State Senator Len Fasano (R-North Haven) today raised questions about Gov. Dannel P. Malloy’s Executive Order (EO) No. 38 which purports to make information regarding certain economic assistance and tax credits used to recruit or retain businesses more accessible to Connecticut residents.

After reviewing the Dec. 3 Executive Order, Sen. Fasano said the governor’s new policy contains several glaring omissions from the legislation it was modeled after (H.B. 6656) and that those omissions will allow for secrecy to continue. Among those omissions, is the fact that Executive Order No. 38 does not require the terms and conditions of state economic assistance to be revealed.

“A specific provision in the bill which failed in this past legislative session would have put this requirement in place,” Fasano said.  “The governor’s budget chief and his economic and community development commissioner testified against the bill, and the bill died.  The governor’s order could have sent a clear message that terms and conditions of deals involving taxpayer money should be laid out for everyone to see them.  That didn’t happen.”

Compliance

“If a company gets state aid, a reasonable expectation would be that the company is in compliance with, and is up-to-date on, its state and local taxes,” Fasano said.  “Yet, that is not always the case.  This executive order is silent when it comes to tax compliance.”

As a recent example, Fasano cited Hybrid Insurance Agency LLC.  Connecticut’s taxpayers provided Hybrid with a $100,000 loan and another $26,320 grant to pay for the company’s move from Bloomfield to Hartford. The company has had state and local tax compliance issues.  Fasano noted that Section 32-7g of the Connecticut state statutes contains a tax compliance requirement for the state Small Business Express program, so the lack of a similar provision in the governor’s executive order seemed odd.

Political contributions from principals of businesses receiving state awards.

“We need to eliminate any perception of a ‘Pay to Play’ in state government,” Fasano said.  “This year, legislative Democrats passed a bill increasing political donation limits and creating new unlimited donation rules for state political parties.  Taxpayers should be able to find out, in one convenient place, whether their money is being given to those who donate to political campaigns.  Is this “Dark Money” going to companies whose top management is donating generously to politicians and political parties?”

Fasano pointed to recent examples, including:

  • A family wrote a series of $10,000 checks to the Connecticut Democratic Party weeks after learning the Department of Transportation selected their company for a $500 million Stamford redevelopment project.
  • Principals of a New Haven development company whose anchor tenant was awarded a $51 million state aid package each gave $10,000 in August to the state Democrats’ federal account.
  • The project manager of a waterfront real-estate development in Bridgeport gave $10,000 to the state Democrats’ federal account on Sept. 26, a day before the State Bond Commission approved $31 million in financing for the development’s anchor tenant. A principal in the project gave $1,000 a week earlier.

“After my review of the governor’s order, I have come to the conclusion that it falls short of true transparency,” Fasano said.  “It fails to address the reasons we need full disclosure of economic assistance.  Connecticut residents should be able to learn whether a grant recipient is in compliance with the terms of the agreement, whether the recipient is current on taxes, and whether or not those receiving state assistance then were inspired to make generous donations.  This is our money.  We have a right to know where it’s going, who it’s going to, and why it is being given to handpicked companies.”

Posted by Chris

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