Bridgewater Associates, Corporate Welfare, Economic Development, Malloy, Ray Dalio Bridgewater Associates, Corporate Welfare, Economic Development, Malloy, Ray Dalio
Yesterday, CNBC reported that with more than $100 billion under its management, Ray Dalio’s Bridgewater Associates is once again the world’s largest hedge fund.
Tomorrow, Governor Dannel Malloy and his appointees on the Connecticut Bond Commission will approve a corporate welfare package for Bridgewater Associates that will cost taxpayers $22 million plus. The plus “part” is due to the fact that Malloy is actually borrowing the money to give to the giant hedge fund, meaning Connecticut taxpayers must pay back the money, along with the associated interest.
As for the entire debacle, long-time Wait, What? readers will remember that this is actually Plan B of Malloy’s effort to subsidize one of the most successful companies in the world.
The Connecticut Bond Commission agenda explains the latest version of the plan as follows:
These funds are requested to provide a grant-in-aid and loan, under the First Five Program, to Bridgewater Associates, LP to assist with expansion of its facilities in Westport, Wilton and Norwalk. The company will retain 1,402 jobs and create 750 new jobs. The loan will be provided at an interest rate of 1% for ten years with principal deferred for five years. The company will be eligible for loan forgiveness if it creates the 750 jobs and retains the existing jobs by the end of 2021. Also included are a $2 million grant to assist with training and a $3 million grant for installation of alternative energy systems.
As an aside, Dalio’s pay – last year – dropped to $1.6 billion, down from the $2.3 billion a year he collected a couple of years ago.
Things are tough all over… Malloy’s solution;
While middle class families across the state struggle with massive costs, such as student loans with rates of 8% or more, not to mention rising energy costs, as a result of Malloy’s economic development strategy, Connecticut taxpayer will be loaning one of the 1%’s most elite members with a $17 million dollar loan at 1% [go –figure] with no payments due for five years – and, should the company stick to its present business trajectory – they don’t have to pay back the loan at all. In addition to the $17 million, Dalio and his company will get $2 million to help subsidize their worker training program and $3 so that they can install some “alternative energy systems.”
Meanwhile, Connecticut’s state budget deficit is about $250 million and growing, The Malloy administration has laid off about 1,000 state employees in the last few weeks and Malloy’s new budget counts on his ability to ax as many as 3,000 more state employees in the coming couple of months.
Called by some, the Reverse Robin Hood Strategy, were in Connecticut we know it as Dannel Malloy’s approach to the advanced capitalist system, one in which taxpayers work extra hard so that their government can give money to successful businesses.
For those who want to know more about Malloy’s horrendous Bridgewater give-a-way program, some of the details can be found in previous Wait, What? posts on this issue.
Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund (8/19/2012)
Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO (1/11/2013)
Damn process gets in the way of the Bridgewater Associates corporate welfare give-a-way (10/2/2013)
“This is stealing from the poor and middle class to make a billionaire even richer” (Pelto, August 2012) (6/27/14)
To Hell with Connecticut’s Middle Class – Someone needs to subsidize the Billionaires (9/16/2015)
Oh, and as for the $2 million Connecticut taxpayers are giving to help Bridgewater Associates train their staff? Check out,
Bridgewater’s Co-CEO Once “Supervised Subordinates Stripping Off Articles Of Clothing And Setting Them On Fire During A Team-Building Exercise”
As long-time Dealbreaker readers know, we have been writing about the slightly unorthodox culture at Bridgewater Associates since 2010, when we received a spiral-bound copy of Principles, the hedge fund’s unofficial company handbook penned by founder Ray Dalio. At the time, it was surprising to learn of an asset management firm that explained its reasoning for why employees shouldn’t hesitate to identify and eliminate weak colleagues via a discussion about “a pack of hyenas [taking] down a young wildebeest”; told them that failing to confront a person about their shortcomings to their face made you “a slimy weasel”; pushed them to ask themselves if they’d “earned the right to have an opinion”; insisted that “firing people is not a big deal”; and quizzed them on all of the above and more.
Amazingly, though, the Westport-based hedge fund continues to surprise us with the new and innovative ways it conducts its business, many of which are on display in a Wall Street Journal article today, examining life under the Tao of Dalio..
Trustfalls…ON STEROIDS: “Mr. Jensen also cut a distinctive path as a manager. About three years ago, he supervised subordinates stripping off articles of clothing and setting them on fire during a team-building exercise at an official company retreat.
No doubt Ray Dalio and his company need the money more than we do.
Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
Known as “corporate welfare” to any reasonable person, Governor Dannel “Dan” Malloy’s economic development policies has been primarily geared toward picking winners and losers in the “free-enterprise system” by giving away large amounts of public funds to selected corporations in return for various promises to do something over the next ten years.
Literally hundreds of millions of dollars in scarce public funds have gone to extremely successful corporations.
Adding to the fiscal irresponsibility of Malloy’s policies is the fact that most of these funds have been charged to the state’s credit card meaning Connecticut taxpayers must not only pay the principal but the interest.
This, of course, comes on top of the fact that Connecticut’s debt ratio is already sky high compared to the other states in the country.
And to prove the foolhardy nature of this corporate welfare system, comes this breaking news from the Day newspaper of New London;
Sprague – The town’s largest taxpayer and employer, Fusion Paperboard, will be closing its Sprague facility in September and laying off about 140 employees, state Sen. Cathy Osten, the town’s first selectwoman, confirmed on Wednesday.
The news comes one year after Gov. Dannel P. Malloy and Osten welcomed news that the state Department of Economic and Community Development had approved a 10-year, 3 percent loan of $3 million to help Fusion expand operations, retain 147 jobs and create 20 new jobs with a $6 million improvement project.
On year after Malloy gives the company $6 million of our tax dollars, the company announces it will be closing down and laying off about 140 Connecticut residents.
File this one along with the other “great deals” that have gone belly-up….all while taxes increase and vital state services go unfunded.
Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto
Corporate Welfare, Economic Development, Malloy Corporate Welfare, Economic Development, Malloy
If you are going to read one Wait, What? post this year —- this is the one to read:
“The [UTC] agreement, which requires legislation, does not require any borrowing or payments by the State of Connecticut.” Governor Dannel Malloy (2/26/2014).
It is safe to say that Governor Dannel Malloy, who often has trouble telling the whole truth, has never uttered a statement as misleading as his remark about the cost that the Malloy/United Technologies Corporation deal will have on Connecticut’s taxpayers.
Dannel Malloy has been Connecticut’s Governor for just over three years. Of all the financially irresponsible, absurd and counter-productive economic policies Malloy has proposed none are as outrageous, inappropriate or fiscally misleading as the farce that he has cooked up with UTC.
As more and more details about the Malloy/UTC deal come out, reporters, legislators, and the public will become increasingly aware of just how fiscally irresponsible this deal is for the taxpayers of Connecticut.
Here is the truth that has yet to be fully revealed,
The day AFTER Sikorsky, a UTC subsidiary, announced that it would be laying off 600 manufacturing workers in Connecticut, Governor Malloy and UTC‘s CEO announced that the incredibly successful, multi-billion dollar, multi-national corporation would make a $500 million investment in its research, training and corporate facilities in Connecticut, “in exchange for $400 million in tax relief over the next two decades.”
First, Sikorsky 600 workers will still be unemployed.
And second, Malloy’s statement that the deal “does not require any borrowing or payments by the State of Connecticut,” to UTC is so misleading as to be nothing short of an outright lie.
As reported by Keith Phaneuf in CT Mirror,
“Like many large corporations, UTC qualifies for various credits to reduce its corporate income tax bill. But regardless of how much in total credit values it has amassed, it cannot reduce its annual tax liability by more than 70 percent.”
This means that large Connecticut corporations can use various tax credits to drop their tax obligation to the state of Connecticut by up to 70 percent – that is – by maximizing the Connecticut Tax Code, UTC and other major companies only pay 30 percent of what they would otherwise be paying to the state.
Malloy’s proposal is to allow UTC to take unused tax credits to reduce their tax obligation ever further – well above the 70 percent level. In this case, UTC would reduce their tax payments to the state of Connecticut by an additional $400 million.
As Wait, What? readers know, according to the independent office of Fiscal Analysis, Connecticut faces budget deficits of at least $1 billion dollars year in each of the three years following this year’s election. Malloy has used budget gimmicks and pushed off obligations in order to make it appear the state has a surplus this year even though the cost will be huge deficits in upcoming years.
While the state of Connecticut will not be “borrowing $400 million” to give to UTC to underwrite their $500 million investment, Malloy’s plan is arguably even worse because the deal means UTC will be paying $400 LESS in state taxes.
The tax cuts for UTC mean $400 million less in tax revenue which means $400 million more in program cuts and/or $400 million more in tax increases for Connecticut’s middle class and small business taxpayers.
To put that cut in to perspective, Governor Malloy takes great pride in saying he has increased funding for Connecticut’s poorest school districts. Altogether, the thirty so-called Alliance Districts, have received about $30 million a year to help all of those students and schools.
And yet, Malloy is allowing one of the most successful corporations in the world to reduce it tax payments to the state by $400 million.
And while Malloy says the “investment” will lead to 1,500 new jobs, reading the agreement reveals that UTC can actually lay off even more Connecticut workers and still collect the corporate welfare that Malloy is pushing on them.
As Keith Phaneuf also reports in the CT Mirror, UTC “currently employs about 4,900 engineers and 14,100 individuals in total in East Hartford, with a gross payroll topping $1.53 billion.”
According to the agreement, UTC could actually drop its engineering workforce to 4,350 and its total employment to 12,450 before it loses all the benefits of this taxpayer give-away.
To repeat, UTC Sikorsky has already laid off 600 workers and UTC could lay off another 1,650 workers before it forfeits this deal.
Governor Malloy’s economic development plan has been fundamentally based on a strategy of corporate welfare. The Malloy/UTC deal not only continues that failed policy bur takes it to an unprecedented level of irresponsibility.
If that isn’t bad enough, what happens when other large corporations come forward and say they want to be able to use their “stranded” tax credits as well?
Using Malloy’s UTC agreement as a model, Connecticut’s biggest and most profitable companies would be able to cut their tax payments by $2.5 billion, there by destroying Connecticut State Government.
It is just a matter of time before Connecticut voters realize just how badly they have been ripped off by the Malloy/UTC farce of a deal.
Unfortunately some media outlets still haven’t caught on to what is included in this Malloy/UTC deal. Here are some of the stories so far.
CT Mirror: http://ctmirror.org/malloy-seeks-tax-relief-to-trigger-500m-expansion-for-utc/
CT Newsjunkie: http://www.ctnewsjunkie.com/archives/entry/state_uses_stranded_tax_credits_to_help_pratt_whitney_sikorsky/
CT Post: http://www.ctpost.com/default/article/UTC-deal-keeps-jobs-in-state-5271800.php
Waterbury Republican: http://www.rep-am.com/news/local/787344.txt
NBC Connecticut: http://www.nbcconnecticut.com/news/local/utc-united-technologies-pratt-whitney-sikorsky-malloy-247310861.html
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.”
BassPro, Bridgeport, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch BassPro, Corporate Welfare, Economic Development, Malloy, Mayor Bill Finch
“Bass Pro often fails to deliver on its promise to be an economic development anchor and major tourist destination. Its stores attract shoppers but often do not produce sought-after economic benefits associated with major tourist destinations.” (Public Accountability Initiative 2010)
“The stores are billed as job generators by both companies when they are fishing for development dollars. But the firms’ economic benefits are minimal and costs to taxpayers are great.” (Franklin Center for Government & Public Integrity 2012)
This coming Friday, Governor Malloy’s State Bond Commission will authorize $31,000,000 in bonds to subsidize the construction of a Bass Bro “retail facility” at Steel Point Harbor in the City of Bridgeport. When the full bill for the principal and interest is paid off this taxpayer gift will cost the citizens of Connecticut in excess of $45 million.
The Governor’s promise to give Bass Pro public funds dates back to July 2012 when he attended a Bridgeport press conference with Bass Pro’s owner, Johnny Morris, to proudly proclaim, “This is about jobs, and it’s great news for the City of Bridgeport…Bass Pro will be a draw for people from throughout the region, one that will help revive the local economy.”
At the time, Mayor Bill Finch chimed in, “Today’s announcement marks a historic moment for the City of Bridgeport and SteelPointe Harbor. Bass Pro Shops’ investment in Bridgeport will create hundreds of jobs, generate new tax revenues and bring economic growth to the City. They are a proven brand that will generate interest and attract customers from throughout the region. Bass Pro Shops is committed to Bridgeport and we are proud to have them as a major anchor tenant at Steelpointe Harbor.”
The total cost of the proposed store is estimated at $68.5 million, but the $31 million in state subsidies doesn’t even count the cost of improvements and tax abatements that the City of Bridgeport will be providing Bass Pro.
Over the years, Bass Pro, a privately held company with at least $2.6 billion in annual revenue, has relied heavily on taxpayer subsidies to pay for the construction of its stores by suggesting that they will create hundreds of jobs and become major tourist attractions.
Last year, the Franklin Center for Government & Public Integrity, a major policy research organization, reported that “Bass Pro and its closest competitor, Cabela’s, received or were promised more than $2.2 billion from taxpayers over the prior 15 years.”
Of course, Bridgeport isn’t the only small city to fall for Brass Pro’s pitch that they can anchor a major revitalization effort. Just a few years ago it was Buffalo, with its population of 261,310 residents (nearly twice the size of Bridgeport), that was promising Bass Pro big money in return for the company opening up a store that would serve as the hook for the Erie Canal Harbor Development Corporation (ECHDC) plan to revitalize Buffalo’s waterfront. In that case, Bass Pro wanted $35 million in public subsidies.
At the time, the New York based Public Accountability Initiative (PAI) conducted a major study of the impact Bass Pro would have on Buffalo and the region.
The Key findings of the PAI study included;
- Bass Pro often fails to deliver on its promise to be an economic development anchor and major tourist destination. Its stores attract shoppers but often do not produce sought-after economic benefits associated with major tourist destinations.
- A Mesa, AZ development anchored by a Bass Pro has been described as a “ghost town” and “dead” and spurred the state to pass a ban on retail subsidies.
- A taxpayer-subsidized Harrisburg, PA Bass Pro is struggling to attract tenants to the mall it anchors, leading to lawsuits, stalled renovations, and increasing stigma. Though the Bass Pro was expected to hire 300-400 employees according to initial projections, it had hired only 101 employees three years after opening.
- A Bass Pro-anchored mall in Cincinnati, OH, is only 35% leased and has been described as “positively post-apocalyptic” and “pretty much on life support” by visitors.
- The Bakersfield, CA Bass Pro site – still in development – is home to a waterless ditch that was intended to serve as the store’s canal. The site has sat vacant for ten years.
- Bass Pro has gone on a building spree over the past ten years that significantly undermines its claims that each new store is a major tourist destination.
For more on the study in Buffalo check the following news clip: Study says Bass Pro won’t spur growth
Meanwhile, Buffalo never got their store…
A few months ago, Bass Pro founder Johnny Morris announced that Bass Pro would be opening up on the Canadian side of the border saying, “It’s an incredible opportunity for Bass Pro Shops to place our third Canadian store in this beautiful part of Southern Ontario.”
Thanks to Governor Malloy, here in Connecticut, the claim that Bass Pro is an “incredible opportunity” is getting this extremely successful private company $45 million of our money.
Bridgeport, Corporate Welfare, Economic Development, First Five, Kenneth Moales, Malloy, Mayor Bill Finch, TicketNetwork Bridgeport, Community Bank, Donald Vaccaro, Economic Development, First Five, Kenneth Moales Jr., Malloy, TicketNetwork
In an article entitled, “State Has First Bank Failure In A Decade, the Hartford Courant reported last night that, “The Community’s Bank, with its headquarters and one branch in Bridgeport, came under the receivership of the Federal Deposit Insurance Corp. late Friday afternoon amid mounting losses from commercial real estate loans.”
“Shocked and saddened” is what Bridgeport Mayor Bill Finch said in a statement, adding “…It is not clear how the state could allow this to happen.”
Not clear how the state could allow this to happen?
What Mayor Finch failed to reveal and the Hartford Courant didn’t report is that The Community Bank is one of the mortgage holders that Finch campaign treasurer and Bridgeport Board of Education Chairman, Kenneth Moales Jr, has failed to repay.
Since April of this year, Wait, What? readers have been learning about the massive financial problems facing Moales his church.
See: Is Bridgeport Board of Education Chairman Kenneth Moales, Jr.’s financial empire collapsing? (April 30), Wait, What? Bridgeport Board of Education scheduled to approve $1 million for Moales Daycare facilities despite foreclosure threat (May 13), Moales Empire Collapsing, Moales’ state funded childcare sites being foreclosed on (June 20), Update: Moales Empire Collapsing, foreclosure to take his state funded childcare sites, churches and apparently his residence. (June 21) News Update: More on financial problems facing Bridgeport Board of Ed. Chair Kenneth Moales, Jr. and his church (June 26).
As reported in those articles, in addition to the $8 million plus in principal and interest owed to Foundation Capital Resources, Inc., Moales and his church owe hundreds of thousands more to various contractors, the City of Bridgeport, the state of Connecticut and Community Bank of Bridgeport.
The Community Bank of Bridgeport loaned Moales and his family $175,000. As collateral for that loan, Moales used his mother‘s residence, which is owned by Moales’ church, as well as the full faith and credit of the church.
Despite benefiting from a $1 million dollar day-care contract his family “won” from the Malloy administration and raking in hundreds of thousands of dollars from his parishioners, Moales failed has consistently failed to make his mortgage payments. One of the entities Moales has refused to pay is The Community Bank in Bridgeport.
Although Moales hasn’t made his legally required payments, he has had the funds to drive fancy cars, wear expensive suits, go on long vacations and send his children to the costly Fairfield Day School, all while supporting Mayor Bill Finch, faux superintendent Paul Vallas and their combined efforts to privatize and run the Bridgeport School System into the ground.
According to the Hartford Courant,
“Chartered in 2001, The Community’s Bank was the state’s only minority-owned lender, and its finances had come under increased scrutiny from regulators since 2010.The traditional focus of minority-owned banks on urban, rather than suburban, areas, provided a major obstacle to building the bank, said state Banking Commissioner Howard F. Pitkin, who issued Friday’s order.’They found it difficult to grow,’ Pitkin said. “They never reached the point where they were making money.”
While Moales’ connection to the demise of Bridgeport’s Community Bank is noteworthy, the Hartford Courant story revealed an equally unsettling development.
The Courant is reporting that, “Late last month, an investor group filed an application with the state Department of Banking for approval to invest in the bank and become a minority shareholder. The group was led by TicketNetwork Chief Executive Donald Vaccaro. A spokeswoman for Vaccaro said late Friday that the effort was supported by U.S. Reps. Jim Himes and John Larson.”
“The cash infusion that I would have provided [would have] meant more loans for inner city development, fewer blighted properties, and more jobs for inner city folks,” Vaccaro said in a statement. “Instead of a rescue by me, closing the bank will cost the state and the federal government millions of dollars and cause a loss of many jobs in the city of Bridgeport.”
The Courant went on to report that “a banking department spokesman, declined to comment late Friday because the application is pending.”
But as Wait, What? readers may recall, TicketNetwork and Vaccaro have been in the news before. TicketNetwork was chosen by Governor Malloy to be his 2nd “First Five” corporate welfare recipient.
See: Shhh… over here… I got some tickets – “cheap”, State Gives Company Millions to Create Jobs – Claims it didn’t know about employee lawsuit…, Oh those crazy CEO’s (aka Our Tax Dollars at Work), First Five Company #2 – TicketNetwork – Takes the Fall, They’re BACK! TicketNetwork moves to “corner” the world market by controlling domain names ending with “.tickets”
Malloy choose TicketNetwork, the “online ticket exchange company” (whatever you do, don’t call them ticket scalpers), despite the fact that Vaccaro and TicketNetwork had a pending lawsuit against the president of the Bushnell.
At the time Malloy announced the multi-million dollar deal with TicketNetwork, Vaccaro and his company had a lawsuit pending against the Bushnell’s David Fay for slander because Fay had spoken at a Connecticut legislative hearing calling for stronger laws to protect consumers and artistic venue such as the Bushnell.
TicketNetwork went to court seeking damages and demanding a retraction because the Bushnell’s representative said that TicketNetwork was “a company that puts tickets to popular events on ‘hold’ and then attempts to sell those tickets to third parties at inflated prices.”
According to the CEO of TicketNetwork, “Mr. Fay’s slanderous comments were made in order to influence Connecticut legislation. That is reprehensible and subverts the whole legislative process.”
When Governor Malloy was asked about the whole controversy surrounding ticket re-sellers and whether the state’s taxpayers should be supporting such an industry, Malloy said “that is all part of the growing pains of this new emerging market.” Malloy went on to say “”There will be winners and losers in any emerging industry” and that the solution is to set up appropriate rules and then, “quite frankly, get out of the way.”
At the time, Malloy’s corporate give-a-way plan to Vaccarro’s company also overlooked a major sexual harassment lawsuit that was pending against Vaccaro and TicketNetwork.
However, despite spending more than $127,000 on lobbying fees, when Vaccaro later verbally abused a bouncer at a Hartford gathering and uttered a string of racial slurs, TicketNetwork was convinced to withdraw his “First Five” application.
The fact that Vaccaro now shows up with an application to invest in Bridgeport’s Community Bank while claiming his application has the support of Congressmen John Larson and Jim Himes is certainly worthy of some more investigation.
As is, of course, the notion that Bridgeport’s Mayor, Bill Finch, is “shocked” and says “It is not clear how the state could allow this to happen,” when the official record reflects the fact that it was at it was Kenneth Moales whose actions helped tank this local community bank.
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
Bridgeport, Economic Development, Malloy, Paul Vallas, Stefan Pryor, Steven Adamowski Bridgeport, Economic Development, Malloy, Paul Vallas, Stefan Pryor, Steven Adamowksi
Updated with additional background on the contract between Paul Vallas and Teach for America
Last Monday night, Paul Vallas, Bridgeport’s faux superintendent of schools revealed that he had hired another 31 Teach for America recruits to staff Bridgeport’s schools this year. Few, if any of the recruits come from Connecticut and none went to a Connecticut college or university to become a teacher.
The TFA recruits come courtesy of a March 2013 deal between Vallas and Nate Snow, the Executive Director for the Connecticut Chapter of Teach for America. Snow is also the President of Excel Bridgeport, Inc. the corporate funded lobbying and advocacy group that has been Vallas’ strongest supporter, turning out crowds for public hearings and rallies in support of the embattled Bridgeport education reformer. Snow and Excel Bridgeport also played a vital role in support of Mayor Bill Finch’s failed charter revision effort that would have done away with an elected board of education and replaced it with one appointed by Finch.
Not only are TFA recruits paid at regular teacher salary levels, but in return for supplying the Teach for America recruits, Vallas committed the City of Bridgeport to pay TFA a “fee” of “$3,000 per year for the first two years a teacher is employed. According to the contract, the annual fee goes up next year to $3,105 a year and then to $3,214 the year after that.
In total, the Vallas/TFA contract calls for the City to hire 125 TFA teachers. That number would provide Nate Snow’s organization with a finder’s fee in excess of $750,000.
Meanwhile in Windham, Malloy’s Special Master, Steven Adamowski, has packed the Windham schools with more and more of these mostly out-of-state Teach for America students.
As a result of Adamowski’s actions, about one in five Windham teachers had just a few weeks of training rather than having gone through one of Connecticut’s university-based teacher training programs.
The approach that is being taken by school administrators like Vallas and Adamowski is leaving hundreds of new Connecticut trained teachers twisting slowly in the wind.
It was only last May that literally hundreds of Connecticut residents earned their teaching certificates, after four or five years-worth of work, at UConn, Connecticut State University or one of Connecticut’s Independent colleges or universities.
At UConn, for example, students have two different options when it comes to teacher preparation programs including the “highly competitive five-year comprehensive teacher preparation program that integrates coursework and school-based clinic experiences facilitated by university and K-12 faculty in the preparation of pre-service teachers.”
As UConn proudly reports, “Over the past few years, U.S. News & World Report has ranked the IB/M program among the top 25 teacher preparation programs in Elementary Education, Secondary Education, and Special Education. We are nationally accredited by the National Council for Accreditation of Teacher Education as well as the Connecticut State Board of Education. Further, certification through the IB/M program is recognized by forty states through the National Association of State Directors of Teacher Education & Certification Interstate Contract.”
But did Paul Vallas or Steven Adamowski hire these students or the others who came out of Central, Southern, Eastern, Western or one of the other colleges in the state?
The answer would be a big NO!
In fact, the teaching positions that went to the out-of-state Teach for America recruits weren’t even posted as vacancies, meaning Connecticut residents never even had a chance to compete for the spots.
Earlier this month, Governor Malloy told the media that the economy was improving and that he was the only Connecticut governor to have created jobs over the past two decades.
Of course his claim wasn’t true…but even worse, he tried to skip over the fact that according to Connecticut’s Department of Labor, “Connecticut’s unemployment rate was estimated at 8.1% for July 2013.” That means the percentage of unemployed actually increased over the summer.
There is nothing fundamentally wrong with giving a few Teach for America recruits the opportunity to get experience by teaching in our public schools but administrators like Vallas and Adamowski have been consistently blocking opportunities for our own Connecticut children… Children who went to college in Connecticut and developed the expertise and knowledge they needed to teach in our public schools.
Imagine, we have Connecticut students, and their families, who were forced to borrow tens of thousands of dollars to go to college. They took the right courses, they got the right grades, they completed their teacher preparation programs and they earned their teaching certification. But when they graduated they discovered that they couldn’t even apply for a significant number of jobs in Connecticut’s public schools because someone had cut a deal to give dozens of those jobs away to out-of-state kids who didn’t even need to take education courses.
Put aside all the issues associated with whether TFA recruits have sufficient training before being sent into the classroom.
The fact is that Connecticut’s economy remains derailed and instead of using every opportunity to create good jobs for Connecticut residents, Governor Malloy, Education Commissioner Stefan Pryor, Paul Vallas and Steven Adamowski are setting up systems that prevent our children from even applying for these good paying jobs.
And as if all of this wasn’t insulting enough to the hard working families of Connecticut, TFA recruits generally qualify for the various federal loan forbearance programs meaning that while getting full teacher salaries their student loans are being paid for by the United States Government.
So when all is said and done, instead of creating jobs for Connecticut residents, the TFA program blocks Connecticut residents from getting jobs, gives jobs to people who have not gone through Connecticut teacher preparation programs, diverts hundreds of thousands of dollars in Connecticut taxpayer funds to Teach for America in the form of finder’s fees and leaves our students with more debt…all while out-of-state students get their student loans paid for by the government for taking away jobs that should be going Connecticut residents who have worked so hard to become teachers.
It is a sad excuse for leadership in these troubled economic times.