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.”
Corporate Welfare, Economic Development, Ethics, Malloy, Prosperity for Connecticut PAC Corporate Welfare, Economic Development, Ethics, Malloy, Prosperity for Connecticut PAC
Thanks to Governor Malloy’s corporate welfare program, Connecticut’s taxpayers provided a Connecticut company with a $100,000 loan and another $26,320 grant to pay for their move from Bloomfield to Hartford.
Malloy said the grant would help Connecticut’s jobless problem by retaining 11 jobs.
In a press release as the time, Governor Malloy explained, “Hybrid Insurance Agency LLC is a full-service, underwriting management and wholesale insurance brokerage firm. This is a fast-growing insurance group, beginning operations in March of 2010 in Windsor, a year later opening a satellite office in Columbus, Ohio, and a service operation in Kathmandu, Nepal. They currently have 11 employees in their headquarters and approximately 650 retail agents and brokers. A $100,000 loan and a $26,320 matching grant will go toward the relocation of the headquarters to Hartford. The project will retain 11 employees.”
Now the owner of Hybrid Insurance Agency reportedly works from home, most of the employees are apparently no longer employed and the company has defaulted on the loan that it received from Malloy’s economic development operation.
Hybrid Insurance is also is under investigation for allegedly failing to pass along $670,000 in premiums to two of the City of Hartford’s insurance carriers.
According to a story written by Hartford Courant columnist and blogger, Kevin Rennie, the Hartford Internal Audit Commission has been asked to investigate Adam Cloud, Hartford’s City Treasurer, “for what they called a possible conflict of interest involving Hybrid, which is at 30 Lewis St. — a building owned by Cloud, his brother Christopher and their father, Sanford “Sandy” Cloud Jr.”
Rennie reports that “Paula Altieri, the city school system’s chief financial officer, stated in a memorandum that Cloud’s office “moved” an insurance policy from one broker to Hybrid around February 2012 “without the need to compete.”
Meanwhile, Hybrid Insurance made an appearance earlier this year in a Wait, What? post when it was noted that the lobbyists for Hybrid Insurance were among those that attended the Prosperity for Connecticut Political Action Committee fundraiser in Hartford.
Prosperity for Connecticut is the PAC affiliated with Governor Malloy and that raised over $235,000 thanks to 15 fundraisers held over an 18 month period. Governor Malloy apparently attended all 15 fundraisers, with three held in Washington D.C., three in New York City and the rest in Connecticut.
Lt. Governor Nancy Wyman joined Malloy at the Hartford event which was targeted to raise donations from Connecticut lobbyists.
Hybrid Insurance has worked with the lobby firm of Camilliere, Cloud and Kennedy for the past two years, paying the lobbyists a total of $26,900. Christopher Cloud, Adam Cloud’s twin brother, is one of the partners and the lobby firm’s offices are located in the same building that “houses” Hybrid Insurance and is owned by the Cloud brothers and their father.
Today Hartford City Treasurer Adam Cloud had a letter to the editor in the Hartford Courant clarifying his role in the whole affair. Adam Cloud wrote;
“I would like to clarify some points made in recent articles about the Hartford treasurer’s office and Hybrid Insurance Group [Oct. 11, news, “Officials Call For Audit Of Treasurer”; Oct. 10, Kevin Rennie column, courantopinion.com, “Who's Got Hartford's Missing $669,997?”].
There are two insurance policies being discussed. First, the smaller pension fund policy was recommended by an insurance agency that had solicited a reduced-cost proposal from Hybrid. The bid was approved by the office of the corporation counsel and the pension commission, not our office.
As for the insurance coverage for the city and the schools, the selection of the insurance was made by an independent committee that neither I nor anyone in my staff was a member of. My office did not approve any business relationship between the city and Hybrid.
It is the finance department, which does not report to the treasurer’s office, that processes payments to vendors. When our office was notified that the carrier had not been paid by Hybrid, and the city could be in danger of an insurance coverage lapse, I engaged the finance department. In consultation with former city Finance Director Julio Molleda, we transferred the funds.
This is not an uncommon occurrence in managing the finances of a large city. It was my intent to protect the city from any potential financial dangers with no insurance.
The fact that Hybrid has an office in a building in which my family and I have an ownership interest had no bearing on this decision. Upon becoming treasurer, I relinquished any management responsibilities of this building.
Finally, it is important to note that in accordance with state law, at no time was the city uninsured. The city does not have to recoup the payment or make any additional payments; this is the carrier’s responsibility.
I strongly support the state Department of Insurance investigation of Hybrid and the city’s internal audit department’s review.
Adam Cloud, Hartford City Treasurer.
And lest it falls through the cracks, the only person who raised concerns about Malloy’s gift to Hybrid Insurance in the first place was Bloomfield’s State Representative who asked why state funds were being used to persuade a company to move from his district into Hartford.
At the time Baram said, “The loan program should primarily focus on growing small businesses in the local community where they are located… ”I will be conveying my disappointment to the governor’s office, urging the Department of Economic and Community Development to award future loans and grants that will allow companies to remain local.”
Bridgewater Associates, Corporate Welfare, Economic Development, Malloy Bridgewater Associates, Corporate Welfare, Malloy
Bridgewater Associates is the gigantic hedge fund company that Governor Malloy is giving over $115 million dollars in public funds, as part of an effort to assist them in their move from Westport, Connecticut to Stamford, Connecticut.
For some, Bridgewater is better known as the company that paid its CEO a compensation package of $2.3 billion a year or two ago. (Yes, that is the letter b and not the letter m after the amount the company paid its CEO).
You can read more about the Bridgewater Associates Project here: Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO and here: Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund
But even when you try to give away $115 million to a successful billionaire financial giant little hurdles develop.
In this case, in order to implement this “economic development initiative,” an existing boatyard has to be moved to make room for Bridgewater’s new headquarters.
It turns out that the developer illegally demolished a 14-acre boatyard in preparation for the Bridgewater Associates project and now needs to find it a new home.
Building and Land Technology (BLT), the developer of the Bridgewater Associates project, had identified a parcel of land owned by the City of Stamford to build the new boatyard.
However, in the face of what appeared to be a pending negative vote yesterday by the Stamford Panning Board, BLT suddenly withdrew its application.
According to a story in the Westport News entitled, Bridgewater plan to relocate from Westport hits new snag, “Planning Board Chairwoman Theresa Dell said BLT General Counsel John Freeman asked to withdraw the proposed agreement at the beginning of Tuesday night’s regular meeting, where the board was expected to consider whether to approve the agreement.”
The BLT General Counsel wrote in an email, “To allow us time to consider and respond to the board’s comments, we have asked the administration to withdraw the application. This will provide us the opportunity to work with city officials to build greater consensus. Ultimately, this project will create new amenities for Stamford residents, boost the city’s economy and bolster the ongoing revitalization of the South End.”
READ: Help, need more time to line up the votes…
As the Westport News article explains, “The decision to withdraw the agreement erases two months of public hearings and fierce debate before the Planning Board over the agreement’s merits.”
The Westport News added, “In late August, more than 200 Stamford residents turned out to the first two public hearings on the proposed agreement, which would have granted the developer the right to use 2.5 acres of city land adjacent to 205 Magee Ave. The agreement needed the approval of that city’s Planning Board, Board of Finance and the Board of Representatives to move forward.
Under the agreement, in exchange for rights to include the land in a 6-acre boat yard facility, the developer would spend $5 million toward planning, design and completion of a new Stamford animal shelter and additional improvements to Czescik Marina to furnish up to 190 slips to city boaters, as well as landscaping improvements to Kosciuszko and Cummings parks.”
Supporters and opponents of Governor Malloy’s historic taxpayer-funded corporate welfare programs will want to read the full details of this latest development in the Bridgewater Associates story here: http://www.westport-news.com/news/article/Bridgewater-plan-to-relocate-from-Westport-hits-4861260.php
BassPro, Bridgeport, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch BassPro, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch
“Bass Pro often fails to deliver on its promise to be an economic development anchor and major tourist destination. Its stores attract shoppers but often do not produce sought-after economic benefits associated with major tourist destinations.” (Public Accountability Initiative 2010)
“The stores are billed as job generators by both companies when they are fishing for development dollars. But the firms’ economic benefits are minimal and costs to taxpayers are great.” (Franklin Center for Government & Public Integrity 2012)
This coming Friday, Governor Malloy’s State Bond Commission will authorize $31,000,000 in bonds to subsidize the construction of a Bass Bro “retail facility” at Steel Point Harbor in the City of Bridgeport. When the full bill for the principal and interest is paid off this taxpayer gift will cost the citizens of Connecticut in excess of $45 million.
The Governor’s promise to give Bass Pro public funds dates back to July 2012 when he attended a Bridgeport press conference with Bass Pro’s owner, Johnny Morris, to proudly proclaim, “This is about jobs, and it’s great news for the City of Bridgeport…Bass Pro will be a draw for people from throughout the region, one that will help revive the local economy.”
At the time, Mayor Bill Finch chimed in, “Today’s announcement marks a historic moment for the City of Bridgeport and SteelPointe Harbor. Bass Pro Shops’ investment in Bridgeport will create hundreds of jobs, generate new tax revenues and bring economic growth to the City. They are a proven brand that will generate interest and attract customers from throughout the region. Bass Pro Shops is committed to Bridgeport and we are proud to have them as a major anchor tenant at Steelpointe Harbor.”
The total cost of the proposed store is estimated at $68.5 million, but the $31 million in state subsidies doesn’t even count the cost of improvements and tax abatements that the City of Bridgeport will be providing Bass Pro.
Over the years, Bass Pro, a privately held company with at least $2.6 billion in annual revenue, has relied heavily on taxpayer subsidies to pay for the construction of its stores by suggesting that they will create hundreds of jobs and become major tourist attractions.
Last year, the Franklin Center for Government & Public Integrity, a major policy research organization, reported that “Bass Pro and its closest competitor, Cabela’s, received or were promised more than $2.2 billion from taxpayers over the prior 15 years.”
Of course, Bridgeport isn’t the only small city to fall for Brass Pro’s pitch that they can anchor a major revitalization effort. Just a few years ago it was Buffalo, with its population of 261,310 residents (nearly twice the size of Bridgeport), that was promising Bass Pro big money in return for the company opening up a store that would serve as the hook for the Erie Canal Harbor Development Corporation (ECHDC) plan to revitalize Buffalo’s waterfront. In that case, Bass Pro wanted $35 million in public subsidies.
At the time, the New York based Public Accountability Initiative (PAI) conducted a major study of the impact Bass Pro would have on Buffalo and the region.
The Key findings of the PAI study included;
- Bass Pro often fails to deliver on its promise to be an economic development anchor and major tourist destination. Its stores attract shoppers but often do not produce sought-after economic benefits associated with major tourist destinations.
- A Mesa, AZ development anchored by a Bass Pro has been described as a “ghost town” and “dead” and spurred the state to pass a ban on retail subsidies.
- A taxpayer-subsidized Harrisburg, PA Bass Pro is struggling to attract tenants to the mall it anchors, leading to lawsuits, stalled renovations, and increasing stigma. Though the Bass Pro was expected to hire 300-400 employees according to initial projections, it had hired only 101 employees three years after opening.
- A Bass Pro-anchored mall in Cincinnati, OH, is only 35% leased and has been described as “positively post-apocalyptic” and “pretty much on life support” by visitors.
- The Bakersfield, CA Bass Pro site – still in development – is home to a waterless ditch that was intended to serve as the store’s canal. The site has sat vacant for ten years.
- Bass Pro has gone on a building spree over the past ten years that significantly undermines its claims that each new store is a major tourist destination.
For more on the study in Buffalo check the following news clip: Study says Bass Pro won’t spur growth
Meanwhile, Buffalo never got their store…
A few months ago, Bass Pro founder Johnny Morris announced that Bass Pro would be opening up on the Canadian side of the border saying, “It’s an incredible opportunity for Bass Pro Shops to place our third Canadian store in this beautiful part of Southern Ontario.”
Thanks to Governor Malloy, here in Connecticut, the claim that Bass Pro is an “incredible opportunity” is getting this extremely successful private company $45 million of our money.
Corporate Welfare, Economic Development, Economy, Malloy, Unemployment Corporate Welfare, Economic Development, Economy, Malloy, Unemployment
As the blind man led the deaf man toward to edge of the precipice he was heard to utter….”things are looking up, we are almost there…”
Those words and that image could certainly be used to describe Governor Malloy’s approach to the Connecticut economy and his so-called economic development strategy of giving away hundreds of millions in taxpayer funds to successful multi-million dollar corporations.
“You can’t name a recent governor who’s had net job growth…I’m the one — no others.”
That is what Governor Malloy told listeners during a recent appearance on the Connecticut Public Radios show “Where We Live.”
But of course, the Governor’s statement wasn’t true.
And when informed of that, Malloy’s PR operation spun into high gear releasing a statement “clarifying” what the Governor meant when he uttered his inaccurate assessment of the truth. Malloy’s spokesman said;
“The Governor was referring to a fact that everyone in this state knows — that our economy had been stagnant for decades. We failed to invest in the industries that were poised to grow, and instead careened from one project to the next without any real cogent strategy. That can no longer be said about Connecticut’s economic development strategy.”
The Governor’s political two-stepping is the manifestation of the Malloy administration’s failed economic development strategies and his attempt to convince voters that the real world isn’t actually real.
The single greatest indication of the Governor’s utter detachment from the real world can be found in his response to the news that although the number of jobs in Connecticut increased in the month of July, Connecticut’s unemployment rate actually rose from 8 percent to 8.1 percent.
To that Malloy explained, “People are sensing that it’s easier to get a job.”
“It’s easier to get a job…” ?
Now that was certainly a Wait, What? moment!
As Malloy spends his time trying to count the number of angels that can fit on the top of a pin, tens of thousands of Connecticut residents feel the crushing pressure of Connecticut failing economic development strategy.
An August 2013 report from Connecticut Voices for Children, the non-partisan research group paints a grim picture of the state of the state when it comes to the Connecticut economy and especially “The State of Working Connecticut 2013: Young People in the Workforce.”
Governor Malloy and his administration would do well to study the report in detail.
CT Voices reports;
- Youth unemployment has dramatically increased in Connecticut over the last decade and is more than twice the rate for older workers.
- The unemployment rate for Connecticut’s young workers (age 16 to 24) is at about 17.1 percent, which is more than double the rate for 25 to 54 year olds (7.4 percent) and almost triple the rate for workers 55 and older (6.4 percent).
- Connecticut’s youth unemployment rate is higher than the United States average (16.2 percent).
Fewer people are looking for work because there is no work to be found;
- A smaller share of the working age population is working or looking for work. (The labor force participation rate is the share of the working age population that is working or looking for work.)
- The rate for all Connecticut workers fell from 68.8 percent in 2007 to 66.2 percent in 2012. The largest decline in participation is among the state’s youngest workers: the rate among 16 to 24 year olds in Connecticut declined over this period from 62.0 percent to 54.5 percent.
Long-term unemployment has reached crisis and historic levels:
- Long-term unemployment — the share of the unemployed who have been out of work for more than 26 weeks — was second highest in Connecticut among all states. Among Connecticut’s unemployed youth, one-third (33.6 percent) have been out of work for more than 26 weeks, above the national rate of 27.7 percent.
- And long-term unemployment is hurting older workers even more. In 2012, long-term unemployment in Connecticut for those age 55 and older, at 61.5 percent, was the highest rate for that age group among all 50 states.
Connecticut’s minority workers are disproportionately hurt by Connecticut’s economy.
- Connecticut’s Black and Hispanic workers face high unemployment and low wages. In 2012, Black unemployment (13.4 percent) and Hispanic unemployment (15.7 percent) were about double the White unemployment rate (7.0 percent).
- On average, Hispanics earned 55 cents and Blacks earned 72 cents for every dollar earned by Whites.
And Malloy’s corporate welfare program of giving out hundreds of millions to successful corporations will not create the breadth of jobs Connecticut needs.
As the CT Voices report explains, “While Connecticut has added jobs in the recent past; these jobs are among the state’s lowest-paid sectors. Connecticut added 15,655 jobs between 2011 and 2012. However, the majority of these jobs (10,050) were added in the lower-wage job sectors.”
Connecticut’s economic problems go much, much deeper than a governor who can’t seem to tell the truth about the state of the state’s economy.
Just ask the deaf man who is being led toward the cliff by the man who is blind.
You can find all this data and the rest of the CT Voices report at: http://www.ctvoices.org/sites/default/files/econ13sowctes.pdf and http://www.ctvoices.org/sites/default/files/econ13sowctfull.pdf
Corporate Welfare, Economic Development, Freedom of Information, Malloy Corporate Welfare, Economic Development, Freedom of Information, Malloy
In the never-ending saga know as, “laws are for normal people” or “those laws are just technicalities” comes news that, “A state economic development agency that approved nearly $37 million in total aid to businesses in 2011 and 2012 failed to give public notice of its meetings during that time as required by law, the state auditors disclosed Wednesday.”
In an article entitled, Auditors: State agency doled out $37M while violating public notice law, the CT Mirror’s Keith Phaneuf writes, “The quasi-public Connecticut Development Authority also did not submit an annual schedule of its meetings with the Secretary of the State’s Office – another violation of Connecticut’s right-to-know laws.”
According to the news coverage;
“During the two-year audit period, the CDA approved a wide range of business assistance including:
$15.2 million in loans and $750,000 in loan guarantees for manufacturing projects that add jobs, enhance exports and support new uses for defense technology;
$8 million to insure loans to help companies acquire industrial land, buildings, machinery and equipment;
$5.6 million in loans to businesses to add machinery and equipment;
$1 million in guarantees for business loans deemed riskier than conventional business financing.”
As to that annoying debate about laws, Governor Malloy’s spokesperson was quick to add;
“It’s the auditors job to point out oversights such as this, and we’re glad they have…Every effort must be made to comply with these important rules, especially when they are designed to increase transparency. We’re glad to hear CDA agrees as well, and that they are committed to addressing the problem.”
So at least in this case, Malloy’s team was nice enough to clarify that these particular laws are only rules, but that the Governor’s Office is glad to hear that his state agency is committed to “addressing the problem” and following the rules in the future.
For more background on this story, check out the CT Mirror at: http://www.ctmirror.org/story/2013/07/31/auditors-state-agency-doled-out-37m-while-violating-public-notice-law
BassPro, Bridgeport, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch Bridgeport, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch
According to the Connecticut Post’s Brian Lockhart, “The state will spend at least $22 million to build Bass Pro Shops a mega-store on the [Bridgeport] city’s waterfront.”
As Wait, What? readers will recall from previous blog posts, Bass Pro, a $2.6 billion privately owned company, specializes in getting taxpayers to fund significant amounts of their development costs.
Last summer, the Franklin Center for Government & Public Integrity, reported that “Bass Pro and its closest competitor, Sidney, Nebraska-based Cabela’s, received or were promised more than $2.2 billion from taxpayers over the prior 15 years.”
It was just a year ago that Governor Malloy and Bill Finch had a spare-no-expense media announcement to share the news that “Missouri-based Bass Pro had agreed to be the anchor company at Steel Point, the empty land along alongside Bridgeport Harbor.
According to Lockhart’s story, “The company was lured to Connecticut with a package of unspecified financial incentives that were still being negotiated. Usually such details are available at the time of an announcement.”
Now, a year later, Connecticut Innovations, Inc. the Connecticut economic development agency’s controlled by the Governor has voted to borrow $22 million to help pay for Bass Pro’s new store.
Interestingly the State of Connecticut’s Department of Economic and Community Development explained that the $22 million will not be the only subsidy provided to Bass Pro.
The Malloy administration’s refusal to allow transparency in its economic development program has been a constant point of contention.
The Connecticut Post did determine that the state will be using a system called tax incremental financing to come up with the $22 million for Bass Pro. The state explained, “They are basically `lock boxing’ a portion of that future sales tax that they know is a net increase from sales tax currently generated in the state, and using that to pay off up front bonds.”
So, in essence, the state is borrowing money and giving up future sales tax revenue to pay it back, with interest.
The Connecticut Post also reported on the employment law problems Bass Pro has been facing. As reported, “In March, a U.S. District Court judge in Houston allowed the EEOC lawsuit, alleging the company turned away black and Hispanic applicants at stores nationwide, to move ahead… “
In addition to the $22 million, Mayor Finch has committed local taxpayer funds and money and federal grants to upgrade the infrastructure at Steel Point.
At this point, Connecticut’s total public subsidy to Bass Pro remains unknown.
Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
On June 19, 2012 Governor Malloy announced that Alexion Pharmaceuticals would become the fourth company to collect taxpayer subsidies (aka Corporate Welfare) under his “First Five” economic development initiative.
With much fanfare, Malloy announced that $51 million in taxpayer funds were being given to Alexion Pharmaceuticals to help persuade the $20 billion dollar company to move from Cheshire back to New Haven where the company had begun in 1992. In return for the money, the company would also promise to create 200-300 jobs.
Thirteen months later, on July 13, 2013, Switzerland’s Roche Holding AG, the world’s largest cancer pharmaceutical company, announced that is rounding up the funds to takeover Alexion Pharmaceuticals.
In 1992, Alexion Pharmaceuticals was opened by Yale faculty member Dr. Leonard Bell in New Haven’s Science Park. Eight years later it moved to Cheshire. Bell remains the company’s CEO.
So, with the development of Governor Malloy’s “First Five” program, Alexion was one of the companies to put their hand out. As noted, Last year, in return for promising to move back to New Haven and create 200-300 new jobs, Governor Malloy gave the company a corporate welfare package worth $51 million.
According to the Connecticut Department of Economic and Community Development, the package included, “A 10-year loan of $20 million at a rate of 1% with principal and interest deferred for five years. Loan forgiveness of $16 to $20 million will be based on the creation of 200-300 full-time jobs; a $6 million grant for laboratory construction and equipment and Urban and Industrial Sites Reinvestment Tax Credits of up to $25 million.”
At a press conference held by Governor Malloy and Mayor DeStefano, Alexion’s CEO explained, “Our new headquarters in New Haven will support the rapid growth of our company as we expand our global mission to transform the lives of patients with severe and life-threatening ultra-rare disorders.”
As part of the deal, Winstanley Enterprises, of West Hartford and Massachusetts is scheduled to build a “$100 million, state-of-the-art, laboratory and office building” at New Haven’s “Downtown Crossing.”
David Winstanley and his two sons, Adam and Carter have been in the commercial real-estate business for many years focusing on the acquisition and development of buildings within the Yale Science Park and facilities for ESPN, among others. In the last New Haven mayoral election, the Winstanley family of Concord, Massachusetts gave DeStefano at least $10,000 and the family and its associates have donated over $26,000 to state-level politicians in Connecticut over the last few election cycles.
At the time of the Malloy/Alexion press conference, the Republican leaders of the Connecticut General Assembly, Senator McKinney and Representative Cafero, complained that a public hearing should have been held on the corporate aid package before the funds were turned over to the private corporation.
Senator McKinney was quoted as saying, “Ultimately, I hope this is a good investment for the state of Connecticut, but the public and the legislature have a right to know more about the deal.”
But remaining true to their arrogant approach to criticism or the call for greater transparency, Governor Malloy’s spokesman, Andrew Doba, blasted the legislators sayings, “With all due respect to the minority leaders, sometimes you get the feeling that they look for clouds on a sunny day…”
At the time, Doba said the state’s interests were protected claiming, “We have extensive safeguards in place to protect taxpayers, including collateral requirements, a 10-year residency requirement, job creation and retention targets and capital investment requirements.” he said.
But one year later, major storm clouds have, indeed, appeared on the horizon.
On Saturday, Bloomberg News broke that Roche Holdings, a company based in Basel, Switzerland is trying to acquire Alexion.
Bloomberg News reported that Roche Holdings recently dropped its hostile takeover effort of Illumine Inc., a $6.7 billion dollar pharmaceutical company and is instead turning its attention on purchasing Alexion.
According to Bloomberg News, “A takeover of Alexion would be Roche’s largest since the company bought the portion of Genentech Inc. it didn’t already own for $46.8 billion four years ago, the biggest biotechnology deal on record, according to data compiled by Bloomberg.”
Bloomberg News went on to report that “a spokesman for Roche, declined to comment. Irving Adler, a spokesman for Alexion, said the company doesn’t comment on rumors.”
According to the news reports, “Alexion climbed 13 percent to $114.26 yesterday in New York, the biggest single-day gain since October 2008. Roche’s American depositary receipts fell less than 1 percent to $64… [And]…Alexion’s shares climbed as much as 24 percent in intraday trading yesterday, matching a potential premium Roche could be expected to offer.”
Interestingly, none of the stories about the potential Roche/Alexion deal made any mention of the Connecticut taxpayer’s $51 million dollar gift to Alexion or the fact Alexion has “committed” to moving from Cheshire to New Haven and creating 200-300 jobs.
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