of his effort to knock down what will surely be a significant budget deficit before the year is out.
Adding insult to injury, Malloy continues to pay for his Corporate Give-A-Way Program with funds that he is charging to the state’s credit card, meaning, he is actually borrowing the money from Wall Street, which in turn, pushes up the long-term cost to taxpayers since we have to pay back the money plus the associated interest.
According to the Malloy administration, in return for the $1 million, MC Credit Partners [Yes, McCredit is their real name], will move their office, along with their 21 employees, from New York City to space in a building in downtown Stamford, Connecticut.
The office building is owned by one of the city’s biggest campaign contributors and is already the home of two other companies that received Corporate Welfare payments from the Malloy administration.
Malloy’s political spin about the whole arrangement takes a bit of hit when one learns, thanks to a quick search on Bloomberg.com, that MC Credit Partners is already located on the 5th Floor of 2200 Atlantic Street in Stamford.
But then again, perhaps the “deal was done” long before the people of Connecticut were provided the opportunity, through the Bond Commission, to actually vote on the decision to give taxpayer funds to MC Credit Partners.
According to the language adopted by the State Bond Commission,
“These funds are requested to provide a loan to MC Credit Partners, LP to assist in relocation from New York City to Stamford. The company will create 21 new jobs. The loan will be provided at an interest rate of 2% for ten years. The company will be eligible for loan forgiveness of $250,000 if it creates the 21 jobs and retains them for two years. Additional loan forgiveness of $250,000 if the company creates five additional jobs and retains them for two years.
Just to be sure we all understand the full parameters of the deal…
Connecticut taxpayers will borrow $1 million for twenty years at an interest rate of about 3 percent. Governor Malloy, on our behalf, is then loaning our money to an extraordinarily successful private equity firm at a rate of 2 percent for ten years. Although it is called a “loan,” the company gets to keep $250,000 of our money if it maintains its present number of employees for 2 years and they get to keep another $250,000 of our money if they create an additional five jobs at some point over the next ten years and keeps those for at least two years.
For background, according to Bloomberg.com,
“MC Credit Partners LP is a private equity firm specializing in debt capital investments in middle market companies in entrepreneur, management / family owned and sponsor-backed businesses. The firm invests in all industry groups. It prefers to invest in United States, Canada, and United Kingdom… MC Credit Partners LP is based in Stamford, Connecticut.”
A bit more research reveals that MC Credit got its start in the spring of 2013 when, as Buyouts Magazine reported, the new company collected $200 million from Billionaire hedge fund manager Louis Bacon. MC Credit apparently remains affiliated with Bacon’s Moore Capital and Michael Zimmerman, who served as a senior managing director at Moore Capital, is now a senior managing director at MC Credit Partners.
Of course, the public may never know whether the $1 million that Governor Malloy gave away was necessary to “lure” the private equity firm to Connecticut, but the company is connected Louis Bacon who sits at the number 375 position on Forbes 400 Wealthiest with a net worth of $1.8 billion. Billionaire Bacon, who gave nearly $500,000 to the Conservative Party in England and was a major fundraiser for Mitt Romney has generated a fair amount of controversy over the years including getting the High Court in London to grant him a court order so that he could try and force the Wikimedia Foundation, The Denver Post and WordPress to hand over the names of “internet users” who allegedly had defamed him.
Meanwhile, back in Connecticut, MC Credit has already moved into a building that is owned by a Delaware company named ONE HARBOR POINT SQUARE LLC, which is owned by a Delaware company named HARBOR POINT HOLDING COMPANY LLC, which is owned by Paul and Carl Kuehner, of Ridgefield and Norwalk, Connecticut respectively.
As reported by the Federal Election Commission, the Kuehners and their immediate family members have donated more than $560,000 in campaign contributions in recent years. While most of their money goes to Republicans, a number of Connecticut Democratic candidates have benefited from the Kuehner’s political donations including Dannel Malloy, Chris Dodd, Ned Lamont and Jim Himes.
It should also be noted that this isn’t the first time the Kuehner brothers have directly or indirectly benefited from Malloy’s Corporate Welfare Program.
In November 2013, the conservative Watch-Dog Group Raising Hale reported,
Stamford real estate developer must spend at least $9.7 million to receive a $25 million taxpayer contribution toward a waterfront remediation project according to documents obtained from the Department of Economic and Community Development.
DECD provided two agreements related to the proposed site for the future headquarters of the world’s largest hedge fund, Bridgewater Associates, in response to a Freedom of Information Act request.
None of the publicly available documents appear to mention Bridgewater, but the company could be referenced in documents that remain secret.
DECD made the agreements with three limited liability companies related to lead developer Building and Land Technology to support the Bateman Way remediation project.
In addition to the $25 million in public money destined for BLT and its partners, DECD plans to give Bridgewater another $115 million to partially fund its move from Westport to Stamford.
BLT is also landlord for two other companies that received aid from the administration of Gov. Dannel Malloy: Deloitte, which will get $14.5 million, and Starwood Hotels, $90 million.
The State Bond Commission approved $7 million for the Bateman Way project in January. DECD completed an agreement with the companies involved on March 19.
The bond commission approved another $9 million in April. An agreement dated June 14 governs that $9 million payment and a possible future payment of another $9 million. The second $9 million still needs bond commission approval.
According to the agreements, state funding cannot exceed 72 percent of the project’s cost. If the bond commission approves the last payment of $9 million, the developer must spend a total of $34.7 million to receive the $25 million from the state.
If the last payment does not come through, the developer must spend $6.2 million of its own money to receive the state’s $16 million contribution.
The state’s agreements are with three related limited liability companies: The Strand/BRC Group, Harbor Point Holding Company and TL76 Holdings.
TL76 Holdings, a real estate operating company, is the direct recipient of the state money.
Harbor Point Holding Company LLC is the sole member of TL76 Holdings, which means Harbor Point effectively owns TL76.
In addition to directly controlling TL76, Harbor Point indirectly controls The Strand/BRC Group, which owns the 14-acre parcel being developed by TL76.
Harbor Point is the managing member of The Strand/BRC and owns 1 percent of the company. The remaining 99 percent is owned by Admirals Wharf LLC.
According to the Secretary of the State’s website, Harbor Point Holding Company also controls Admirals Wharf.
Carl Kuehner III and Paul Kuehner, the brothers behind BLT, serve on Harbor Point’s board of managers. They are joined by Gerald Ronon and Jane Smith, executives with Lubert-Adler Real Estate Funds, BLT’s Philladelphia-based partner on the project.
Initially, Lubert-Adler partnered with Antares Investment Partners on the Harbor Point project. After taking unrelated losses during the financial crisis, Antares withdrew and BLT took its place, making a $200 million investment, according to the Wall Street Journal.
Harbor Point, the joint venture between BLT and Lubert-Adler, recently sold an apartment building, Infinity Apartments, for $98.8 million.
As Wait, What? readers learned just two weeks ago, while elements of the Bridgewater deal fell by the wayside when the world’s largest hedge fund company decided not to move from Westport to Stamford, Governor Malloy has put together a second deal to help Connecticut’s wealthiest billionaire Ray Dalio and his company by giving them more than $50 million in Connecticut taxpayer money to expand their Westport headquarters. See: To Hell with Connecticut’s Middle Class – Someone needs to subsidize the Billionaires
Bridgewater Associates, Corporate Welfare, Malloy, Ray Dalio Bridgewater Associates, Corporate Welfare, Malloy, Ray Dalio
Here we go again!
As tens of thousands of Connecticut families struggle to pay their local property taxes due to the state’s inadequate funding of public education, Governor Dannel Malloy is giving scarce public funds to some of the wealthiest companies in the country.
As the Hartford Courant reports today in their article entitled, “State Proposes $52 Million In Subsidies To Giant Hedge Fund,”
Bridgewater Associates, the world’s largest hedge fund, can qualify for up to $52 million in tax credits, grants and a loan from taxpayers as it renovates and expands its headquarters in Westport, state officials say.
Bridgewater Associates, which has about 1,500 employees, originally was offered a $115 million incentives package in the state’s First Five program, but it abandoned its plan to build a new headquarters in Stamford after local residents’ opposition. (See: Bridgewater Associates Abandons Plan To Build in Stamford.)
Although it has not been widely reported, before Bridgewater Associates “abandoned” their move to Stamford, the Malloy administration spent millions to help Bridgewater Associates facilitate the move.
But today’s news means that while Governor Dannel Malloy effort to “lure” Bridgewater Associates from Westport to his pet project called Harbor Point in Stamford with that $115 million publicly financed corporate welfare package failed, Connecticut’s taxpayers are now being put on the hook to give Ray Dalio and his gigantic Hedgefund $52 million to help subsidize a half-billion dollar upgrade to their Westport corporate headquarters.
For those who haven’t followed the saga, the following Wait, What? posts are worth a read;
See: NEWSFLASH – I gave a billionaire $115 million today (and if you’re from CT, so did you!) (8/15/2012); 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) and “This is stealing from the poor and middle class to make a billionaire even richer” (6/27/2014)
The background to this latest development is that for more than three years, Malloy has been working to hand taxpayer money over to Ray Dalio, one of Connecticut’s 16 billionaires.
According to Forbes Magazine, Dalio is a high-ranking member of the list of “The World’s Billionaires.”
Dalio’s worth is estimated at $15.5 billion, bolstered by income of more than $1 billion last year. His annual salary is down sharply from 2011 when Dalio earned $3.9 billion, making him the highest paid person in the United States. As of now, Dalio ranks #30 on Forbes list of the richest 400 and #2 among Hedgefund owners. The number of billionaires who call Connecticut home has actually jumped from 9 to 16 since September 2014.
According to the latest announcements, Malloy’s new plan is for the state of Connecticut to borrow $17 million at about 3 percent a year and lend it to Dalio’s company with a rate of 1 percent interest.
The Courant reports added that,
“The entire loan could become a gift, depending on how Bridgewater meets its job creation targets. But the exact terms are still being negotiated”
In addition to the $17 million loan, the Malloy administration will be giving Dalio and his company $2 million for employee training and $3 million to subsidize the company’s energy costs. Apparently these funds would also come from money that the state has borrowed as part of its economic development activities, meaning the long term cost to taxpayers is actually significantly higher than $5 million.
Finally, Dalio and his company would also be given $30 million in tax credits over the next 10 years under the “Urban and Industrial Sites Reinvestment Program.” The actual impact of the tax credits would be that Bridgewater’s tax liability to the state of Connecticut would drop by $30 million.
As to how Malloy can get away with using money for urban renewal on a project in Westport, the Hartford Courant explains,
“Westport is not a distressed city, and the office park is not a brownfield, but because Bridgewater Associates’ investment is so large, it qualifies for the credits.”
Malloy’s rationale appears to be his ongoing reliance on the old theory of “trickle-down” economics which claims that if government uses its taxing and expenditure policies to redistribute wealth from the Middle-Class to the rich, the wealthy will be able to create even more wealth which will then trickle down to the rest of society via more jobs and higher tax revenues.
As if to reiterate how the economic strategy as consistently failed, Reuters is reporting today that;
“Hewlett-Packard Co, which is splitting into two listed companies later this year, said on Tuesday it expects to cut another 25,000 to 30,000 jobs in its enterprise business as the tech pioneer adjusts to falling demand.
The latest cuts, on top of layoffs of 55,000 workers previously announced under Chief Executive Officer Meg Whitman.”
As the independent think-tank, Citizens for Tax Justice has reported, Hewlett-Packard Co, has been a major recipient of taxpayer funded corporate welfare. In addition to direct subsidies, HP ranks #13 on the list of major corporations that have the most money hidden in “off-shore investments” in order to avoid paying federal and state taxes (See: Offshore Shell Games 2014 The Use of Offshore Tax Havens by Fortune 500 Companies.)
Citizens for Tax Justice notes,
“As of 2013, the 287 Fortune 500 companies that report holding offshore cash had collectively accumulated close to $2 trillion that they declare to be “permanently reinvested” abroad. That means they claim to have no current plans to use the money to pay dividends to shareholders, make stock repurchases, or make certain U.S. investments. While 72 percent of Fortune 500 companies report having income offshore, some companies shift profits offshore far more aggressively than others. The thirty companies with the most money offshore account for nearly $1.2 trillion. In other words, six percent of Fortune 500 companies account for 62 percent of the offshore cash.”
Corporate Welfare didn’t work with Hewlett-Packard Co, and won’t work with Ray Dalio’s Bridgewater Associates…but that fact certainly isn’t stopping Governor Dannel Malloy from giving one of Connecticut’s billionaires $52 million more of our money.
Corporate Welfare, Malloy, State Budget, State Debt, State Deficit Corporate Welfare, Malloy, State Budget, State Debt, State Deficit
The headline in today’s Hartford Courant – Malloy: No ‘Meaningful’ Cuts In Business Aid.
FACT: As the CT Mirror’s Keith Phaneuf has consistently explained in his news articles, Connecticut faces a $1.4 billion budget deficit in next year’s state budget and the projected state deficit over the next three years exceeds $4.5 billion. [Compare that to the $3.7 billion deficit that Malloy “inherited” when he took office in 2011…a deficit that led to a record breaking $1.5 billion tax increase.]
But instead of telling the truth about Connecticut’s growing fiscal crisis during his recent re-election campaign, Malloy claimed that there was no deficit, that he would not propose or accept any tax increases in his second term, that he would actually implement more than $260 million in targeted tax cuts for certain groups, that he would preserve the level of funding to cities and towns, that he would not make cuts to “vital” state programs and that he would not need to talk to the state employee unions about concessions.
And now, after the election, when even his own budget office is finally telling the truth about this year’s $100 budget deficit, Malloy continues to deny the reality of the fiscal crisis that is facing the state and its residents.
As the Hartford Courant is reporting, Malloy went before the MetroHartford Alliance (chamber of commerce) yesterday to proclaim that the “State budget shortfall won’t hit business aid “in any meaningful way.”
When the Courant’s Dan Haar asked Malloy how his massive corporate welfare program could go unscathed in the face of the upcoming budget deficits, Malloy explained that “One reason is that most of the economic development spending is “capital-based,” meaning it is financed with borrowed money. ‘We’ll be in good shape with respect to the business programs,’ Malloy explained.
Translated to English, Malloy was telling the Hartford Courant that since his Corporate Welfare Program is put on the State’s credit card, he has no intention of cutting back on its largess.
Apparently in Malloy’s mind, his ongoing and excessive taxpayer funded program to give successful corporations large financial gifts isn’t made with “real” money. It is simply borrowed money that only adds to Connecticut’s long-term debt.
But what about the fact that Connecticut’s state debt and obligations already exceed $68.4 billion, an incredible sum of money that Connecticut taxpayers will have to pay back over the next twenty to twenty-five years – in addition to their regular federal, state and local tax payments? (See yesterday’s Wait, What? post entitled, “WARNING! WARNING! The state of Connecticut’s Fiscal Health”)
For Malloy’s answer to that, we need only turn to headline #2: Commission Poised To Exceed Malloy’s Self-Imposed Bonding Cap (CTNewsJunkie)
“The state Bond Commission is expected to borrow $267 million in general obligation bonds Wednesday during its first meeting since July. The amount will exceed Gov. Dannel P. Malloy’s voluntary bonding cap by about $167 million.
The governor, who controls the Bond Commission’s agenda, has set a “soft” annual borrowing limit of $1.8 billion for the last two years. Although he stayed under the soft cap in 2013, he is poised to exceed it after Wednesday’s agenda, which puts state borrowing at about $1.97 billion for 2014.
‘Governor Malloy has prioritized projects that were long overdue because they improve our quality of life and create jobs. The agenda reflects both the readiness of current projects and the importance of making these investments in infrastructure, public education and job creation right now,’ Malloy’s spokesman Andrew Doba said in a statement Tuesday.”
Among the bond items that will be voted on today…
- $25 million more in borrowing for Connecticut Innovations, Inc. to support more venture capital “investments” in companies
- And another $19 million for the Manufacturing Assistance Act program, the largest beneficiary being a $10 million gift to Electric Boat/General Dynamics, a multi-billion dollar company that paid its new CEO $18.8 million last year.
As we sit on the deck of this ship with no lifeboats, perhaps the most serious question is whether the Democrats will stand up to Malloy and finally use their authority to turn this ship of state away from the iceberg field that lies ahead?
Sadly the answer to that question is almost definitely a big NO!
Watch the Democratic Constitutional Officers and the Democratic Legislators on the State Bond Commission vote in favor of Malloy’s plan today to speed up rather than turn away from the extreme financial danger that lies straight ahead.
By noon, Connecticut taxpayers will be in debt another $297 million, an amount that includes the $10 million so that Malloy can send that check to Electric Boat/General Dynamics, a company that had $32 billion in revenue last year.
$32 billion in revenue last year —- Connecticut’s entire annual state budget …. $20 billion.
Lesson NOT learned!
Update: The State Bonding Commission “swiftly and unanimously approved borrowing nearly $267 million to fund dozens of new capital projects.” So there you go, after criticizing the practice of excessive borrowing, even the Republican members of the Bond Commission voted to borrow more.
Campaign Finance, Corporate Welfare, Gubernatorial Election 2014, Malloy Campaign Finance Reform, Corporate Welfare, Gubernatorial Election 2014, Malloy
With Election Day almost upon us, Governor Dannel “Dan” Malloy used the past week to continue his massive “Corporate Welfare” Program.
On Wednesday, Malloy delivered a $10 million dollar Corporate Welfare Check, on behalf of Connecticut’s taxpayers, to General Dynamic’s Electric Boat division to help the company renovate a building in Groton that had been vacated by Pfizer.
While most Connecticut taxpayers are still struggling under the weight of the Great Recession, General Dynamics is on track to pull in another $32 billion in revenue this year. Thanks to the nation’s never-ending war effort, the defense giant has generated revenues in excess of $294 billion over the past ten years. The company is doing well enough that they even paid their new CEO $18.8 million last year. (For those that are keeping track, that would be nearly double what Connecticut taxpayers handed the company this week.)
On Thursday, the company receiving Malloy’s taxpayer funded largess was Fuel Cell Energy Inc. Fuel Cell Energy only collected $188 million in revenues last year, but that was up from just $70 million in 2010. Malloy is giving the company $20 million in taxpayer funds so that they can expand their Torrington facility rather than have to rely on private investors.
And on Friday, Malloy was in Danbury, this time with a Corporate Welfare Check for $32.5 million to help Praxair fund their new corporate headquarters.
Praxair’s revenue last year was about $12 billion, enough to pay their CEO a salary and compensation package of 26.5 million, “earning” him the #33 spot on Forbes list of highest paid executives. Praxair’s CEO has been paid more than $70.1 million over the past five years.
Of note is the fact that while Malloy was giving away taxpayer funds, Connecticut’s Office of Fiscal Analysis announced that the Malloy administration is overspending this year’s state budget allocation by at least $88 million. It is grim news and reflects the reality that Connecticut will be facing a major budget deficit next year.
But the fiscal problems facing that state didn’t deter Governor Malloy from giving away $62.5 million more in corporate welfare, and that doesn’t even count the tens of millions of dollars in other checks he handed out this week to private corporations.
In return for all this money, Malloy says that Electric Boat and Praxair have promised to create a total of 330 jobs over the next five years, while Fuel Cell Energy has agreed to create 160 new positions and keep those jobs in place for at least 4 years.
Meanwhile, on the campaign finance front, it is undoubtedly a coincidence that all three of these financially successful companies have generously donated to the Connecticut Democratic Party’s “federal account.”
The campaign contributions from General Dynamics, Praxair and Fuel Cell Energy are just a tiny fraction of the $4.3 million that Malloy and his political operation have raised from state contractors, people who have benefited directly from Malloy’s corporate welfare program, federal Political Action Committees and other wealthy individuals.
While many believe that state law clearly prohibits these funds from being spent to benefit a state-level campaign, Malloy and his campaign have been using the Democratic Party’s “federal account” to pay for his campaign mailings and other campaign expenses, allowing him to augment the $6.5 million Malloy received in public funds from the Connecticut Public Financing Program.
It all leaves one wondering what the “True Capitalists” would think of this world in which public funds are used to subsidize private activities that help ensure corporate officers and investors can get a better return on their private investments?
Of course, as Haruki Murakami, one of my favorite authors has observed,
“Waste is the highest virtue one can achieve in advanced capitalist society.”
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
Bridgewater Associates, Corporate Welfare, Gubernatorial Election 2014, Malloy, Pelto, School Governance Councils Bridgewater Associates, Corporate Welfare, Gubernatorial Election 2014, Malloy, Pelto
Twenty-two months later – vindication!
Almost two years ago, Governor Dannel “Dan” Malloy announced that he was giving Bridgewater Associates, the world’s most profitable hedge fund, $120 million to move their headquarters from Westport to Stamford.
Bridgewater’s CEO, Ray Dalio, is known as the nation’s highest paid individual with an annual income of over $2 BILLION a year.
At the time, Bloomberg news quoted me as saying, “This is stealing from the poor and middle class to make a billionaire even richer.”
But as reported in the Norwalk Hour, Bridgewater announced the following this evening.
“WESTPORT — The Bridgewater Associates’ move to Stamford is not going to happen.
According to a statement released by the global hedge fund on Friday, Bridgewater “will not proceed with the move.”
“After careful examination and reflection surrounding the challenges, time, energy, and resources needed to bring the proposed Stamford project to completion, we have decided not to proceed with the move. We are particularly thankful to Governor Malloy for doing his utmost to make this opportunity possible. We are now exploring our other options,” the statement read…”
While it remains unclear whether Connecticut taxpayers will get all of their money back, the good news is that the governor’s corporate welfare folly for Bridgewater looks like it is coming to an end.
Here is the Wait, What? post from August 12, 2012,
NEWSFLASH – I gave a billionaire $115 million today (and if you’re from CT, so did you!)
When one of my favorite readers sent me the news late this afternoon, I didn’t believe it.
When Bloomberg News Service wrote seeking a comment a few moments later, I almost drove off the road.
Personally, I can’t make my mortgage payments, but like Connecticut’s other taxpayers, it turns out that I managed to scrounge together $115 million for Bridgewater Associates, the world’s biggest hedge fund.
In fact, since the state is borrowing some of the money, it will actually cost Connecticut’s taxpayers well over $150 million.
And what do we get for it.
Bridgewater will build a $750 million headquarters in Stamford, Connecticut.
And the bargain is that it only costs us $25 million for a “’forgivable” 10-year loan with interest set at 1 percent”, plus $80 million in tax credits, $5 million for some type of “alternative-energy system” and $5 million for job training…although the 154,000 Connecticut residents on unemployment (and the additional 100,000 who have part-time jobs when they really want full time jobs) shouldn’t hold their breath; Bridgewater is very particular about the types of people it hires.
Oh, and the kicker, they will be moving their offices….FROM WESTPORT, CONNECTICUT TO STAMFORD, CONNECTICUT.
My first response to the reporter wasn’t printable, so I stopped the car, took a deep breath and tried again.
The following is what Bloomberg News printed under the sub-headline, “‘Shocking’ Deal”:
“This is stealing from the poor and middle class to make a billionaire even richer…“This isn’t economic development…[it is] shocking beyond words…If a Republican governor did this, we Democrats would be calling for impeachment,” said Jonathan Pelto, a Democrat and former deputy majority leader in Connecticut’s House of Representatives.
The full Bloomberg News article can be found here: http://www.bloomberg.com/news/2012-08-15/connecticut-aids-bridgewater-hedge-fund-to-build-new-hq.html
Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto
For the full Wait, What? post go to: http://jonathanpelto.com/2012/07/18/will-parents-speak-up-in-time-to-end-the-standardized-testing-madness/
Corporate Welfare, Gubernatorial Election 2014, Malloy Corporate Welfare, Gubernatorial Election 2014, Malloy
A pathological liar someone who, “is an abnormally habitual liar.” Some call it a disease, some call it a condition, and some just call it the typical behavior of far too many politicians.
As noted in a Wait, What? post yesterday entitled, “Malloy/UTC Scam – the biggest lie yet,” Governor Malloy and the CEO of United Technologies announced a deal in which the state of Connecticut will forgo $400 million dollars in tax revenues. UTC will commitment to a $500 million investment in Connecticut, but UTC reserves the right to lay off up to 1,400 more employees… on top of 600 Sikorsky workers the laid off this year.
At the press conference Governor Malloy said:
“The [UTC] agreement, which requires legislation, does not require any borrowing or payments by the State of Connecticut.” Governor Dannel Malloy (2/26/2014).
The state of Connecticut doesn’t borrow the money or make payments to UTC because the agreement allows UTC to REDUCE their tax payments to Connecticut by $400 million.
United Technologies is one of the most profitable companies in the world.
Thanks to Connecticut’s system of tax credits and breaks, UTC is already allowed to reduce their tax payment to Connecticut by up to 70%.
This means that when it comes to UTC’s corporate liability to Connecticut, it presently only pays Connecticut 30 cents on the dollar.
Malloy’s plan would give UTC another $400 million tax break.
And although it was hidden inside the agreement, Governor Malloy never explained that while UTC will lose some of these benefits if it lays off more workers, United Technology can lay off up to 1,400 more workers – on top of the 600 laid off this week – before they lose out completely on Malloy’s corporate welfare reform giveaway
Regardless of whether you are a Democrat, Republican, unaffiliated, liberal, conservative, moderate, pro-union or anti-union, every single Connecticut voter and taxpayer should be demanding that the Connecticut General Assembly defeat this Malloy/UTC scam.
Watch for more coverage of this breaking issue in coming days.
For the best media coverage to date, check out CT Mirror story from yesterday: http://ctmirror.org/malloy-seeks-tax-relief-to-trigger-500m-expansion-for-utcs/
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
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.