It is just as well that justice
is blind; she might not like
some of the things done in her name if she could see them. Anonymous
ETHICAL BEHAVIOR OR THE LACK OF IT.
And then
there's Congress...









GO TO CONTENTS OF
THIS PAGE
H O
T L I N K S immediately below...
This
is the place on this website to address the question, most especially
in relation to government, but things do cross over to real life..."So
what do you think is
not ethical?" And also, when is "free
speech" free? WHERE DOES F.O.I.
FIT IN?
Indeed,
it (ethics) is all in the eye of the beholder. And everyone is
different. Some people never even think about it - including
people who should. So, as my newspaper publisher once said, "when
in doubt, don't." Below please find articles about judges,
public employees, and a really outrageous
couple of actions by folks who should have known better. (Didn't
anyone ask themselves "how will this look in 72-point type on the front
page?") Some examples of ethical "challenges" in the news:




Washington
"foggy bottom" neighborhood (l)? Our bet: Congressman
Rangel gets slap on the wrist, keeps seat.
Jury
of Rangel's House peers meets in ethics case
Washington Times
By Larry Margasak - Associated Press
9:16 a.m., Thursday, July 29, 2010
WASHINGTON (AP) — A jury of Rep. Charles Rangel's congressional peers
is ready to publicly discuss charges of ethical misdeeds. But the
political discussions outside the room will be far more significant.
Eight House lawmakers who will
determine guilt or innocence of the former committee chairman will hold
their first meeting Thursday. A number of Democrats considering calls
for the New York Democrat to resign will get their first look at the
allegations.
"I think everyone is looking forward
to getting all the facts out in the open and people will have to react
once we know what we're dealing with," said Rep. Mike Quigley, D-Ill.
Rangel is tied for fourth in House
seniority, having served for 40 years. He's still vigorous at 80 years
old. He had substantial influence as chairman of the House Ways and
Means Committee, which handles taxes, trade, portions of health care,
Medicare and Social Security.
Rangel stepped down from that post
in March after the ethics committee criticized him in a separate case,
saying he should have known that corporate money paid for two trips to
Caribbean conferences.
The four Democrats and four
Republicans acting as judges are holding their organizational meeting
for an ethics trial that many Democrats hope will go away. That could
only happen if Rangel negotiates a plea bargain, admitting to
substantial violations, or resigns. Punishment could range from a
report criticizing his conduct to a reprimand or censure by the House,
or a vote to expel him — which is highly unlikely.
Rangel's attorney has been
negotiating with nonpartisan lawyers for the House ethics committee.
Any agreement would have to be approved by Rangel and ethics committee
members.
"Depends on what the settlement is,"
Rangel said, when asked whether he was likely to approval a deal
negotiated by his lawyer.
Rangel has repeatedly said he looked
forward to a public discussion of the allegations. A four-member
investigating panel, with separate members from the judging
subcommittee, brought the charges after a two-year investigation.
The investigators looked at Rangel's
misuse of his office for fundraising, failure to disclose income,
belated payment of taxes and possible help with a tax shelter for a
company whose chief executive was a major donor.
The 42-member Congressional Black
Caucus has warned Democrats against a rush to judgment, and any
lawmaker with a significant African-American constituency must consider
whether it's worth asking Rangel to quit.
However, some Democratic House
members in close races may think it's more important to distance
themselves from Rangel. They don't want to have to answer negative
Republican ads about Speaker Nancy Pelosi's promise to wipe Congress
clean of ethical misdeeds.
Two Democrats didn't wait to hear
the charges.
Rep. Betty Sutton of Ohio, a
second-term lawmaker who received 65 percent of the vote two years ago,
said Rangel needs to resign to preserve the public's trust in Congress.
Rep. Walt Minnick of Idaho, a
freshman who got 51 percent of the vote last time, called for
resignation if the charges are proven.
If a trial is held, it probably
would begin in September. Congress adjourns for its August recess after
this week.
"The focus right now is let's get
out of here," said Rep. William Delahunt, D-Mass.
The Rangel
Standard
A public ethics
trial will be instructive.

24 July 2010
The House ethics committee announced on Thursday that it
would bring charges against Charlie Rangel, and the Manhattan Democrat
responded by telling reporters that "I look forward to airing this
thing." Don't we all.
The ethics committee has been investigating Mr. Rangel since
2008 and its formal charges will remain sealed until a public hearing
next week. However, the committee is not lost for choices:
Allegations include Mr. Rangel's failure to report assets and
income totaling at least a half-million dollars that, when he "amended"
his reporting last year, doubled his net worth; his use of four
rent-stabilized apartments in New York's tony Lenox Terrace complex,
including one that he used as a campaign office; concealing taxable
rental income from his Dominican Republic beachfront villa at the Punta
Cana Yacht Club; and using his official Congressional letterhead to
solicit donations for the Charles B. Rangel Center for Public Service
at the City College of New York.
Mr. Rangel has portrayed these charges as
it-could-happen-to-anyone accounting errors, and he has vigorously
denied any wrongdoing while declining to provide details until the
ethics committee completed its inquiry. Still, in March he surrendered
his gavel as Chairman of the tax-writing Ways and Means Committee, not
as the result of these accusations or any other pang of conscience, but
because a separate investigation concluded that his participation in
several corporate-sponsored Caribbean junkets violated House
regulations. At the time, his work in raising taxes to pay for
ObamaCare was nearly complete.
The ethics committee's step of proceeding to a public trial is
the first since 2002, when Ohio Democrat James Traficant was removed
from Congress after federal prosecutors indicted him for bribery,
racketeering and other corruption. Possible ethics punishments range
from censure to removal from office. Mr. Rangel—Congressional class of
1970—is nonetheless expected to prevail in his September primary and go
on to a 21st term, unless the ethics charges intervene.
The prospects of a public trial, perhaps beginning in
September, are excruciating for Democrats. They won the House in 2006
in part by running against the corruption of GOP Members, and now one
of their own barons is in the dock. The charges appear to be the kind
that would cost any normal citizen a big fine if not jail time, and the
spectacle of the nation's chief tax writer not reporting all of his
income and half his assets will infuriate voters who know their own
taxes are going up.
We certainly look forward to hearing Mr. Rangel's defense, in
particular his explanation for why the rules that apply to everyone
else would seem not to apply to him.
Copyright 2009 Dow Jones &
Company, Inc. All Rights Reserved
The Separation of Politics and State
NYTIMES
By RICHARD PAINTER
June 11, 2010
Minneapolis
PRESIDENT OBAMA has made some
headway in government ethics reform by imposing new restrictions on
those who join his administration from the private sector, moving to
exclude lobbyists from presidential boards and commissions, and
suggesting legislation that might lessen the influence of corporate
campaign spending on federal elections.
It’s unfortunate, then, that his
White House staff remains so deeply immersed in partisan politics, as
demonstrated by the administration’s offering a presidential
appointment to try to dissuade Representative Joe Sestak from running
in the Pennsylvania Democratic primary against Senator Arlen Specter.
There were similar discussions with Andrew Romanoff, a former speaker
of the Colorado House, who is challenging Senator Michael Bennet.
Despite what some Republicans might
claim, such politicking is not illegal; in fact, this sort of thing has
been business as usual in presidential administrations for a very long
time. Nonetheless, these recent incidents should prompt us to rethink
whether overtly partisan work has a legitimate place in the White House
and, if so, who should be doing it.
Federal employees’ participation in
partisan political activity is governed by the Hatch Act of 1939, which
was put into place after accusations that New Deal programs were being
used by party bosses to influence Congressional elections. The statute
prohibits government officials from engaging in political activity
using official titles, at government expense or while on duty. And it
prohibits them from using their official capacities to sway an election.
The Hatch Act has a few big
exceptions, however: not only the president and vice president but also
political appointees, including cabinet members and many senior White
House staff members, may do both government and political work in the
same office, provided they distinguish between the two.
For instance, White House officials
usually use separate BlackBerrys, cellphones and computers for their
partisan activities. That way, political calls and e-mail messages
coming from White House officials are not legally coming from the White
House at all. They are instead “personal capacity” communications by
people who happen to be White House staff members — including, in this
administration, the chief of staff, Rahm Emanuel, and his deputy.
This is not the Hatch Act’s only
legal distinction with little grounding in reality: the regulations
also allow government employees to speak at partisan fund-raising
events, provided they do not explicitly ask for money.
The employees of the White House
Office of Political Affairs, which was established under Ronald Reagan
to offer advice on the political viability of administration policies,
thus spend an enormous amount of their “personal time” moonlighting for
the president’s political party.
These distinctions between official
work and personal political work are nonsensical. When White House
staff members send a message, everyone knows where they work. When they
speak at campaign events, everyone knows who they are. Calling partisan
political activity by White House staff “personal” rather than
“official” is a legal fiction.
There is also no way of knowing how
much time is spent on politics instead of official duties because time
records for senior political employees are not required. Little is
known, for example, about how many trips are taken by the staff of the
political affairs office and who pays for them.
Then there are the conflicts of
interest that inevitably and frequently arise. Suggestions made to
government employees by candidates, contributors and political
operatives can easily influence White House policy, whether it be
political concerns about a United States attorney or a Senate candidate
who is getting in the way. But what is best for a political party does
not often reflect what is best for the country — and what is best for
the country should be the top priority of full-time federal employees.
Congress should amend the Hatch Act,
or the president should issue an executive order, to prohibit all White
House staff members from participating in partisan political activity
in any capacity during the relatively short time they serve in
government. (The act already imposes similar restrictions on federal
employees in intelligence and some areas of law enforcement.)
The president and vice president,
the only two elected officials in the executive branch, should still be
permitted to engage in partisan politics while holding office. But in
their partisan duties, they should be supported only by the staff of
their political party, and not that of the White House.
Incidents like the Pennsylvania and
Colorado primary controversies might still occur even if the White
House staff is barred from partisan politics, but they would occur less
often. Expanding the Hatch Act would be a change in keeping with the
ethics reform that the Obama administration has promised the American
people.
Richard W.
Painter, a professor of law at the University of Minnesota, was the
chief White House ethics lawyer from 2005 to 2007.

"Hollow" men? Senator
Dodd ends career "not with a bang but a whimper."
EDITORIAL: Obama's financial
Frankenstein
Failure to reform Fannie and Freddie
puts taxpayers at risk
By THE WASHINGTON TIMES
6:52 p.m., Thursday, May 27, 2010
The oil spill in the Gulf isn't the only calamity the administration is
ignoring. As a result of the BP accident, anywhere from $400,000 to $7
million worth of crude oil is leaking into the ocean each day,
threatening widespread environmental damage. A much larger leak - $232
million per day - has come from taxpayer vaults since Sept. 7, 2008,
when mortgage giants Fannie Mae and Freddie Mac came seeking the first
billion-dollar patch for their fiscal mismanagement. And there's no
plug in sight for that gusher.
The disaster caused by these so-called government-sponsored enterprises
(GSEs) threatens even more widespread economic fallout after already
causing thousands to lose their homes, their jobs and their way of
life. Requests for billions more to shore up the financial ledgers
continue to come in, but the administration and congressional Democrats
remain silent about their plans to stop the losses. President Obama's
budget promises no more than to "monitor the situation of the GSEs
closely" and to "provide updates" on long-term reform proposals. House
Financial Services Chairman Barney Frank, Massachusetts Democrat,
protected Fannie and Freddie from his own legislation that would break
up large private institutions that run into financial trouble. In a fit
of bravado, Senate Banking Chairman Christopher J. Dodd, Connecticut
Democrat, vowed to "study" the problem.
Rep. Jeb Hensarling, Texas Republican, and Sen. John McCain, Arizona
Republican, have introduced serious reform proposals that have been
passed over by the majority. Mr. Hensarling will settle - for the
moment - for a little bit more openness from what he called the
financial Frankensteins.
"The least Congress can do is require frequent and fully transparent
disclosures from its regulator, the Federal Housing Finance
Administration [FHFA]," Mr. Hensarling told The Washington Times.
"Taxpayers have already spent over $145 billion to cover Fannie's and
Freddie's losses, losses which will likely grow to be tens or hundreds
of billions of dollars more. If the Obama administration believes it is
worth spending so much money on Fannie and Freddie, then it ought to be
willing to justify why to the American people every time they need a
new bailout."
Mr. Hensarling's latest bill, introduced Tuesday, would require FHFA's
director to testify before Congress before the full Financial Services
and Banking committees in the House and Senate whenever Fannie and
Freddie seek another taxpayer handout. It's a simple and
non-controversial idea meant to raise the profile of an ongoing
disaster that so far has failed to dominate the daily headlines despite
its impact on everyone in the country.
The federal responsibility for the Gulf oil spill may be limited, but
Fannie and Freddie are creatures of Congress. Government has a
responsibility to clean up this mess of its own making.
© Copyright 2010 The Washington Times, LLC. Click here for reprint
permission.
O's hollow promises
NYPOST
By NICOLE GELINAS
Last Updated: 8:38 AM, April 22, 2010
Posted: 1:18 AM, April 22, 2010
President Obama hits Lower Manhattan today to chastise Wall Street
ahead of a Senate debate on fixing finance. Problem is, he's using his
bank-bashing to push a bill that doesn't deliver what he's promising.
Obama pledged Saturday and likely will today: "Never again will
taxpayers be on the hook because a company is 'too big to fail.' " This
reform is vital. No business should be able to expect government
bailouts, of course -- but it's especially dangerous when it comes to
banks.
When lenders to banks believe they'll be bailed out, they inevitably
create too much debt -- because they'll profit as long as the
investment works, but have their losses covered by the taxpayers if it
blows up.
And for 25 years, the feds have done just that -- protected bondholders
to big banks from losses. The crises, and the bailouts, kept growing
with each cycle -- until we reached the near-meltdown of 2008. Lending
to the financial world has ballooned, too: In the early '80s, financial
firms had borrowed just 25 percent of the nation's GDP. By 2007, they
had borrowed 115 percent of GDP.
But, as critics led by Kentucky's Sen. Mitch McConnell, have pointed
out, the bill, sponsored by Sen. Chris Dodd, doesn't end "too big to
fail" -- under any fair reading.
It says that failed financial firms must repay taxpayer money "unless
the United States agrees or consents otherwise." It says, too, that
Washington can bail out bondholders to financial firms as long as
officialdom "determines that such payments or credits are necessary or
appropriate to minimize losses."
Wall Street will read this as a capitulation: Despite Obama's
pronouncements, bailouts will still come when "necessary and
appropriate." And bailouts will be "necessary and appropriate" during
the next crisis -- a crisis created by this very expectation.
Without ending "too big to fail," Obama can't deliver on his other big
promise: to "enact the strongest consumer financial protections ever."
Dodd's bill offers 306 pages on how to protect consumers -- but omits
the three words that describe what really plagues consumers: "too much
debt." Consumers can borrow so much only because the banks could borrow
so much, thanks to "too big to fail."
Legislation to end this permanent subsidy must do two things:
* Force now-unregulated "derivatives" onto public exchanges. Trillions
of dollars are tied up in derivatives, like the synthetic mortgage
securities that Goldman Sachs is now in trouble over. Yet almost no one
understands what's really in any given "financial product" -- which
means a serious problem can easily trigger mass panic, as it did in
2008.
Getting derivatives onto public exchanges will let regulators limit
borrowing and force price and volume disclosures -- so that millions of
investors, rather than just a few backroom negotiators, know what's
going on.
* Limit borrowing across-the-board at financial institutions -- no
matter how safe the firms, or their holdings, seem. Firms should also
have to hold even more cash down behind their short-term borrowings --
because this debt leaves them more vulnerable to a crisis.
If firms can't leverage at the extremes seen in 2007-8, then one firm's
failure won't trigger a wave of other failures.
The Dodd bill fails both these tests. On derivatives, it leaves
loopholes that will let far too many financial instruments remain
utterly opaque.
There's some hope: The Senate Agriculture Committee, led by Arkansas'
Blanche Lincoln, yesterday passed a tougher derivatives bill. Yet only
one Republican -- Iowa's Chuck Grassley -- voted for the fix. The
public needs Republicans to get how important this is, so that they can
push the Dems to fold the provision -- without loopholes -- into the
Dodd bill.
Wall Street won't like it: Big banks reap billions a year under the
current rules. And it would be easy for Congress and the president to
leave this money pot alone -- because the next blowup is in the future.
On the second point, consistent borrowing limits for financial firms,
Dodd's bill is a complete failure. It leaves the issue to the
discretion of a new "financial-stability oversight council." The
problem here is that nobody can predict the future. Eventually,
regulators will guess wrong -- leaving the whole financial industry
open to another catastrophe.
Obama hasn't said a word about this deficiency -- and don't expect him
to today. The GOP, led by the Banking Committee's Sen. Richard Shelby,
long ago signed on to the idea that "a systemic-risk regulator" will be
able to magically see the future, after all.
Yes, strict borrowing limits -- ones that regulators and banks can't
game -- will curtail credit for consumers. That's the point: Credit
that is too easy endangers the economy.
The president may sound tough in today's speech -- but the bill is what
matters. And, just as on Wall Street, the fine print needs lots of
public scrutiny, lest it be a blueprint for a future disaster.


How many
in Congress
are guilty of doing similar things?
Representative Charles Rangel, holder of former Congressman Adam
Clayton Powel's seat, has a problem (read article from NYPOST
below). Chicago-style politics
is "change?"
Ethics raps put Rangel on trial
NYPOST
By GEOFF EARLE Post Correspondent
Last Updated: 9:24 AM, July 23, 2010
Posted: 2:29 AM, July 23, 2010
WASHINGTON -- Rep. Charles Rangel was slapped yesterday with charges of
serious ethics violations -- and faces a public trial in the House that
could end with his expulsion after 40 years in office.
The charges are the latest setback for the embattled 80-year-old dean
of the state congressional delegation, who grudgingly relinquished his
chairmanship of the powerful Ways and Means Committee in March after
being admonished by the committee for going on a corporate-paid junket
to the Caribbean.
The secretive House Ethics Committee didn't reveal which of the
accusations leveled against the Harlem Democrat were included in the
formal charges being brought against him. But sources said
they're related to Rangel's use of official stationery to raise money
for a City College center named for him; his use of four rent-regulated
apartments; and his failure to report income.
"It's very bad news for Mr. Rangel," said Melanie Sloan of Citizens for
Responsible Ethics in Washington, which called for him to step down
yesterday.
"This means they found some very bad stuff. To me, this is a step
toward expulsion."
Rangel was briefed in recent weeks on the allegations and rejected
them, The Washington Post reported, citing sources who said he could
have avoided the trial by accepting the findings.
Among the most serious charges that have been aired against Rangel --
first disclosed by The Post -- was his failure to report and pay taxes
on rental income from his villa in the Dominican Republic. The
Post later revealed that Rangel also didn't report hundreds of
thousands of dollars in assets and income on the financial-disclosure
forms he has filed with Congress each year.
And Rangel has been accused of soliciting large corporate donations for
a center named after him at CCNY while heading Ways and Means.
He also was found to be maintaining four rent-regulated apartments in
Harlem, as well as preserving a tax shelter for an oil-drilling
company, Nabors Industries, whose CEO had donated to the Rangel
Center. The trial is set to kick off Thursday and is certain to
draw national attention. The sharp-tongued Rangel was spotted
arguing with Ethics Chairwoman Zoe Lofgren (D-Calif.) right before the
bombshell charges were announced.
First elected in 1970, Rangel, under intense pressure in this election
year, handed over his Ways and Means Committee gavel "temporarily" in
the spring, hoping to reclaim it after clearing his name through an
investigation he requested two years ago. Attaining the committee
chairmanship in 2007 had been considered the high point of his career.
"I am pleased that, at long last, sunshine will pierce the cloud of
serious allegations that have been raised against me in the media,"
Rangel said in a statement yesterday.
"I will be glad to respond to the allegations at such time as the
Ethics Committee makes them public."
Rangel also told The Hill newspaper, "I have no idea as to what the
alleged violations are finally going to be."
He has already spent $1.7 million on lawyers defending him against the
charges. Under House rules, the official charges will be brought
before a bipartisan subcommittee of eight lawmakers, acting essentially
as jurors, who must find guilt by "clear and convincing evidence."
The committee has a range of options, including expulsion, reprimand, a
fine or no action at all. The last lawmaker to face a public
trial, in 2002, was Ohio Rep. James Traficant, a Democrat, who ended up
in prison.
A public trial is the last thing Democratic leaders want to contend
with just months before midterm elections in which they already face
resurgent Republicans -- who were thrown out of power in 2006 by
Democrats calling to end a "culture of corruption."
Democratic House leaders weren't going out of their way to defend
Rangel yesterday.
"The process needed to work and it is working, and we'll see what the
findings are," said House Majority Leader Steny Hoyer (Md.).
Sleazy does it: Pol’s shady record
* Unpaid taxes: Rangel admitted he neglected to pay taxes on $75,000 in
rental income from his villa in the Dominican Republic.
* 4 rent-stabilized apartments: He leased the Harlem units, including
one as an office — which is barred by state law.
* Undisclosed income: Failed to reveal to Congress more than $600,000
in assets and tens of thousands of dollars in income.
* Inappropriate fund-raising: Wrote letters on official congressional
stationery to solicit money to build the Rangel Center at CUNY.
* Pay-to-play: Preserved a tax shelter for an oil-drilling company,
Nabors Industries, whose chief executive donated money to the Rangel
Center.
* Breaking House rules: Stored his vintage Mercedes in the
congressional garage.
House Panel Will Try Rangel in Ethics Cases
NYTIMES
By ERIC LIPTON and DAVID KOCIENIEWSKI
22 July 2010
WASHINGTON — A House investigative panel has found “substantial reason
to believe” that Representative Charles B. Rangel violated a range of
ethics rules, dealing a serious blow to Mr. Rangel, a Harlem Democrat,
in the twilight of his political career.
The finding means that he must face a public trial before the House
ethics committee, the first member of Congress to be forced to do so
since 2002, when Representative James A. Traficant Jr. was expelled
from Congress after a corruption conviction.
The investigative panel did not disclose any details about the nature
of the violations.
But two Democrats with knowledge of the investigation said the
committee found evidence to support accusations that Mr. Rangel, 80,
wrongly accepted four rent-stabilized apartments in Manhattan and
misused his office to preserve a tax loophole worth half a billion
dollars for an oil executive who pledged a donation for an educational
center being built in Mr. Rangel’s honor.
The committee also found evidence to support a charge that Mr. Rangel
failed to report or pay taxes on rental income from his beachfront
Dominican villa.
They are among the most serious of the assortment of charges against
Mr. Rangel that the panel has been examining for nearly two years.
Mr. Rangel, who has dismissed the accusations since they were first
made in 2008, continued to contest them on Thursday and said he looked
forward to publicly rebutting them. “I am pleased that, at long last,
sunshine will pierce the cloud of serious allegations that have been
raised against me in the media,” Mr. Rangel’s statement said.
Mr. Rangel, who in March gave up his seat as chairman of the House Ways
and Means Committee in response to a separate ethics issue, has spent
nearly $2 million fighting to clear himself in the various
investigations as he seeks a 21st term this fall.
His office said Thursday that there was no possibility he would
withdraw from the race or resign. But his mounting problems have become
a liability for Democrats nationally as they seek to retain their
control of the House. Republicans have criticized Speaker Nancy Pelosi,
Democrat of California, for not moving more swiftly and decisively to
discipline Mr. Rangel.
“Today’s announcement is a sad reminder of Speaker Pelosi’s most
glaring broken promise: to ‘drain the swamp’ in Washington,” said
Representative John A. Boehner, Republican of Ohio, the House minority
leader.
The ethics charges rattled New York’s Democratic establishment, which
considers Mr. Rangel political royalty, and touched off speculation
about his future. The committee’s action comes days after the deadline
for candidates to enter the Sept. 14 primary. Mr. Rangel faces four
poorly financed opponents: Vince Morgan, a banker; Adam Clayton Powell
IV, a state assemblyman; Jonathan Tasini, an activist, and Joyce
Johnson, a former Obama campaign official.
There were indications on Thursday that New York’s Democratic leaders
would rally around Mr. Rangel, at least for now. But at least one of
his opponents, Mr. Tasini, called for the representative to drop out of
the race, saying that his presence in the contest posed a “threat to
the future of the Democratic Party.”
“The Republicans will make him the face of Washington corruption,” Mr.
Tasini said. “It is not good for the party or for New York.”
The findings on Thursday were made by a four-member bipartisan
investigative subcommittee of the full House Committee on Standards of
Official Conduct. They will be aired at a public trial before an
adjudicatory subcommittee, which will report to the full committee
about whether it substantiated the findings. If the accusations are
substantiated, the full committee then decides on what punishment
should occur, from a letter rebuking him to a recommendation that he be
expelled from the House.
The investigative panel began its work in September 2008 after The New
York Times reported that Mr. Rangel accepted four rent-stabilized
apartments from a developer at a price below market value, despite
rules forbidding House members from taking gifts worth more than $50.
The units, one of which he used for his campaign, are in Lenox Terrace,
a luxury complex in Harlem. Mr. Rangel paid a total of $3,894 monthly
for the four units, while the market-rate rent for similar apartments
in his building would total $7,465 to $8,125 a month, according to the
Web site of the owner, the Olnick Organization.
After years of Mr. Rangel’s facing little opposition or scrutiny, the
revelations about his arrangement set off a flurry of questions and
aggressive examination of his personal finances and fund-raising.
The panel also examined whether Mr. Rangel had improperly used his
position as chairman of the Ways and Means Committee to preserve a tax
loophole worth more than half a billion dollars for the oil company
whose executive, Eugene Isenberg, had promised $1 million for the
Charles B. Rangel Center for Public Service at City College of New
York. It also was exploring whether Mr. Rangel broke ethics rules when
he failed to report taxable income received from the Dominican villa.
Mr. Rangel, who was first elected to the House in 1970, has usually
coasted to re-election thanks to deep popularity in his district and
his ability to deliver money and projects to the city.
His life story has been one of overcoming seemingly insurmountable
challenges, dating to his service in the Korean War when he nearly
froze to death while under attack by the Chinese, so New York
politicians have been skittish about how the ruling would affect the
outcome of the September primary.
“It means the investigation is still taking its course,” said Keith L.
T. Wright, a State Assembly member. “It is not time for him to resign.
I fully expect for him to be re-elected this fall and carrying the
concerns of the people of Harlem down to Washington.”
As recently as this month, Mr. Rangel was boasting about how his
constituents in Harlem were coming to his defense, despite the
long-running investigation. And he showed no signs of considering
retiring. “This is not the time to be hanging up the gloves,” he said
in an interview last month.
Still, it is not clear whether Mr. Rangel, a proud and combative
figure, will want to face the public spectacle of a trial. Democratic
leaders, eager to contain the damage from his troubles, may push him to
step aside in the coming weeks. If Mr. Rangel resigns from the House,
the proceedings against him would almost certainly end.
In March, Mr. Rangel was admonished by the ethics committee for trips
he and other members of the Congressional Black Caucus took to the
Caribbean in 2007 and 2008 that were indirectly paid for by corporate
sponsors like Pfizer, Verizon and AT&T, in violation of House rules.
On Thursday, after the findings were released, reporters pressed Mr.
Rangel for a response. The congressman slapped away a question from
Luke Russert of MSNBC about whether the inquiry might cost him his job.
“Basically you know it’s a dumb question, and I’m not going to
respond,” he said.
Michael Barbaro contributed reporting
from New York.
Long history of vote-trading on
Capitol Hill
Washington Times
Stephen Dinan
Originally published 05:45 a.m., December 24, 2009, updated 08:48 a.m.,
December 24, 2009
UPDATED:
As it has come down in history,
President Andrew Johnson's narrow escape from being the first president
convicted on impeachment charges in 1868 depended on the honorable
doings of Sen. Edmund Ross of Kansas.
But David O. Stewart, author of
"Impeached," a book looking at the Johnson trial, says it's more likely
the president owed his survival to payments made by his allies'
$150,000 "acquittal fund" and to the patronage jobs he doled out after
the vote, all but turning over to Ross some appointments in Kansas and
the Colorado and New Mexico territories.
Vote-trading has a long, inglorious
history in Congress, and presidents and party leaders alike have played
the role of Monty Hall, the original host of TV's "Let's Make a Deal."
In recent days that's included
Senate Majority Leader Harry Reid, who bargained wherever he could to
gain the 60 votes needed to pass his version of health care reform.
A final vote occurred Thursday
morning, and the bill passed. On Wednesday, Democrats turned back
several challenges, including rejecting two claims that the bill is so
broad it violates the Constitution.
Democrats also turned back an effort
to add a new rule preventing senators from trading votes in exchange
for earmarked spending, voting 53-46 against a rule that just two years
ago had passed 98-0. Even Sen. Richard J. Durbin, Illinois Democrat,
who co-sponsored the rule in 2007, voted against it this time.
Senators' change-of-heart may have
come based on the realization they never would have gotten this far on
health care without the deals Mr. Reid struck.
Behind door No. 1 was Sen. Ben
Nelson of Nebraska's bargain to exempt his state from having to pay for
expanded Medicaid costs under the bill. Door No. 2 held $100 million to
help Louisiana pay Medicaid costs, which secured Sen. Mary L.
Landrieu's vote. Door No. 3 offered extra Medicaid help for Vermont,
which preserved the support of Sen. Bernard Sanders, an independent who
caucuses with Democrats. And Door No. 4 included protections for
Medicare Advantage customers in three states, even as customers in
other states face cuts.
It's in the eye of the beholder,
though, whether those deals are more or less altruistic than the days
of old.
"That's not that different than the
patronage jobs; it's just a different kind of trophy to bring home,"
Mr. Stewart said. "In the 1860s, we didn't have so many massive
government programs you could get pieces of."
Still, Sen. Judd Gregg, New
Hampshire Republican, said there is a difference. In the past, folks
traded votes in exchange for specific goodies for themselves or their
state: a pet project, say. But, Mr. Gregg said, in this bill, senators
bargained for policy changes that actually exempt their states from
part of the law they are being asked to support.
"There's nothing like this," said
Mr. Gregg, looking back on his quarter-century in Congress. "It
balkanizes the country."
Sen. Jon Kyl, Arizona Republican,
said he expects Democrats will hear during their winter break from
their constituents angry at the deals.
He pointed to several Democrats who
have had to denounce the deals, including Sen. Michael Bennet of
Colorado, who took to the Senate floor Monday to denounce the
bargaining.
Mr. Reid, though, said the trading
is no different than what happens with the thousands of earmarks in the
dozen annual spending bills.
He said senators should be
embarrassed if they weren't able to carve out exemptions.
"There's 100 senators here, and I
don't know if there is a senator that doesn't have something in this
bill that was important to them," he said. "And if they don't have
something in it important to them then, it doesn't speak well of them."
The White House has also given the
deals a pass, with press secretary Robert Gibbs saying it has long been
part of legislating.
Asked how that squared with Mr.
Obama's pledge to do things differently, Mr. Gibbs said the end result
is what matters.
"Well, I think one of the things
that's going to be done differently is, we're going to have health care
reform in this country," he said. "The president thinks that's an
enormously good thing for the American people."
Deal-making has landed some members
of Congress in jail, and has earned others admonishment and ridicule.
Former House Majority Leader Tom
DeLay was admonished for appearing to trade his political endorsement
of a congressman's son in exchange for the member's support for the
2003 Medicare prescription-drug bill.
And in the 1990s, late-night comics
joked that President Clinton won votes by offering rides on Air Force
One.
Not all of the deals struck on
health care reform have clear-cut winners. Sen. Christopher J. Dodd,
Connecticut Democrat, inserted a provision to spend $100 million on a
university hospital. He hopes the money goes to the University of
Connecticut, but said he wrote the language so that another state could
win the money if it has a better proposal.
History suggests dealmakers should
beware.
Public Citizen, a consumer advocacy
group, studied the deals Mr. Clinton cut in 1993 to secure passage of
the North America Free Trade Agreement, and found that most went
unfulfilled.
Opponents of NAFTA were brutal in
criticizing Mr. Clinton for offering those, including then-Rep. Sherrod
Brown, Ohio Democrat, who was the only congressman to attend a press
conference with consumer advocate Ralph Nader blasting the president
for horse-trading.
He told the Cleveland Plain Dealer
newspaper he wanted to "shame" members into rejecting the deals.
"Gov. Clinton campaigned for change.
All of us campaigned against business as usual," Mr. Brown said.
"Unfortunately, the last two weeks of wheeling and dealing in Congress
has shown pork-barrel politics at its worst."
Mr. Brown is now a senator who
supports the health care reform bill, and has changed his tune on deals.
He told PBS' "News Hour" program
this week he didn't like the bargaining that forced Mr. Reid to drop
abortion coverage or the government-sponsored public option from the
bill, but said "the deals notwithstanding, this bill is good for the
country in so many ways."
So far in the health care reform
debate, there have been no allegations of senators trading votes for
personal gain - which puts them ahead of their predecessor Ross and
many other colleagues.
Former House Majority Leader Dick
Armey, Texas Republican, bristles at vote-dealing. "I was always
appalled by it when I saw it going on or knew it was going on," he
said, adding there were times when other members "were so dense about
it, they would brag about it in the cloakroom."
One congressman traded a vote for an
invite to the next state dinner at the White House, Mr. Armey said.
Mr. Armey said one reason
vote-trading happens is party leaders in Congress often come from the
ranks of the Appropriations Committee, where trading is a way of life.
The
House has a rule banning members from trading their votes in exchange
for getting pork-barrel spending projects, but the Senate does not. The
provision that passed the Senate 98-0 in 2007 was dropped from the
final version of a House-Senate compromise bill, and never became law.
The
2007 measure was sponsored by Sen. Jim DeMint, South Carolina
Republican, and Mr. Durbin. Mr. DeMint was incredulous yesterday when
it became clear on the Senate floor Mr. Durbin would no longer support
his own legislation.
"This
is the DeMint-Durbin amendment," he said, to which his erstwhile
partner replied, "Not anymore."
Congress lower than car salesmen
Politico
Andy Barr
Wed Dec 9, 8:32 am ET
Being a member of Congress rates as the least ethical and honest
professions – faring worse than car salesmen by 4 percent – according
to a new Gallup poll out Wednesday.
In a poll ranking how Americans view the honesty and ethical standards
of 21 professions, Congressmen were rated as having a “low/very low”
ethical standards by 55 percent of 1,017 adults across the nation. Only
9 percent said members of Congress have “high/very high” standards,
while 35 percent gave the lawmakers an “average” rating.
Car salesmen were the only other professionals to get a “low/very low”
rating by at least 50 percent of respondents, receiving 51 percent.
Senators ranked third lowest in the poll, earning a 49 percent
“low/very low” ethical rating, beating out stockbrokers, 46 percent,
and HMO managers at 43 percent.
Only 11 percent of respondents gave senators a “high/very high” ethical
rating.
Nurses ranked as the most respected profession with an 83 percent
positive rating. Following nurses were pharmacists at 66 percent,
doctors at 65 percent, police officers at 63 percent and engineers, who
received a 62 percent “high/very high” rating.
Governors were the only other political job polled, and ranked much
higher than lawmakers in Washington. Only 15 percent said they had a
“high/very high” opinion of governors, but 48 percent gave governors an
“average” rating while 35 percent rated them as “low/very low."

Photo
from AP - President Barack Obama speaks in Strongsville, Ohio,
Monday, March 15, 2010.
PROMISES,
PROMISES: Is gov't more open with Obama?
YAHOO
By SHARON THEIMER, Associated Press Writer
16 March 2010
WASHINGTON – Federal agencies
haven't lived up to President Barack Obama's promise of a more open
government, increasing their use of legal exemptions to keep records
secret during his first year in office.
An Associated Press review of
Freedom of Information Act reports filed by 17 major agencies found
that the use of nearly every one of the law's nine exemptions to
withhold information from the public rose in fiscal year 2009, which
ended last October.
Among the most frequently used
exemptions: one that lets the government hide records that detail its
internal decision-making. Obama specifically directed agencies to stop
using that exemption so frequently, but that directive appears to have
been widely ignored.
Major agencies cited that exemption
at least 70,779 times during the 2009 budget year, up from 47,395 times
during President George W. Bush's final full budget year, according to
annual FOIA reports filed by federal agencies. Obama was president for
nine months in the 2009 period.
Departments used the exemption more
even though Obama's Justice Department told agencies to that disclosing
such records was "fully consistent with the purpose of the FOIA," a law
intended to keep government accountable to the public.
For example, the Federal Aviation
Administration cited the exemption in refusing the AP's FOIA request
for internal memos on its decisions about a database showing incidents
in which airplanes and birds collided. The FAA initially tried to
withhold the bird-strike database from the public, but later released
it under pressure.
The FAA claimed the same exemption
to hold back nearly all records on its approval of an Air Force One
flyover of New York City for publicity shots — a flight that prompted
fears in the city of a Sept. 11-style attack. It also withheld internal
communications during the aftermath of the public relations gaffe.
In all, major agencies cited that or
other FOIA exemptions to refuse information at least 466,872 times in
budget year 2009, compared with 312,683 times the previous year, the
review found. Agencies often cite more than one exemption when
withholding part or all of the material sought in an open-records
request.
All told, the 17 agencies reviewed
by AP reported getting 444,924 FOIA requests in fiscal 2009, compared
with 493,610 in fiscal 2008.
The AP examined the 2008 and 2009
budget year FOIA reports from the departments of Agriculture, Commerce,
Defense, Education, Energy, Health and Human Services, Homeland
Security, Housing and Urban Development, Interior, Justice, Labor,
State, Transportation, Treasury and Veterans Affairs; the Environmental
Protection Agency; and the Federal Reserve Board.
Other FOIA exemptions cover
information on national defense and foreign relations, internal agency
rules and practices, trade secrets, personal privacy, law enforcement
proceedings, supervision of financial institutions and geological
information on wells.
One, known as Exemption 3, covers
dozens of types of information that Congress shielded from disclosure
when passing other laws.
In sentences that are often vaguely
worded and buried deep in legislation, Congress has granted a wide
array of information special protection over the years: information
related to grand jury investigations, the additives in cigarettes,
juvenile arrest records, the identities of people applying
restricted-use pesticides to their crops, and the locations of
historically significant caves are a sampling of the broad range of
information the public cannot get under FOIA.
The chairman of the Senate Judiciary
Committee, Sen. Patrick Leahy, D-Vt., was so concerned about what he
called "exemption creep" that last year he successfully pressed for a
new law that requires FOIA exemptions to be "clear and unambiguous."
The federal government cited
Exemption 3 protections to withhold information at least 14,442 times
in the last budget year, compared with at least 13,599 in the previous
one, agency FOIA reports show.
The prolific use of FOIA exemptions
is one measure of how far the federal government has yet to go to carry
out Obama's promise of openness. His first full day in office, Obama
told agencies the Freedom of Information Act, "which encourages
accountability through transparency, is the most prominent expression
of a profound national commitment to ensuring an open government."
Obama told agencies they shouldn't
hide information merely because it might make them look bad. "The
presumption of disclosure should be applied to all decisions involving
FOIA," Obama wrote.
Following up on Obama's words, the
Justice Department advised agencies against withholding records sought
under FOIA "merely because an exemption legally applies." Most
recently, the White House encouraged agency officials to hold contests,
complete with prizes, to encourage employees to promote open government.
White House Chief of Staff Rahm
Emanuel and White House Counsel Bob Bauer called on agency heads
Tuesday to improve their handling of FOIA requests and assess whether
they are devoting the resources needed to respond to requests "promptly
and cooperatively."
Describing the Justice Department's
actions on FOIA on Monday at the start of Sunshine Week, when news
organizations promote open government and freedom of information,
Attorney General Eric Holder said his agency is making progress. He
noted that Justice provided everything sought in a FOIA request in more
than 1,000 more cases than it had the previous year.
"Put simply, I asked that we make
openness the default, not the exception. Today, I'm pleased to report
that the disturbing 2008 trend — a reduction in this department's rate
of disclosures — has been completely reversed," Holder said. "While we
aren't where we need to be just yet, we're certainly on the right path."
Much of the Obama administration's
early effort on FOIA seems to have been aimed at clearing out a backlog
of old cases: The number of requests still sitting around past the time
limits spelled out in the open-records law fell from 124,019 in budget
year 2008 to 67,764 at the end of the most recent budget year over the
17 agencies, the AP's review found. There is no way to tell whether
those whose old cases that were closed ultimately received the
information they sought.
Don't Limit Public Right To
Know
DAY
By Morgan McGinley
Published on 5/3/2009
The state bureaucracy and the legislature's Judiciary Committee are up
to mischief again, trying to weaken the Freedom of Information law in
the name of privacy. State Victim Advocate Michelle Cruz, a former
Massachusetts prosecutor, developed the legislation to prevent
information considered embarrassing to victims from becoming a matter
of public record.
But in her well-meaning yet misguided zeal to give comfort to victims,
Ms. Cruz would damage the public's right to information about its
government. An amendment now being developed to a bill already cleared
by the Judiciary Committee contains an assault on the public's right to
know and carries an administrative burden that would disrupt the free
flow of information.
The amendment would require any public agency that receives a freedom
of information request to inspect or copy “any files,” to raise a
privacy objection if the item can be “reasonably determined to be an
invasion of personal privacy.” The language in quotations is vague and
virtually meaningless unless tested before a court or appropriate
commission. The agency would notify the person requesting the
information and decline to release any details unless ordered to do so
by the state Freedom of Information Commission. So any of thousands of
legitimate requests for information might be denied and held up while
the FOI Commission tries to fit the matter into its hearing schedule,
typically months away.
The first writing of the bill put the matter of defining privacy in the
hands of individual victims. That bill was such a twisted proposal that
proponents saw trouble from FOI advocates ahead and changed the
bill. This amendment shifts the power to the hands of the public
agency officials. This makes more sense than having victims interpret
what is public information, but it is harmful for creating a
bureaucratic labyrinth of potentially epic proportions.
Thus, matters that previously were public record and deserve to be
available might be described by police, prosecutors or others as a
matter of privacy rights. And that would then potentially require an
FOI Commission hearing on all matter of material that ought not be
challenged under normal conditions.
This is bad legislation because it does not provide a balancing act of
public benefit versus a right to privacy. Rather, it stipulates a
potential challenge to the most legitimate information and forces
agency bureaucrats to determine what is an invasion of privacy,
something better determined by the courts.
My colleague, Chris Powell, managing editor of the Journal Inquirer in
Manchester, says that West Hartford Police Chief James J. Strillacci is
concerned because, “We're put in the position of being the arbiter of
whether there's an invasion of privacy or not.”
There's a danger, too, because police, prosecutors and other law
enforcement officials are predisposed by their own self-interests to
keep information secret from the public. Faced with privacy claims
handed down by public agency administrators, police reporters could
find themselves challenged to appeal, over and over again, to the FOI
Commission for the most basic information.
Ms. Cruz apparently does not trust the media and so she is attempting
to open virtually a blanket challenge to the release of basic
information. This is a bad omen, for the public's interest
sometimes can be different from the intentions and motives of the
police or other public officials.
Democracy flourishes when government is open and responsive. Ms. Cruz
says the privacy rights of victims are a matter for agency bureaucrats
to determine and undercuts the idea that government functions best when
the people get the facts and understand what is happening. Crimes
often involve sensitive matters, many of them potentially embarrassing
to victims and their families. But free, unfettered media provide the
best opportunity for democracy to work well.
The legislature should see this bill for what it is and not entertain
the idea of keeping more information from the public.
The
Countrywide Vote: The
backroom battle over a subpoena on VIP mortgages.
OCTOBER 17, 2009
Senators Chris Dodd and Kent Conrad
lawyered up when the Senate ethics committee asked about their VIP
loans from Countrywide Financial. But the sweetheart Senators may not
be able to stop another look at their dealings with the subprime
mortgage factory. A Democrat on the House oversight committee, Illinois
freshman Mike Quigley, tells us that he supports a subpoena to obtain
documents on the "Friends of Angelo" loan program.
Named for former Countrywide CEO
Angelo Mozilo, the program was used to curry influence with government
officials. Bank of America, which bought the failed lender last year,
has said it's ready to turn over the files as soon as it receives a
subpoena.
We're told that, at a closed
Thursday meeting of Democrats on the House oversight committee, several
Members urged Chairman Edolphus Towns (D., N.Y.) to allow a vote on
California Republican Darrell Issa's proposal to issue the subpoena.
Mr. Towns received two mortgage loans from the Countrywide unit that
processed VIP loans but claims he received no special favors.
How long can Mr. Towns bottle up the
subpoena vote? Mr. Quigley is urging Democrats to remember that ethical
lapses helped end the GOP majority. "The right thing to do is also the
smart thing to do," says Mr. Quigley. "Both parties must decide that
they can't protect their members, no matter how powerful they are."
Countrywide's efforts to obtain influence were not limited to one
party, nor is there any guarantee that only Democrats like Messrs. Dodd
and Conrad succumbed to Angelo's charms. As Mr. Quigley says,
"Stupidity wears both hats."
Still, Mr. Issa tells us that he has
all Republican members of the committee ready to vote for a subpoena.
The aim is to find out the extent and impact of Countrywide's efforts
to influence federal housing policy. This goes to the heart of the
financial crisis. Countrywide was the largest originator of subprime
loans and provided billions of dollars of mortgages to Fannie Mae and
Freddie Mac, at huge cost to taxpayers.
Mr. Issa has even offered to redact
the names of individuals. This would allow the committee to study
Countrywide's activities without revealing individual recipients of VIP
mortgage terms. Replies Mr. Quigley: "Forget redacting names." He
believes the oversight committee should forward to the House ethics
committee all the "names on Angelo's list."
To find out what role cut-rate
mortgages might have played in encouraging politicians to allow Fan,
Fred, Angelo and others to create the mortgage debacle, taxpayers will
need four more Democrats to vote for a subpoena. Among potential swing
votes, New Hampshire's Paul Hodes doesn't seem eager to have to vote on
the issue. "The Congressman will make an independent judgment on this
issue when it is brought up before the committee," says his spokesman.
No response yet from Virginia Congressman Gerry Connolly, another
oversight member.
Mr. Quigley, for his part, favors a
broad investigation of "predatory lending." But he should understand
that a party-line vote to redirect the inquiry away from evidence of
wrongdoing will not instill public confidence. As he told us on Friday,
"No one's going to believe you if you do this on a partisan basis."
It's good advice for oversight committee Democrats, and a hopeful
message for taxpayers.
Printed in The Wall Street Journal,
page A12
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Dow Jones & Company, Inc. All Rights Reserved
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Dodd cleared in VIP mortgage probe
DAY
Published on 8/8/2009
Washington - The Senate ethics panel
cleared Sens. Chris Dodd and Kent Conrad Friday of breaking rules by
getting mortgages through a VIP program, but it scolded them for not
being more careful to avoid the appearance of sweetheart deals.
The Select Committee on Ethics told
Dodd, D-Conn., and Conrad, D-N.D., in separate letters that it found
“no substantial credible evidence” after a yearlong investigation that
their mortgages from Countrywide Financial Corp. broke Senate gift
rules. The two influential Democrats got their mortgages through a VIP
program for those designated as “friends” of then-Countrywide CEO
Angelo Mozilo.
The committee said participants in
the program “were often offered quicker, more efficient loan processing
and some discounts,” but it also found that those borrowers didn't
necessarily get the best financial deal available. And in both Dodd's
and Conrad's cases, the panel said the loans they received would have
been available to a wide variety of borrowers with comparable financial
profiles.
Both senators have said that at the
time the mortgages were being written, they didn't know they were in
the so-called “Friends of Angelo” program and didn't think they were
getting special deals.
At an afternoon news conference at
his Hartford office, Dodd said he was “pleased and grateful” with the
committee's conclusions, adding, “There was no sweetheart or special
deal. The allegations have always been false.”
But the fifth-term Democrat, whose
2010 re-election bid has been badly damaged by the mortgage scandal,
also acknowledged having mishandled the allegations, waiting for months
to address them in detail or release documents on his loans.
”I think (that) contributed to
people's cynicism and distrust, that maybe I wasn't telling the truth.
And so I blame myself for that. That was a huge mistake I made and I
paid a price for it,” Dodd said.
A Republican challenger to Dodd
criticized the committee findings.
”Now that the World's Most Exclusive
Club has - surprise, surprise - given a pass to one of its own, we
still await the day when Senator Dodd will live up to his pledge of
full transparency and make his mortgage documents public,” said former
2nd District Rep. Rob Simmons.
Dodd in February did allow reporters
to view loan documents but did not permit them to be copied.
Conrad said the ethics panel's
finding “confirms what I have said all along: I did not ask for or
receive any preferential pricing on my loans.”
”While I should have shown more
vigilance in the appearance of these transactions, the committee has
concluded I did nothing unethical, and that is the truth.”
Both senators are playing pivotal
roles in shepherding key elements of President Barack Obama's agenda
through Congress. Dodd heads the Banking Committee, and is also playing
a leading role in the health care overhaul taking shape on Capitol
Hill. Conrad, the Budget Committee chairman, is also a major player in
the health care debate, as well as in shaping legislation to curb
global warming.
The investigation stemmed from a
complaint by the watchdog group Citizens for Responsibility and Ethics
in Washington (CREW) that charged that the two senators violated Senate
rules against knowingly accepting gifts. The rule has an exception for
loans that are provided on terms generally available to the public. The
panel also said it looked into whether Dodd and Conrad violated another
rule that bars senators from using their official positions for
personal gain.
While it found no basis to believe
Senate rules had been broken, the panel didn't excuse the two senators'
behavior entirely. Dodd and Conrad “should have exercised more
vigilance in your dealings with Countrywide in order to avoid the
appearance that you were receiving preferential treatment based on your
status as a senator,” the committee wrote to them.
Dodd has previously said that he
knew he was in a so-called “VIP” program, but thought it involved only
enhanced customer service - not special deals. Conrad spoke by
telephone with Mozilo when he was seeking one of his loans, but
according to the letter the panel sent Conrad, he told the committee
that when he learned of his VIP status, he too “assumed it was merely
an employee and customer relations effort.”
The panel told both senators that
their eventual realization that their loans were being handled through
a VIP program - and Conrad's call with Mozilo - “should have raised red
flags for you,” and prompted them to learn more about the loans, and
whether they might have been special deals.
The committee acknowledged it hasn't
given specific guidance on mortgages, and should do so in the future.
Sen. Barbara Boxer, D-Calif., the ethics chairman, and Sen. Johnny
Isakson of Georgia, the senior Republican, announced they've introduced
legislation to require lawmakers to make “full and complete” public
disclosures about their mortgages.
Melanie Sloan, CREW's executive
director, all but called their panel's findings a whitewash.
”As is its practice, the Senate
Ethics Committee has cleared the senators of any wrongdoing despite the
fact that the senators participated in a program the committee found
'offered quicker, more efficient loan processing and some discounts,' “
she said in a statement.
The panel of three Democrats and
three Republicans said it heard testimony and pored through 18,000
pages of documents from Countrywide - which has since been bought by
Bank of America - to reach its conclusions.
As part of its investigation, the
ethics committee heard from Robert Feinberg, the Countrywide official
who handled the two senators' mortgage deals.
Feinberg told GOP investigators for
another congressional panel, the House Oversight and Government Reform
Committee, that both Dodd and Conrad were aware they were getting
special treatment. He said it was standard practice for all borrowers
in the VIP program to be told they were.
A transcript shows Feinberg
initially replying yes when asked if he had told Dodd that he was
getting special treatment. But when asked the same question again, he
said, “I don't remember... but, you know, it was conveyed in some way,
shape or form.”
Dodd got two Countrywide mortgages
in 2003, refinancing his home in Connecticut and another residence in
Washington. Conrad's two Countrywide mortgages in 2004 were for a beach
house in Delaware and an eight-unit apartment building in Bismarck in
his home state of North Dakota.
Associated Press
writer Susan Haigh in Hartford contributed to this report.
SENATOR’S WIFE: Jackie Clegg Dodd
Making Big Money As Corporate Director
The Hartford
Courant
By EDMUND H.
MAHONY and JON LENDER
May 3, 2009
U.S. Sen. Christopher Dodd has long had a
reputation as a politician of limited means — a reputation underscored,
for good or bad, by recent disclosures about his dependence on friends
to finance his homes.
The reputation could prove difficult to sustain as Dodd begins what
political operatives predict might be the toughest campaign of his
35-year congressional career — considering the dramatic uptick in his
wife's income since they married.
Since the low-profile family wedding on a rise above the Connecticut
River in 1999, Jackie M. Clegg Dodd's income has quadrupled to the
mid-six-figure range. All of the increase is due to her appointment as
a highly compensated member of multiple corporate boards of directors.
Clegg Dodd, a former legislative aide and senior federal Export-Import
Bank officer, was compensated at a rate of about $500,000 a year in
2007 and 2008 from seats on five corporate boards, according to the
most recent filings by the companies to the federal Securities and
Exchange Commission. The companies report based on overlapping fiscal
years. About half the income is in cash; the remainder, in equity, is
more difficult to calculate because of the accounting methods that
corporations use to value stock and option compensation. A sixth
company lists Clegg Dodd as a director but has not reported her
compensation.
A spokesman for Dodd's office, who returned a call first placed to
Clegg Dodd by The Courant, said that the annual figure is actually
about $100,000 less. Some of the stock values reported in the SEC
filings are unlikely to be realized or cannot be collected by Clegg
Dodd until after she leaves the boards, said Dodd's press secretary,
Bryan DeAngelis.
Clegg Dodd was dismissive late last week of any analysis linking her
professional income to her husband's political career.
"I'm curious if you would ask the same questions of a male spouse of a
female lawmaker," she said.
On his annual financial disclosure reports to the U.S. Senate, Dodd
lists his wife's annual income from each of five of her corporate board
seats as "over $1,000." One of those corporations, Blockbuster Inc.,
where Clegg Dodd is listed as a financial expert on the board's audit
committee, reported paying her nearly $160,000 last year in cash and
stock.
For the past half a dozen years, Dodd has listed his wife's stock
holdings on the same financial disclosure reports. But the reported
value of those holdings has been imprecise because the Senate does not
require precision. For example, in his 2007 disclosure, the most recent
one, Dodd listed his wife's dividend and interest income from publicly
traded CME Group Inc. stock as between $100,001 and $1 million.
Precise or not, Dodd's disclosure reports comply with Senate standards.
And experts say there is nothing improper about Clegg Dodd's serving on
multiple boards of directors. But some independent analysts have
questioned her credentials for corporate leadership, especially as
directors in general are subjected to heightened scrutiny for
compliance with strict, new financial reporting reforms and, more
recently, for presiding over corporate meltdowns.
None of the boards on which Clegg Dodd sits has been accused of
financial reporting or leadership lapses. And Dodd, his wife and their
supporters say that she is eminently qualified for her directorships.
They say that her qualifications are a product of her work for two
decades as an aide to the Senate banking and appropriations committees,
her senior position with the Export-Import Bank of the United States
and as founder and chief executive of her own consulting business,
Clegg International Consultants.
Credentials Eyed
Other analysts and observers, however, question the value that Clegg
Dodd's experience brings to corporate boards and wonder whether it is
really Dodd the corporations are targeting through his wife. Dodd is
one of the longest-serving and most influential members of the U.S.
Senate and is chairman of its powerful banking committee.
"In Washington, offering employment to the spouses and family members
of politicians is a time-honored, if not so honorable, tradition," said
Sheila Krumholz of the nonprofit watchdog group Citizens for
Responsibility and Ethics in Washington. The group last year asked the
Senate Ethics Committee to investigate whether the Dodds received
favorable treatment when Countrywide Financial refinanced mortgages on
two of their homes.
"It's another way for politicians to gain income and for donors,
potential donors, people and industries with business before government
to curry favor with powerful members who have jurisdiction over their
issues," Krumholz said.
State Republican Chairman Christopher Healy was more blunt, saying that
Clegg Dodd's directorships don't "pass the smirk test."
"I think in general the volume and the depth of value that Mrs. Dodd
seems to have acquired would make even a gullible person wince at the
hint of nepotism and favors that would be shown toward the spouse of a
very powerful political leader," Healy said.
His wife's income is the most recent target of Dodd's political
opponents. In addition to the Countrywide mortgages, his reliance on
wealthy friends for help in buying residences in Washington and Ireland
has drawn political scrutiny.
Clegg Dodd is listed in SEC filings as a director of Cardiome Pharma
Corp. and Javelin Pharmaceuticals Inc., both pharmaceutical firms;
Brookdale Senior Living Inc., which describes itself as the nation's
largest owner and operator of senior living communities; Blockbuster
Inc., the home entertainment company; and CME Group Inc., which became
the world's largest futures exchange through a 2007 merger with the
Chicago Board of Trade and the 2008 acquisition of the parent company
of the New York Mercantile Exchange.
Pear Tree Pharmaceuticals, an apparent startup, lists Clegg Dodd as a
director but the SEC has yet to report further information.
Clegg: No Clients
In the SEC filings, companies list directors' credentials. In Clegg
Dodd's case, they mention — as Javelin Pharmaceuticals does in a new
filing — that "in August 2001, she formed the international strategic
consulting firm Clegg International Consultants, LLC ... specializing
in emerging markets, and she has served as the Managing Partner of that
entity since that time."
But Clegg Dodd's consulting firm has neither clients nor a current
business phone listing.
"There are no clients now and there have been no clients for three and
a half years," she said, responding to written questions. "Since the
birth of my second child four years ago, I have not sought clients. My
focus has been my two children and my board service which has kept me
busy, full time."
Clegg Dodd said that she was recruited for her directorships and
accepted only those cleared by an ethics adviser that she hired after
leaving government service.
"Individuals sought me out directly or through headhunters to see if I
would be interested in serving on a corporate board," she said. "After
consultation and working with my ethics counsel, some opportunities
after review have been rejected."
The directorships are not related to her husband's position and he has
played no role in her obtaining them, Clegg Dodd said. She said she
does not consider offers that could conflict with her husband's Senate
duties and his name usually is mentioned only when she brings it to the
attention of boards. Because she uses her maiden name professionally,
some companies are not aware of her marriage, Clegg Dodd said.
If anything, Clegg Dodd said that her marriage has detracted from her
appeal as a potential director.
"The marriage probably makes me less attractive because companies
typically don't want the distraction that can come with reporters
asking intrusive questions," she said. "Also, there were lost business
opportunities because of the complications that come from the public
and political nature of my family and the restrictions that I put on my
service."
Executives from three of the companies she's served as a director —
Javelin Pharmaceuticals, Blockbuster and CME —have contributed more
than $40,000 to Dodd's campaigns in recent years, records show.
"Any contributions to my husband are irrelevant to my service on the
boards," Clegg Dodd said.
Key Committees
Clegg Dodd holds a variety of committee assignments on the various
boards, many of which provide committee members with thousands of
dollars in additional income. But two assignments stand out: She is
chairwoman of the audit committee at Javelin and is an audit committee
member at Blockbuster. Both boards have designated her as an audit
committee financial expert.
The designation is a demanding qualification written into SEC rules
with the enactment of what has become known as the Sarbanes-Oxley law.
The reform followed a succession of corporate accounting scandals and
requires that corporate audit committees contain at least one member
competent in complex corporate financial accounting. The goal was to
put enough sophisticated accounting muscle on audit committees to
resist companies' trying to inflate bottom lines.
Charles Elson, who directs the corporate governance program at the
University of Delaware, said that Sarbanes-Oxley established a rigorous
set of qualifications for directors designated as audit committee
financial experts.
"You are held to a very high standard," Elson said. "Basically, if you
are on an audit committee you better have been an accountant."
Clegg Dodd's supporters say that corporate boards have qualified her as
an audit committee financial expert. But she did not list any financial
accounting experience in her responses to questions.
Dodd's political critics say that the greater part of his wife's career
has been the result of political appointments and that Dodd had a hand
in some of them.
In interviews published during Dodd's unsuccessful effort to win the
Democratic presidential nomination last year, Clegg Dodd said that she
studied communications at the University of Southern Utah. She obtained
an internship in the U.S. House of Representatives, a master's degree
in national security studies from Georgetown University and later a job
as an aide to former astronaut and Republican Utah Sen. Jake Garn, who
was chairman of the Senate banking committee until 1987.
She worked for 10 years in the U.S. Senate as a staff member on both
the banking and appropriations committees, according to SEC filings. In
1993, she was appointed as special assistant to the chairman of the
Export-Import Bank. The bank, which is authorized by and subject to
review by the Senate banking committee, was created to provide export
financing for U.S. goods and services.
Over eight years, Clegg Dodd held a variety of positions at the bank,
among them chief of staff and vice president for congressional and
external affairs. In 1997, President Bill Clinton nominated her as
first vice president and vice chairman of the bank. An attendee
described her confirmation hearing before her former colleagues on the
banking committee as a "love fest."
Eighteen months later, Clegg Dodd was named the bank's chief operating
officer. When she left the bank in 2001, her salary was $125,700 a
year, a bank spokesman said.
An official familiar with the bank's operations said that Clegg Dodd's
duties at the bank involved, for the greater part, administration and
public and congressional relations. The official, who asked not to be
identified for fear of offending Dodd, said he does not believe that
Clegg Dodd's legislative and banking experience qualified her as an
audit committee expert.
U.S. Plans Attack and Defense in
Cyberspace Warfare
NYTIMES
By DAVID E. SANGER, JOHN MARKOFF and THOM SHANKER
April 28, 2009
When American forces in Iraq wanted to lure members of Al Qaeda into a
trap, they hacked into one of the group’s computers and altered
information that drove them into American gun sights.
When President George W. Bush ordered new ways to slow Iran’s progress
toward a nuclear bomb last year, he approved a plan for an experimental
covert program — its results still unclear — to bore into their
computers and undermine the project.
And the Pentagon has commissioned military contractors to develop a
highly classified replica of the Internet of the future. The goal is to
simulate what it would take for adversaries to shut down the country’s
power stations, telecommunications and aviation systems, or freeze the
financial markets — in an effort to build better defenses against such
attacks, as well as a new generation of online weapons.
Just as the invention of the atomic bomb changed warfare and deterrence
64 years ago, a new international race has begun to develop
cyberweapons and systems to protect against them.
Thousands of daily attacks on federal and private computer systems in
the United States — many from China and Russia, some malicious and some
testing chinks in the patchwork of American firewalls — have prompted
the Obama administration to review American strategy. President
Obama is expected to propose a far larger defensive effort in coming
days, including an expansion of the $17 billion, five-year program that
Congress approved last year, the appointment of a White House official
to coordinate the effort, and an end to a running bureaucratic battle
over who is responsible for defending against cyberattacks.
But Mr. Obama is expected to say little or nothing about the nation’s
offensive capabilities, on which the military and the nation’s
intelligence agencies have been spending billions. In interviews over
the past several months, a range of military and intelligence
officials, as well as outside experts, have described a huge increase
in the sophistication of American cyberwarfare capabilities.
Because so many aspects of the American effort to develop cyberweapons
and define their proper use remain classified, many of those officials
declined to speak on the record. The White House declined several
requests for interviews or to say whether Mr. Obama as a matter of
policy supports or opposes the use of American cyberweapons.
The most exotic innovations under consideration would enable a Pentagon
programmer to surreptitiously enter a computer server in Russia or
China, for example, and destroy a “botnet” — a potentially destructive
program that commandeers infected machines into a vast network that can
be clandestinely controlled — before it could be unleashed in the
United States.
Or American intelligence agencies could activate malicious code that is
secretly embedded on computer chips when they are manufactured,
enabling the United States to take command of an enemy’s computers by
remote control over the Internet. That, of course, is exactly the kind
of attack officials fear could be launched on American targets, often
through Chinese-made chips or computer servers.
So far, however, there are no broad authorizations for American forces
to engage in cyberwar. The invasion of the Qaeda computer in Iraq
several years ago and the covert activity in Iran were each
individually authorized by Mr. Bush. When he issued a set of classified
presidential orders in January 2008 to organize and improve America’s
online defenses, the administration could not agree on how to write the
authorization.
A principal architect of that order said the issue had been passed on
to the next president, in part because of the complexities of cyberwar
operations that, by necessity, would most likely be conducted on both
domestic and foreign Internet sites. After the controversy surrounding
domestic spying, Mr. Bush’s aides concluded, the Bush White House did
not have the credibility or the political capital to deal with the
subject.
Electronic Vulnerabilities
Cyberwar would not be as lethal as atomic war, of course, nor as
visibly dramatic. But when Mike McConnell, the former director of
national intelligence, briefed Mr. Bush on the threat in May 2007, he
argued that if a single large American bank were successfully attacked
“it would have an order-of-magnitude greater impact on the global
economy” than the Sept. 11, 2001, attacks. Mr. McConnell, who left
office three months ago, warned last year that “the ability to threaten
the U.S. money supply is the equivalent of today’s nuclear weapon.”
The scenarios developed last year for the incoming president by Mr.
McConnell and his coordinator for cybersecurity, Melissa Hathaway, went
further. They described vulnerabilities including an attack on Wall
Street and one intended to bring down the nation’s electric power grid.
Most were extrapolations of attacks already tried.
Today, Ms. Hathaway is the primary author of White House cyberstrategy
and has been traveling the country talking in vague terms about recent,
increasingly bold attacks on the computer networks that keep the
country running. Government officials will not discuss the details of a
recent attack on the air transportation network, other than to say the
attack never directly affected air traffic control systems.
Still, the specter of an attack that could blind air traffic
controllers and, perhaps, the military’s aerospace defense networks
haunts military and intelligence officials. (The saving grace of the
air traffic control system, officials say, is that it is so old that it
is not directly connected to the Internet.)
Studies, with code names like Dark Angel, have focused on whether
cellphone towers, emergency-service communications and hospital systems
could be brought down, to sow chaos. But the theoretical has, at
times, become real.
“We have seen Chinese network operations inside certain of our
electricity grids,” said Joel F. Brenner, who oversees
counterintelligence operations for Dennis Blair, Mr. McConnell’s
successor as national intelligence director, speaking at the University
of Texas at Austin this month. “Do I worry about those grids, and about
air traffic control systems, water supply systems, and so on? You bet I
do.”
But the broader question — one the administration so far declines to
discuss — is whether the best defense against cyberattack is the
development of a robust capability to wage cyberwar. As Mr.
Obama’s team quickly discovered, the Pentagon and the intelligence
agencies both concluded in Mr. Bush’s last years in office that it
would not be enough to simply build higher firewalls and better virus
detectors or to restrict access to the federal government’s own
computers.
“The fortress model simply will not work for cyber,” said one senior
military officer who has been deeply engaged in the debate for several
years. “Someone will always get in.”
That thinking has led to a debate over whether lessons learned in the
nuclear age — from the days of “mutually assured destruction” — apply
to cyberwar.
But in cyberwar, it is hard to know where to strike back, or even who
the attacker might be. Others have argued for borrowing a page from Mr.
Bush’s pre-emption doctrine by going into foreign computers to destroy
malicious software before it is unleashed into the world’s digital
bloodstream. But that could amount to an act of war, and many argue it
is a losing game, because the United States is more dependent on a
constantly running Internet system than many of its potential
adversaries, and therefore could suffer more damage in a counterattack.
In a report scheduled to be released Wednesday, the National Research
Council will argue that although an offensive cybercapability is an
important asset for the United States, the nation is lacking a clear
strategy, and secrecy surrounding preparations has hindered national
debate, according to several people familiar with the report.
The advent of Internet attacks — especially those suspected of being
directed by nations, not hackers — has given rise to a new term inside
the Pentagon and the National Security Agency: “hybrid warfare.”
It describes a conflict in which attacks through the Internet can be
launched as a warning shot — or to pave the way for a traditional
attack.
Early hints of this new kind of warfare emerged in the confrontation
between Russia and Estonia in April 2007. Clandestine groups — it was
never determined if they had links to the Russian government —
commandeered computers around the globe and directed a fire hose of
data at Estonia’s banking system and its government Web sites.
The computer screens of Estonians trying to do business with the
government online were frozen, if they got anything at all. It was
annoying, but by the standards of cyberwar, it was child’s play.
In August 2008, when Russia invaded Georgia, the cyberattacks grew more
widespread. Georgians were denied online access to news, cash and air
tickets. The Georgian government had to move its Internet activity to
servers in Ukraine when its own servers locked up, but the attacks did
no permanent damage.
Every few months, it seems, some agency, research group or military
contractor runs a war game to assess the United States’ vulnerability.
Senior intelligence officials were shocked to discover how easy it was
to permanently disable a large power generator. That prompted further
studies to determine if attackers could take down a series of
generators, bringing whole parts of the country to a halt.
Another war game that the Department of Homeland Security sponsored in
March 2008, called Cyber Storm II, envisioned a far larger, coordinated
attack against the United States, Britain, Canada, Australia and New
Zealand. It studied a disruption of chemical plants, rail lines, oil
and gas pipelines and private computer networks. That study and others
like it concluded that when attacks go global, the potential economic
repercussions increase exponentially.
To prove the point, Mr. McConnell, then the director of national
intelligence, spent much of last summer urging senior government
officials to examine the Treasury Department’s scramble to contain the
effects of the collapse of Bear Stearns. Markets froze, he said,
because “what backs up that money is confidence — an accounting system
that is reconcilable.” He began studies of what would happen if the
system that clears market trades froze.
“We were halfway through the study,” one senior intelligence official
said last month, “and the markets froze of their own accord. And we
looked at each other and said, ‘Our market collapse has just given
every cyberwarrior out there a playbook.’ ”
Just before Mr. Obama was elected, the Center for Strategic and
International Studies, a policy research group in Washington, warned in
a report that “America’s failure to protect cyberspace is one of the
most urgent national security problems facing the new administration.”
What alarmed the panel was not the capabilities of individual hackers
but of nations — China and Russia among them — that experts believe are
putting huge resources into the development of cyberweapons. A research
company called Team Cymru recently examined “scans” that came across
the Internet seeking ways to get inside industrial control systems, and
discovered more than 90 percent of them came from computers in China.
Scanning alone does no damage, but it could be the prelude to an attack
that scrambles databases or seeks to control computers. But Team Cymru
ran into a brick wall as soon as it tried to trace who, exactly, was
probing these industrial systems. It could not determine whether
military organizations, intelligence agencies, terrorist groups,
criminals or inventive teenagers were behind the efforts. The
good news, some government officials argue, is that the Chinese are
deterred from doing real damage: Because they hold more than a trillion
dollars in United States government debt, they have little interest in
freezing up a system they depend on for their own investments.
Then again, some of the scans seemed to originate from 14 other
countries, including Taiwan, Russia and, of course, the United States.
Bikini Atoll for an Online Age
Because “cyberwar” contains the word “war,” the Pentagon has argued
that it should be the locus of American defensive and offensive
strategy — and it is creating the kind of infrastructure that was built
around nuclear weapons in the 1940s and ’50s.
Defense Secretary Robert M. Gates is considering proposals to create a
Cyber Command — initially as a new headquarters within the Strategic
Command, which controls the American nuclear arsenal and assets in
space. Right now, the responsibility for computer network security is
part of Strategic Command, and military officials there estimate that
over the past six months, the government has spent $100 million
responding to probes and attacks on military systems. Air Force
officials confirm that a large network of computers at Maxwell Air
Force Base in Alabama was temporarily taken off-line within the past
eight months when it was put at risk of widespread infection from
computer viruses.
But Mr. Gates has concluded that the military’s cyberwarfare effort
requires a sharper focus — and thus a specific command. It would build
the defenses for military computers and communications systems and —
the part the Pentagon is reluctant to discuss — develop and deploy
cyberweapons.
In fact, that effort is already under way — it is part of what the
National Cyber Range is all about. The range is a replica of the
Internet of the future, and it is being built to be attacked. Competing
teams of contractors — including BAE Systems, the Applied Physics
Laboratory at Johns Hopkins University and Sparta Inc. — are vying to
build the Pentagon a system it can use to simulate attacks. The
National Security Agency already has a smaller version of a similar
system, in Millersville, Md.
In short, the Cyber Range is to the digital age what the Bikini Atoll —
the islands the Army vaporized in the 1950s to measure the power of the
hydrogen bomb — was to the nuclear age. But once the tests at Bikini
Atoll demonstrated to the world the awesome destructive power of the
bomb, it became evident to the United States and the Soviet Union — and
other nuclear powers — that the risks of a nuclear exchange were simply
too high. In the case of cyberattacks, where the results can vary from
the annoying to the devastating, there are no such rules.
The Deterrence Conundrum
During the cold war, if a strategic missile had been fired at the
United States, screens deep in a mountain in Colorado would have
lighted up and American commanders would have some time to decide
whether to launch a counterattack. Today, when Pentagon computers are
subjected to a barrage, the origin is often a mystery. Absent certainty
about the source, it is almost impossible to mount a counterattack.
In the rare case where the preparations for an attack are detected in a
foreign computer system, there is continuing debate about whether to
embrace the concept of pre-emption, with all of its Bush-era
connotations. The questions range from whether an online attack should
be mounted on that system to, in an extreme case, blowing those
computers up.
Some officials argue that if the United States engaged in such
pre-emption — and demonstrated that it was watching the development of
hostile cyberweapons — it could begin to deter some attacks. Others
believe it will only justify pre-emptive attacks on the United States.
“Russia and China have lots of nationalistic hackers,” one senior
military officer said. “They seem very, very willing to take action on
their own.”
Senior Pentagon and military officials also express deep concern that
the laws and understanding of armed conflict have not kept current with
the challenges of offensive cyberwarfare.
Over the decades, a number of limits on action have been accepted — if
not always practiced. One is the prohibition against assassinating
government leaders. Another is avoiding attacks aimed at civilians. Yet
in the cyberworld, where the most vulnerable targets are civilian,
there are no such rules or understandings. If a military base is
attacked, would it be a proportional, legitimate response to bring down
the attacker’s power grid if that would also shut down its hospital
systems, its air traffic control system or its banking system?
“We don’t have that for cyber yet,” one senior Defense Department
official said, “and that’s a little bit dangerous.”

"Isn't this the way the Republicans do things?" Congresswoman
asks. Yes, some, but these Republicans end up in stripes.
Congresswoman With Ties to Bank
Helped Seek Funds
NYTIMES
By ERIC LIPTON and JIM RUTENBERG
March 13, 2009
WASHINGTON — Top
banking regulators were taken aback late last year when a California
congresswoman helped set up a meeting in which the chief executive of a
bank with financial ties to her family asked them for up to $50 million
in special bailout funds, Treasury officials said.
Representative Maxine Waters, Democrat of California, requested the
September meeting on behalf of executives at OneUnited, one of the
nation’s largest black-owned banks. Ms. Water’s husband, Sidney
Williams, had served on the bank’s board of directors until early last
year and has owned at least $250,000 in stock in the institution.
Treasury officials said the session with nearly a dozen senior banking
regulators had been intended to allow minority-owned banks and their
trade association to discuss the losses they had incurred from the
federal takeover of Fannie Mae and Freddie Mac. But Kevin Cohee,
OneUnited’s chief executive, instead seized the opportunity to plead
for special assistance for his bank, federal officials said.
“Here you had a tiny community bank that comes in and they are not
proposing a broader policy — they were asking for help for themselves,”
said Steve Lineberry, a former Treasury aide who attended the meeting.
“I don’t remember that ever happening before.”
Ms. Waters declined on Tuesday to comment on the meeting, or to say if
her husband still owns OneUnited shares. Her staff released two letters
that showed the meeting was initially called to discuss industry
concerns broadly, not matters related just to OneUnited.
The congresswoman, a member of the House Financial Services Committee,
did not disclose her ties to OneUnited to Treasury officials, who said
they learned of them only later.
“It angers me,” said one former Treasury official, asking that his name
not be used because he had not been authorized while at Treasury to
speak about the gathering. “You got to know you have to be careful when
you are dealing with people who you have personal relations with.”
While OneUnited did not get the $50 billion it requested, the bank did
become among the first minority-owned institutions to receive a cash
infusion — $12 million — in December through the Treasury’s bank
bailout effort, called the Troubled Asset Relief Program.
The aid surprised some bank analysts because the bailout was intended
for healthy banks, and OneUnited was then considered to be in
precarious condition. In addition, it had been harshly criticized by
regulators in 2007 for failing to give a sufficient number of loans to
lower income residents in Miami, while favoring wealthier customers
there. And the F.D.I.C. sanctioned the institution in October 2008 for
“unsafe or unsound banking practices,” including excessive compensation
for Mr. Cohee. The bank had provided him with a 2008 Porsche SUV and
maintained his $6.4 million beachfront compound in Santa Monica.
Calif., with views of the Pacific and a spa and pool.
Critics of OneUnited, which is based in Boston and has branches in poor
neighborhoods of Los Angeles and Miami, say the episode shows how
special access arranged through a lawmaker with financial ties to the
bank had compromised the integrity of the federal bailout effort.
“A member of Congress should not be helping out a family friend,
especially one they share business ties with” said Kenneth H. Thomas, a
Florida banking consultant who has filed complaints with federal
regulators about OneUnited’s lending practices. “The folks who really
need help here is the community served by OneUnited — a community that
is starving for credit. ”
Mr. Cohee and Treasury officials said the TARP money had nothing to do
with the intervention by Ms. Waters. Mr. Cohee also suggested that
criticism of his operations by federal banking regulators was racially
motivated.
“This is where the race issue comes in,” he said.
Ms. Waters and Mr. Cohee have been outspoken advocates for fair
treatment of African-Americans and other minorities by the nation’s
banks — “silver rights,” Mr. Cohee called it during an interview in his
Los Angeles office, where he prominently displays a photograph of him
with the congresswoman. Indeed, in Los Angeles the bank has won praise
for its record of helping minority businesses and lower-income
residents.
Their interests first intersected in 2002, when Mr. Cohee was involved
in a bidding war for Family Savings, a small, black-owned bank in Ms.
Waters’ South Los Angeles District.
As a white-owned Illinois bank initially emerged as the winner, Ms.
Waters made clear through the local news media that she opposed any
deal in which Family would fall out of African-American hands. She was
credited when the bank abruptly changed course and gave Mr. Cohee
another chance to submit a winning bid.
“It’s very helpful if you have a community-based transaction to have
the real or implied support of Maxine,” said Wayne-Kent A. Bradshaw,
the former president of Family Savings, who preferred the initial deal.
“She’s a star in the community.”
The acquisition nearly doubled the size of Mr. Cohee’s bank, making it
among the nation’s largest African-American-owned banks.
Less than two years later, Mr. Cohee named Mr. Williams, Ms. Waters’
husband, to the bank’s board. A former professional football player and
ambassador to the Bahamas, Mr. Williams was working as a business
consultant, pulling in hundreds of thousands of dollars over a
several-year period working with some of Ms. Waters’s political allies,
according to disclosure forms.
Mr. Williams accepted no compensation from the bank, to avoid any
appearance of a conflict, Mr. Cohee said. But as a director, Mr.
Williams was required to hold stock. Accordingly, he acquired between
$250,000 and $500,000 worth, records show. Mr. Cohee said that Mr.
Williams paid for the stock himself, although Ms. Waters and Mr. Cohee
would not say how much he paid for the stock. He would not say whether
Mr. Williams sold the shares after leaving the board last April.
Attempts to reach Mr. Williams through his wife’s office were
unsuccessful. He did not return a call left at his Los Angeles office.
The federal takeover of Fannie and Freddie last fall was a near-fatal
blow to One United. The bank, like many others around the United
States, had invested some of its capital in preferred stock of the two
mortgage companies.
After the federal intervention, the stock became nearly worthless and
OneUnited lost almost $50 million. That left the bank dangerously under
capitalized.
Ms. Waters had been in regular contact with Henry M. Paulson Jr., then
the Treasury secretary, urging him to hire minority contractors to
advise the federal government on investments and to move more
aggressively to head-off a rash of forced evictions of people
defaulting on their mortgages, Treasury officials said.
It was in one of those conversations that she asked Mr. Paulson to host
a gathering at Treasury of representatives from minority-owned banks to
discuss their losses related to Fannie Mae and Freddie Mac, the
officials said.
OneUnited officials, including Mr. Cohee, had separately been pressing
for such a meeting, requesting it on behalf of the National Bankers
Association, a Washington-based group that represents minority-owned
banks. Its incoming chairman was a OneUnited executive, Robert Cooper.
But it was only after Ms. Waters intervened that the session was
approved, Treasury officials said.
At the meeting were representatives from the offices of Representative
Barney Frank and Senator John Kerry, both Democrats of Massachusetts,
the home state of OneUnited, along with Ms. Waters’s chief of staff. As
the hour-long meeting got underway, Treasury officials were surprised
as Mr. Cohee and Mr. Cooper focused the discussion on their bank, not
broader industry problems, participants said. Mr. Cohee made it clear
that he wanted the federal government to somehow make up for their $50
million loss.
“They wanted money — cash,” said a former Treasury Department official
who attended the meeting but asked not to be named, because he was not
authorized to speak to reporters. “That is why they were there. It was
very, very explicit.”
No commitment was made at the meeting, federal officials said.
But Ms. Waters intervened again, in early December, calling Treasury to
request a second meeting to ensure that minority-owned banks received a
chunk of the $700 billion worth of bailout funds recently approved by
Congress, according to Michael Grant, president of the National Bankers
Association. At a Dec. 4 meeting, he and Mr. Cooper of OneUnited urged
Treasury to release some of the bailout funds to their members.
Two weeks later, OneUnited received its $12 million TARP allocation.
That money was approved by a five-member committee that included
Anthony Ryan, then the Treasury department’s Undersecretary for
Domestic Finance, who had been present at the September meeting.
The Wall Street Journal has previously reported that Mr. Frank had
urged Treasury to act on the application, although in an interview last
week he noted that he had no financial connection to the institution.
On Thursday, The Journal reported the financial connections between Ms.
Waters’s husband and OneUnited, as well as her role in requesting the
Treasury meeting.
Treasury Department officials said neither political influence nor the
appeals by OneUnited executives played a role in their decision to
award the funds to the bank. They noted that the bank had met its
requirement to raise roughly $20 million in private funds before
receiving the aid. Officials from the F.D.I.C., which recommended that
OneUnited get the money, said that based on the “entire spectrum of
financial and other supervisory information,” about OneUnited, it felt
that allocating the bailout funds to the bank was appropriate.
Mr. Cohee said he resents any suggestion that Ms. Waters played a
direct role in this aid — or that she did anything out of the ordinary
for the bank simply because her husband had been on its board.
“Ms. Waters is an important advocate for minorities and minority issues
and an indispensable part of Los Angeles communities,” he said. “But we
derived no benefit whatsoever from any activity related to her. And she
did not really do anything. There is nothing that she did that impacted
the process.”
The Price of Pay-to-Play
NYTIMES Editorial
January 14, 2009
We’re sure that he isn’t enjoying
it, but Gov. Bill Richardson of New Mexico is offering statehouses
across the nation a needed lesson in “pay-to-play” contamination. Mr.
Richardson backed away from the chance to run the Commerce Department
as federal prosecutors investigate whether his aides steered a
lucrative state contract to a generous political donor.
The governor proclaimed his
innocence while conceding the inquiry would be too much of a
distraction from the Obama administration’s opening months. (Neither he
nor the Obama team explained why the investigation — which has been
going on for months — is more of a distraction now than when Mr.
Richardson was first interviewed for the job.)
Pay-to-play is a staple of bad
government. Proving an actual quid pro quo that can be prosecuted can
be difficult, especially under porous state laws. But appearances — the
fawning recipient, the deep-pocketed donor — taint all politicians. And
pleas of “I didn’t know,” or “everyone else does it” aren’t fit for
middle-schoolers let alone elected leaders.
What’s needed is some courage in
statehouses to fix the shoddy campaign-finance rules and laissez-faire
lobbying privileges and impose bans on “fact-finding” junkets and other
“honest graft” for legislators. Clear rules would remove any doubt, and
any temptation.
In Massachusetts, a public integrity
task force just issued a sweeping plan to fix the state’s toothless
lobbying and conflict-of-interest laws. Sure enough, one state
lawmaker, caught up in ethics allegations, is already arguing that the
Legislature doesn’t have the time, given the ballooning budget deficit
— as
if responsible politicians can’t walk and chew gum in the same session.
Of course, the most brazen episode
of pay-to-play of late is Gov. Rod Blagojevich of Illinois. He is
charged with trying to auction off the United States Senate seat
vacated by President-elect Barack Obama. The now-impeached governor
wound up arrested, begging for someone to take the seat off his hands
for nothing — with the rest of us shuddering at the spectacle.
Nationwide Inquiry on Bids for
Municipal Bonds
NYTIMES
By MARY WILLIAMS WALSH
January 9, 2009
The federal investigation
that prompted Gov. Bill Richardson of New Mexico to withdraw his
nomination as commerce secretary offers a rare glimpse into a
long-simmering investigation of possible bid-rigging, tax evasion and
other wrongdoing throughout the municipal bond business.
Three federal agencies and a loose
consortium of state attorneys general have for several years been
gathering evidence of what appears to be collusion among the banks and
other companies that have helped state and local governments take
approximately $400 billion worth of municipal notes and bonds to market
each year.
E-mail messages, taped phone
conversations and other court documents suggest that companies did not
engage in open competition for this lucrative business, but secretly
divided it among themselves, imposing layers of excess cost on local
governments, violating the federal rules for tax-exempt bonds and
making questionable payments and campaign contributions to local
officials who could steer them business. In some cases, they created
exotic financial structures that blew up.
People with knowledge of the
evidence say investigators are not just looking at a few bad apples,
but also at the way an entire market has operated for years.
“It’s rare to sell a Senate seat,
but it’s not rare to sell a bond deal,” said Charles Anderson, who
retired as manager of tax-exempt bond field operations for the Internal
Revenue Service in 2007. “Pay-to-play in the municipal bond market is
epidemic.”
Michael D. Hausfeld, an antitrust
lawyer in Washington, who is representing some of the cities, counties
and states entangled in the federal dragnet, called it “one of the
longest-running, most economically pervasive antitrust conspiracies
ever to be uncovered in the U.S.” Many of these municipalities say they
did nothing wrong and were duped by financial firms, which they are
suing.
The possibility of a vast web of
collusion would be sobering in any case, but the issue is of particular
concern now, as Congress and the incoming Obama administration prepare
a big fiscal stimulus package that may spawn infrastructure projects
carried out and financed at the state and local level. States and
cities issue bonds to raise money to pay for things like schools and
road construction, and are supposed to follow strict rules on how the
proceeds are handled for investors to receive a tax exemption on the
interest.
Mr. Anderson estimated that as much
as $4 billion a year was vanishing into the system, based on the volume
of problems he saw before retirement.
Christopher Cox, the chairman of the
Securities and Exchange Commission, has said oversight of the municipal
bond markets is inadequate, and has urged Congress to take steps to
protect both investors and taxpayers. Congress has not taken up the
initiative.
The S.E.C. and the Justice
Department declined to discuss the details or status of their
investigations, including in New Mexico, where work on municipal bonds
is part of a federal grand jury investigation. Officials at the I.R.S.
said they were giving the matter high priority and had challenged the
tax-exempt status of municipal bonds in a number of places but declined
to describe individual cases.
Christopher Taylor, who retired in
2007 as executive director of the Municipal Securities Rulemaking
Board, said the evidence amassed so far included tape-recorded phone
calls, in which the independent specialists who are supposed to help
local governments pick their bankers could be heard telling bankers:
“We want you to bid on this deal, but you’re not going to get it —
you’re going to get the next one. We want you to submit a sloppy bid.”
Unsuspecting governments then
accepted the recommended bids, and paid too much, he said. Mr. Taylor
also cited evidence of banks being paid in cities where they did no
work at all, apparently to reward them for throwing the business to
their rivals.
The business is lightly regulated,
with rules governing the conduct of companies set by the municipal
securities board. Municipal bond underwriters are prohibited from
making campaign contributions to “buy” the business of bringing bonds
to market. But no such rules govern the conduct of a type of
professional who appeared in the industry about a decade ago —
specialists who work with financial derivatives, like swaps and
options.
In the last few years, the use of
such derivatives in combination with municipal bonds has grown rapidly,
market participants say. And so, it appears, has the interest of
federal agents. The
federal inquiry appears to have started at the I.R.S., which was
concerned that the rules for tax-exempt bonds were being trampled.
“We saw this coming and went to the
Department of Justice and said, ‘Hey look! It looks as if there’s been
price-fixing and bid-rigging on a major scale here,’ ” said Mr.
Anderson, the retired I.R.S. manager.
The efforts have broadened into what
investigators and lawyers described as a coordinated effort among the
federal agencies broken down by jurisdiction. The S.E.C. polices fraud in the municipal
bond markets and is looking into whether municipal bonds are routinely
certified for tax-exempt treatment, by people who perhaps know or
should know they do not qualify. The Justice Department’s criminal
antitrust division has authority over bid-rigging, and that part of the
investigation is being led by federal prosecutors in Manhattan. At the
same time, various regional U.S. attorneys’ offices around the country
are looking at whether campaign contributions and other gifts to state
and local politicians were used improperly to “buy” bond-related
business.
More than 30 financial services
companies have been subpoenaed, including JPMorgan Chase, Merrill Lynch
and the American International Group, which have recently received
government assistance and in the case of A.I.G., an outright federal
bailout. Several have disclosed in corporate filings that their
employees have been called to testify before grand juries or have
received “Wells notices” from the S.E.C. warning that an enforcement
action is looming.
The disclosures follow raids by the
F.B.I., in 2006, of the offices of three specialized firms that bring
together local officials and the banks and other companies that seek
business working on municipal bond sales.
One of the three, CDR Financial
Products, of Beverly Hills, Calif., is at the heart of the federal
investigation in New Mexico. Investigators there are looking at how CDR
Financial came to be selected as the “swap adviser” for a $1.5 billion
program — called Governor Richardson’s Investment Program, or GRIP — to
raise money for road and rail construction in New Mexico.
CDR Financial and its founder, David
Rubin, gave $100,000 to two of Governor Richardson’s political action
committees in 2003 and 2004, and the company earned $1.5 million for
advising GRIP in 2004. A Colorado political consultant, Michael
Stratton, lobbied on behalf of CDR Financial, and was paid $269,000 by
JPMorgan Chase during the same period, according to regulatory filings.
JPMorgan was the lead underwriter on about $1.1 billion of bond sales
for GRIP.
Mr. Stratton did not respond to
messages requesting comment, and a JPMorgan spokesman said the bank
would have no comment.
Allan Ripp, a spokesman for CDR
Financial, said that Mr. Rubin had made the contributions because he
supported Governor Richardson’s efforts to register people likely to
vote Democratic in the presidential election. He said CDR Financial had
competed fairly for the bond business and won its assignment on the
merits.
Governor Richardson has said that he
and his aides acted correctly at all times, and that he withdrew his
nomination as commerce secretary only out of concern that the
investigation might cause a long and distracting confirmation battle.
CDR Financial and the other two
firms raided by the F.B.I. — Investment Management Advisory Group,
known as Image, of Pottstown., Pa., and Sound Capital Management of
Eden Prairie, Minn. — had attracted unfavorable attention even before
the F.B.I. raids, in some cases because of campaign contributions.
In Philadelphia, Image and CDR
Financial were described as “Company No. 1” and “Company No. 2” in the
indictments of the former city treasurer, Corey Kemp, and other
officials in 2004. CDR Financial had made political contributions and
earned $415,000 for helping Philadelphia link a type of derivative
called a “swaption” to its bonds. Image squired the city treasurer
around by limo, and was in the running to participate in a school bond
sale, but the deal fell apart when a local newspaper, The Daily News,
questioned Image’s involvement.
Mr. Kemp is serving a 10-year prison
sentence for accepting illegal payments in exchange for steering city
bond business and other contracts to selected companies. Neither CDR
Financial nor Image was formally accused of wrongdoing.
The use of derivatives in connection
with municipal bonds has grown rapidly in the last five years. The
packages are presented as money-savers to the municipalities, which may
want to protect themselves against interest rate changes. But over the
last year, as turmoil spread through the credit markets, some of the
derivatives have blown up, leaving local governments stuck with
unexpected costs.
That happened in Alabama, where
Jefferson County linked an extraordinary number of derivatives, called
interest-rate swaps, to its bonds, in some cases with the help of CDR
Financial. Despite publicized concerns about whether improper payments
to certain officials were behind the swaps, the county insisted the
swaps were saving money. Last year, the derivatives failed, leaving the
county with vast bills. Jefferson County is now at risk of declaring
what would be the biggest governmental bankruptcy in United States
history.
Even in places where the bonds and
derivatives are performing as expected, irate government officials are
finding they may have overpaid for various services and have
inadvertently broken federal tax rules. Again and again, proceeds from
tax-exempt bonds appear to have improperly generated investment income
for banks and insurers.
Among the governments that have sued
these financial firms are the cities of Chicago and Baltimore; Oakland
and Fresno, Calif.; the state of Mississippi; and a number of counties,
school districts and at least one water and sewer district. The
lawsuits were consolidated in November, in Federal District Court for
the Southern District of New York. Chicago has since abandoned that
litigation.
Rowland
on Fox says Illinois governor should quit
DAY
Posted on Dec 15, 9:00 AM EST
HARTFORD, Conn. (AP) -- Former Connecticut Gov. John G. Rowland has
told a national TV audience that the governor of Illinois, who is the
target of a corruption probe, should step down immediately.
Rowland has been there.
The Republican and Waterbury native
who now lives in Middlebury, resigned amid an impeachment probe in 2004
and spent 10 months in federal prison after pleading guilty to a
corruption-related charge.
Rowland appeared on the Fox News
channel show "Huckabee" over the weekend.
Illinois Gov. Rod Blagojevich
(blah-GOY'-uh-vich) is caught up in scandal over trying to sell the
U.S. Senate seat once held by President-elect Barack Obama. Rowland
says Blagojevich should immediately resign for the sake of his family
and the state.
Connecticut's former governor says
corruption comes from arrogance and sense of entitlement.
No
"reach back"
State ethics bill at last is passed
Stamford ADVOCATE, Staff
Reports
Article Launched: 06/17/2008
01:00:00 AM EDT
Finally, after years of lip service
but little substantive action, the state General Assembly placed its
imprimatur on a tough law to allow the reduction or total revocation of
a state or municipal employee's public pension if he or she is
convicted of corruption.
Of all the reforms approved by the
assembly following a wave of state and municipal corruption scandals in
the 1990s, pension revocation may well prove to be the most successful
deterrent. This measure serves notice on elected officials and
government employees that corruption related to their jobs or public
offices won't be tolerated and will be dealt with by attaching their
assets.
Lawmakers completed passage of the
bill last week in special session, and Gov. M. Jodi Rell, an adamant
supporter of ethics reform, was expected to sign it into law barring
any technical flaws.
The measure requires the state
attorney general to ask a state or federal judge to revoke or reduce
the pension of a public official or employee convicted of public
embezzlement, felonious theft, bribery or defrauding public funds.
Legislative leaders wisely dropped a
two-tier system of punishment voted by the House in this year's regular
assembly session that blocked passage of the reforms in the session's
closing days.
Instead, it is left to judges to
determine if full pension revocation would violate collective
bargaining agreements.
More significant, the measure bars
all future collective bargaining agreements negotiated by
the state or municipalities from containing any language that limits
the application of pension revocation.
The ethics package is
far-ranging. For example, it prohibits certain state contractors from
employing former public officials or state employees for a period of
one year after their service ends, and it makes it a Class A
misdemeanor for failure to report bribery by a public servant. Further,
it defines the governor's spouse as a public official; limits gifts to
public officials to major life events, such as the birth of a child,
and to $1,000 or less; and provides for ethics training for lawmakers.
Unfortunately, a "reach-back"
provision that would have allowed pension penalties for those employees
or officials who had been convicted in the past was not included. The
state attorney general maintained that would be permissible, but its
inclusion in the legislation was a sticking point for lawmakers, even
though they failed to publicly provide a reason as to why that was so.
Thus the legislation could have been
stronger and helped mete out penalties for corrupt officials who
deserved them in recent years. Yet it still represents a much-needed
commitment to emphasizing and enforcing ethical standards in doing the
people's business. That certainly was missing in the cases of such
corrupt politicians as ex-Gov. John G. Rowland, ex-State Treasurer Paul
Sylvester, ex-Bridgeport Mayor Joseph P. Ganim and ex-Bridgeport state
Sen. Ernest E. Newton II.
We hope this legislation is a major
step in restoring the public's confidence in the credibility of state
and local government.
Legislators still debating ethics
reform proposals
Stamford ADVOCATE
By Brian Lockhart
Article Launched: 05/30/2008 02:51:36 AM
EDT
Lawmakers yesterday met briefly to
try to bridge the divide over ethics reforms. State Sen. Gayle Slossberg, D-Milford,
and state Rep. Christopher Caruso, D-Bridgeport, met for about half an
hour in the conference room of the Government Administration and
Elections Committee, of which they are co-chairmen.
"We had a very productive meeting,"
Slossberg said. "We're making positive movement, and I'm hopeful we'll
be able to come to a resolution."
Caruso agreed, but neither divulged
details of their discussion.
"It's a very delicate matter,"
Slossberg said. "Presumably at some point there will be an agreement,
which will become public very quickly."
Slossberg and Caruso have been on
opposite sides of the debate over how far lawmakers should go in
penalizing corrupt state and municipal workers. Senate Democrats, Republicans and Gov. M.
Jodi Rell want to pass a bill that would allow judges to reduce or
revoke the pensions of corrupt elected officials and public employees. But last month, House Democrats amended
the Senate bill, limiting the amount a worker's pension could be
revoked to the total cost of fines, restitution and incarceration.
Caruso and state Rep. Diana Urban,
D-Stonington, vice chairwoman of the committee who sat in on the
meeting, said the Senate bill is illegal because it would interfere
with union agreements.
Attorney General Richard Blumenthal
issued an opinion that the House is justified in creating a two-tiered
pension revocation system for elected officials and public
workers. Slossberg disagrees. Republicans said House Democrats are
protecting union interests. The House sent the amended bill back to
the Senate, which stripped out the changes and called on the House to
revote on the original bill. The House did not revisit the bill. It
died when the session ended May 7.
Slossberg and Caruso said they did
not schedule a follow-up meeting; neither could say whether a
compromise might be reached in time for the June 11 special session.
Democratic leaders in the House and Senate scheduled the special
session to attempt to extend a real estate conveyance tax worth about
$40 million a year to municipalities.
"I'd love to get it done for June
11, but we'll have to see how we go," Slossberg said.
Caruso said lawmakers were "just
trying to get through some of the issues."
Last week, several House Democrats
from Fairfield County said they would be willing to vote for the Senate
bill rather than risk having no bill at all. The negotiations could be complicated by
Caruso's efforts to reinsert a provision that would allow judges to
reduce or revoke pensions of anyone found guilty of corruption in the
past 10 years, including that of former Gov. John Rowland.
Under the House and Senate bills,
failure to report a bribe and failure to report witnessing a bribe
would be a crime; the governor's spouse would be considered a public
official; gifts to public officials would be limited to major life
events, such as the birth of a child, and to $1,000 or less; state
contractors would be prohibited from offering a job to a state employee
who participated significantly in awarding a state contract to that
firm; and lawmakers would be required to complete ethics training.
Senate Minority Leader John
McKinney, R-Fairfield, said he was disappointed that no Republicans
were invited to yesterday's meeting.
"I'm a little bit leery of the fact
that three members of the General Assembly, none from the minority
party, are in a room," McKinney said. "The bill we had in the Senate
was the result of a lot of hard work between a lot of people. I would
hope that cooler heads would prevail and they'd put the Senate bill
before the House for a vote. I'm certain it would pass."
Lawmakers' tempers flare over ethics;
Dueling viewpoints at news conference
DAY
By Susan Haigh , Associated Press
Published on 5/16/2008
Hartford - State lawmakers have said they want to reach a compromise on
revoking pensions of corrupt politicians, but on Thursday they couldn't
seem to agree on who should be speaking to the news media on the
subject.
Reps. Christopher Caruso and Diana Urban, who support a version that
creates different rules for elected officials and state and municipal
workers, were miffed that Sen. Edward Meyer, a fellow Democrat, crashed
their news conference on Thursday to give reporters his opposing point
of view.
It's the latest wrinkle in the heated battle at the state Capitol
between House and Senate Democrats over the pension revocation issue.
Now that the regular session has ended, some lawmakers are hoping to
revisit the bill in a special session. But given the continued
acrimony, it's questionable whether that will happen.
Meyer, who wants the same standards for pension revocation for both
elected officials and government workers, showed up as the two
lawmakers were wrapping up the briefing at the Legislative Office
Building. Even though Caruso told him he couldn't speak, Meyer
approached the podium - infuriating Caruso and Urban, who loudly
complained to one another while watching from the sidelines.
”That was just bush-league,” said Caruso, co-chairman of the Government
Administration and Elections.“I have never had a colleague do that.”
Meyer, the committee's Senate vice chairman from Guilford, was
unapologetic. He said the representatives' proposal is bad for the
state and goes against what the public wants. Caruso's version does not
automatically revoke a corrupt state or municipal employee's pension.
”It looks self-serving, it looks union-biased, it looks like (it's)
against the public policy to our constituents and to me as a state
legislator,” Meyer said.
Caruso, of Bridgeport, and Urban, the committee's House vice chairman
from North Stonington, maintain that the pensions of unionized
employees can only be reduced, not revoked, because of collective
bargaining agreements. Instead, they support reducing a pension by the
amount of any fines, restitution or incarceration costs.
They predict the state will face legal action if it tries to pull the
pensions.
Meanwhile, Caruso said he wants legislators to again consider making
the revocation provision retroactive to affect people like former
Republican Gov. John G. Rowland, who resigned in 2004 amid a corruption
charge and later served time in prison.
That idea was stripped from the bill last session because there wasn't
enough support.
Lawmakers
preventing ethics reform?
Stamford ADVOCATE editorial
Article Launched: 05/03/2008
02:56:53 AM EDT
Shame on the state House of
Representatives for making a mockery of ethics reform.
The Democratic majority in the House
on Tuesday narrowly added an amendment to the landmark ethics bill
approved last week by the state Senate that could very well kill any
reforms from being approved this year.
House members dismembered the Senate
bill - which contained its own failings but was acceptable - by
approving a provision that creates separate standards of punishment for
corrupt state and municipal officials and for corrupt state and
municipal employees.
Under the House amendment, unionized
public employees covered by collective bargaining agreements would be
subject to less-severe penalties than elected or appointed officials
when it comes to revocation of their pensions.
In essence, the amendment sets up a
double standard of punishment that is unfair and, frankly,
incomprehensible. The two-tier system, which is being studied by state
General Assembly lawyers to see if it would even pass a constitutional
muster, is a concept which "came out of the blue" despite several
months of negotiations on the legislation by a special task force
created by Gov. M. Jodi Rell and assembly leaders.
We second the protest of House
Minority Leader Lawrence Cafero, R-Norwalk, who declared, "So what
we're doing here is not raising the standard of a public official. ...
We're lowering the punishment for a state employee."
Employees can do just as much damage
to the public trust as elected
officials can. Why some on the take should suffer less that others is
beyond us. It's hard to see how the sudden monkey wrench is anything
but political maneuvering. If the intention of those behind the
House amendment is to torpedo ethics reform, they most likely have
succeeded in the waning days of this session. In addition, they've also
appeased the state's public employee unions that have quietly but
strenuously opposed this measure.
Since the bill to revoke corrupt
public officials' pensions was introduced, it was the question of
retroactivity - whether the state could reclaim pensions already paid -
that threatened to sink it. That issue has been separated out, only to
give way to a new challenge.
Some legislative strides have been
made in reforms in the wake of a string of political corruption cases
ranging from ex-Gov. John G. Rowland and ex-state Sen. Ernest E. Newton
II of Bridgeport down to state employees working in the Transportation,
Environmental Protection and Motor Vehicles departments.
However, for the past four years,
state lawmakers have given an incredible amount of lip service to tough
reforms needed within their own ranks, but taken little action.
Now, House members appear to have
set the stage for more of the same.
-------------------------------
Blumenthal sides with House on
ethics proposal
Stamford ADVOCATE
By Brian Lockhart, Staff Writer
Article Launched: 05/03/2008
01:00:00 AM EDT
HARTFORD - The House of
Representatives' decision to establish different pension revocation
rules for public employees and elected officials is constitutional,
state Attorney General Richard Blumenthal said yesterday.
Whether his opinion leads to a
compromise with the Senate and passage of an ethics bill before the
legislature adjourns Wednesday remains to be seen.
House Democrats last week amended a
Senate ethics bill, backed by both parties, allowing courts to revoke
the pensions of corrupt elected officials and public employees at both
the state and local levels.
The change states that the amount of
a worker's pension revoked cannot exceed the total cost of fines,
restitution and incarceration.
House Democrats said they had to
make the change for practical legal reasons, arguing the Senate bill
interfered with the state's collective bargaining laws. But many also believe elected officials
should be held to a higher standard and face greater punishment than
rank-and-file workers. Senate
Democrats and the legislature's Republican minority cried foul, arguing
the amendment weakened pension revocation penalties and that public
employees in many cases have greater power than part-time
lawmakers. Some
lawmakers also questioned whether it was legal to tailor the state's
ethics laws to different "classes" of individuals.
Blumenthal, in a letter to the
co-chairmen of the Government Administrations and Elections Committee,
sided with the House.
"My conclusion is that this distinction would
be justifiable legally under well-established constitutional
principles," Blumenthal wrote. "If the General Assembly approves (the
House-amended bill) a court would likely find the distinction between
elected and appointed officials and state employees to be
constitutional, because it has a supportable rational basis."
He said it is common for the
General Assembly to make distinctions between public officials and
municipal or state employees.
"There are civil service statutory
protections for employees that are not available to officials,"
Blumenthal wrote. "State and municipal officials often receive pensions
and other compensation different from employees, many of whom are
subject to annual contractual increases and other benefits."
Existing requirements in the state
code of ethics are "much more extensive and detailed" for elected or
appointed public officials, he said. Blumenthal's letter should settle the
debate over the House amendment, said state Rep. Christopher Caruso,
D-Bridgeport, the Government Administrations and Elections Committee
co-chairman who spearheaded amending the Senate bill.
"The chief attorney for the state
has spoken, so no more excuses," Caruso said. "The Senate needs to stop
talking, act on it and send it to the governor's desk. If she really
wants ethics reform and pension revocation, she'll sign it."
Gov. M. Jodi Rell, during a budget
news conference last night, declined to take a question about the
ethics bill. But committee co-chairwoman Sen. Gayle Slossberg,
D-Milford, said all Blumenthal's letter did is confirm the House
weakened the Senate's ethics bill.
"The same questions still stands.
What's the right thing to do here?" said Slossberg, who argues that
similar laws revoking corrupt union workers' pensions in other states
have been upheld.
She is not looking to talk about a
compromise. Slossberg said she needs to discuss the House bill with her
fellow Senate Democrats. She said she has not spoken to Caruso
about it since the House added the amendment.
Caruso last night said the time for
talk was before the Senate passed its bill, expecting the House to
approve it without changes.
"We acted on it and sent it back up
(to the Senate)," Caruso said. "Now they must act."
House Minority Leader Lawrence
Cafero, R-Norwalk, said he has doubts about Blumenthal's opinion and
accused House Democrats of pandering to organized labor.
"We shouldn't have a double
standard" for politicians and public employees, he said.
Cafero said he believes Caruso is
angry he could not muster support for another change to the Senate bill
that would have allowed retroactive pension revocation for people such
as former Gov. John Rowland.
Rell backs
Democrats’ plans for ethics reform
New Haven REGISTER
By Gregory B. Hladky, Capitol Bureau Chief
Thursday, December 13, 2007
HARTFORD — A new Democratic proposal to create a bipartisan legislative
ethics panel and to bar state pensions for corrupt state officials drew
support Wednesday from Republican Gov. M. Jodi Rell.
“I think it is indicative of the fact that most people in the state
right now want to see ethics reform continue,” Rell said of the plan,
portions of which Democratic lawmakers have opposed in the past.
“I welcome the proposal they are putting forward,” Rell said. But the
Rell added she believes her own ethics reform efforts from the time she
first entered office in 2004 “set the right tone and the right path”
for the legislature to follow.
The five-point ethics reform plan offered by state Senate Democrats
this week included possible restrictions on state officials who lobby
lawmakers and requiring criminal penalties for elected officials who
fail to report a bribe.
Both of those reform ideas clearly relate to two recent controversies
involving state Sen. Thomas P. Gaffey, D-Meriden, and Louis C. DeLuca,
a Woodbury Republican who recently resigned his Senate seat.
Gaffey has denied any wrongdoing in connection with his personal
relationship with Jill Ferraiolo, an assistant vice chancellor with and
legislative liaison for the Connecticut State University system.
Critics claim Gaffey should have recused himself from voting on a major
state bond allocation for CSU that Ferraiolo was pushing.
Under the Democratic proposal, state agency legislative liaisons like
Ferraiolo might be subject to some of the restrictions currently
applied to private lobbyists, such as prohibiting political
contributions to the lawmakers they are attempting to persuade.
DeLuca stepped down from his seat amid a Senate investigation of his
relationship with a Danbury garbage hauler facing organized crime
charges. A federal undercover agent at one point offered DeLuca a
$5,000 bribe, which he refused. But DeLuca also failed to report the
bribe offer to any law enforcement authorities.
GOP lawmakers say Democrats in the past blocked some reforms they are
now proposing, including the plan to revoke state pensions for elected
officials convicted on corruption charges.
Rell said some past opposition to that proposal was based on concerns
that revoking a state official’s pension could hurt innocent members of
his or her family.
The governor said she has long supported pension revocations for
corrupt officials and noted the new Democratic proposal would give
prosecutors and judges discretion about whether such sanctions should
be applied in any particular case.
“I’m hoping that if they proposed it they will support it,” Rell said.
Ethics Proposals:
Democrats Offer Five-Point Reform Plan
By CHRISTOPHER KEATING |
Capitol Bureau Chief
December 12, 2007
A week after questions surfaced about their colleague's personal
relationship with a university official, Senate Democrats unveiled a
five-point plan Tuesday that calls for creating a permanent legislative
ethics committee and possibly treating certain state employees as
lobbyists.
The Democrats said that the
legislature needs to create a bipartisan committee that would oversee
their peers regarding possibly unethical and illegal conduct, including
criminal convictions, abuse of office and conflicts of interest.
The committee would be evenly
divided among Republicans and Democrats, even though Democrats now hold
more than two-thirds of all seats in the legislature.
Concerns about ethics have been
heightened at the Capitol since the felony conviction of Democratic
Sen. Ernest Newton of Bridgeport for accepting a bribe and the
misdemeanor conviction of Republican Sen. Louis DeLuca of Woodbury for
conspiring with a trash hauler to threaten his grandson-in-law.
Democrats last week rejected calls for an investigation into Sen.
Thomas Gaffey, D-Meriden, for his relationship with a high-ranking
official at the Connecticut State University system as they were both
working to gain $1 billion in bond funds for the university over 10
years.
Some of the proposals in the
five-point plan, such as revoking the pension of a corrupt public
official, have failed in the past and are being offered again as part
of an overall package. But Sen. Edward Meyer, D-Guilford, one of the
primary authors of the plan, said that it was not prompted by the
recent revelations of the relationship between Gaffey, 48, and
44-year-old Jill Ferraiolo, the assistant vice chancellor at CSU.
"This has nothing to do with Sen.
Tom Gaffey," Meyer told reporters. "If the media and the people of
Connecticut think that what we are doing up here at this podium with
these proposals relates to Sen. Gaffey, you are wrong."
But Republicans scoffed at the
notion, saying it was obvious that the new call for ethics reform was
connected to Gaffey.
"Let's face it. The timing is very
curious," said House Republican leader Lawrence Cafero of Norwalk.
"We're not stupid. C'mon."
Cafero said that the Democrats want
"to try to get out in front of the issue."
The Democrats responded, however,
that they had been working on most of the proposals for years,
including the pension revocation plan that dates to 2003 when then-Gov.
John G. Rowland's deputy chief of staff, Lawrence Alibozek, pleaded
guilty in a corruption scandal that eventually led to Rowland's
resignation and prison sentences for former co-chief of staff Peter
Ellef and contractor William Tomasso.
The Democrats have controlled both
chambers of the legislature since then, but Republicans say that the
Democrats have balked at revoking pensions because it could extend to
state employees. In addition, Republicans say, Democrats were concerned
that a pension revocation could have extended to former Democratic
state Rep. Jefferson Davis of Pomfret, who pleaded guilty in 2004 to
risk of injury to a minor after admitting to committing a sex act with
his former foster son. An arrest-warrant affidavit said that the boy
had told investigators that he was assaulted 50 to 100 times by Davis.
Prompted by Gaffey's case, the
Democrats are considering whether to treat legislative liaisons — like
Ferraiolo — the same as registered lobbyists who are hired under
contracts by various special interests. Registered lobbyists are
prohibited from making campaign contributions to legislators, and gifts
and meals are also heavily restricted.
The Democrats will examine whether
to expand the lobbyist restrictions to commissioners, deputy
commissioners, and heads of state agencies, as well as the liaisons.
Under the law, gifts and meals are
regulated, but relationships are not. As such, Gaffey could have had a
relationship with Ferraiolo if she was a registered lobbyist, and it
would not have violated the law, officials said.
"Sen. Gaffey had no conflict. He
violated no law," Williams said. "It was not a conflict. In hindsight,
we wish he had disclosed his relationship. He wishes that he had as
well."
In another proposal, it would become
a crime for the first time if a lawmaker were offered a bribe and
failed to report it. Currently, the law is silent on that point, which
caught most legislators by surprise.
"I didn't know that you didn't have
a duty to report a bribe," said Senate GOP leader John McKinney of
Fairfield, a University of Connecticut law school graduate who has
served in the legislature since 1999.
After 15 years in the General
Assembly, Cafero said he was dumbfounded that there is no law on
reporting bribes.
"I always thought that was the law,"
Cafero said.
Note: Sen.
Gaffey was an excellent speaker at a forum about vouchers some years
ago.
A Compromising Affair
Hartford Courant editorial
December 7, 2007
Sen. Thomas Gaffey, D-Meriden, argues that his affair with a
legislative liaison at the Connecticut State University System doesn't
violate either the letter or the spirit of the state's ethics laws. Yet
the romantic relationship raises troubling questions about Mr. Gaffey's
role in a $1 billion bonding package for CSUS approved by the General
Assembly this year.
Mr. Gaffey's failure to disclose his
relationship with Jill Ferraiolo, the assistant vice chancellor for
governmental affairs, reflects poorly on his ethical judgment. It
should also disqualify him from serving on the legislature's Committee
on Higher Education and Employment Advancement, which oversees public
and independent colleges and universities, including CSUS.
Mr. Gaffey is a graduate of Southern
Connecticut State University, one of four universities in CSUS. He says
his push for the bonding proposal was consistent with his long record
of work on behalf of the state's institutions of higher learning. He
also says his support for the proposal predated his affair with Ms.
Ferraiolo.
The senator also notes that Ms.
Ferraiolo is a state employee who is a legislative liaison, not a
registered lobbyist. It's not as though she were looking to line the
pockets of some private special interest with the state's money, he
said.
This argument is not persuasive. Ms.
Ferraiolo's job is to influence lawmakers on her employer's behalf. The
10-year, $950 million bonding authorization is one of the largest
bonding projects in Connecticut history, and taxpayers are entitled to
have confidence that lawmakers are thinking clearly and protecting the
public's interests when handing out millions of dollars in public funds.
In addition to serving on the higher
education committee, Mr. Gaffey is also a member of the legislature's
Finance, Revenue and Bonding Committee. Given his relationship with Ms.
Ferraiolo, he could have recused himself from voting on the bonding
package (it would have passed anyway). Or he could have informed both
committees of the relationship. Mr. Gaffey, however, did neither.
In fact, the affair did not become
widely known until it was the subject of a Commentary article last
Sunday by Courant columnist Kevin Rennie. (It
apparently also figured in Ms. Ferraiolo's divorce this past summer,
although the terms were kept secret as part of the settlement.) Senate
President Pro Tem Donald Williams said he first heard a rumor about the
affair on the night of the vote for the CSUS bond money.
Mr. Gaffey may be comfortable with
his motives. But to those outside the legislature who are unfamiliar
with his record and commitment to the state's institutions of higher
learning, his relationship with Ms. Ferraiolo calls those motives into
question. His silence about the relationship raises the question of
whether the public's trust in him is justified.
Now Republicans are calling for an
investigation. One of the leaders of this push is, of all people,
former Sen. Louis DeLuca, who resigned his seat three weeks ago, just
hours before a Senate vote on pursuing FBI tapes he wouldn't release.
Mr. DeLuca had pledged the powers of his public office to protect the
business interests of a trash hauler who had promised to intimidate a
relative on Mr. DeLuca's behalf.
Mr. DeLuca is obviously in no
position to question ethical conduct. On Wednesday, however, Senate
Democrats appeared quick to publicly absolve Mr. Gaffey and sweep this
matter under the rug by rejecting calls for an investigation.
Mr. Gaffey has caused his own
judgment to be called into question. His relationship with Ms.
Ferraiolo is a conflict of interest and clear grounds for his removal
from the Higher Education and Employment Advancement Committee. His
conduct is also grounds for censure by the Senate.






U.S. HOUSE OF REPRESENTATIVES: POINTING FINGERS
Coffee, tea or...how about tweaking that bill? And how
about those taxes, not to mention cozy relationships with health care,
banking industries? Hedges are GREEN.
Op-Ed Columnist
The
Rabbit Ragu Democrats
By FRANK RICH
October 4, 2009
IN the annals of American excess,
there often arrives a moment when those with too much money, too much
clout and too much hubris just can’t stop themselves from tempting the
fates. They throw an over-the-top party in public, or parade their
wealth and power before the press, and the next thing you know their
world, and sometimes ours, has crashed.
In the go-go Reagan 1980s, the junk
bond king Michael Milken bedazzled investors with lavish Predators’
Balls in Beverly Hills. Sure enough, he and Wall Street would end the
decade in ruin. Back East, the financier Saul Steinberg celebrated his
50th birthday in 1989 with a $1 million party in the Hamptons. “Honey,
if this moment were a stock, I’d short it,” he said when toasting his
wife. He would soon suffer a stroke and see his company go bankrupt.
Steinberg sold his vast New York
apartment to the private equity titan Stephen Schwarzman. In February
2007, Schwarzman marked his 60th birthday with a highly visible
multimillion-dollar bacchanal in the Park Avenue Armory. Though
Schwarzman hasn’t suffered much since — he is tied for 50th on the new
Forbes list of the 400 wealthiest Americans — his bash presaged the
bust to come. He became, as James Stewart wrote in The New Yorker, “the
designated villain of an era on Wall Street — an era of rapacious
capitalists and heedless self-indulgence.”
It’s in this context that you have
to wonder what some of the Obama era’s most moneyed and White
House-connected lobbyists were thinking as they preened before a
Washington Post reporter recently for two lengthy articles. We’re not
even nine months into the new administration, yet these swaggering,
utterly un-self-aware influence peddlers seem determined to prove that
nothing except the party affiliations has changed in the Beltway’s
pay-for-play culture since Tom DeLay. If these lobbyists were stocks,
I’d short them.
One of the articles focused on
Heather Podesta — “The It Girl of a New Generation of Lobbyists” — who
lobbies for health care players like Eli Lilly, HealthSouth and Cigna.
Podesta is half of what The Post has called a “mega-lobbying” couple.
Her husband, with his own separate (and larger) lobbying shop, is Tony
Podesta, the brother of John Podesta, the Clinton White House chief of
staff who ran the Obama transition. Back in November, Tony Podesta told
The Times that only “very unsophisticated” clients would hire his firm
because of his brother’s role in assembling the new administration.
That encyclopedic and ever-expanding list of “unsophisticated” clients
includes Amgen and the American Coalition for Clean Coal Electricity —
and that’s just among the A’s. His business was up 57 percent from last
year in the first six months of 2009. Heather Podesta’s was up 65
percent.
When we first meet Heather Podesta
in The Post, she is being bussed on the cheek by Charles Rangel at his
August birthday party at New York’s Tavern on the Green. In keeping
with the usual pattern of blowback, it took only one day after the
article appeared for The Times to report that Rangel, the ethically
challenged chairman of the House Ways and Means Committee, was guilty
of yet another lapse: He’d neglected to list at least $500,000 in
assets on his 2007 Congressional disclosure form. As if that were not
karmic retribution enough, Tavern on the Green filed for bankruptcy
just days after that.
The second Post article, on the
front page two weeks ago, described the scene, as well as the rabbit
ragu, at Ristorante Tosca, the lobbyists’ hangout on F Street in
downtown Washington. The Post did not mention that it is just four
blocks away from the location of the now defunct Signatures, the
restaurant whose owner, Jack Abramoff, was the go-to fixer of the DeLay
“K Street project” before scandal brought him down.
The stars of Tosca’s “Power
Section,” we learned, include the Podestas, Tom Daschle (“not
technically a registered lobbyist” but, as The Post put it, “a ‘special
policy adviser’ — wink wink”) and Steve Elmendorf (who “eats lunch out
only at Tosca”). Elmendorf was chief of staff to the former Democratic
House leader Dick Gephardt. A quick visit to opensecrets.org reveals
that Elmendorf Strategies’ client list includes Citigroup and Goldman
Sachs, among other players in the coming battle over financial
regulation reform. Then again, as The Nation details in its current
issue, Gephardt has also lobbied for Goldman, among many other
corporate clients in opposition to the populist policies he once
championed.
Barack Obama promised a change from
this revolving-door, behind-closed-doors collaboration between special
interests and government. He vowed to “do our business in the light of
day” — with health care negotiations broadcast on C-Span — and to
“restore the vital trust between people and their government.” He said,
“I intend to tell the corporate lobbyists that their days of setting
the agenda in Washington are over.” That those lobbyists would so
extravagantly flaunt their undiminished role shows just how little they
believe that a new sheriff has arrived in Dodge.
In his scathing Wall Street Journal
column on The Post articles last week, Thomas Frank crystallized the
gap between Obama’s pledge and this reality. “There is something
uniquely depressing about the fact that the National Portrait Gallery’s
version of the Barack Obama ‘Hope’ poster previously belonged to a pair
of lobbyists.” That’s no joke: It was donated by Tony and Heather
Podesta.
Obama’s promise to make Americans
trust the government again was not just another campaign bullet point;
it’s the foundation of his brand of governance and essential to his
success in office. At the first anniversary of the TARP bailout of the
banks, we can see how far he has to go. Americans’ continued suspicion
that Washington is in cahoots with powerful interests in joints like
Tosca is contributing to their confusion and skepticism about what’s
happening out of view in the battle over health care reform.
The public is not wrong. The
administration’s legislative deals with the pharmaceutical companies
were made in back rooms. Business Week reported in early August that
the UnitedHealth Group and its fellow insurance giants had already
quietly rounded up moderate Democrats in the House to block any public
health care option that would compete with them for business.
UnitedHealth’s hired Beltway gunslingers include both Elmendorf
Strategies and Daschle, a public supporter of the public option who
nonetheless does some of his “wink, wink” counseling for UnitedHealth.
The company’s in-house lobbyist is a former chief of staff to Steny
Hoyer, the House majority leader. Gephardt consults there too.
But it’s not as if the Republicans
now have the public’s back. DeLay may be reduced these days to
violating public taste rather than the public trust on “Dancing With
the Stars,” but back on Capitol Hill, his successors keep the K Street
faith. In their campaign to kill the public option, G.O.P. leaders
often cite data from the Lewin Group, a research company, which has
projected that 88 million Americans might quit their private insurance
plans if given a government alternative. (The Congressional Budget
Office puts the figure at the far less earthshaking 10 to 11 million.)
Lewin, which repeatedly insists it’s still a nonpartisan outfit, was
actually bought by a subsidiary of UnitedHealth in 2007. The Huffington
Post reported in August that John Boehner and Eric Cantor — who use
Lewin’s findings to scare voters about a “government takeover” of
health care — are big recipients of UnitedHealth campaign cash.
Next up will be the overhaul of
financial regulations. With job seekers now outnumbering job openings 6
to 1 in America, many still wonder why most of the big-dog culprits who
helped speed the national meltdown — from lying and gambling bankers to
shyster subprime mortgage packagers to executives at delinquent ratings
agencies — have not shared their pain. In his speech marking the
anniversary of Lehman Brothers’ failure, Obama chastised Wall Street
for having taken irresponsible risks. But of course it is already back
doing exactly that.
Meanwhile, we’re hearing of
behind-the-scenes Congressional softening of perhaps the most promising
component of the White House’s modest financial regulatory package, a
Consumer Financial Protection Agency. Real-estate brokerages are being
exempted from its purview, and banks will not be required to offer
“plain vanilla” mortgages. As in health care, the question of what the
White House will really fight for in financial reform remains open.
While the ostentatious daily predators’ ball at Ristorante Tosca is a
bad omen, we don’t know yet whether that omen is for the lobbyists, or
the Obama administration, or both.
This is history that the president
still has the power to write. It will be written in the bills he will
or won’t sign into law. We can only hope that he learned an important
lesson from his stunning failure to secure Olympic gold for his
political home of Chicago last week. If the Olympic committee has the
audacity to stand up to a lobbyist as powerful as the president of the
United States, then surely the president of the United States can stand
up to the powerful interests angling to defeat his promise of reform.
It
is in this newspaper
that you get all the news the NYTIMES finds "inconvenient truth...not
fit to print."
EXCLUSIVE: Obama nominee omitted ties to biotech
Washington Times
Jim McElhatton
Originally published 04:45 a.m., September 8, 2009, updated 06:25 a.m.,
September 8, 2009
President Obama's nominee at the Department of Homeland Security
overseeing bioterrorism defense has served as a key adviser for a
lobbying group funded by the pharmaceutical industry that has asked the
government to spend more money for anthrax vaccines and biodefense
research.
But Dr. Tara O'Toole, whose confirmation as undersecretary of science
and technology is pending, never reported her involvement with the
lobbying group called the Alliance for Biosecurity in a recent
government ethics filing.
The alliance has spent more than $500,000 lobbying Congress and federal
agencies -- including Homeland Security -- since 2005, congressional
records show.
However, Homeland Security officials said Dr. O'Toole need not disclose
her ties to the group on her government ethics form because the
alliance is not incorporated: "There's no legal existence so she
wouldn't have to disclose it," said Robert Coyle, an ethics official
for the Department of Homeland Security.
Analysts say the lack of disclosure reflects a potential loophole in
the policies for the Obama administration, which has boasted about its
efforts to make government more transparent. They also question
lobbying laws that allow such a group to spend hundreds of thousands of
dollars without the public knowing exactly how much money each of the
companies that belongs to the group contributes, though such
arrangements are permitted under the law.
"You're not allowing the public to know the full background of this
nominee," said Judy Nadler, a senior fellow at the Markkula Center for
Applied Ethics at Santa Clara University in California. "It shouldn't
matter whether it's incorporated or not."
Craig Holman, legislative director of the nonpartisan watchdog group
Public Citizen, said the lack of disclosure "definitely and clearly
runs counter to the intent of the law."
Ethics rules require nominees to report any paid or unpaid positions
held outside of government, including but not limited to those of
"officer, trustee, general partner, representative, employee or any
consultant of any corporation, firm, partnership or other business
enterprise ...." Dr. O'Toole signed a letter on behalf of the group
sent to the White House as recently as March.
Dr. O'Toole declined to comment for this article. Her office referred
questions to Mr. Coyle at Homeland Security and to officials for the
Alliance for Biosecurity, who said the group is in "full compliance"
with lobbying rules and noted that there were no financial ties between
the Center for Biosecurity, where Dr. O'Toole is chief executive, and
the lobbying group she help found.
In written testimony to Congress, Dr. O'Toole said the alliance was
"created to protect the Center for Biosecurity's status as an honest
broker between the biopharma companies and the U.S. government."
As undersecretary of science and technology, one of Dr. O'Toole's
responsibilities would involve overseeing the department's chemical and
biological division, which is in charge of making sure the nation is
prepared to defend itself against chemical and biological attacks.
Dr. O'Toole was nominated less than four years after the alliance was
formed in 2005. She has served as the group's unpaid strategic director
and has signed her name on more than a dozen letters sent to Congress
and federal agencies.
The group's letters to policymakers often seek more money for research
and vaccines. She signed the letters as the group's strategic director,
in addition to listing her full-time paid job as director of the Center
for Biosecurity, which is affiliated with the University of Pittsburgh.
The letters, including one that Dr. O'Toole sent to House Speaker Nancy
Pelosi, California Democrat, last fall, describe the Alliance for
Biosecurity as a "collaboration" among the Center for Biosecurity of
the University of Pittsburgh Medical Center, pharmaceutical companies
and biotechnology companies "working to develop vaccines, medicines and
other medical countermeasures for the nation's Strategic National
Stockpile."
Members include companies such as Pfizer Inc., Sig Technologies and
PharmAthene Inc. The group discloses the letters and list of members on
a Web site.
But for all its lobbying and letters to Congress, the alliance isn't
incorporated, it doesn't have a bank account and its day-to-day
operations are overseen by the K Street lobbying arm of Drinker Biddle
& Reath LLP, which also lobbies on behalf of the alliance,
according to records and interviews.
The alliance's legal counsel, Anita Cicero, is also a Drinker Biddle
lawyer who serves as a lobbyist for the group. In an e-mail response to
questions about the alliance, Ms. Cicero said the group was formed to
work "in the public interest to improve prevention and treatment of
severe infectious diseases - particularly those diseases that present
global security challenges in the 21st century."
Ms. Cicero described the lobbying activities as focusing on broad
issues. "The overarching advocacy issues we address run across the
industry, and we do not conduct lobbying activities to advance the
commercial interests of any individual member company," she said.
Still, a review of the group's correspondence to federal lawmakers
along with member companies' public disclosures to investors show that
the lines between advocacy and commercial interests aren't always clear.
In an Oct. 31 letter to Mrs. Pelosi signed by Dr. O'Toole and two other
alliance officials, the group called on Congress to include more than
$900 million for the "advanced development of medical countermeasures"
to be administered by the Biomedical Advanced Research and Development
Authority.
The letter also was signed by the chief executive officer of member
company PharmAthene, David Wright, who was one of the two first
co-chairmen for the alliance after its creation in 2005.
Mr. Wright's company has a big financial interest in securing work from
the authority, according to investor filings. A Securities and Exchange
Commission filing last summer disclosed that PharmAthene has been
trying to win a contract administered by the authority to supply 25
million doses of an anthrax vaccine to the national stockpile, which is
overseen by the Department of Health and Human Services.
As undersecretary, Dr. O'Toole wouldn't be directly responsible for
decisions on which vaccines to develop or buy. Still, she would oversee
the government's threat assessments on the risks of bioagents.
Dr. O'Toole has told the Senate in written testimony that she would
adhere to all ethics rule on conflicts of interests, but that because
she has no financial interest in PharmAthene, she's not aware of any
recusal requirements if she were to become involved in decisions
concerning government funding for anthrax vaccine development.
Ethics groups say the alliance's setup is an example of what critics
call "stealth lobbying," in which like-minded companies form a loosely
knit compact and spend lots of money lobbying the government. The
arrangement is legal, but it exposes loopholes that prevent the public
from finding out how much money each company pays and whether one
business exerts more control over the others.
Ms. Cicero said the group is complying with all applicable federal laws
and that the alliance discloses on a Web site its membership list and
correspondence to the White House, Congress and federal agencies. She
said the companies pay a "pro rata" share to the Drinker Biddle &
Reath firm.
"The alliance does not generate income, does not have a bank account
and does not owe taxes," she said.
Ms. Cicero said the law firm "regularly convenes consortia of biopharma
companies that share common goals or interests and provides secretarial
and legal support for the groups." She said the alliance was formed so
companies, academic institutions and the government could work together
to "accelerate the development of therapeutic and vaccine
countermeasures."
Ms. Cicero said Dr. O'Toole no longer has an active role as the
strategic director for the alliance.
Another lobbying client of the firm, the International Pharmaceutical
Aerosol Consortium, appears structured similarly. There are no records
of any incorporation papers for that group, either. The group has a Web
site listing several pharmaceutical companies as members, and Senate
records show it has paid more than $250,000 to Drinker, Biddle &
Reath since 2007.
Government watchdog groups acknowledge that the arrangement is legal
but say it seems at odds with lobbying reform laws that were intended
to shed more light on who bankrolls and controls special interest
groups.
"At the end of the day, companies that form coalitions like this are
being able to get around having to disclose the full breadth of who
they are and what they're doing and what they're doing," said Dave
Levinthal, a spokesman for the nonpartisan Center for Responsive
Politics. "Does that cut against an open and transparent government? It
appears that it does.
"Stealth lobbying has been taking place for years and despite the focus
on the influence of lobbying, what's happening is that organizations
are finding, if not loopholes, then ways around the spirit of the law,"
he said. "Companies that are lobbying Congress are not necessarily
disclosing the full strength of their lobbying."
Fund-Raiser for Obama and Clintons Accused of Fraud
NYTIMES
By LIZ ROBBINS and BENJAMIN WEISER
August 26, 2009
A prominent Democratic party fund-raiser for Barack Obama and Hillary
Rodham Clinton was arrested in Manhattan on Tuesday and accused of
lying about his assets to obtain a $74 million loan from Citibank, the
United States Attorney’s office said.
The fund-raiser, Hassan Nemazee, 59, had been a national finance
chairman for Mrs. Clinton’s presidential campaign before raising more
than $500,000 for Mr. Obama’s campaign after the Democratic National
Convention last August.
F.B.I. investigators found that Mr. Nemazee, a Park Avenue financier
and the chairman of Nemazee Capital Corporation, had claimed his assets
were worth hundreds of millions of dollars, according to the complaint.
In order to secure the loan, Mr. Nemazee submitted fraudulent documents
about his holdings to Citibank, offering information for accounts that
“never existed or had been closed years before,” Preet Bharara, the
United States attorney for the Southern District of New York, said in a
statement.
Mr. Nemazee was due in court on Tuesday afternoon, where he was to be
formally charged with bank fraud. The charge carries a maximum prison
term of 30 years and a maximum fine of $1 million.
Investigators said the fraud had been going on since December 2006.
F.B.I. agents stopped and interviewed Mr. Nemazee at Liberty Newark
International Airport on Sunday before he was able to board a flight to
Rome. On Monday, Mr. Nemazee repaid the $74 million loan in full to
Citibank, according to the U.S. Attorney.
Investigators found that Mr. Nemazee had provided false names,
addresses and telephone numbers of institutions that he said could
vouch for his assets. Instead, those numbers directed callers back to a
number “controlled by Nemazee,” Mr. Bharara said in the statement.
Mr. Nemazee had been a Democratic fund-raiser since the early 1990s,
when he raised money for the Clinton-Gore presidential campaign. His
father was a shipping magnate who later became a diplomat for Iran in
Washington, where Mr. Nemazee grew up.
Mr. Nemazee had given more than $450,000 over the years, mostly to
Democrats, and entertained President Bill Clinton, Vice President Al
Gore and Senator John Kerry, among others, at his Park Avenue home.
There were questions raised, about his financial dealings in 1998, when
Mr. Nemazee was named by Mr. Clinton to be ambassador to Argentina. The
Senate Foreign Relations Committee rejected his appointment after
Forbes magazine published a scathing article about his business
dealings and Republicans questioned his qualifications.
EXCLUSIVE: Rep. Perlmutter part owns
'green' bank he helped
Provision
in bill would aid family members, political donor
Washington Times
By Kara Rowland
Originally published 04:45 a.m., July 15, 2009, updated 11:06 a.m.,
July 15, 2009
Rep. Ed Perlmutter of Colorado inserted a provision into the recently
passed House climate change bill that would drum up business for
"green" banks, such as the one he has invested in and his family and a
political donor helped found in San Francisco.
The bill calls on bank regulators to promote green banking and says
federal dollars should be used to support energy-efficient home
improvements at government-funded housing projects.
Mr. Perlmutter, a two-term Democrat, has two investments in the
3-year-old New Resource Bank, which calls itself the nation's first
green bank. Among other environmentally conscious banking products, the
bank offers home equity loans for consumers to make their homes more
energy efficient, in addition to construction loans for green builders.
A Perlmutter spokeswoman stressed that the bill provisions benefit any
bank that offers qualifying products.
"Any bank can use this or take advantage of this, period. So it's equal
opportunity," Leslie Oliver said.
"New Resource Bank was not even on the radar screen" when the
congressman first introduced his ideas in a bill called the Green
Resources for Energy Efficient Neighborhoods (GREEN) Act last session,
she said, adding that four hearings have been held on the bill, which
passed the House last year.
New Resource also lists Deana Perlmutter, the congressman's former
spouse, and his father, Leonard Perlmutter, among those who have
invested "seed capital and effort" to get the venture off the ground,
according to the bank's Web site.
Mr. Perlmutter's sponsorship of the GREEN Act given his financial stake
in the bank raises ethical questions.
Elliot S. Berke, a lawyer specializing in government ethics, said
lawmakers should be cognizant when it comes to even the mere appearance
of an ethical problem.
"Members of Congress always need to be aware of how a personal
financial interest and an official action may intersect and whether or
not it creates even the appearance of impropriety or a conflict of
interest under the House Ethics Rules," Mr. Berke said.
According to the House Ethics Manual's guidance on outside employment
and income: "Although the term 'conflict of interest' may be subject to
various interpretations in general usage, under federal law and
regulation, this term 'is limited in meaning; it denotes a situation in
which an official's conduct of his office conflicts with his private
economic affairs.' The ultimate concern 'is risk of impairment of
impartial judgment, a risk which arrises whenever there is a temptation
to serve personal interests.' "
Mr. Perlmutter's GREEN Act was part of a 300-page amendment added at
the last minute to the Waxman-Markey energy bill, which the House
passed June 26 by a narrow 219-212 vote.
According to financial disclosure forms, Mr. Perlmutter holds shares in
New Resource Bank valued between $15,001 and $50,000 through a trust
for his children. His stake in a separate investment partnership totals
between $1,001 and $15,000.
Ms. Perlmutter, an environmental lobbyist who divorced Mr. Perlmutter
in 2008, said she helped found the bank but did not invest any money
into the venture.
"In my case, I provided effort [on green and sustainability
principles]," she wrote in an e-mail.
Mr. Perlmutter's 2008 financial disclosure form lists Ms. Perlmutter as
having received an unspecified salary from New Resource. She said she
was compensated for being a founder and for finding investors.
The lawmakers father confirmed that he is an investor but said he has
not had any conversations with his son about the GREEN Act.
In addition to having family ties with New Resource, the congressman
has received more than $6,000 in political contributions throughout the
2006 and 2008 election cycles from Daniel Yohannes, a seed investor and
former board chairman, records show.
Repeated efforts to reach Mr. Yohannes were unsuccessful.
Peter Liu, founder of New Resource and vice chairman of its board,
declined to disclose information about the size of the investments,
citing "privacy and regulatory issues."
"However, Leonard, Deana and Daniel are not significant shareholders
warranting regulatory disclosure," he said, adding that the bank "has
not had any conversation with the congressman or his staff about the
green banking center proposals."
New Resource - which had $166 million in assets as of March - was the
recent target of disciplinary action by the Federal Deposit Insurance
Corp., which issued a cease-and-desist order in May instructing the
bank to bolster its lending standards and reduce its bad debt. Mr. Liu
credited the action to a slew of poorly performing construction loans.
"Back at the end of last year when the regulators were having their
examination, in California the real estate market was definitely having
a lot of problems," he said, noting that the bank nevertheless has "a
very solid capital base."
The language Mr. Perlmutter inserted into the House bill instructs the
secretary of Housing and Urban Development to "develop and implement a
pilot program ... to facilitate the financing of cost-effective capital
improvements for covered assisted housing projects to improve the
energy efficiency and conservation of such projects" through a
"privately financed loan."
Elsewhere, the bill says banking regulators "shall prescribe guidelines
encouraging the establishment and maintenance of 'green banking'
centers by insured depository institutions" and those centers will
provide consumers with information on obtaining a home energy rating or
getting financing for energy-saving improvements.
Another section seeks to minimize the upfront costs of renewable energy
systems for homeowners by insuring loans for energy-efficient home
improvements from green banks.
The Senate is not expected to take up energy and climate change
legislation until this fall.
The firms he gave
advice to should ask for their money back, perhaps?
Summers Paid Millions as Hedge Fund Director
By THE ASSOCIATED PRESS
Filed at 12:21 p.m. ET
April
4, 2009
WASHINGTON (AP) -- Lawrence Summers, President Barack Obama's top
economic adviser, earned millions over the past year as managing
director of the hedge fund D.E. Shaw Group and through speaking fees,
some from financial institutions now at the center of the government's
rescue program.
Financial disclosure reports released by the White House show that
Summers received $5.2 million from D.E. Shaw. He also reported payments
for appearances before institutions such as J.P. Morgan, Citigroup,
Goldman Sachs and Lehman Brothers.
Overall, Summers was paid $2.7 million for more than 40 appearances
before different organizations and companies, including financial
institutions.
''Given that Dr. Summers is widely recognized as one of the country's
most distinguished economists and formerly served as treasury
Secretary, there was considerable interest in hearing his economic
insights from companies across various industries,'' White House
spokesman Ben LaBolt said.
Obama has enacted strict rules against hiring lobbyists for
administration positions that would have influence over their former
clients. A White House official said Summers will not work on issues
specifically related to D.E. Shaw for two years. The official noted
that Summers was not an adviser or an employee of the firms that paid
him to give speeches.
Summers began as managing director at D.E. Shaw Group in October 2006.
A company press release at the time said Summers would be involved part
time to offer advice on strategic initiatives, provide high-level
research and advise the executive committee. His income from the firm
included deferred compensation from 2007 and 2008 that he was paid this
year.
D.E. Shaw is a global investment and technology development firm with
about $36 billion in investment capital.
LaBolt said the administration has worked to tighten accountability
over banks and altered conditions for the receipt of government
financial bailout funds ''so that taxpayers can see how their money is
being spent, the influence of lobbyists is curbed, executive
compensation is reined in, and firms are required to show how they will
preserve or expand lending using government funds.''
He said Summers ''has been at the forefront of this administrations
work to shore up our nations financial system and to put in place a
regulatory framework that will strengthen the financial system and its
oversight -- all in an effort to help the families across America who
have paid a very steep price for risky decisions made by Wall Street
executives.''
Dodd
Admits Role In AIG Bonus Controversy
By CHRISTOPHER KEATING, The Hartford Courant
March 19, 2009
U.S. Sen. Christopher Dodd, already reeling in public opinion polls,
suffered another political blow Wednesday with the admission that he
had been involved in key legislative changes that helped pave the way
for AIG to pay controversial bonuses to its employees.
In a retreat from earlier statements, Dodd said Wednesday that U.S.
Treasury Department officials had approached him last month, urging him
to modify an amendment to the federal stimulus bill that capped bonuses
for executives at companies receiving aid.
On Tuesday, Dodd said that he was not a member of the conference
committee that crafted the final compromise bill and said that the
exception had not been in the bill as he drafted it.
But late Wednesday, Dodd admitted in an interview with CNN that he had
been involved in the change.
"I agreed reluctantly," Dodd said. "I was changing the amendment
because others were insistent."
The admission was another in a series of issues that have brought
negative attention to the state's senior senator.
"It's apparent that Sen. Dodd — on a whole host of issues — has a lot
of explaining to do," state House Republican leader Lawrence Cafero
said. "People are having a credibility problem here. ... For a long
time, there was an impression that Chris Dodd was an institution and
could be there [in the U.S. Senate] as long as he wanted to. Once you
believe that, that's when the wheels come off."
Dodd said he agreed to the Treasury Department's request, which made
the limits apply only to future bonuses. Dodd's provision, as
originally proposed, operated retroactively, meaning that it would have
applied to any firm, such as AIG, that benefited from the first wave of
federal assistance.
The senator said he agreed to the change to protect the compensation
restrictions he was seeking. He refused to name the U.S. Treasury
officials who asked him to add the language that paved the way for the
bonuses, saying that much of the detailed work on the bill was done on
the staff level.
"The alternative was losing the amendment entirely," Dodd said.
The political firestorm that had been simmering around the issue all
day exploded with Dodd's admission.
Sen. Chris Dodd Changes Explanation on AIG
Bonuses
By Christopher Keating, Hartford Courant, on March 19,
2009 7:03 AM
U.S. Sen. Christopher Dodd, already reeling in public opinion polls,
suffered another huge political blow Wednesday with the stunning
admission he'd been involved in changes in legislation that helped pave
the way for AIG to pay controversial bonuses to its employees.
In a retreat from earlier statements, Dodd said Wednesday that
U.S. Treasury department officials had come to him last month urging
him to modify an amendment to the federal stimulus bill capping bonuses
for executives at companies receiving aid.
On Tuesday, Dodd said he agreed to makes changes in the final version
of the federal stimulus bill. This represented an about-face in his
explanation, only one day after he said that he was not a member of the
conference committee that crafted the final compromise bill and pointed
out the exception had not been in the bill as he drafted it.
But late Wednesday, Dodd admitted in a live television interview with
CNN he'd been involved in the change.
"I agreed reluctantly," Dodd said. "I was changing the amendment
because others were insistent."
That admission increased the concerns raised by Republicans both
nationally and locally.
"It's apparent that Senator Dodd - on a whole host of issues - has a
lot of explaining to do,'' said State House Republican leader Lawrence
Cafero. "People are having a credibility problem here. ... For a long
time, there was an impression that Chris Dodd was an institution and
could be there [in the U.S. Senate] as long as he wanted to. Once you
believe that, that's when the wheels come off."
The political firestorm that had been simmering around the issue all
day exploded in wake of Dodd's admission. Dodd is already vulnerable
when it comes to matters relating to AIG. Employees and PACs related to
the financial services company have donated thousands to the senator's
campaign coffers over the years.
Amber Wilkerson, a spokeswoman for the National Republican Senatorial
Committee, said "Senator Dodd's reversal on this issue is both
astonishing and alarming. ... Contrary to his statements and denials
over the last 24 hours, Senator Dodd has now admitted that he and his
staff did in fact change the language in the stimulus bill to include a
loophole for AIG executive bonuses."
Dodd said flatly that his comments were not a reversal, though when
asked by CNN what had changed in his understanding between Tuesday and
Wednesday, Dodd replied, "Going back and reviewing it. ... I apologize
if we had some confusion.''
Still, he said in a statement, "Reports that I changed my position on
this issue are simply untrue. I answered a question by CNN last night
regarding whether or not a specific date was aimed at protecting AIG.
When I saw that my comments had been misconstrued, I felt it was
important to set the record straight - that this had nothing to do with
AIG."
The political firestorm around Dodd is the most intense of his career
for a veteran and highly successful politician who is known as one of
the most savvy political players nationally. In Connecticut, his name
recognition is as close to 100 percent as possible, and he normally
wins re-election in a blowout.
But this year is different.
In a telephone interview with The Hartford Courant on Wednesday night,
Dodd said he knows he has been enmeshed in multiple controversies
recently, including the refinancing of his two mortgages with
Countrywide Financial, his purchase of a 10-acre cottage in Ireland,
and the latest firestorm over the AIG bonuses.
"I've been getting whacked around the head for the last eight or nine
months - part of it my own fault for not stepping up earlier,'' Dodd
said.
Concerning his poll ratings that show he is in a statistical dead heat
with Republican Rob Simmons in a potential matchup in 2010, Dodd cited
the national and state economies as being a major problem for an
incumbent politician.
"The backdrop doesn't help,'' Dodd said. "Jobs being lost. Homes being
lost. There are obviously exceptions to this, and we know it.''
When asked about the possibility of retiring rather than rumors among
political insiders that he could retire instead of seeking re-election,
Dodd said, "I'm running. I haven't announced anything yet. ... I want
to win. What I want more than winning is to do what I'm supposed to be
doing.''
Simmons declined to return multiple telephone calls.
As a liberal Democrat, Dodd said he expects to be criticized during the
coming campaign by "the Rush Limbaughs and so forth'' on conservative
talk radio programs nationwide. But, he added, "I'm not going to let
them define my role.''
He said he learned about the AIG bonuses "a few days ago'' - long after
the conference committee and even longer after the original bill on the
Senate floor.
Dodd's turnaround on the AIG bonuses came during a live interview on
CNN with host Wolf Blitzer and correspondent Dana Bash. The interview
was arranged because Dodd had come under strong fire from Republicans
and others as the person who was involved in what Blitzer called a
"mysterious loophole'' in the legislation.
"I agreed to a modification in the legislation, reluctantly,'' Dodd
said.
After Dodd's live segment on CNN was over, Blitzer continued with a
report in which he said that Dodd was "coming forward with a vastly
different story'' on Wednesday than he had told to a CNN producer on
Tuesday regarding whether he was responsible for including the crucial
date for the bonuses of February 11, 2009 into the bill.
"It's very embarrassing to Senator Dodd to say one thing yesterday and
another thing today,'' Blitzer said.
Dodd declined to comment to The Courant about Blitzer's post-interview
statements, saying, "We get caught up in the minutiae of all of this.''
When asked about Blitzer's comment that the legislation included "a
mysterious loophole,'' Dodd said, "No, that's a lot of hype. It wasn't
a mystery.''
In
Daschle’s Tax Woes, a Peek Into Washington
NYTIMES
By DAVID D. KIRKPATRICK
February 2, 2009
WASHINGTON
— Tom Daschle, the former Democratic Senate leader, had been voted out
of office. His close friend Leo Hindery, a Democratic donor and media
mogul, was out of a job too, having just sold his latest company, Yes
Networks.
So in early 2005 the two men decided
to team up. Mr. Daschle agreed to become the founding chairman of “a
world-class executive advisory board” of “industry and regulatory
experts” for a new investment firm run by Mr. Hindery, according to a
news release announcing its inception and seeking investors. The
Daschle-led board, the release said, would help provide a “collective
depth of industry knowledge and expertise that will allow us to pursue
unique and high-value opportunities.”
In addition to lending the prestige
of his name, Mr. Daschle traveled to help raise money from investors
for Mr. Hindery’s new venture, said Jenny Backus, a spokeswoman for Mr.
Daschle. And in exchange, over the next four years the firm compensated
Mr. Daschle with over $2 million, and Mr. Hindery lent Mr. Daschle the
use of a chauffeured limousine in Washington.
Ms. Backus said that when Mr.
Hindery was not in Washington he lent his car to Mr. Daschle as a favor
to a friend.
The partnership has now come back to
haunt Mr. Daschle, with the disclosure that he had failed to pay
$128,000 in taxes on the car and driver Mr. Hindery’s firm provided
him, threatening to derail his confirmation as secretary of health and
human services...full story here.
Spousal Ties to Lobbying Test a Vow
From Obama
NYTIMES
By CHARLIE SAVAGE and DAVID D. KIRKPATRICK
December 15, 2008
WASHINGTON — Linda Hall Daschle is one of the most
important aviation lobbyists in town. Ms. Daschle is also the wife of
Tom Daschle, whom President-elect Barack Obama has chosen to be the
next secretary of health and human services.
Tom Downey is the founder and chairman of a lobbying firm with dozens
of clients, including several with interests in energy policy. Mr.
Downey is also the husband of Carol M. Browner, Mr. Obama’s likely
choice to be the next White House energy czar.
Mr. Obama’s selection of Mr. Daschle and Ms. Browner to high-level
positions illustrates a potential loophole in his pledge of keeping
special interests at a distance.
The ethics code that Mr. Obama imposed on his transition team takes a
hard line against lobbyists.
People are disqualified from working on any matters they lobbied about
within the past year, and currently registered federal lobbyists are
barred from playing a significant role — regardless of the issues they
lobby about. But Mr. Obama’s embrace of Mr. Daschle and his presumed
choice of Ms. Browner suggest that he will take a softer line on
lobbying by the spouses of the officials in his administration.
In a town where influencing the government is a main industry, Thomas
Susman, an expert on ethics rules who is also a lobbyist for the
American Bar Association, said issues surrounding spousal lobbying
presented a particular ethical challenge.
“On the one hand,” Mr. Susman said, “you say a spouse shouldn’t be
disenfranchised from his or her professional activities because his or
her spouse goes into government. But it does seem to me that a spouse
ought not be allowed to lobby an agency or on issues under the control
of the spouse in government.”
In the presidential campaign, Mr. Obama railed against
influence-peddling in Washington and pledged to hold his administration
to a higher standard.
“Your voices should speak louder than the whispers of lobbyists,” Mr.
Obama told a crowd in Green Bay, Wis., in September.
Stephanie Cutter, the transition spokeswoman, said Mr. Obama’s team was
writing “ethics rules for an Obama administration that will meet every
commitment made during the campaign.”
“To prevent conflicts of interests,” Ms. Cutter added, “administration
officials will recuse themselves from any issue involving a spouse, and
spouses will be banned from lobbying relevant agencies.”
In a bid to avoid conflicts, Ms. Daschle has announced that she will
leave her lobbying firm, where colleagues represent health care
clients, and plans to start her own practice, which will not accept
clients with interests in health care policy. Mr. Downey has not
disclosed his plans and did not respond to an interview request, but
Ms. Cutter said that if Ms. Browner became energy czar, Mr. Downey’s
firm would no longer accept energy or environment-related work.
Joan Claybrook, the president of Public Citizen, a government watchdog
group, said it would be going too far to require spouses of
administration officials to give up their careers and “go do something
else, like home decorating.”
“You may have to change your business plan and just give up on lobbying
on those issues that are directly the responsibility of your spouse,”
she said.
The business dealings of family members created a headache for Mr.
Obama’s team even before the election. After Mr. Obama selected Senator
Joseph R. Biden Jr. as his vice-presidential nominee, Republicans
pounced on the fact that Mr. Biden’s son R. Hunter Biden was a
lobbyist. He quit his firm in September.
Mr. Obama’s choice of Senator Hillary Rodham Clinton as secretary of
state raised related issues. Since leaving the White House, her
husband, former President Bill Clinton, has collected tens of millions
of dollars in speaking fees and donations to his presidential library
and charitable foundation, including from foreign governments. As a
condition of his wife’s selection, Mr. Clinton agreed to disclose the
identity of donors, to take no new donations from foreign governments
and to let the administration review his speaking schedule.
The working relationship between the Daschles, who married in 1984, has
come under scrutiny before. After three people died in the 1994 crash
of a small plane operated by a friend of Mr. Daschle, he was accused of
helping his friend’s firm evade oversight, and his wife was accused of
helping her husband hide his efforts.
Both Mr. Daschle, who was then the top Senate Democrat, and Ms.
Daschle, who then worked for the Federal Aviation Administration, were
cleared of wrongdoing.
Ms. Daschle has been a lobbyist since 1997. Some early clients had an
interest in health policy, like the drug maker Amgen and the tobacco
giant Philip Morris. In recent years she has mainly represented
aviation companies like Lockheed Martin.
Ms. Browner, a former administrator for the Environmental Protection
Agency, is a principal at the Albright Group, an international
consulting firm. She married Mr. Downey in 2007.
He had been a Democratic congressman from Long Island from 1975 to
1993, but lost his seat after it was revealed that he was among several
lawmakers who had frequently overdrawn their House bank accounts
without penalty, and that his wife at the time was a House bank auditor.
Mr. Downey later founded a lobbying firm whose past clients included
energy companies like Chevron and the Standard Renewable Energy Group,
several foreign countries, and the Albright Group. In 2006 the couple
worked together on issues related to a Dubai firm’s purchase of a
United States port operator.
His firm’s current clients include the government-backed mortgage giant
Fannie Mae and Securing America’s Future Energy, a nonprofit that
advocates reducing dependence on foreign oil.
Several other spouses of people tapped for top Obama administration
jobs have careers connected to government.
Susan E. Rice, the United Nations ambassador pick, is married to a
producer of the ABC program “This Week With George Stephanopoulos.”
Gregory B. Craig, the White House counsel designate, is married to a
graphic designer who has worked on Postal Service stamps. And the wife
of Timothy F. Geithner, who is Mr. Obama’s choice for Treasury
secretary, once worked for Common Cause, a watchdog group that lobbies
for tighter ethics rules.
Ms. Daschle and Ms. Browner did not respond to interview requests. But
in a 2002 interview with The New York Times, Ms. Daschle defended
pursuing her lobbying career despite her husband’s Senate role.
“Why should a spouse, just because she is married to a high-profile
public official, have to walk away from a career?” she asked.
Former
Lobbyist Named Biden’s Chief of
Staff
NYTIMES
By DAVID D. KIRKPATRICK
November 16, 2008
WASHINGTON — President-elect Barack Obama on Saturday named Ronald A.
Klain, a former lobbyist and Clinton White House lawyer, as chief of
staff to Vice President-elect Joseph R. Biden Jr.
His selection is one of several early appointments to Mr. Obama’s White
House and transition staff that calls attention to the limits of Mr.
Obama’s sweeping self-imposed ethics rules, laid out to fulfill a
campaign pledge to “wrest the federal government out of the hands of
lobbyists.”
Mr. Klain, who was chief of staff to former Vice President Al Gore, is
an executive at Revolution, the investment company of the AOL founder
Steve Case. He worked until 2005 as a lobbyist at the law firm of
O’Melveny & Myers, where he lobbied for clients including the
failed mortgage giant Fannie Mae; an industry group seeking help with
asbestos lawsuits; a drug maker under federal investigation; the cable
and media giant Time Warner; and an airline.
Mr. Obama’s ethics rules, however, do not bar former lobbyists. The
rules prohibit officials like Mr. Klain from working on any matter
directly related to their employers over the previous two years, so Mr.
Klain would be required to recuse himself from issues involving Mr.
Case’s firm Revolution.
The Obama transition also named Philip Schiliro as its liaison to
Congress. Mr. Schiliro is a former chief of staff to Representative
Henry A. Waxman, the California Democrat. Mr. Waxman is chairman of the
House committee on government oversight and reform, which watches and
sometimes investigates the White House.
Mr. Schiliro worked for Mr. Obama’s presidential campaign and had
previously worked on Capitol Hill for 25 years. His jobs there have
included a stint as an aide to former Senator Tom Daschle, adding to a
growing roster of former Daschle aides in the Obama administration.
In
Transition, Tangle of Ties to
Lobbying
NYTIMES
By DAVID D. KIRKPATRICK
November 15, 2008
WASHINGTON — President-elect Barack Obama has imposed stricter
conflict-of-interest restrictions on his White House transition team
than any president before him. But a list of transition team members
that his office made public on Friday includes a complicated tangle of
ties to private influence-seekers.
Among the full roster of about 150 staff members being assigned to
government agencies between now and Inauguration Day are dozens of
former lobbyists and some who were registered as recently as this year.
Many more are executives and partners at firms that pay lobbyists, and
former government officials who work as consultants or advisers to
those seeking influence.
After campaigning on promises to end the influence of lobbyists in the
White House, Mr. Obama has imposed rules that bar officials on his
transition team from handling any issues in areas of policy where they
have lobbied over the last 12 months or from seeking to influence the
same agencies for the next 12 months.
The rules also bar officials from working on matters where family
members or recent business associates may have a direct conflict of
interest. In cases where there is even an “appearance of conflict,”
officials must seek a waiver from the transition’s executive director,
an Obama Senate aide and law school classmate, Christopher Lu.
At least one official initially involved in the transition appears to
have been reassigned because of concern about his lobbying or legal
work. Henry Rivera, a former Democratic commissioner on the Federal
Communication Commission who was involved in planning for the agency’s
transition, has dropped out of that role because he had represented
clients on communications policy in the last year, the newsletter
Communications Daily reported Friday.
Instead, on the list that was made public on Friday, Mr. Rivera was
listed on the team handling science, technology, space and the arts.
The rules permit people who have lobbied in one area to join an Obama
transition team in another. (With Mr. Rivera is Jim Kohlenberger,
executive director of an advocacy group for Internet companies.)
Representatives of the transition team declined to comment on the
assignment, and Mr. Rivera did not return a phone call seeking comment.
Transition officials said that their policy went further than any
previous White House to avoid self-dealing or influence-trading in the
formation of the new administration, and that in the modern Washington
it would be foolish to try to eliminate anyone who had worked in public
policy for a private interest — or who had a family member in that
business — from contributing to the transition.
Stephanie Cutter, a transition spokeswoman, said in a written statement
that the transition team reflected what she called Mr. Obama’s
“commitment to change the way Washington does business and curb the
influence of lobbyists on our government.”
“While these rules disqualify many well-qualified professionals from
participating in the transition as a result, they also put in place the
right safeguards to prevent any potential conflicts of interest,” Ms.
Cutter said.
Some appear to skirt the edges of the ban on working in areas of the
transition where they have recently lobbied. Handling some Interior
Department issues is Keith Harper, who lobbied earlier this year for
Native American tribes. Overseeing the Consumer Products Safety
Commission is Pamela Gilbert, a former executive director of the agency
who as recently as two years ago lobbied for a consumer advocacy group.
Within the last year she has lobbied for the company Barr Laboratories,
for an investor group, and for an antitrust enforcement group.
Among the group handling the Justice Department and civil rights areas
of the transition is Theodore Shaw, a litigator for an arm of the
N.A.A.C.P. He has registered as a lobbyist for the group in the past,
but N.A.A.C.P. officials say he has not lobbied in the past 12 months.
David J. Hayes, part of the 12-member group overseeing the transition
and co-head of the team handling the areas of energy and natural
resources, is the chairman of the environmental practice at the law and
lobbying firm Latham & Watkins. He was personally registered as a
lobbyist as recently as 2006, for clients including San Diego Gas and
Electric.
Sally Katzen, another member of the supervisory group who is also on
teams for the office of the president and government operations, was
registered last year to lobby for the pharmaceutical company Amgen on
Medicare reimbursements. Louisa Terrell, another member of the top
working group, is on leave from the public policy office of the
Internet company Yahoo! Tom Wheeler, another of the 12, is on leave
from a firm that invests in technology companies and before 2004
lobbied for the cable television and wireless industries.
John L. White, a former Clinton official charged with overseeing the
new Defense Department, is a partner in a firm that invests in defense
contractors. Michael Warren, charged with overseeing Treasury, is chief
operating officer of a firm that lobbies for clients including the
U.S.-India Business Council.
Several of the officials have ties to Fannie Mae, the government-backed
mortgage firm whose implosion this fall contributed to the financial
meltdown. Thomas Donilon, overseeing the State Department, is a partner
in the law and lobbying firm O’Melveny and Myers who until three years
ago lobbied for Fannie Mae. Wendy R. Sherman, the other official
charged with reviewing the State Department, once headed Fannie Mae’s
charitable foundation.
Even Mr. Lu, the transition’s executive director charged with policing
potential conflicts of interests, may have his own appearance problems.
His wife, Kathryn Thomson, is a lawyer who represents corporate clients
dealing with federal environmental regulations, while his older
brother, Curtis Lu, is a top lawyer for Fannie Mae. (Such family
connections may not be disqualifying conflicts depending on the nature
of the transition job, ethics lawyers said.)
Mr. Lu has his work cut out for him in deciding which apparent
conflicts may be of real concern, said Robert Walker, a Washington
lawyer and former staff director of the Senate Ethics Committee. “I
don’t think it is the brightest of bright lines, and there is going to
be a lot of time spent thinking about just where that line is,” Mr.
Walker said.
The people involved in the transition teams assigned to each federal
department and agency have begun meeting with their current staff to
collect information on budgets, pending issues and personnel matters.
For now, the advisers assigned to each agency report back to the
central 12-person working group, which coordinates the efforts.
The vast majority involved are second-tier officials of the Clinton
administration, eager to help another Democrat take control of the
White House. With the exception of a few academics, almost all of them
spent the intervening years in the private sector, usually capitalizing
on the connections and expertise they developed in the Clinton years.
For example, Sandy Berger, the Clinton national security adviser,
founded Stonebridge International, a consulting and lobbying firm
focused on helping clients resolve government issues here and overseas.
Mr. Berger took with him Mr. Warren, the former executive director of
the president’s economic council who became chief operating officer of
Stonebridge and has now become a major contributor to the transition in
the pivotal areas of the Treasury Department and economic policy.
Although not a registered lobbyist, Mr. Warren helped manage
Stonebridge while it lobbied the government for clients including the
U.S.-India Business Council within the last year as well as Dynergy
International, Airbus and Conoco in earlier years. (More of
Stonebridge’s business involves using government expertise and
connections to help corporate clients abroad.)
Some transition officials now work at firms that do business with the
agencies they are examining. John O. Brennan, a former Central
Intelligence Agency official working on its transition, is president
and chief executive of the Analysis Corporation, an intelligence
contractor.
On the NASA review board, Lori Garver is now president of a strategic
consulting company, Capital Space LLC, and previously worked for the
aerospace company DFI International.
Among the transition officials charged with reviewing the Securities
and Exchange Commission — likely to come under significant scrutiny
amid the financial meltdown — is Mozelle Thompson, who runs a legal and
policy consulting business for publicly traded companies. One name on
the transition list comes unencumbered by potential conflicts but
instead by bad luck. Jami Miscik, leading a review of American
intelligence agencies, was the head of intelligence analysis at the
Central Intelligence Agency during its biggest embarrassment: the
botched assessments about Iraq’s weapons of mass destruction. Then she
moved on to become a senior official managing risks in emerging markets
for the investment bank Lehman Brothers, until its collapse this fall.
Obama
Transition Team Adopts Ethics
Rules
NYTIMES
By BRIAN KNOWLTON
Published: November 11, 2008
WASHINGTON -- A top adviser to President-elect Barack Obama said
Tuesday that the transition team would raise about $7 million to cover
its costs, supplementing $5 million in government funds, but would
reject donations from lobbyists or corporations and rely instead on the
same of small donors who helped propel the Democrat to victory.
“We’ll raise all that money from individuals,” said John D. Podesta,
who is a co-chairman of Mr. Obama’s transition team. “There’s a $5,000
limit on those contributions.”
In his remarks to a packed briefing room in the temporary transition
offices here, Mr. Podesta, a former of chief of staff to President Bill
Clinton, seemed intent on striking a tone of brisk efficiency and in
advertising what he insisted would be historically high standards.
Under the rules announced by Mr. Podesta, federal lobbyists will not be
allowed to raise money for the transition, nor continue lobbying while
working in the transition. In addition, he said that someone who became
a lobbyist after being involved in the transition would be prohibited
from lobbying the administration on related matters for 12 months.
“These are the strictest ethics rules ever applied,” he said.
Mr. Podesta also vowed that the new administration would move “very
aggressively and very rapidly” to address the country’s energy
challenges, shifting American factories and consumers toward cleaner
sources of power while creating more jobs.
Mr. Obama’s first priority was “to stabilize the economy and put
America back to work,” he said.
Reiterating what Mr. Obama said at a news conference last week, Mr.
Podesta said that if Congress did not pass an economic stimulus package
in a lame-duck session next week that was announced on Tuesday, it
would be “the first item of business after he is inaugurated.”
He confirmed reports that the transition team was reviewing options for
closing the detention camp at Guantánamo Bay, but provided no
details.
Mr. Podesta also said that Mr. Obama had no plans to meet with any of
the world leaders coming to Washington this weekend to take part in a
financial summit meeting — “either here or in Chicago,” where Mr. Obama
is spending most of his time for now.
He described a brisk pace for some transition actions, noting, for
example, that fact-finding teams would review more than 100 agencies
and commissions starting next week to aid in decisions on budget,
personnel and policy.
He said that Mr. Obama wanted to expand on the practice of some
presidents of selecting one cabinet member from the opposition party,
but that whoever was chosen, it was rare for any cabinet members to be
named before December.
“At a moment when we face the most serious challenges of a lifetime,”
said Mr. Podesta, referring to the ailing economy. “President-elect
Obama wants to assure that we hit the ground running on Jan. 20,
because we don’t have a moment to lose.”
While new administrations almost always promise to hew to strict
ethical standards, Mr. Podesta’s language was particularly strong as he
promised “the strictest, most far-reaching ethics rules of any
transition team in history.”
He said about 450 people would be hired to undertake the work of
preparing for the new administration, promising a transition “that is
efficient, that is organized, that is bipartisan, and more open and
transparent than others before.”
Lawmakers not able to avoid conflict
issues
Norwalk HOUR editorial
Dec. 6, 2007
Having just endured the forced resignation from the state Senate of
their minority leader, Louis C. DeLuca, some Republicans are accusing
Democratic Sen. Thomas P. Gaffey of a breach of ethics and are urging
the Senate to put him through the same sort of inquiry that pushed
DeLuca out.
Gaffey, who represents the Meriden area, co-chairs the General
Assembly's Education Committee, and is vice chairman of the Higher
Education Committee, has had to do some explaining. But his situation
is not the least comparable to DeLuca's.
To threaten the troublesome boyfriend of his granddaughter, DeLuca
engaged a friend he considered a gangster, and as a result pleaded
guilty to a misdemeanor charge. Along the way he failed to report a
bribe offer. This was criminality and indifference to criminality.
Gaffey romanced a state university official while he voted for
university bonding legislation, a relationship confirmed by
affectionate remarks to each other in messages that became public
record in the university e-mail system. At worst this relationship was
a conflict of interest, but if it was, it was a small one, since, as a
matter of state law, licensed professionals sit on the agencies that
regulate their professions and practicing lawyers sit on the
commissions that select and discipline judges.
The ethics questions are whether Gaffey's romantic interest could have
compromised his view of the public interest in the bonding legislation
and whether the public interest actually was compromised.
Political Fund Hanky-Panky?
Hartford Courant
Kevin Rennie | NOW YOU KNOW
December 9, 2007
An outbreak of modesty among Democratic state senators last week failed
to divert attention from Sen. Thomas Gaffey's role in the passage of
nearly $1 billion in funding for the Connecticut State University
System. Democratic leaders waved away questions about Gaffey's affair
with CSUS' legislative liaison, Associate Vice Chancellor Jill
Ferraiolo, reported here a week ago. Gaffey, according to the party
line, was just one of 187 legislators, nearly all of whom eventually
supported the CSUS plan.
State Senate President Pro Tem Donald Williams, displaying his taste
for censorship, mustered a studied disdain for the idea that Gaffey
ought to have disclosed his affair while shaping and promoting the CSUS
legislation. Pay no attention to Gaffey's gambit last spring, as a
member of the legislature's Finance Committee, to replace a carefully
controlled plan for CSUS with one that spent a lot more and included
less oversight.
Williams pronounced, "People are kind of sick and tired with politics
being played with people's private lives." Wrong again. People are sick
and tired of politicians refusing to keep their private escapades
separate from their public obligations. It's not much to ask.
Gaffey was deeply involved with the CSUS proposal at each step of the
way. During the brief Oct. 30 debate on the proposal, Gaffey was one of
the few senators to speak. He couldn't resist. After all, CSUS
Chancellor David Carter, Gaffey said, "came to me about a year ago with
this dream he dares to dream." And Carter is Gaffey-certified as "a
great man."
Gaffey and Carter are good friends. Friends help each other. In
February 2004, Carter, then serving as president of Eastern Connecticut
State University, was in a bind. As a member of the NCAA Division III
Presidents Council, Carter had been able to purchase tickets to the
NCAA Final Four tournament in San Antonio. That's the one, you may
recall, that the UConn men's team won.
An obligation at ECSU meant Carter couldn't go. How could he unload
those tickets? Only several thousand people might want them. Carter
offered them to Gaffey, who agreed to buy them at the original purchase
price. What a lucky break for both of them, especially since no one
else Carter offered them to was interested, he said.
Gaffey says he's an old-fashioned fella; he paid for meals with his
inamorata, CSUS link Jill Ferraiolo, he said early last week.
By Friday, however, Gaffey's recollection was getting sharper. He
recalled, in response to written questions, two previously undisclosed
luncheons with Ferraiolo and others that he paid for with money from
his Government Action Fund Political Action Committee. Those are
political contributions that Gaffey has used for years to finance
travel, dinners and trips.
He is indeed an old-fashioned guy. Sen. Williams should be disappointed
to learn that Gaffey and Ferraiolo were mixing their private lives with
political contributions.
GAFPAC, like every Connecticut political committee, must file quarterly
finance reports. The law requires an itemized accounting of each
contribution and expenditure. Gaffey has often neglected to comply with
that requirement. It's hard to know exactly where, when and on what
thousands of dollars have been spent. GAFPAC has made many payments to
the senator's personal credit card for purchases that are not clearly
disclosed.
On Friday, Gaffey said he'd file an amendment to one mysterious payment
this year of $1,281 to his personal credit card. There are plenty of
other blank spaces in the reports he's filed since the millennium that
the state Elections Enforcement Commission may want to review.
Every two years, Gaffey pours his hefty campaign surplus into GAFPAC. A
year ago, he held a fundraiser to put some more dough into the fund.
Nearly all the contributors were lobbyists and other political action
committees. Only two were not. One of those was ticket master Carter,
good for $250 (what a return on that he got). Neither Carter nor Gaffey
remembers how the kind invitation to donate to the PAC was made.
Friends just do things for each other.
Visitors to the state Capitol often receive a brochure titled "How a
Bill Becomes Law." It's a dry account of the formal process from
proposal in the legislature to a signature by the governor.
It tells a tale, and so do political finance reports. And so will
payments to Gaffey's credit card.
Kevin Rennie is a lawyer and a former
Republican state lawmaker. His column appears Sundays on the Other
Opinion page. He can be reached at kfrennie @yahoo.com.
Note:
we are including this column to fully explicate the editorial above.
Affair Tainted Schools' $1
Billion: Legislator, CSUS Officer Took Bonding To Improper Level
Hartford Courant
Kevin Rennie | NOW YOU KNOW
December 2, 2007
Lust for power is merely ambition. Lust and power together, however,
can make trouble.
The question is whether that potent cocktail cost taxpayers $1 billion
this year because of a secret relationship between a high-ranking
legislator and a state university vice chancellor. While they were
pushing the bonding package, they were bonding.
Supporters and leaders of the Connecticut State University System
wanted $1 billion to renovate and expand facilities at its four schools
(Eastern, Central, Southern and Western). But they haven't spent years
cultivating a large network of supporters the way the University of
Connecticut has. CSUS faced a much bigger task.
State agencies and institutions hire people to represent them in other
parts of the government. Bureaucratic veteran Jill Ferraiolo bats for
CSUS as associate vice chancellor for government relations and
communications. She's the legislative liaison for the central office,
which oversees the four schools.
State Sen. Thomas Gaffey, D-Meriden, is a chairman of the Education
Committee and vice chairman of the Higher Education and Employment
Advancement Committee.
Ferraiolo and Gaffey became allies in the quest for that billion.
E-mails between the two show that their entanglement extended beyond
the halls of government as the legislature shaped policies on CSUS.
State Sen. Joan Hartley, D-Waterbury, a fiscal conservative and
co-chairman of the Higher Education committee, resisted efforts to give
$1 billion to CSUS without essential oversight. She opposed making the
10-year plan immune from the normal constraints of spending programs in
a state with plenty of fiscal swings and roundabouts.
Hartley infuriated Ferraiolo. In June, the associate vice chancellor
expressed her contempt for Hartley in a presumptuous e-mail she
forwarded to Gaffey (her "big boy" in a later e-mail). Hartley's aide
had dared to make an inquiry of Southern Connecticut State University
on behalf of some constituents, not something that would usually be
shared by a Connecticut State University System staff member with
another senator. But Gaffey and Ferraiolo shared more than a legislator
and a bureaucrat usually do.
June was not a good month for Ferraiolo. In June, Joseph Ferraiolo,
married for 18 years, sued his wife for divorce, citing adultery, a
pointed claim in an age when the vague "irreconcilable differences"
suffices. The couple divorced in October. Their three young children
live mostly with their dad under the divorce agreement. A highly
unusual paragraph in it precludes the parties and their lawyers from
discussing their grievances. It punishes any leaks. Husbands and wives
don't usually worry about leaks, but politicians do.
As the summer ended, Gaffey and Ferraiolo were living in a convoluted
e-mail world, one that could have been written by Barbara Cartland with
some Stephen King creeping in. In August, Ferraiolo oohs and aahs at a
Gaffey favor for a mutual friend. He declares, "I move mountains for my
friends." In September, brace yourself, she proclaims him a "god."
"Alongside every god is a great goddess," reads his modest reply. News
from Gaffey that he's had a call from an editor at The New York Times
has Ferraiolo repeating in capitals that he is indeed a god. Another
exchange finds Zeus offering bon mots in French. Power rarely improves
the judgment of those who wield it.
Plans for a trip to Dubai in the spring appear amid the e-mailed
political hackery and claims to divinity. Meanwhile, Ferriaolo strayed
far from her portfolio by helping Gaffey find ways to criticize Gov. M.
Jodi Rell's refusal to join the Democrats in the annual bonding
bacchanalia. Considering the authority the governor exerts over the
state university system, Ferraiolo became reckless in her job in order
to help Gaffey. There's the whiff of undue influence here in conducting
the public's business.
Through this tumultuous year, Gaffey and Ferraiolo attended meetings,
planned strategy and kept flogging that proposal for $1 billion —
without telling their colleagues they were dating.
David G. Carter, chancellor of the Connecticut State University System,
said the personal relationship wasn't disclosed to him until after the
billion-dollar package passed. Don Williams, state Senate president pro
tem, says he first heard the rumors on Oct. 30 — the day the big
bonanza for CSUS passed the Senate. But he says "the governor, and
legislative leaders from both parties and chambers had already agreed
upon the total bond package which included the CSUS 2020 program." He
said the relationship was not a conflict for Sen. Gaffey.
The state ethics office says that "the Code does not bear on this
situation because "the liaison is not a family member" and the senator
didn't receive "any benefit" from the bill's passage.
This kind of relationship, as is recognized throughout our land, clouds
judgment. People involved in such entanglements end up serving each
other rather than their constituents.
Hartley eventually forced constraints on the $1 billion present,
angering her Democratic colleagues. She became the target of their
wrath. As they bayed for Hartley's head, no one mentioned Gaffey's
private interest in the bill.
They're celebrating at the Connecticut State University System, but
Gaffey and Ferraiolo should brace themselves for scrutiny. The benefits
bestowed by state employees on individual legislators are regulated.
Ferraiolo and Gaffey had better start gathering receipts for the
state's ethics agency. Shortly after the bill was passed, the Senate
Democrats requested an opinion from the Office of State Ethics on
Gaffey's role in the legislation, but failed to ask about any benefits
he may have derived from his relationship with Ferraiolo.
Legislators who knew of the relationship but remained silent deceived
their colleagues.
The philosopher-comedian Joan Rivers often declared that a pretty face
and other attributes could get a girl a lot of good jewelry. Even the
worldly Miss Rivers would gasp at a prize of a billion dollars in state
bonds instead of traditional gems.
This Is Ethics 101
Hartford Courant editorial
July 27, 2007
Edward Sasso has a clear conflict of interest. If he's unable to see
the light, aldermen on New Britain's common council should quickly show
him the door.
Mr. Sasso is a New Britain representative to the Mattabassett regional
sewage district's board of directors. He also heads an affiliate of the
American Federation of State, County and Municipal Employees, a union
representing supervisors - including some at the Mattabassett plant.
On May 21, Mattabassett's directors voted to go into a closed-door
session. The purpose was to discuss labor-related matters, including
its strategy for negotiating with Mr. Sasso's union. Over board
members' clear objections, Mr. Sasso insisted upon sitting in at the
meeting, forcing the meeting to adjourn.
The board's bylaws are clear. Any director with a "real or perceived"
conflict of interest should abstain from debate and remove himself from
executive session. But Mr. Sasso shouldn't need a bylaw to tell him his
presence posed a threat to the purpose of that meeting. By discussing
their negotiating strategy in Mr. Sasso's presence, board members would
have been showing their hand and potentially undermining their position.
New Britain's common council has sole authority to remove Mr. Sasso
from the board. In a letter to the council dated May 31, the
Mattabassett board outlined its dilemma. The aldermen's responsibility
here is clear: Set Mr. Sasso straight or fire him. But the aldermen are
balking.
Mr. Sasso's usefulness on the board is already somewhat restricted by
the various potential conflicts arising from his union duties. His
willful disregard of the board's bylaws in this matter only worsens
that problem. Now, it's holding up the Mattabassett board's business.
So is the common council's unwillingness to resolve this matter. This
is Ethics 101. If Mr. Sasso doesn't understand the inappropriateness of
his actions, then he lacks the judgment necessary to serve on the board.
House panel moves toward impeaching a judge
NYTIMES
By THE ASSOCIATED PRESS
Published: September 17, 2008
Filed at 6:18 p.m. ET
WASHINGTON (AP) -- The House
Judiciary Committee voted Wednesday to open the first impeachment probe
of a sitting judge in almost two decades.
With little discussion, the
Democratic-led panel voted unanimously to launch an investigation
against U.S. District Judge Thomas Porteous, a Louisiana jurist, who is
charged with presiding over a trial in which the lawyers involved had
given him money. He's also accused of filing for bankruptcy under a
false name.
Porteous was appointed by President
Clinton.
The Judicial Conference of the
United States reported in June that Porteous may deserve impeachment.
If the full House impeaches Porteous, the case would advance to a
Senate trial. A guilty verdict would remove him from the bench.
It would be the first impeachment of
a federal judge since 1989, when the House impeached Walter Nixon of
Mississippi and the Senate convicted Alcee L. Hastings, now a
Democratic congressman from Florida, who had been impeached the year
before.
Neither Porteous, his attorney Kyle
Schonekas, nor Chief Judge Helen G. Berrigan of Louisiana's Eastern
District was available for comment.
In its report, the Judicial
Conference said Porteous may deserve impeachment over allegations that
he filed a personal bankruptcy petition for himself and his wife under
a false name in 2001 and filed many other false statements under oath
during the bankruptcy proceedings. He also allegedly took ''gifts and
things of value'' from lawyers with cases before him.
''We take it very seriously when the
governing body of the Judiciary sends us a referral for impeachment,''
said Judiciary Committee Chairman John Conyers, D-Mich. ''Upon review,
we believe this matter merits a full investigation.''
There was no dissent on the often
highly polarized panel.
''I strongly believe that the
committee is doing the right thing,'' said the panel's ranking
Republican, Lamar Smith of Texas. ''The alleged corruption of a federal
judge, who is appointed for life, is especially egregious.''
The U.S. House has impeached 13
judges; the Senate acquitted four, convicted seven and two resigned
without trial, according to the Federal Judicial Center's Web site.
The last acquittal was of Harold
Lauderback, a California district judge, in 1933. Four federal district
judges have been convicted and removed from office since then: Halsted
L. Ritter of Florida in 1936; Harry E. Claiborne of Nevada in 1986 and
Hastings and Nixon in 1989.
The allegations against Porteous
were uncovered during the FBI's Operation Wrinkled Robe, an
investigation of the relationship between state judges in Jefferson
Parish, where Porteous served until he was appointed a federal judge in
1994, and bail bondsman Louis Marcotte.
That 5 1/2-year investigation put
court-ordered wiretaps and video cameras in the parish courthouse and
brought 14 convictions, including those of two state judges who were
sent to federal prison.
In addition to making false
statements under oath and taking gifts from attorneys, the charges
against Porteous include hiding assets from the bankruptcy estate,
leaving gambling losses off the list of debts and getting short-term
credit from casinos after the bankruptcy judge ordered him to get
approval of the court before taking on any debt.
The probe also uncovered evidence
that Porteous rejected a request to step down from a case without
revealing that he had a history of financial relationships with at
least one attorney involved and leaving lawyers gifts off financial
disclosure statements from 1994-2000.
Porteous stepped aside from all
civil cases involving the federal government and all criminal cases in
2003, after a relative of Marcotte said the bondsman -- sent to prison
for racketeering -- had paid for Porteous' car repairs and arranged
another favor.
He was removed from bankruptcy cases
after the 5th Circuit's judicial council's report.
Weston Police
Commission - October 4, 2007, Selectmen appoint, as requested by the
DTC, John Hammerslough (on the ballot November 6) "to
fill vacancy of Walter Marcus"
Selectmen rescind decision
to appoint Edward Schwarz
Weston FORUM
by BRIAN GIOIELE
Jul 13, 2007
Two weeks after granting its unanimous approval, the Weston Board of
Selectmen voted last night, Thursday, July 12, to rescind its decision
to appoint Edward Schwarz to fill the vacant Police Commission seat.
Mr. Schwarz was nominated by the Democratic Town Committee to fill the
seat vacated by Wally Marcus, but unbeknownst to the selectmen, Mr.
Schwarz had been arrested by Weston Police in December 2006 for a
domestic incident.
“The Democratic Town Committee owes an explanation to the selectmen as
to their candidate selection process,” said Selectman Glenn Major
during Thursday’s selectmen’s meeting.
“They have a duty to give all the information we need to make an
appropriate choice,” added Mr. Major. “To think that a criminal matter
that is still pending is not information we should have ... it’s
absurd, particularly when that board or commission is the Police
Commission.”
“Knowing what I know today, I would not have voted the way I voted,”
said First Selectman Woody Bliss.
Selectman Richard Miller agreed. “If I knew at the time I voted at the
last meeting what I know now, I would not have voted ‘yea,’” he said.
Because Mr. Schwarz was appointed to an elective commission — not an
appointive one — the question as to whether the Board of Selectmen has
the legal authority to now reverse its decision is still not crystal
clear. Mr. Bliss said he talked to town counsel, who confirmed there is
precedent for such a reversal.
“The case law is not 100%,” said Mr. Bliss.
Arrest
The selectmen were informed about Mr. Schwarz’s arrest by Interim
Police Chief John Troxell during the June 28 meeting, but after the
appointment had already been approved.
Chief Troxell said Thursday he knew that the Mr. Schwarz being
nominated for the post was the man arrested by Weston police but did
not speak up because he did not know if it was appropriate.
“We did know he was the individual, we just didn’t know the process,”
said Chief Troxell. “It was my fault.”
The circumstances surrounding Mr. Schwarz’s arrest have Weston police
officers unified in their opposition to Mr. Schwarz’s appointment.
According to the chief and the police union, Mr. Schwarz’s conduct and
the words he said to them when he was arrested for a domestic incident
last December make them question whether he can sit on the commission
objectively.
Officer Robert Klein, who arrested Mr. Schwarz, said Monday, “At the
time of his arrest, Mr. Schwarz was very argumentative and said to me,
‘I’ll have your f--ing badge.’”
Officers Chris Powers and Rob Curcio were also at the scene at the time
of the arrest, and recalled Mr. Schwarz using those exact words.
Officer Powers said Mr. Schwarz told them he was a lawyer and was
careful to note the spellings of their names. “He told us we were
making the situation worse by being there,” he said.
Mr. Schwarz has said he told DTC Search Committee members about the
domestic incident and also explained that the DCF (Department of
Children and Families) had found the allegations unsubstantiated and
they were withdrawn.
Mr. Schwarz has a court date of July 18 for the remaining charges and
he said he expects the case to be dismissed or nollied. A nolle means
the prosecutor has agreed to drop the case but has the right to reopen
and prosecute it at any time during the next 13 months.
Discussion
Mr. Bliss said he had asked Mr. Schwarz to attend the July 12
selectmen’s meeting, but that Mr. Schwarz said he had a conflict and
was unable to attend. Mr. Schwarz, per Freedom of Information rules,
has asked that any discussion about the “content” of his legal
situation be held in executive session.
But that did not stop the selectmen from voicing their concerns about
the process used in selecting potential candidates to fill vacancies on
boards or commissions.
Tradition has held that the political party representing an individual
vacating his seat must provide a replacement. The political party does
its own search, including interviews, narrowing the field until a
single candidate is presented to the selectmen for approval.
Mr. Bliss said over the years the selectmen’s vote has become somewhat
of a rubberstamp for the political party’s selection.
“This is troubling,” said Mr. Bliss. “If we are going to have
situations like this, where there is a deficiency of information, we
may have to have a whole new process for these appointments.”
Chief Troxell suggested performing background checks.
“If a background check or something like that was done, we would not be
here right now,” added the chief.
More contentious
The discussion turned more contentious when Mr. Major questioned the
DTC’s handling of the selection process. Mr. Miller said he felt that
was an inappropriate political attack.
“The (DTC) candidate selection committee had this information. They
withheld it from the selectmen, and it sounds like they withheld it
from the entire committee,” said Mr. Major.
“You are trying to put the DTC on trial here, and I strongly object to
this conversation,” responded Mr. Miller.
“The DTC brought this candidate to the table. They represented that
they had vetted the candidates. This is not a political issue. We were
deceived, and for you to defend that deception is shocking,” Mr. Major
said.
Mr. Miller, a DTC member, said he was not told about Mr. Schwarz’s
arrest before the Democrats approved backing his appointment. Mr. Bliss
added that fellow DTC member Rick Saltz, also a member of the Police
Commission, stated in a letter to the selectmen that he, also, did not
know about Mr. Schwarz’s arrest prior to his appointment.
“I don’t know how anyone can possibly justify not telling us this
information,” added Mr. Major.
Mr. Miller said he was uncomfortable making any final decision until
Mr. Schwarz’s case is heard next week. He did say he felt that Mr.
Schwarz should have informed the selectmen about the arrest during his
interview the night he was approved.
“In my opinion, when Ed Schwarz was at this table, he should have made
the statement, just as he did before the candidate search committee,”
said Mr. Miller.
Mr. Major added that, with Mr. Schwarz not informing the selectmen, it
became incumbent on the search committee chairman, Barbara Reynolds,
who was in attendance when the selectmen were asked to approve the
appointment, to provide the information.
Mr. Miller said, “This was a combination of a lot of people making poor
judgments,” adding that Chief Troxell or the officers in attendance
should have spoken up before the appointment was finally approved.
“We’re all at fault.”
“That’s ridiculous,” responded Mr.
Bliss. “The fault lies with the one
who failed to provide the information.”
Good Ethical
Decisions
DAY editorial
Published on 5/26/2007
The state Senate this past
week
unanimously approved two bills that provide a proper balance between
ethics and common sense. Both repair well-intentioned, but impractical,
rulings by the Office of State Ethics.
In one case the ethics regulators
decided that faculty doctors at the University of Connecticut, if they
prescribed to their patients medications developed in drug-company
sponsored drug trials in which they were involved, were at risk of
violating state ethics codes. The office reasoned that the doctors, as
state employees, should not personally benefit in any way from
public-private partnerships in which they took part.
The ruling placed at risk all work
done by university researchers involving corporate involvement.
The proposed new law would allow
such beneficial research to continue with enough oversight to prevent
abuses. The watchdog group Common Cause, which is always mindful of
potential conflicts involving state officials, agrees that the bill has
adequate safeguards to prevent exploitation.
Addressed in the second bill was an
ethics decision that state legislators would no longer have to disclose
outside employment. Though lawmakers have been including employment
information on disclosure forms for about 25 years, the newly created
Office of State Ethics said it found no such specific requirement in
the law.
It is important for constituents to
know how lawmakers make their money when not in session in Hartford.
Logical assessments can then be made whether legislators are acting in
their personal best interest, as it relates to their job, or in the
best interests of the voters.
The Senate recognized the
reasonableness of requiring employment disclosures and acted
accordingly in passing the bill that specifically mandates them. If the
measure is approved by the House of Representatives and signed into law
by Gov. M. Jodi Rell, as expected, legislators will have to file
amended disclosure forms by Aug. 1.
In both cases lawmakers acted in the
best interests of good government. Well done.
Our view:
Legislators must be held to highest ethical standards - Why
does it seem ethics is such a difficult issue for some lawmakers to
understand?
Norwich Bulletin editorial
April 3, 2007
The Office of State Ethics
recently handed down an opinion that says legislators cannot act in a
way that benefits their employers. It is a reversal of a 2005 opinion
that suggested legislators could act to benefit their employers, if
they had no personal financial gain.
The issue was sparked by House
Speaker James Amann, D-Milford, who has been criticized for soliciting
donations for the Greater Connecticut Multiple Sclerosis Society from
lobbyists. Amann is a paid fund-raiser for the society.
Democrats are saying this could
change the way the part-time legislature does business, as most do have
outside employment. Frankly, that seems ridiculous.
Most professionals, such as doctors,
lawyers, accountants and journalists, have far more stringent ethics
codes. Legislators are elected and handed the public trust to make
decisions for the right reason, not their personal pocketbooks.
Benefits
to the job
Let's look at Amann's
situation closer. While the donations did not go directly to his
pocket, are we to actually believe he did not benefit from bringing the
money in? Wouldn't the society compensate him properly and keep him on
the job for the work he did?
Beyond his personal gain, there
could also be the perception that in getting donations from the
lobbyist, Amann would now be beholden to them. As house speaker, Amann
has the power to decide which issues the full house votes on, or never
sees. That kind of power requires nothing less than behavior beyond
reproach.
Unfortunately, it seems that many
legislators prefer to bemoan a higher ethical standard and talk about
how it will impinge on their abilities to legislate. We would prefer
they embrace a higher standard of behavior and truly earn the public
trust they have been granted.
Doesn't pass the smell test...as in "smell a rat"...in Legislative language, of
course!
Two Ways To Look At Norwich Billboards; Is new city contract political
patronage, or just the best business deal?
DAY
By Ted Mann
Published on 4/2/2007
When John W. Fonfara's fledgling business
won a municipal contract to rebuild and manage four billboards in the
city of Norwich this month, a few sets of ears at the state Capitol
stood straight up.
Fonfara is a state senator from
Hartford, and, as co-chairman of the Energy and Technology Committee, a
powerful member of the legislature's even more powerful Democratic
majority. The Norwich
alderwoman who initially offered the resolution to grant the billboard
contract to Fonfara's company is Jackie Caron, a longtime employee of
the state Senate Democrats.
And the lobbyist for Fonfara's
company, Face Value LLC, who introduced the senator around City Hall,
is Jude Malone, an employee of the ubiquitous Hartford firm Sullivan
& LeShane, a former political adviser to Norwich's Democratic
mayor, and the ex-wife of one of the city's two Democratic
representatives. So to
some critics at the state Capitol — namely Republicans — the case of
Fonfara, his business, and the Norwich billboards sounded like yet
another case of conflicted interests, of Connecticut's governing class
helping itself to the most desirable morsels in the public trough.
But to Fonfara and his defenders,
the story is more simple, and lot less controversial: A part-time
legislator, out on his own and trying to build his start-up business,
saw an undervalued asset in the city and pounced.
It was Fonfara the businessman, they
said, not Fonfara the public official, who offered the city a better
deal.
Norwich city officials say the city
council chose the best deal it could get for the management of the
billboards. Everyone involved, from Fonfara to City Manager Robert
Zarnetske to representatives from NextMedia, the company that manages
and owns them now, seems to accept that they are worth much more than
the city had been paid over the years: less than $500 a month for years.
Fonfara, who says the motive of his
business is to reap profits by helping billboard owners realize the
untapped worth of their property, says he dropped in on the city after
spying the signs from Route 2, and inquired about the amount the city —
through its Parking Commission — was being paid for the right to erect
and maintain the signs.
His proposal to the city, which
Zarnetske and others say was both lucrative and similar to the bid made
by NextMedia, is a 20-year lease agreement at payments equal to $29,500
per year or 35 percent of the net advertising revenue reaped from the
four signs, whichever is greater. Fonfara also offered a $100,000
signing bonus, and, in what the senator says is perhaps the greatest
benefit of his proposal, the city will own the billboard stanchions
outright when the 20-year lease period is complete. Construction of
those stanchions, Fonfara said in an interview, will likely cost him
$120,000. NextMedia proposed a 15-year lease but the city would not own
the stanchions at the end of the lease.
“They have benefited themselves far
beyond the money today,” Fonfara said about the city. “They have now
obtained an asset that they will now be able to use for years to come.”
In a wide-ranging conversation, he
defended himself against the accusation by NextMedia's general manager,
Charlie Ghione, that Fonfara's firm only won the Norwich competition
because the senator is “politically connected.”
“I have a private company, and I do
my work,” Fonfara said, adding that he is “careful” to avoid
negotiations where he might be accused of using his status as a public
official to assist his own business interests.
Of the Norwich proposal, he said, “I
bid more money than anyone else, cumulatively and any other way.”
Malone, citing her firm's policy of
not talking about its clients, declined to comment. But the political climate in Hartford and
the state at large is as hostile as it has been in years to conflicts
of interest for elected officials. Years of corruption and ethics
scandals have tarred legislators and appointees of both political
parties with charges that they have used the power of government to
steer contracts to friends and benefactors, pressured subordinates into
showering them with gifts, and otherwise taken advantage of their
offices.
Even as those knowledgeable about
the Norwich deal were being interviewed over the last two weeks, the
speaker of the state House of Representatives, Rep. James A. Amann,
D-Milford, was vigorously defending himself against renewed complaints
that he was inappropriately using his powerful legislative position to
bolster his day job as a contracted fund-raiser for the Connecticut
Chapter of the Multiple Sclerosis Society.
Some at the Capitol, seeing
headlines about Fonfara's successful takeover of the Norwich
billboards, and Caron's involvement, soon began muttering along similar
lines.
“This doesn't even pass the smirk
test,” said Chris Healy, the chairman of the Connecticut Republican
Party and a veteran political operative.
Healy said he thought Fonfara was
getting a free ride from legislators and journalists because of his
party affiliation.
“If you put an 'R' by all these
people, there'd be a hue and cry that they'd be screaming from the
rooftops,” Healy said.
And the company that Fonfara
defeated was eager to join in that discussion.
“I wasn't born at night,” said
Ghione, who has known Fonfara for years, and who suggested soon after
NextMedia lost its right to lease the billboard properties in Norwich
that something was amiss.
Ghione noted that Fonfara had only
been in business on his own since 2005 — he previously worked for
AllVision, another outdoor advertising firm with which NextMedia has
been involved in a legal fight — and questioned whether the senator's
firm had the wherewithal to construct the stanchions it has promised
the city, or to market the advertising space that it will create.
“I don't think you need to be a
brain surgeon to see what happened, but we tried as hard as we could to
be as straightforward and honest with city officials of Norwich.”
But those officials deny any
political motive inspired them. Instead, said Caron, the city rewarded
the newcomer for helping the city realize the value of its
underappreciated asset.
“The reason I liked it (the
proposal) was because they were the ones who brought to the attention
of the parking commission” that the city was not receiving all it
could, said Caron, who initially proposed the resolution awarding
Fonfara's company the bid, but eventually recused herself. “It didn't
even come into play that we worked in the same place, because I have no
interaction with him whatsoever.”
“I didn't put that forward because
of any political ties,” Caron said. “I truly feel that Face Value was
giving the city of Norwich the best buy.”
Caron's other potential conflict
also didn't come to mind, she said: The nonprofit group she founded and
runs along with her husband, the Connecticut Pardon Team Inc., is
currently seeking funding from the state to help finance its
operations. Helping a state senator win private business even as she
seeks funding from a budget he will be voting on could appear
questionable, Caron acknowledged, adding that she withdrew from the
billboard vote “more so for his sake than mine.”
As the legislature continues to
debate ethics measures, similar dilemmas are continually presenting
themselves, government reform advocates say, in which part-time
legislators who must work to support themselves wind up confronting at
least the appearance of conflicts of interest.
“What you're seeing happen there
you're seeing happen in almost every town in Connecticut,” said Andy
Sauer, the executive director of Common Cause Connecticut. “Does it
raise the specter of something improper happening? Of course it does.”
“There's law, and then there's
perception, and the perception is uncontrollable,” Sauer said, sitting
outside a hearing where a legislative committee had just approved a
proposal for a model code of municipal ethics. “The questions of
impropriety are almost as bad as actual instances of conflict. It still
harms the public trust in government.”
But at least at the municipal level
in Norwich, there appears to be no concern that Fonfara or his firm got
anything they did not deserve.
“I think that the decision made is
substantiated by the evidence in the proposal records,” said Zarnetske.
“It's a perfectly reasonable conclusion.”
A Reputation Stained;
Review Council Punishes Former Chief Justice For Delaying Opinion, A
First In Judicial History
By LYNNE TUOHY, Courant Staff Writer
November 18, 2006
For
former Chief Justice William J. Sullivan, the harshest sanction Friday
wasn't a 15-day suspension for holding up the release of a
controversial ruling to help a colleague succeed him as chief
justice.
It was the notoriety of being the first judge in the nation ever to be
disciplined for holding up release of an opinion. It was
the ugly
blot on an otherwise unblemished judicial career of 28 years that
threatens to overshadow many remarkable accomplishments.
As he faced the 12-member Judicial Review Council just after 6 p.m.
Friday to learn his fate, Sullivan appeared deflated, in contrast to
the normally robust former chief justice. There would be five verdicts
- one for each of the charges the council lodged against him in July.
He won the first round. The council voted 10-2 that he had not
prejudiced the impartial administration of justice and brought
disrepute to his judicial office. There was no smile, no evidence of
relief.
The council voted 8-4 that Sullivan failed to observe high standards of
conduct and preserve the integrity and independence of the judiciary.
It voted 11-1 on what many had called the slam-dunk count: that he
allowed his social or other relationships to influence his judicial
conduct. The council unanimously rejected charges that Sullivan failed
to promptly dispose of the business of the court and that he failed to
discharge his administrative responsibilities.
Superior Court Judge Christine E. Keller was the only council member
who voted across the board not to convict Sullivan. She cited the lack
of precedent and any rules at the court itself about withholding
release of a ruling. She noted that the ethics experts who testified
before the council - renowned expert Geoffrey C. Hazard and Rutgers
University School of Law Professor Robert Leubsdorf - disagreed on
whether Sullivan's conduct warranted disciplinary action.
"There was no precedent. There was no rule. There wasn't even a memo
about what could be done or not," Keller said at one point. "I've
placed strong emphasis on the career of this man - 41 years of public
service, 28 years on the judiciary. That should be given extreme
consideration."
Sullivan, 67, a man of immense pride and intense loyalty, faced up to a
year's suspension for violating two canons of judicial ethics. He had
assembled an impressive list of character witnesses, capped Friday by
Louis Pepe, the former president of the Connecticut Bar Association.
"Chief Justice Sullivan's character and integrity is of the absolutely
highest order, beyond reproach," Pepe testified. He recounted one of
Sullivan's accomplishments as chief justice, transforming the
swearing-in ceremony for new lawyers from a five-minute cattle call in
a crowded courtroom to a dignified, two-hour ceremony held at either
the Supreme Court or at the Bushnell Center for the Performing Arts.
The council's deliberations behind closed doors included discussion of
the appropriate sanction. Sullivan politely declined to speak to the
council before its members retired to discuss his fate. "Everything I
had to say has been said," he replied.
And it had. Some rolled their eyes at his testimony on the opening day
of the hearings Sept. 6, seeing it as more of a biographical soliloquy
than relevant to the alleged misconduct. But it clearly worked to his
benefit when it was time to levy sanctions. The council had before it a
whole man, one in obvious anguish over the taint he brought on himself
and the judiciary.
He hails from a blue-collar family, worked hard labor to pay his way
through college and fought in Vietnam. He is personable, self-effacing
and plain-spoken. His history of heart problems - one that forced a
month's delay in the hearings - is staggering.
Sullivan did not deny that he held up publication of a controversial
ruling on public access to court documents, nor that he did it to save
Associate Justice Peter T. Zarella from having to answer for the ruling
during his confirmation hearings to be chief justice.
Sullivan put a hold on the case March 14, the same week he told Gov. M.
Jodi Rell he was going to resign as chief justice and take senior
justice status. He knew from a conversation with her four months
earlier that if he retired, she planned to nominate Zarella -
Sullivan's protege and the only Republican on the high court - to
succeed him.
"I had an unblemished record," Sullivan testified last month. "If I
thought I was doing anything wrong I wouldn't have done it."
Sullivan also said he would have done it for any member of the court
facing confirmation proceedings. Sullivan wrote the 4-3 opinion;
Zarella sided with him in the majority. Sullivan's defense was
multifaceted. His lawyers claimed the council had no jurisdiction to
review acts of judicial discretion and that a chief justice or the
author of a Supreme Court ruling has unfettered authority to hold up
release of a decision for any reason.
"There is no evidence that a judge has ever been disciplined for
putting a hold on a case," Sullivan's attorney Edward Maum Sheehy
argued.
Sheehy, after advising the council to consider the motives behind the
actions of other members of the court, questioned why Justice Richard
Palmer, who learned of the hold on April 8, did not confront Sullivan
until eight days later, April 17.
Sullivan's expert witness, Leubsdorf, testified that Sullivan's actions
- "whether or not they were ideal, they did not rise to a level
requiring disciplinary action."
Before going into executive session, the council heard testimony by
three notable witnesses - Hazard, Pepe, and videotaped deposition by
Frank Williams, the chief justice of the Rhode Island Supreme
Court.
Hazard quoted the provision of the Code of Judicial Conduct that bars a
judge from "allowing his social or other relationships to influence his
judicial conduct."
Hazard then noted, "It seems to me it's pretty straightforward. I don't
understand that there is any dispute Justice Sullivan ... exercised his
administrative discretion with the view to benefiting the chances of a
colleague being considered for chief justice of the state."
Asked about Leubsdorf's opinion that Sullivan's conduct did not warrant
disciplinary action, Hazard replied, "Perhaps in days past we would
have said this is okay between colleagues, but it is not consistent
with the rules." Hazard noted, "The whole thing is tragic."
Williams was adamant that a chief justice has the authority to delay
release of a ruling even when the motive is to aid a colleague during
confirmation proceedings.
"I don't know that there can be any detriment to the legislature when a
chief holds a decision to maintain a level playing field so that the
legislature does not home in unnecessarily on one case," Williams
asserted. He said a chief justice has "absolute discretion."
Sullivan, asked afterward if he wanted to comment on the council's
action, winced and said softly, "No." Sheehy attempted to convey
Sullivan's feelings.
"I think it hits him pretty hard," Sheehy said. "As you all know, he's
a man of integrity. We don't feel there was clear and convincing
evidence on any of the charges."
Sullivan could appeal his disposition to the state Supreme Court, the
justices of which would be obligated to disqualify themselves from
hearing his appeal. Judges from the Appellate Court would sit in their
place, creating a court closely resembling the one that heard the
appeal earlier this month on whether the judiciary committee
co-chairmen could subpoena Sullivan to testify before their
investigation. No ruling has been issued in that appeal.
Sen. Andrew McDonald, the co-chairman of the judiciary committee, said
there is little historic framework out of the Judicial Review Council
against which to measure the severity of Sullivan's sanction. Only
three judges since 1989 have received suspensions - one for five days,
one for 15 and one for 30.
"By the precedents of the JRC, this is not an extraordinary penalty,"
McDonald said. "This was a clear manipulation of a branch's
governmental operations for a brazen political purpose, to undermine a
constitutional [confirmation] process."
But McDonald acknowledged the intangible penalty Sullivan has paid.
"In many ways, this is the denouement of Justice Sullivan's career," he
said. "He's paid a personal price, as well as a legal price now."
An Imprudent Judge
Hartford
Courant edirotial
August 25, 2006
Whatever made Judge Anna Taylor Diggs of the U.S. District Court in
eastern Michigan think she didn't have to disclose her ties to
plaintiffs in a case before her court?
She's the jurist who ruled last week that President Bush's warrantless
surveillance program is unconstitutional.
Set aside the merits of her arguments, which have come under fire
from all sides. Stick to the cold fact that Judge Diggs is a trustee
and an officer of the Community Foundation for Southeastern Michigan.
The foundation has contributed more than $125,000 to the Michigan ACLU.
It and its national parent were among the parties in Judge Diggs' court
challenging the administration's eavesdropping practices.
As trustee and secretary of the foundation, Judge Diggs is supposed to
participate in making all financing decisions of the organization. At
least that's the role of the trustees, according to the foundation's
website.
Federal judges are required by law to disqualify themselves from a case
in which their impartiality might be "reasonably questioned." There
certainly is reason to question Judge Diggs' partiality, given her ties
to two parties in the case.
The judge's conduct cries for judicial review. At the very least a
complaint should be filed with Michigan's judicial disciplinary body.
Whether she broke the law would be for courts to decide, but she
certainly compromised her impartiality.
Judge Diggs obviously believed that she need not have recused herself.
Maybe so, but she should at least have disclosed her connection to two
of the plaintiffs.
That would have been prudent.
Ethics dispute gets top billing; panel
probing deal on Stratford theater
RICHARD WEIZEL rweizel@ctpost.com
Article Last Updated: 12/23/2006 07:16:20 AM EST
STRATFORD — Tragedy or comedy?
That's what Town Council leaders were trying to figure out Friday after
learning they will be investigated for allegedly violating the town's
ethics code in selecting a New York developer to revitalize the
long-dormant Shakespeare theater.
The Ethics Commission will investigate complaints by supporters of
local director/promoter Louis Burke that council leaders had "conflicts
of interest" and used "undue influence" in selecting Koerner Kronenfeld
Partners LLC over Burke's Stratford Theater Group to reopen the theater.
If the complaints are found to have merit, the commission will schedule
hearings on the allegations.
Council Chairman James Feehan, R-9; Majority Leader Michael Henrick,
R-10; and Councilman Angelo Stavola, D-4, are named in at least one of
the complaints, while Henrick and Feehan are named in several others.
Town Clerk Patricia Ulatowski confirmed her office has received seven
ethics complaints through Friday, though she is not permitted to reveal
the contents or the names of the complainants. But a half-dozen Burke
supporters said they have filed ethics complaints.
"All anybody has to do is read what we are presenting and it's clear
this whole process was handled illegally," said actor Lee Bergman, who
filed one of the complaints.
The decision to launch a probe comes as Mayor James R. Miron said
Friday he plans to sign a contract with KKP over the weekend,
completing an agreement that could reopen the theater as early as
spring 2008. The theater has been closed since 1989.
"This would be very humorous if it weren't so ludicrous," Henrick said
of the ethics complaints. "These people just cannot accept that we have
selected another developer and they are just proving my point about how
fanatical they are."
Stavola, who has headed the council's efforts to reopen the theater,
said it is "very unfortunate that these misguided individuals are
trying to disrupt the process."
Feehan added, "I can't wait to show how completely unfounded these
allegations are."
All three councilmen said if the Ethics Commission takes the probe to a
hearing, they would demand it be open to the public. Burke's
failed attempt to reopen the theater during the 1990s has drawn
considerable criticism from Town Council members, but Burke has
insisted he was within months of opening the crumbling showcase when
the state invoked a "reverter clause" to reclaim the Elm Street
property.
The Ethics Commission has notified the complainants and those accused
of violating the ethics code that it will consider whether there is
"probable cause" for a final hearing.
"The Ethics Commission has determined that sufficient cause exists in
the complaint filed by you," commission Chairwoman Susan Birge stated
in a letter to one of the complainants, Meredith Gatschet. "The
commission will proceed with an investigation of this matter."
Henrick, Feehan and Stavola, all named in a complaint by resident
Daniel Chase, have been notified by the commission of its decision to
weigh the allegations, made in closed session earlier this week.
"I am very pleased there will be an investigation because many of us
strongly believe there was conflict of interest, corruption and an even
illegal process used in selecting KKP during the Nov. 13, 2006, council
meeting," Gatschet said.
In her complaint, she states, "Feehan's regular inflammatory statements
against Mr. Burke, within the debate on the theater issue, compromised
his impartiality as a member of the council, especially since, as
chairman, he wields influence over other members, including the
council's newest members."
She also blasts Henrick for comparing Burke to the late cult leader Jim
Jones during the same Nov. 13 council meeting.
"I do see a very close correlation to that," Henrick said, standing by
his comments. "I strongly suggest you take a look at who you are
following."
State Senator's
Spouse Tied To Tax Debt
Courant.com
Jon
Lender, Government Watch
May 24, 2009
State Sen. Toni Harp, D- New Haven, plays an important role as
co-chairwoman of the legislature's appropriations committee during
current efforts to balance a state budget that faces a two-year deficit
projected at $8.7 billion.
She issued a press release a few months back about how "vitally
important" it is to "bring the state's current-year budget back into
balance" and then to "address the serious matter of a state budget for
the next [two-year] biennium."
One way to balance the budget is to increase tax collections -- so
here's an irony: A company owned and headed by the senator's husband,
New Haven developer Wendell Harp, is listed by the Department of
Revenue Services as the state's third-largest business tax delinquent.
The company, New Haven-based Renaissance Management Co. of New Haven,
owes $706,634 in back sales-and-use taxes and interest, ranking it
third on DRS' official website listing of "The Top 100 Delinquent
Business Taxpayer Accounts."
Public corporate filings verified her husband's role in the company.
Also, his interest in Renaissance Management is listed on the senator's
annual filing to state ethics officials of the financial interests of
herself and her family.
However, when Toni Harp was asked Thursday how she feels about
Renaissance Management's tax debt, in light of her public role
concerning the budget, she said she hadn't known anything about it.
"I'm as shocked as anyone else would be," she said.
"I have nothing to do with his business. I didn't know anything about
it at all. I don't get involved in his business," she said, adding that
she was not aware of the DRS' public Top 100 tax delinquency list. "He
never discusses his business with me. He has several companies. I
really don't know [the details]." She said "that's the way it's been"
while "I've been married to him for 30 years."
Asked if she planned to talk to her husband about the tax issue, Sen.
Harp said, "Well, of course I'll mention it," but "I don't know whether
or not he'll discuss it with me, because he typically handles it
himself."
Wendell Harp has been a prominent, politically connected and sometimes
controversial developer for years in New Haven. Questions about back
taxes have come up continually, and records show a long history of
government liens being placed on his properties and then removed.
A lawyer for Renaissance Management, Robert J. Percy, said Friday that
the tax debt dates back to a dispute about whether the company was
exempt from certain sales taxes on gross receipts examined during an
audit covering 1993 to 1996. The company had been paying sales tax on
its management fees for eight federally subsidized, low-income housing
projects in and around New Haven in which Harp is a partner -- but the
DRS took the position that payments for accounting and other services
also should have been taxed.
Renaissance challenged that in the state Superior Court and later
before the state Supreme Court, but lost. By 2003, when the high court
ruled, the interest on about $418,000 in sales tax had snowballed. "The
properties did not have the ability to pay the sales tax debt, as they
were just keeping afloat, and the mortgages are at 12.5 percent
interest," Percy said.
Now, monthly interest payments of $4,180 are being made to DRS while
arrangements are being made to refinance the housing properties through
the quasi-public Connecticut Public Housing Authority, "which I
understand will lower the interest rates significantly and generate
funds to deal with the taxes owed," Percy said. He did not say when he
expected the $706,634 debt, including interest, to be settled.
Jon Lender is a reporter on The Courant's investigative desk, with a
focus on government and politics. Contact him at jlender@courant .com,
860-241-6524, or c/o The Hartford Courant, 285 Broad St., Hartford, CT
06115.
Copyright © 2009, The Hartford Courant

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Hartford's Perez
should resign
DAY editorial
Published on 1/29/2009
Eddie A. Perez should resign as
mayor of Hartford.
It will be left to the justice
system to determine whether Mayor Perez's decision to accept free work
from a contractor doing major business with the city was criminal. At
the very least, it showed extremely poor judgment. It is both depressing and disheartening
to find the energetic mayor in this position. On Tuesday state police
charged Mayor Perez with bribery, falsifying evidence and conspiring to
falsify evidence.
The charges stem from renovation
work done to his home by contractor Carlos Costa beginning in 2005. The
mayor should not have engaged a city contractor for work on his home.
There are plenty of contractors in the state not doing business with
Hartford.
Mr. Costa worked without pay,
something the mayor calls an oversight. Mr. Costa told investigators he
considered doing free work for the mayor “the cost of me doing business
with the city.”
And in 2005 the mayor intervened to
keep Mr. Costa working on the multimillion-dollar Park Street
streetscape project, overruling city administrators who wanted to fire
the contractor. In
2006, beginning to feel the heat, the mayor asked Mr. Costa for a bill,
and paid about $20,000 for the home renovations. Mr. Costa estimates
the true cost at $40,000.
The mayor's actions were foolish and
shameful. It is time for him to step aside.
Sen. Gaffey’s
Expenses: State GOP Chairman Calls For Gaffey Investigation
The
Hartford Courant
By JON LENDER
January 17, 2009
Revelations about state Sen. Thomas
Gaffey's double-billing for thousands of dollars' worth of travel and
hotel accommodations prompted state Republican Party Chairman Chris
Healy to call Friday for a bipartisan legislative investigation.
"The Hartford Courant reported
Friday that Sen. Gaffey sought and received reimbursement twice for
travel to legislative conferences," Healy said. He noted that Gaffey
repeatedly collected trip expenses from both the state Office of
Legislative Management and from his own political action committee,
called the Government Action Fund.
Gaffey, D- Meriden, acknowledged the
double-billing in an interview Thursday, saying it was unintentional
and that he has repaid his PAC for funds that he also received in state
reimbursements. All told, he estimated he has repaid the PAC $2,500 to
$3,000.
"By his own admission, Sen. Gaffey
has broken the public trust," Healy said. "Sen. Gaffey's casual
disregard for the rules and his flagrant misuse of state funds and
campaign contributions more than qualifies for further investigation
and punishment."
The matter has been under
investigation for months by the State Elections Enforcement Commission,
but that panel has not indicated how it plans to deal with the matter.
Gaffey's lawyer told The Courant Friday he thinks the case is headed
for a negotiated settlement, perhaps involving a fine or forfeiture of
the $15,000 to $20,000 the PAC now has on hand. Gaffey said he has
heard nothing about the possibility of the commission referring the
case for a criminal investigation.
However, Healy said that the
Democrats who control the Senate should vote to convene an
investigative "committee of inquiry" — as they did in 2007 after
then-state Senate Minority Leader Louis DeLuca, R-Woodbury, pleaded
guilty to a misdemeanor charge of conspiring to threaten the husband of
his granddaughter. That six-member, bipartisan committee conducted an
inquiry before DeLuca finally resigned in November 2007.
Healy said Gaffey "has a history of
noncompliance" with state election laws and "has also run afoul of
reimbursement protocols with his employer," the Connecticut Resources
Recovery Authority. "It seems that the only time Sen. Gaffey is
embarrassed is when he is caught," said Healy. Healy wondered if
Democrats "will apply the same standard to him" they did to DeLuca.
Senate Democrats brushed off Healy's
comments. "The State Elections Enforcement Commission is investigating
and we should respect that process," said Derek Slap, spokesman for
state Senate President Pro Tempore Donald Williams, D-Brooklyn. "It
appears that the mistakes were unintentional but it is up to the SEEC
to look at the facts and make its determination."
Auditor sees ethics issues in UConn polling
center case
By Don Michak, Journal Inquirer
11/28/2006
The state auditors say they expect to soon forward to Attorney General
Richard Blumenthal their review of an internal University of
Connecticut probe involving the former directors of the school's
polling center. The move would mark the latest development in the
auditors'
investigation of a "whistleblower" complaint concerning the polling
operation, according to auditor Robert G. Jaekle, who last week cited
the confidentiality of such probes in declining to provide further
details.
Jaekle, however, said some matters that were not investigated by
UConn's Office of Audit, Compliance, and Ethics - whose report
concluded that nearly $100,000 was improperly deposited with the
school's private fundraising entity when the polling center was run by
its former director and associate director, Kenneth Dautrich and
Christopher Barnes - were expected be dealt with by the State Office of
Ethics.
"The UConn internal report touched on some conflict-of-interest issues
that are appropriately within the purview of the Ethics Commission," he
said. "There are still some issues about some contracts let by UConn to
SmartRevenue.com."
The latter is a market research firm that in 2002 provided work for
clients of the UConn polling operation, according to the university's
auditors.
They said Dautrich and Barnes had described the firm as a "startup dot
com company that developed Internet technologies," and that the two men
"were consulted on how to apply this technology to market research."
Dautrich and Barnes in 2000 provided "information on current practices"
in the industry, "guidance on the types of commercial industries and
companies within those industries that might use and adapt this new
technology," and "lists of potential commercial clients that
SmartRevenue might target for business development."
The report by UConn's Office of Audit, Compliance, and Ethics stated
that while their consulting agreement was officially terminated in
2001, Dautrich and Barnes retained a 0.2 percent ownership of
SmartRevenue's capital stock.
The school's auditors concluded that "it appears that the consulting
work provided" by Dautrich and Barnes "was not work which related to
the mission" of the UConn polling center and that "it appears the work
was a legitimate use of their expertise."
"The evidence provided indicates that they did not receive any direct
financial gain as a result of directing work to SmartRevenue in 2002,"
the auditors wrote, noting that in prior advisory opinions the state
ethics office had ruled "that you may not use your position to direct
work to a business with which you are associated."
"Based on the information provided, it appears that SmartRevenue is not
a business with which they are associated (as defined in the code of
ethics); it follows that they are not prohibited from referring any
work to that organization."
The school auditors probed SmartRevenue's dealings with Dautrich and
Barnes after the current director of the polling operation, Samuel
Best, forwarded his own reviews of the vendor and his predecessors'
"business interests."
They said Best was concerned that Dautrich "may have intercepted calls
received at" UConn's polling operation, called the Center for Survey
Research and Analysis, "and steered potential CSRA work to his private
consulting firm."
Best's reviews also cited two other companies, Validata Research, a
firm that analyzes market research and focus group results which the
school's auditors described as partly owned by Dautrich, and New
England Survey Associates, with which they said Dautrich also is
"associated."
The school auditors reported that Dautrich had said his consulting
through Validata was exclusively for two clients, Foxwoods Resort
Casino and JPMorgan/Chase.
They said Best had documented that CRSA had done polling regarding the
casino and that he was "concerned that the polling questions could have
been skewed by professor Dautrich in order to create a need for his
consulting work thereby giving rise to a conflict of interest."
They added, however, that Dautrich and Barnes said Dautrich did not
participate in the CSRA's polling on the issue of casinos.
The school's auditors concluded that the state ethics office would have
to determine whether it was appropriate for Dautrich to accept private
employment from Foxwoods while he was still associated with CSRA.
Similarly, they said the ethics office also would "need to determine"
whether Dautrich's consulting for New England Survey Associates - work
on surveys for the First Amendment Center of the Freedom Forum - is a
conflict of interest.
The school auditors also noted that the state ethics office had yet to
issue any form opinion "regarding whether it is appropriate for a state
employee to otherwise compete through one's private enterprise with
university projects, when such projects are not conducted in one's own
department."
They concluded that the state ethics office "should rule on whether or
not it is a conflict of interest for a state employee to discuss his
department's ability to provide the work with a potential client if the
department is likely to be a bidder for the business."
Ethics Law May Force Schools To Refuse
Donated Equipment, Gifts
Hartford Courant
Associated Press
4:55 PM EDT, June 29, 2006
HARTFORD,
Conn. -- An ethics law intended to clean up Connecticut's contracting
process could force state educators to refuse equipment, scholarship
money and other corporate donations intended to benefit students.
State officials worry the new rules could end a practice that they say
curbs costs and tuition rates while giving students hands-on experience
on donated machinery and computers.
In a recent opinion, the state Office of Ethics said the 2005 law bans
all gifts to state agencies from certain types of donors, including
companies that spend more than $2,000 a year on lobbying. But
many of those businesses also make large yearly donations to the
state's colleges, universities and vocational-technical high schools,
providing everything from science lab equipment to secondhand cars for
auto-repair classes. Connecticut's departments of education and
higher education are examining whether accepting the equipment,
scholarship money and other items violates the law.
Laura Anastasio, a staff attorney for the Department of Education, said
her agency will review offers on a case-by-case basis, but that certain
donations will be refused from now on.
"The ethics opinion says the statute is very clear that they definitely
don't want gifts given," she said. "That would indicate to me that even
if it's for the benefit of the students, it doesn't matter."
Brian O'Dowd, assistant general counsel at the state Office of Ethics,
said the law makes no exceptions for education-related gifts, so they
are banned along with all others.
"It was a very broadly written provision that basically says, no more
gifts to the state from regulated donors," he said. "Reading the plain
language, the (ethics) board didn't think it could be read any other
way."
The law does not apply to local schools run by municipal boards of
education.
The legislature approved the new rules in an attempt to curb
contracting abuses. They prohibit state workers and agencies from
accepting gifts, trips and other benefits from lobbyists, contractors,
aspiring contractors and companies that pay for lobbying. State
Rep. Christopher Caruso, D-Bridgeport, co-chairman of the legislature's
Government Administration and Elections Committee, said he is willing
to review whether the law should be revised to allow scholarship
donations.
But the state should not offer courses with the expectation that key
supplies, such as used cars for auto-repair classes, will come from
outside sources, he said.
Regardless of the intent of their gifts, those companies still seek
contracts with the state, he said, adding that being viewed as a
generous benefactor could give them an unfair advantage over companies
that do not have the money to make such donations.
"If you start carving out exemptions to the law, then what you're
saying is that it's OK in certain situations to have conflicts, and in
others it is not," Caruso said. "Then you intentionally or otherwise
allow corruption to breed."
State education officials said this week that several large Connecticut
companies that contract with the state and hire lobbyists also have
unrelated philanthropic programs that donate to the state-run technical
schools, colleges and universities. Valerie Lewis, the state's
higher education commissioner, said she is still trying to interpret
how the state's colleges and universities will be affected.
"It potentially has a very large effect," she said. "It is not a small
question as to how we handle those gifts and contributions, weighed
against the clear intent of doing that ethically."
Politician's Job
Raises Ethical Concerns; Ex-Official Now Paid By Bidder He
Helped Pick
By RACHEL GOTTLIEB, Courant Staff Writer
May 8, 2006
A
prominent Hartford politician who was in a key position when a Kansas
firm secured a multimillion-dollar contract to oversee the rebuilding
of city schools is now working for the company as a $3,000-a-month
consultant with the job of soothing relations with the community.
The relationship between
Louis Watkins, a former councilman and chairman of the city's school
building committee, and Diggs Construction may violate city ethics
regulations governing conflicts of interest, according to city
officials.
"I
think it raises questions with respect to the ethics issue," said Carl
Nasto, the city's deputy corporation counsel. Those
regulations include a permanent ban on former officers or officials
representing companies in their dealing with the city if the official
"exercised contract management authority" over the contract in
question. That authority is defined in the code as "involvement in or
direct supervisory responsibility for the formulation or execution of a
city contract."
First as chairman, then as a member,
of the city's school building committee, Watkins was a key player when
Diggs was selected as the lead choice to oversee the school
construction projects in the city. The expansion and renovation of
Hartford schools is a 10-year project with a price tag of more than $1
billion. City lawyers
began looking into the question of a conflict of interest at the
request of Hartford Mayor Eddie A. Perez after The Courant filed a
freedom-of-information request for Watkins' contract with Diggs.
Nasto sent a copy of the code to
officials at Diggs - who initially fought public release of the
contract - along with a letter directing the company to comply with it.
Watkins' contract states that, in addition to creating "a positive
relationship with city and state leaders, community based organizations
and minority contractors," Watkins is to advise Diggs on where to make
charitable contributions for community projects.
It remained unclear whether the
permanent ban provision included in the ethics code, which specifically
addresses those who represent "for compensation any persons in their
business with the City," applies to the work Watkins is doing for
Diggs. But there is no
formal investigation underway into that question because no one has
filed a complaint with the city's ethics commission.
"We put Diggs on notice of what the
rules are. They have to comply with the rules," Perez said. "We're not
going to tolerate any violation of the rules. ... We have a contract.
The contract requires Diggs to follow the rules."
Perez did not say whether he
believes Watkins' employment for Diggs violates city ethics rules.
"Corporation counsel gives me advice. As mayor and board chairman, I
will make sure that whatever corporation counsel's advice is, I follow
it."
Officials at Diggs said it is not up
to them to enforce the city's rules. James Keaney, program director for
Diggs, said Diggs is a private firm not bound by the city's code of
ethics. Moreover, he asserted that Watkins' job does not fall within
the bounds of the firm's contract with the city.
"If Lou Watkins feels he is in
violation of some ethics code, that would be his issue, not necessarily
my issue," Keaney said. "I think Lou's doing a fantastic job for us.
I'm not considering letting him go."
Watkins said he didn't realize that
the city's code of ethics may apply to his work for Diggs. "I never
knew that piece was in there," Watkins said. "I think that's ludicrous.
I think it's crazy that it's forever."
But he nonetheless said he would
defer to the city ethics commission if his contract is referred there
for review. "If I'm in violation, then I will resign," Watkins said. "I
always abide by whatever the law says."
Diggs hired Watkins this year to
help soothe relations with the community and help deal with complaints
from minority contractors and construction workers in the city.
For more than a year, minority
contractors have complained that payment for their work was sometimes
months late, or they weren't being paid at all. The contractors have
blamed Diggs for holding up payments they say they are owed, and have
accused the firm of holding on to their money.
"There are misunderstandings about
what power we have and what money we control. We didn't have anyone
close enough to the community and respected in the community to tell
the truth - a community liaison," Keaney said.
Watkins, a longtime player in the
city's Blue Hills neighborhood, said he approached Dale Diggs,
principal of the Kansas-based construction firm, and offered to help
him improve the company's image. Watkins signed a one-year contract for
$36,000 for his consulting firm, Jazmin Associates, LLC, starting Feb.
1.
A problem with the job, however, may
be the role Watkins played when Diggs was selected to oversee the
school construction project in Hartford. Watkins was chairman of the
committee when the panel narrowed the choice to Diggs, and was a member
of the panel when the contract was signed.
To move construction along more
quickly, the committee was looking for an outside company to focus
exclusively on the project. The new company was to help select and
supervise architects and construction managers, oversee budgets and
monitor compliance with the city's goals of hiring city residents,
women and minority contractors.
But the selection process became
politically charged as city officials wrangled with the building
committee - which had been created by the state legislature - over who
had the authority to choose which company to hire. State Attorney
General Richard Blumenthal stepped in to settle the matter, advising in
October 2001 that the power rested with the building committee.
In December 2001 the committee
settled on Diggs, but the wrangling around the selection process
continued. Three months later, Perez joined the building committee and
muscled Watkins - then city council minority leader - out of the
chairmanship.
Although the committee had settled
on Diggs, the final selection of the company hit a snag in March 2002.
Perez and then state Education Commissioner Theodore Sergi said the
city had not completed financial background checks on the company, with
both expressing discomfort about Diggs overseeing construction on its
own. Diggs had never built a school anywhere, nor had it ever worked in
Connecticut.
Two months later, in May 2002, after
months of behind-the-scenes negotiations, the building committee
unanimously voted to hire Diggs to oversee the first five schools and
the city was to pay Diggs more than $6 million in fees, with the
proviso that it sign contracts with more experienced partners. The
school building committee acted with few questions and no debate,
giving no hint of the city's bruising negotiations with Diggs and
persistent lobbying on Diggs' behalf by leaders in the city's African
American community, who complained the company was being held to too
high a standard.
The company's contract was recently
extended for three years, with fees of just more than $10 million,
though Watkins is no longer a member of the building committee.
Former state ethics
chief offered spot in Blumenthal's office
DAY
Apr 22, 12:13 PM EDT
HARTFORD,
Conn. (AP) -- Former state ethics chief Alan Plofsky is scheduled to
meet Monday with state Attorney General Richard Blumenthal about a new
job in that office.
A state appeals board ruled in March that Plofsky was improperly fired
in 2004 from his position as head of the State Ethics Commission, and
that he deserves to be reinstated to the spot and receive back
pay. However, Plofsky's old job no longer exists, so he must be
offered a position that is the equivalent in pay and duties.
Gregg Adler, Plofsky's attorney, said Friday that Blumenthal has
offered Plofsky a position in the consumer protection department of the
attorney general's office. They will meet Monday to discuss a potential
starting date and other details. Plofsky was paid $120,000
annually in his old position, where he also had supervisory
responsibilities.
State Administrative Services Commissioner Linda Yelmini asked
Blumenthal earlier this month to accept Plofsky. The state Employees'
Review Board ordered her last month to find a new position for him.
Blumenthal said Friday that his office was willing to welcome Plofsky,
but that he "could in no way promise or represent that this position is
comparable" because it is "non-supervisory," a fact that he has told
Yelmini. Adler, Plofsky's attorney, told The Hartford Courant
that he still plans to file a federal lawsuit seeking compensation for
violations of Plofsky's rights during what he called a "public
crucifixion."
But Adler said that he first is focusing on "trying to get the state to
comply" with the review board's ruling.
Plofsky was fired in September 2004 after an investigation found he had
misused compensatory time by failing to obtain advance authorization
from the commission chairwoman. The review board said that such
authorization had not been required in the past.
The review board also found that Plofsky may have chosen his words
poorly when talking with an employee anxious about receiving a federal
subpoena regarding former Gov. John G. Rowland, but that he did not
order her to lie.
The ethics commission has since been dissolved and replaced with a new
Office of State Ethics and a Citizens Ethics Advisory Board.
Ethics Chief Wins
Reinstatement
By JON LENDER, The Hartford Courant
11:02 AM EST, March 31, 2006
In a thorough reversal of the former State Ethics Commission and a top
state personnel official, the state Employees' Review Board Friday
ruled that Alan S. Plofsky was fired as ethics director without
reasonable cause in 2004 and ordered him rehired with back pay and
benefits.
Where Plofsky will land on the state employment roster was not
immediately clear: His old job was abolished when the General Assembly
scrapped the ethics commission in the bitter turmoil that followed his
ouster. Friday's ruling entitles him to a job of comparable rank and
pay.
In one ironic note, the employees' review board ordered that Plofsky's
new position in state government be found for him by Linda Yelmini, now
the commissioner of the state Department of Administrative Services,
who as a top personnel administrator in 2004 advised the former ethics
panel on procedures leading to Plofsky's termination. Those procedures
were flawed, the review board noted in Friday's 27-page decision, as
the state Freedom of Information Commission ruled that the ethics panel
had held an illegal closed session that denied Plofsky his rights.
State officials who had defended the firing could not immediately be
reached to say if they would appeal the decision to the state Superior
Court. However, more litigation appears to be brewing, as Plofsky's
lawyer, Gregg Adler, said he expects to file a federal lawsuit over
violations of his constitutional rights during what he called a "public
crucifixion."
Friday's ruling would mean at least $180,000 in back pay for Plofsky,
who has been out of his $120,000-a-year job for 18 months. Pension and
other benefits also would be reinstated for the lost time.
"I am deeply gratified by the Employee Review Board's unanimous
decision exonerating me of wrongdoing and reinstating me to state
service," Plofsky said Friday. "At the same time, neither I nor my
lawyer are in the least surprised by the outcome. We have both been
confident throughout this long ordeal that any impartial tribunal would
totally reject the rationale given for my illegal firing.
"While I am understandably pleased by the board's decision, I remain
outraged over my gross mistreatment by the members of the former ethics
commission.
To address my outstanding grievances and vindicate my rights in this
matter, I have authorized my attorney to file a federal lawsuit seeking
compensatory and punitive damages for the violation of my
constitutional right to free speech and due process."
Adler added: "The former members of the State Ethics Commission
succumbed to political pressure by rushing to judgment in this matter
without fully or fairly considering the evidence, without ever
discussing any of the issues directly with Mr. Plofsky, without
informing him of the evidence being used against him, and without
regard to his constitutional right to due process of law."
He said the that "the devastating impact of the ethics commission's
public crucifixion of Mr Plofsky after more than than 24 years of
effective and dedicated service to the state of Connecticut cannot be
fully remedied by this order," requiring the intended federal lawsuit.
Plofsky's Sept. 10, 2004 firing came after a year of tumult and tension
at his agency, which played a prominent role in the investigation and
scandal that led to the resignation of former Gov. John G. Rowland.
Plofsky incurred the ire of his superiors on the old commission by
calling Rowland a liar during a public speech before Rowland gave up
his fight to survive as governor and quit July 1, 2004.
Plofsky narrowly averted a suspension, but further problems erupted
when three subordinate staff attorneys lodged sworn complaints of
misconduct against him in August of 2004. Those charges led to an
investigation by a former DAS deputy commissioner, Alan Mazzola, and
finally the proceedings that abruptly led to his termination that
September.
Bitter divisions remained at the old agency after Plofsky's departure
prompting state lawmakers in 2005 to scrap the old agency and replaced
it with the Office of State Ethics and a Citizens Ethics Advisory Board.
A provision in that legislation required the transfer of all seven of
the agency's remaining paid staff members to jobs elsewhere in state
government. It is under the provisions of that law, requiring spots to
be found for all of the old ethics agency's employees, that Yelmini
would have to find Plofsky a new job.
Ethics Chief: Shaky Start; Bycel, Facing Scrutiny,
Says `Time To Move On'
By JON LENDER, Courant Staff Writer
January 16, 2006
Last
month, Charlotte Koskoff quit her seat on the new Citizen's Ethics
Advisory Board because she believed the board was moving too hastily
toward hiring a new state ethics director.
On Sunday she said, "I am saddened that some of my fears seemed to have
been proven" - referring to a debacle last week in which newly
appointed ethics director Benjamin Bycel quickly had to rescind his
controversial hiring of a gubernatorial aide for his new Office of
State Ethics.
Despite Bycel's impressive resume that includes service as Los Angeles'
ethics chief, Koskoff said, "This is troubling."
Though it's too early for a final judgment, "sometimes a resume is more
about a person's ability as a self-promoter," said Koskoff, a
three-time Democratic nominee for Congress from Plainville. Such
comments by Koskoff and others in recent days indicate that Bycel will
now be watched even more carefully in his sensitive new role.
"We want to give him a chance to redeem himself, but at the same time
we'll be watching closely the new hires that he makes," said Rep.
Christopher Caruso, D-Bridgeport, co-chairman of the legislative
committee that oversees Bycel's ethics agency. Bycel said Sunday
night that he is "looking forward to Tuesday morning" when he returns
to work after the holiday. "I was hired to do a job, and I think there
was some fair criticism of me last week - that I did stumble." But, he
said, "it's time to move on, it's time to work together, and it's time
to allow me to do my job."
Caruso and other legislators had been irked by Bycel's defiance
Wednesday after his hiring of Daniel Moreland, aide to the governor's
chief of staff, M. Lisa Moody.
The lawmakers said the new Office of State Ethics is too sensitive a
spot to plant any political appointee - particularly Moreland, who
recently was questioned by criminal investigators focusing on Moody's
improper distribution of political fundraiser invitations at the state
Capitol. Bycel first told lawmakers it was none of their business
- and only relented after it was revealed Moreland lied on his resume.
Even after dumping Moreland, it took Bycel until Friday to comply with
Caruso's demand that he reveal the identity of a "mutual acquaintance"
he said told him Moreland might make a capable executive assistant in
the ethics office. Bycel said Friday the acquaintance was Gov. M. Jodi
Rell's own ethics counsel, Rachel Rubin.
So angry were Caruso and other lawmakers that the good-government group
Common Cause spent two days last week making calls to calm them down.
For example, they helped broker a Thursday meeting in which Bycel
apologized to Caruso.
"We went to the leaders and said to them, `Give the guy a second
chance. As crazy as it seems, he did not comprehend the situation
here,'" said Andy Sauer, Common Cause's local director. The
"situation" is that Connecticut has been reeling from ethics scandals
such as one that jailed ex-Gov. John G. Rowland. The stress of dealing
with the Rowland scandal paralyzed the former State Ethics Commission
so badly that legislators abolished it last year, replacing it with the
new ethics office and advisory board. Caruso and other leaders wanted
no more trouble from the new office - and that's why Sauer moved so
fast last week.
"It's important that the new office succeed," Sauer said. "We need a
strong office of ethics."
Whether it succeeds depends partly on whether legislators who created
the office are satisfied. Caruso, although satisfied with Bycel's
apology, still questioned the salary that Rell-administration personnel
officials established for the intended Moreland hiring.
Moreland makes $51,500 a year in the governor's office, where he will
stay. The new job of "ethics program manager," created by
Rell-administration personnel officials in consultation with Bycel, has
a salary range from $60,951 up to $78,185.
"That's excessive," Caruso said, noting that Bycel had described the
job as merely a get-things-done office assistant's job.
"He was never intended to be a policy guy," Bycel said - but the
official listing for Moreland's intended job at ethics involved
"drafting regulations, policies and procedures." Bycel said from now on
he will "look at every single job description."
Caruso said it was "very upsetting that anyone from the governor's
office" spoke to Bycel about Moreland's potential transfer. "I think
this is a clear warning for anyone who works for the legislative or
executive branch: Keep your hands off the Office of State Ethics,"
Caruso said. "It's an independent agency, and needs to be maintained as
that."
"Do
as I say, not as I do" Democrat response to
most
things...
Aide: N.J. Governor Was Not Wearing Seat Belt; Corzine Critical With
Broken Bones After Car Crash
DAY
By Kathy Matheson , Associated Press Writer
Published on 4/14/2007
Camden, N.J. — Gov. Jon S. Corzine was apparently riding without a seat
belt, in violation of state law, when he was critically injured in the
crash of his official vehicle, a spokesman said Friday.
A state trooper was at the wheel and the governor was sitting as usual
in the front passenger seat when the SUV slammed into a guard rail
Thursday night, authorities said. Corzine broke a leg, his breastbone,
12 ribs and a vertebra.
Corzine, 60, was sedated and on a breathing tube, and a doctor who
helped treat him said the governor was fortunate he was not more
seriously hurt.
“There's no way to tell specifically how close he came to more severe
injuries, but based on pictures I've seen of the crash, I think he's
lucky,” said Dr. Steven E. Ross, trauma chief at Cooper University
Hospital.
Ross said Corzine was stable and improving, and could be removed from a
ventilator within the next few days. But a spokesman said it is unclear
how long it will take before the governor is well enough to return to
work.
Dr. Robert Ostrum, who performed two hours of surgery on the governor
Thursday night, said a rod was inserted in Corzine's leg, and
additional operations were scheduled for today and Monday.
State police were looking for the driver of a pickup truck they believe
caused the crash and fled. That driver could be charged with careless
driving and leaving the scene of an accident. The governor himself
could face a citation.
New Jersey law requires all front-seat occupants of a vehicle to wear a
seat belt. Violators face a $46 fine.
Corzine chief of staff Tom Shea said he did not believe the governor
had been wearing his seat belt.
“If he was not, he certainly should have been,” Shea said, “and we
would encourage the state police to issue a citation.”
Shea said Corzine usually wears his seat belt. When asked why the
trooper who was driving would not have asked Corzine to put on his seat
belt, Shea said the governor was “not always amenable to suggestion.”
A law enforcement official close to the investigation told The
Associated Press on Thursday that the governor typically does not wear
his seat belt, and that his state trooper detail had not been
successful in persuading him. The source spoke on condition of
anonymity, citing a lack of authorization to speak on the matter.
Corzine cannot speak because of the breathing tube down his throat, and
state police said they have been unable to interview him about the
accident.
Senate President Richard J. Codey, a fellow Democrat, took over as
acting governor. It is a familiar role for Codey, who served the last
14 months of Gov. James E. McGreevey's term after he disclosed a gay
affair and resigned in 2004.
The accident happened while Corzine was en route from Atlantic City to
the governor's mansion in Princeton for a meeting between the Rutgers
women's basketball team and radio host Don Imus, who was fired for
using a slur to describe the athletes.
State Trooper Robert Rasinski was driving the governor's Chevrolet
Suburban when another vehicle, swerving to avoid a pickup truck, hit
the sport utility vehicle and sent it off the Garden State Parkway,
authorities said. Police following the governor in another vehicle
administered first aid to Corzine and called for a helicopter.
Rasinski also was injured. His condition was not disclosed, but Codey
said he was expected to be released from the hospital Friday. A
governor's aide in the vehicle was not hurt, authorities said.
The speed limit was 65 mph. State police said speed was not believed to
be a factor, but they had no immediate word on how fast the SUV was
going. Shea said he did not know whether its air bags deployed.
The accident marks the third straight time a New Jersey governor has
broken a leg while in office. McGreevey broke his leg in 2002 during a
nighttime walk on the beach, and Christie Whitman broke her leg while
skiing in the Swiss Alps in 1999.
Will Morano's
Warning Shot Be Heeded?
Hartford Courant
Stan Simpson column
September 4, 2005
This much we know about Chief State's
Attorney Christopher Morano's failed attempt to arrest imprisoned
ex-Gov. John Rowland for securing consulting contracts with companies
that had business ties to Connecticut:
The chief state's attorney's office, before Morano took charge two
years ago, mostly passed when it came to cracking down on crooked
Connecticut pols. It's the federal government that has taken the lead
in stamping down political corruption here.
Morano has sought to change the perception of his office as
uninterested in corruption cases, even re-establishing a public
integrity bureau. The good news for him is that Connecticut's
incorrigible public officials give his office ample opportunities to
redeem itself.
Even though he was stiff-armed in his efforts to bring Connecticut's
first criminal charges for ethics violations, Morano is telling the
gang at the legislature that the state's top prosecutor is back on the
case. No more influence peddling.
Brazen behavior runs rampant at the state Capitol.
How else do you explain Rowland - months before he was to be sentenced
on a corruption-related charge - securing $15,000-a-month consulting
gigs with companies that had business links to the state?
How else do you explain the allegation that Bridgeport Sen. Ernie
Newton accepted a bribe - during the Rowland impeachment hearings, of
all times - to steer bonding money to a nonprofit group? He denies the
charge, saying he was paid by the group as a consultant - which gets to
another ethical issue.
Sen. Toni Harp, D-New Haven, introduced a bill this year that would
have funneled $6.5 million to New Haven's Hill Health Center, where
Harp is employed. She pulled back when others took umbrage.
Deputy House Republican leader Lawrence Cafero Jr. was pushing a bill
that would have hooked up the Maritime Aquarium in his hometown of
Norwalk with $1.5 million in state funds. Cafero is a lawyer with Brown
Rudnick Berlack Israels, whose lobbying arm represents the aquarium.
When the CRRA, a quasi-state regional trash authority, was under heavy
scrutiny by the legislature a few years back for squandering $220
million in public money in a dubious loan deal with Enron, its chief
spokesman was Brian Flaherty. At the time, Flaherty was a Watertown
Republican state representative. CRRA was also fortified by the
employment of Sen. Thomas P. Gaffey, D-Meriden, and Rep. Paul Doyle,
D-Wethersfield.
So, while Morano may have been overzealous in seeking to send Ole JR
farther up the river, he's also frustrated that Connecticut lawmakers
are awfully thick in adhering to conflict-of-interest concerns.
"The best way to avoid potential conflicts of interest is to have a
clear law that draws a very bright line," said state Rep. Christopher
Caruso, D-Bridgeport. He co-chairs the legislative committee that is
examining the "revolving door" policy, which bans for one year a former
state official from lobbying his former agency on behalf of a private
company.
Superior Court Judge Edward J. Mullarkey reportedly balked at busting
Rowland because the "revolving door" law is so poorly worded that it
could be read as only banning him from lobbying the governor's office
itself - not the dozens of agencies whose top officials he appointed.
That's got to change.
Caruso this year introduced an amendment - which never got voted on -
that would ban lawmakers from introducing legislation on behalf of
their employers. That there is not already such a law on the books
suggests there is little political will to change the norm.
Here are two more amendments that should be enacted next year:
If you're a lawmaker, you can no longer be employed by quasi-state
agencies.
And if you're a company that violates the revolving door policy or
enters into shady side "consultant" deals with politicians, then the
CEO will be criminally liable too.
Call Morano's calculated maneuver with Judge Mullarkey a warning shot.
Let's see if the legislators take heed.
Meeting Stirs Advocates
of Government Reform; Lawmakers, Officials Dismiss Criticism, See
Chance To Tout Region
By TED MANN
Day Staff
Writer, Politics/Government
Published
on 7/26/2005
Mystic— The
legislators, lobbyists and state officials waiting for the clam bake at
the Mystic Seaport Museum had all heard the complaints.
The annual
meeting of the Eastern Regional Conference of the Council of State
Governments,
their critics say, is tainted by corporate money, another opportunity
for
the rich and persuasive to shower lawmakers with goodies in exchange
for
later favors.
The crowd at
cocktail hour said it's all nonsense.
“This,” state
Rep. Robert Godfrey, D-Danbury, said Monday evening, as lawmakers from
10 states, two territories and three Canadian provinces mingled behind
him, “is about showing off what this state is all about.”
To some advocates
of government reform, the conference's annual meeting, which takes
place
in a different host state every year and this year continues through
Thursday
at Mohegan Sun, demonstrates perfectly the problems plaguing state
government:
Lawmakers luxuriating in a setting partially paid for by the
corporations
who stand to benefit from their votes.
To many of
those lawmakers, that view is twisted and cynical. This, they said
Monday,
is how government happens, how smart officials share their ideas.
And, they said,
this is a rare chance to show off a part of the state that must grow if
the state is to keep pace with its neighbors, namely the tourist
destinations
of Mystic, the beaches and islands, the towering casinos in the woods.
As both sides
talk at length about changing campaign finance laws, reform groups and
the politicians who will make those changes remain divided about a
central
question: What is an inappropriate level of influence on legislators?
How
much is too much?
“There's a
legitimate purpose for these things,” said Andy Sauer, the executive
director
of the state chapter of Common Cause, the reform lobbying group. “The
schmoozing
is also an element of it. This is how these relationships are made, and
there is a legitimate public interest in getting to know
representatives
from other states. That part doesn't bother me.”
But, he said,
the list of contributors who helped pay for the meeting and its perks —
a ferry ride to Block Island, the Mystic clam bake, the wine and hors
d'oeuvres
on tables topped with whole pineapples — is “a who's who of special
interests.”
Among the sponsors
he cited are some of the state's biggest corporations — Northeast
Utilities,
United Technologies — and also some businesses that have been rewarded
by actions of some of the legislators they are helping to wine and dine.
Among those
is Cross Sound Ferry, for which legislators voted a grant of $1.75
million
for shipyard dredging and repairs, and which provided the ferry jaunt
to
Block Island Sunday night.
After Sauer's
public complaints and a skeptical opinion from the new Office of State
Ethics, Lt. Gov. Kevin B. Sullivan, one of the organizers, decided to
skip
the boat ride and all but one day of the annual meeting as well.
“I've had more
than enough exposure to the Council of State Governments for one week,”
Sullivan said Monday, with a chuckle.
Asked about
the propriety of accepting some of the offered perks, he replied,
“Frankly,
I didn't think about it until we got down to this week, and it started
to not look so hot.”
But Sullivan
suggested the new watchdog office will have to delineate clearer
boundaries
for legislators, state officials and their guests.
“Now I think
the new ethics people need to probably sit down and put this out more
clearly,
because this is going to recur,” he said.
But organizers
and attendees said they don't see anything to apologize for.
Godfrey and
his co-chairwoman, Sen. Toni Harp, D-New Haven, said the corporate
contributions
were raised by an independent fund-raising outfit, D & J Strategic
Communications, so lawmakers didn't know who had supported the event
when
they were drawing up the state budget.
And, Godfrey
said, the contributions of private business and the dues of the
legislators
themselves help pay for an invaluable experience, when elected
officials
who might otherwise not meet face-to-face can talk casually and trade
suggestions
on policy, from taxes to crime prevention.
“There's never
been a consideration, certainly in my mind, of any kind of quid pro quo
in the slightest,” Godfrey said Monday afternoon. “This was set up
months
and months ago, out of that context. There were no qualms on my part of
treating one kind of company differently from others.
“I didn't even
know the Cross Sound Ferry had gotten anything (in the budget) until I
read about it Sunday morning in the paper.”
Speaker of
the House James Amann, D-Milford, strolled along with his wife and a
plastic
cup of wine, shaking hands, accepting congratulations and dismissing
the
critics.
“This is the
best way to promote your state,” Amann said. “If Andy Sauer wants to
continue
down the path that everyone's a crook, a thief and a liar, he's wrong.”
And, he said,
the state's corporations aren't the only ones trying to persuade
legislators
to change the law.
“He's a good
guy,” Amann said, “but he lobbies, too.”
That, to Sauer,
was beside the point.
“There might
be some lawyer within the caucus who says, ‘Yeah, this is perfectly
legal,'
” he said. “(But) does this enhance the public's trust in government? I
think it's clear the answer is a no. So, whether it is or isn't a
violation
of the ethics laws, it should be.”
Appeal Of
FOI Ruling Sought; Ethics Board Asks Blumenthal To Act
By JON LENDER,
Courant Staff Writer
June 25, 2005
The State Ethics
Commission, slapped this week with a ruling that it violated the
Freedom
of Information Act in the process of firing its executive director last
year, asked the attorney general Friday to appeal that ruling in court.
The request
came a week before the ethics panel is due to expire under reform
legislation
scheduled to take effect next Friday. The state Freedom of
Information
Commission ruled Wednesday that the ethics panel acted illegally Sept.
8 when it met in private to consider an investigator's report on
alleged
misconduct by Alan S. Plofsky. The ethics panel voted to fire Plofsky,
a longtime head of the agency, two days later.
It was the
second finding since last year that the ethics panel violated the FOI
law
concerning Plofsky, who now has an appeal for reinstatement pending
before
the state Employees' Review Board.
State Attorney
General Richard Blumenthal said he has not decided whether to file an
appeal
to state Superior Court. "We need to study the ruling by the FOI
Commission
and then determine whether the state's interest is best served by an
appeal,"
he said.
Helen Z. Pearl,
one of five ethics panel members who voted to seek the appeal Friday,
said
that court action is necessary because "a legal issue ... needs to be
clarified."
At issue is
whether state law protecting the confidentiality of so-called
whistleblowers
takes precedence over another law giving state employees the right to
insist
that disciplinary proceedings take place in public. Pearl said the
ethics
panel relied on a 2002 opinion by Blumenthal when it decided to meet in
secret to protect the identities of three agency employees who had
complained
about Plofsky - even though the complainants' names had by then been
published
in The Courant.
The FOI commission's
director, Mitchell W. Pearlman, said that the opinion cited by Pearl is
"inapplicable and wrong" and that a state Supreme Court ruling supports
the FOI ruling against the ethics panel.
Andy Sauer,
Connecticut director for the government-watchdog group Common Cause,
criticized
Friday's appeal effort by the ethics panel, calling it a waste of
taxpayers'
money on legal and court costs. He noted that the FOI ruling does not
overturn
the ethics commission actions, but only directs the panel to obey the
law
in the future.
"After all
this - in the last remaining days of the ethics commission - they still
fail to see what it is that made everyone think they should be
dissolved,"
Sauer said.
Pearl responded:
"He doesn't understand the policy implications or the issues involved,
or he wouldn't be saying that."
Plofsky's lawyer,
Gregg Adler, said, "I'm confident that when the attorney general
reviews
this matter, he'll recognize that the whistleblower statute was simply
used as a tool to deny Mr. Plofsky's due process rights and that it
would
be a gross misuse of taxpayers' money" to appeal.
Adler used
Wednesday's ruling as part of the basis for a motion to the Employees'
Review Board to immediately reinstate Plofsky. Arguments are scheduled
to be heard July 20.
Under the new
ethics reform bill, the ethics commission will cease to exist next
Friday,
although clarifying legislation in the current special session is
expected
to enable commission members to continue serving in an interim capacity
under a new organizational structure. Permanent members of that new
board
will be installed Oct. 1.
Pearlman, the
FOI director, has been named interim ethics director to oversee the
ethics
office during the three-month transitional period. He has expressed a
desire
to resolve issues that could weigh down the newly created agency -
including
a possible settlement of Plofsky's appeal for reinstatement. Adler has
said that Plofsky plans a federal lawsuit based on the existing ethics
panel's handling of the firing.
Vested-interest
vote would be blocked by amended ethics bill
CT POST May
31, 2005
HARTFORD (AP)
— A top legislator is hoping to amend an ethics reform bill in the
final
days of the session to prevent his fellow lawmakers from voting on
proposals
that affect their employers or groups they're directly associated with.
Such a provision
has been suggested for years by ethics advocates. But the concept could
have more momentum this session, in the wake of the corruption scandal
involving former Gov. John G. Rowland and an ongoing federal
investigation
of Sen. Ernest Newton III, D-Bridgeport.
Dozens of Connecticut
legislators are employed by nonprofit agencies or associated with
groups
that receive millions of dollars in state taxpayer money each year.
"There are
a lot of people up here who work for nonprofits or other organizations
legitimately, honestly. I'm not questioning their integrity," said Rep.
Christopher Caruso, D-Bridgeport, co-chairman of the Government
Administration
and Elections Committee.
"The problem
is, conflicts develop when you're in those situations," Caruso said.
Caruso wants
to amend a state and municipal ethics reform bill that is wending its
way
through the Legislature during these final days of the session and
include
language forbidding lawmakers from taking official action on
legislation
affecting their employers who do business with the state.
Sen. John McKinney,
R-Fairfield, the second-highest ranking Republican in the Senate, said
he supports the concept, but questions if there's enough support to
pass
it this year.
"I think it's
more common than you think," said McKinney, referring to the number of
lawmakers who take action affecting their employers.
"It doesn't
look right in the post-Rowland world," he said. "I think as a
Legislature,
we need to deal with it."
This session,
Democratic Sen. Toni Harp submitted a bill earmarking $6.5 million in
state
bonding for Hill Health Center in New Haven. Harp, co-chairman of the
Legislature's
Appropriations Committee, is project coordinator for Hill Health's
homeless
health care program.
Harp's bill,
which ultimately died in committee, is perfectly legitimate under state
law. Lawmakers are only prohibited from acting on legislation that
affects
them personally, or their families, more than anyone else.
Harp said it
was the first time in her 18 years at Hill Health that she offered a
bill
to help the center. She said it was late in the legislative process and
Hill Health was under pressure to complete much-needed renovation work.
"In all honesty,
I did it because we didn't have a law against it," Harp said.
The senator
agrees it might make sense for the General Assembly to debate whether
lawmakers
should be restricted from taking official action that affects their
employers.
"If it's passed,
it at least clarifies where the lines are and I think that's good," she
said. "And I would probably vote for it."
At one point
this session, the ethics reform bill would have also prohibited
legislators
from appearing before all executive branch and quasi-public agencies in
their private capacities. That would have prevented Rep. Paul Doyle,
D-Wethersfield,
for example, from providing legal services to the Connecticut Resources
Recovery Authority.
According to
Doyle's financial disclosure filing, he has a contract with the
quasi-public
trash agency. Such a law change would have affected other legislators
as
well.
Caruso said
he still wants that provision included in the final version of the
ethics
reform bill. He said there may be a way to include language protecting
current legislators.
He also hopes
to amend the bill with language that requires the Legislature examine
the
feasibility of becoming a full-time body. Caruso and some other
lawmakers
— including Newton, who is being investigated to see whether family
members
improperly received state money — have said they believe that is the
only
way to prevent any potential conflicts of interest and appearances of
conflicts
of interest.
"I think if
the state pays the Legislature on a full-time basis, there isn't a need
for these outside sources of income that frankly set up all these land
mines of potential ethical exposure," Caruso said.
Rep. Sandy
Nafis, D-Newington, said she believes there are benefits to having a
part-time,
citizen Legislature in Connecticut, where many lawmakers have regular
jobs
in the community.
"We are grounded
in reality when we have other jobs, where we see legislation has
impacts
in the real world," she said.
Senate Majority
Leader Martin Looney, D-New Haven, said he's willing to study the idea
of a full-time Legislature, but he too believes it's important to have
a citizens' legislature.
And Looney
said there are already laws on the books that require lawmakers to
recuse
themselves from voting on matters that affect them personally. He said
any further changes must be made cautiously.
"I think you
have to be careful not make it impossible," he said, "for someone to
serve."
Ethics bill clears another
hurdle
By Tobin A.
Coleman
Stamford ADVOCATE
Staff Writer
Published
April 30 2005
HARTFORD --
Concerns raised by state lawmakers who passed a sweeping ethics reform
bill out of committee yesterday could weaken the legislation, according
to its main proponent on the Judiciary Committee.
"I think all
of the concerns would soften the standards we would set for
Connecticut,"
said state Sen. Edward Meyer, D-Guilford. "I heard one rep say, 'I want
to be able to go to a dinner that's $115 and have the lobbyist pay for
the dinner.' So he'd like an increase in the exemption amount and I
don't
think we should do that."
Other committee
members raised concerns that by prohibiting all state employment for
state
legislators, the bill would take away their livelihoods.
"What I heard
here is something that will surely come out in (political) caucuses,
efforts
to weaken the standards of the bill," Meyer said. "And I hope we stand
strong. Ultimately, the business climate in the state will start with a
government of integrity."
The Judiciary
Committee approved an amendment yesterday striking language from the
bill
that would bar state legislators from working for state agencies or
quasi-public
agencies such as the Lottery Corp. and Connecticut Development
Authority.
But as Meyer suggested, the language could be resurrected or modified.
Otherwise yesterday
the Judiciary Committee, presided over by co-Chairman Andrew McDonald,
D-Stamford, passed the bill almost intact from its committee of origin,
Government Administration and Elections, which had spent months
drafting
and refining the bill. On Tuesday, the GAE committee co-chairmen called
the bill a work in progress and said they expected changes to be made,
either in the Judiciary Committee or on the House and Senate floors,
before
the measure gets final approval.
The committee
spent about an hour recommending changes and raising concerns about
specific
language that Meyer, vice chairman of the GAE committee, noted. He said
after the meeting he was about to prepare a memo listing the concerns
that
he would discuss with the GAE committee co-chairmen.
Changes to
the bill resulting from those discussions would likely be incorporated
into a master amendment or series of smaller amendments and offered
with
the bill when it is introduced on the House floor, Meyer said.
Some of the
concerns were about the way some sections of the bill were worded. For
example, McDonald said as written, one section aimed at keeping
municipal
officials from having undue influence in their local governments "would
prevent someone on the Stamford Shellfish Commission from appearing
before
the Board of Assessment appeals to appeal their assessment," which the
bill's authors clearly had not intended.
The Judiciary
Committee approved the bill unanimously. In addition to McDonald, lower
Fairfield County committee members, Rep. Claudia "Dolly" Powers,
R-Greenwich;
Rep. Lawrence Cafero Jr., R-Norwalk; and Rep. Gerald Fox III,
D-Stamford,
voted yes.
The bill, and
other ethics and contract reform measures being considered by the
Legislature
this session, arose from the ethics scandal that led to the departure
of
former Gov. John Rowland, who resigned in July after admitting that he
took gifts from state contractors and subordinates. Rowland this year
pleaded
guilty and began serving a 366-day federal prison term April 1.
The municipal
ethics reforms also stemmed from the convictions of former Bridgeport
Mayor
Joseph Ganim, who is serving a nine-year prison term for accepting
cash,
expensive dinners, wines and clothing for steering municipal contracts;
and former Waterbury Mayor Phil Giordano who is serving a 37-year
prison
term on child sex charges that sprung from a municipal corruption probe.
The ethics
bill would combine several proposals that would affect state ethics
laws
as well as impose new ethics restrictions on municipal officials. In
one
provision, the spouse of the governor would be considered a state
official
for purposes of the ethics law.
The 65-page
bill would expand the application of state ethics laws, tighten
restrictions
on gifts to public officials, expand the list of prohibited activities,
add people to the list of those who must file financial disclosure
forms
and extend "revolving door" laws that set time limits before former
state
and local officials can go to work for private entities they used to
regulate
or do business with.
Some of the
bill's provisions were proposed by Republican Gov. M. Jodi Rell, who
succeeded
Rowland, including a ban on gifts from lobbyists. The bill extends the
gift ban to immediate family members of people who do business or seek
to do business with the agency the official is employed by.
Rell had asked
the Legislature for quick passage of her ethics package in January.
Rell
also had called for municipal ethics legislation, including tightened
controls
over gift giving to local officials by contractors doing business with
cities and towns.
The bill includes
dozens of provisions. One of the more controversial, which has raised
the
ire of some municipal officials, is the requirement that local
officials,
from mayors to members of the zoning board, would be required to file
financial
disclosure statements.
The disclosure
language was toned down as a result of those concerns. It now would be,
for many city and town positions, simply a statement giving a name,
address,
place of employment, type of business and promise not to engage in
conflicts
of interest.
The bill would
for the first time put municipalities under many of the other ethics
requirements
as the state, and would require municipal lobbyists who makes at least
$2,000 a year for any client to register with the municipality and with
the state Ethics Commission. Local land-use attorneys, and development
consultants such as engineers, landscape architects, traffic
consultants
and others who routinely appear before local boards such as a zoning
board,
would have to register as lobbyists under the bill.
The bill also
would allow local ethics commissions to levy civil penalties of up to
$2,000
for violations. It would allow someone found to have violated municipal
ethics laws to appeal to the state Ethics Commission.
The Connecticut
Conference of Municipalities, which represents most of the state's
cities
and towns, said it has serious concerns about the bill but will not
oppose
it while legislators work out promised amendments.

Perez
Submits Resignation
By JENNA CARLESSO, jcarlesso@courant.com
3:46 PM EDT, June 25, 2010
HARTFORD —
Mayor Eddie A. Perez, formally submitted his resignation this
afternoon, effective at 5 p.m.
Perez' chief of staff, Susan McMullen, submitted the letter of
resignation to City Clerk John Bazzano. It was stamped at 3:07
p.m.
Council President Pedro Segarra will be sworn in as mayor at 5:01 p.m.,
Bazzano said. Perez, who was convicted of five felony corruption
charges June 18, did not make a public appearance and was unavailable
for comment. He released a statement with his resignation:
"Over the past nine years, it has been my honor and privilege to serve
the residents of Hartford. I have done my best to improve their
neighborhoods, schools and public safety.
"I thank the voters for the confidence they placed in me.
"I am truly sorry for the mistakes I made that have harmed the
reputation of the city I love.
"I hope to earn the forgiveness of its people, who have enriched my
life in hundreds of ways. God bless the City of Hartford and all who
live and work in it."
Perez was convicted of five felony charges, including bribery and
extortion. He had been charged with receiving a bribe, fabricating
evidence, accessory to the fabrication of evidence, conspiracy to
fabricate evidence, conspiracy to commit first-degree larceny by
extortion and criminal attempt to commit first-degree larceny by
extortion. A jury found him guilty on all counts except for a charge of
fabricating evidence.
He has said he plans to appeal.
Councilman Larry Deutsch, a frequent critic of Perez, said he was
relieved that the mayor's resignation would take effect today.
"I am gratified that it didn't go into next week."
Copyright © 2010, The Hartford
Courant
Hartford
mayor guilty,
to step down:
Perez 'maintaining
my innocence' after conviction on five corruption charges
New London DAY
By EVERTON BAILEY Jr. Associated Press Writer
Article published Jun 19, 2010
Hartford - A one-time gang leader who escaped an impoverished childhood
to become Hartford's first Latino mayor announced Friday that he would
step down after being convicted of five corruption charges, including
taking a bribe and attempted extortion.
"I have decided that it is not in the best interests of the city and my
family for me to continue my duties as mayor during the appeal of my
case," Eddie Perez said in a written statement.
Perez, who had insisted on his innocence and vowed to clear his name,
faces up to 60 years in prison, with each of the five counts carrying a
minimum of one year in jail. The six-person Hartford Superior Court
jury acquitted him of one count of tampering with evidence. Sentencing
is scheduled for Sept. 10.
Calls for Perez's resignation came shortly after he was convicted of
receiving a bribe, attempted first-degree larceny by extortion,
accessory to evidence tampering and two conspiracy counts - all
felonies. The jury delivered the verdicts after a six-week trial.
The mayor looked at his lawyer with no visible emotion after the
verdicts were announced, and his wife, Maria, collapsed into his arms
and cried inconsolably. Paramedics gave her oxygen, but she didn't need
to go to the hospital.
"I'm extremely disappointed," Perez said as he walked away from the
courthouse. "I'm maintaining my innocence, and I plan to appeal."
The trial focused on allegations that Perez accepted home improvements
from a city contractor in return for keeping him on a lucrative $2.4
million construction project, and tried to extort a developer into
paying $100,000 to a political ally. State prosecutor Michael
Gailor said he was thankful that the jury convicted the mayor.
"We never thought we had this case in the bag," Gailor said.
Perez's convictions were the latest in a series of corruption cases
over the past decade involving Connecticut politicians, most notably
Gov. John G. Rowland, who resigned in 2004 and served 10 months in
federal prison after admitting he traded political access for vacations
and repairs to his lakeside cottage. It was not immediately clear
if the mayor planned to resign from office or take a leave of absence.
His spokeswoman, Sarah Barr, said those details were still being worked
out. His decision to step down came after city councilors and
other officials called for his resignation.
Republican Gov. M. Jodi Rell called it "a sad and extremely difficult
day for Hartford, Mayor Perez's family and all who care about our
capital city..."
Hartford Mayor convicted in corruption
case
DAY
EVERTON BAILEY Jr., Associated Press Writer
Article published Jun
18, 2010
HARTFORD, Conn. (AP) — A Connecticut jury has convicted Hartford Mayor
Eddie Perez of corruption charges, including accepting home
improvements as a bribe and trying to extort money from a real estate
developer.
The jury convicted Perez of five of six corruption charges Friday after
a six-week trial. The jury acquitted him of a tampering with evidence
charge.
The charges stemmed from allegations he accepted $40,000 in home
improvements from a city contractor and tried to extort $100,000 for a
political ally from a developer who wanted to buy city-owned property.
Sentencing is set for Sept. 10. He faces up to 60 years in prison. Each
of the five counts carries a minimum of one year in jail.
Perez looked at his lawyers with no visible reaction after hearing the
verdicts.
Defense:
Perez's Dyslexia Is Reason He
Didn't See E-Mail
By JOSH KOVNER, The Hartford Courant
2:27 PM EDT, June 10, 2010
HARTFORD —
The defense today offered a reason why Mayor Eddie A. Perez may not
have seen a March 5, 2007, e-mail from a developer indicating North End
politician Abraham Giles was, with the mayor's knowledge, demanding
$100,000 to vacate a parking lot that the developer wanted to buy.
"The mayor's dyslexia creates a problem,'' Susan McMullen, the mayor's
chief of staff, testified this morning at Perez's corruption trial. She
said the city hall staff tries "to keep reading to a minimum."
That Perez, a Trinity College graduate, has dyslexia is not widely
known. For example, of the 4,490 articles in the Hartford Courant
archives that mention "Mayor Eddie A. Perez,'' none say that the mayor
has dsylexia.
Perez says in an interview secretly tape-recorded by the lead
investigator in the city hall corruption investigation that he never
saw the e-mail from developer Joseph Citino that mentions' Giles payoff
demand in writing. Citino testified that in a follow-up phone
conversation, the mayor told the developer he shouldn't have included
the Giles reference and said it could look bad if the e-mail ended up
in the wrong hands.
McMullen, who was a paid adviser to Perez's first campaign before
joining the mayor's staff in 2004, said that e-mails were screened by
the mayor's personal assistant. Most were forwarded to the appropriate
staffers, while the most important e-mails were printed out and given
to the mayor.
McMullen said that staff members assisted the mayor by giving him
summaries and bullet points.
McMullen, who was director of constituent services for the mayor from
January 2004 until she succeeded Matthew Hennessy as chief of staff in
September 2009, also said that the mayor was "concerned, preoccupied,
and distracted,'' by his wife's life-threatening illness beginning in
June of 2005.
It was during that time that city contractor Carlos Costa, who would
later require the mayor's help to remain on a troubled $5.3 million
reconstruction of Park Street, did up to $40,000 worth of work on the
mayor's home. The mayor, in the June 27, 2007, taped interview, told
investigators that he'd already paid for the work – but he hadn't.
Later on the day of the interview, he took out a second mortgage on his
house and in July 2007, paid Costa $20,000 – two years after the work
was done.
The defense contends that Perez on a couple of occasions brought up the
issue of paying for the work, including right around the time that
Maria Perez was stricken with a brain aneurysm. At that point,
according to the defense, Costa told the mayor not to worry about it.
Costa said he doesn't recall that happening.
The defense asserts that the mayor had other things on his mind when
Costa was doing the work at his home. McMullen said that his wife's
illness dominated Perez in 2005 and 2006. She said the mayor would
interrupt meetings if a special phone devoted solely to calls from
Maria Perez would ring.
McMullen also said that the city's onging fiscal crisis, a spike in
violence, and the mayor's self-appointment to the school board all were
competing for the mayor's time and attention. Still, she testified that
the mayor's assistant asked her in the summer of 2005 to look up
information on obtaining a second mortgage. She said she was told that
the mayor wanted to finance home remodeling work.
But prosecutor Chris Alexy suggested that Perez, like any city mayor,
would understand that fiscal obligations and crime were part of the
job, and he noted that Perez didn't step down from the school board or
the school building committee and its $400 million construction agenda.
"He had a lot of energy,'' McMullen said.
Alexy suggested that the mortgage research mentioned by McMullen was
nothing more than Perez checking to see if he could refinance his first
mortgage at a better rate. McMullen disagreed.
Earlier today, Charles Crocini, a trouble-shooter on construction
projects for Perez, testified it was his idea to reverse a decision to
fire contractor Costa from the Park Street reconstruction job.
Crocini, whose main job was to direct school construction projects,
said it was his recommendation -- not the mayor's -- that it would cost
less to keep Costa on a job that was marred by delays and disputes than
it would be to fire him and re-bid the remaining work.
Costa testified earlier in the mayor's corruption trial that he did the
work on the mayor's house with the expectation that the mayor would
help him on Park Street.
Costa testified that the mayor assigned Crocini to run interference for
Costa on Park Street.
Crocini, testifying as the first witness in the defense portion of the
trial, said the mayor only asked him to examine problems with delays
and workmanship and to look at claims that Costa was seeking extra
payments.
But prosecutor Michael Gailor noted that a company called Urban
Engineers was hired to evaluate those claims. Gailor also pointed out
discrepancies in Crocini's testimony today and what he told a grand
jury investigating corruption at city hall two years ago.
Crocini, for example, told the grand jury that he never consulted with
the mayor about writing a letter to Costa's bond company that reversed
an earlier request by other city officials to start the process of
terminating Costa's insurance bond and removing him from the job.
But Crocini testified today that he had several meetings with the mayor
about the issues concerning Costa's removal.
Crocini said this morning that he didn't recall if he told a public
works official that the mayor said he was concerned that Costa, as a
minority businessman, would be ruined if he was dismissed from the job.
The state asserts that Crocini did make that statement.
Earlier this morning, Judge Julia Dewey dismissed a defense motion for
acquittal, ruling there was sufficient evidence of bribe-receiving,
evidence fabrication and attempted larceny by extortion for the case to
go to the jury.
Dewey will rule Friday morning on defense motions for a mistrial,
separating the bribery and larceny evidence into two cases, or, in the
alternative, allowing Perez to testify only on the bribery charges and
not answer questions about the extortion charges.
Copyright © 2010, The Hartford
Courant

Perez, 3 Others Charged As State Widens Its
Case
The Hartford Courant
By JEFFREY B. COHEN And STEVEN GOODE •Courant staff writer Hilda
Muñoz contributed to this report.
September 3, 2009
HARTFORD —
After months of rumors, two years of investigation and near political
paralysis in Connecticut's capital city, state prosecutors expanded
their case against Mayor Eddie A. Perez Wednesday, arresting him for
the second time this year on charges that he misused his office for his
own gain.
Perez was the most notable person charged Wednesday, but he wasn't the
only one. Others stung by the state's grand jury investigation of
corruption at city hall were a city councilwoman, a former state
representative and a city businessman. All say the charges won't stick.
Last time around, Perez was accused of trading his influence at city
hall for discounted work on his Bloomfield Avenue home. This time,
state prosecutors say Perez, in his 2007 race for mayor, attempted to
extort money from a private developer for the benefit of political ally
Abraham L. Giles — allegations first made public in an April 2007 story
in The Courant.
In return, Giles could have brought Perez votes, prosecutors alleged.
"Mayor Perez instilled in a developer a fear that if he did not take
care of Giles ... the mayor would use his position to prevent the
developer from developing two properties within the city of Hartford,"
the warrant alleges.
Wednesday was not unlike the day just over seven months ago when Perez
was first arrested. As he did in January, Perez turned himself in for
arrest. And, as he did in January, Perez made his way back to city
hall, where he was surrounded by a crowd of friends and family who
chanted his name and applauded his words.
"The voters in Connecticut's capital city elected me to a third term as
mayor of Hartford. The term is not over," Perez said, to applause. "The
term is not over."
A Trial Delayed
Perez has been under investigation since early 2007, after stories
published in The Courant stirred interest. In October of that year,
prosecutors working for Chief State's Attorney Kevin Kane got
permission to impanel a secret grand jury — one that would last 18
months and bring a steady parade of witnesses to a third-floor
courtroom at Superior Court in New Britain.
In January, Perez, a Democrat, was arrested on bribery and other
charges relating to discounted work done on his home by city contractor
Carlos Costa. A third man, former city employee Edward Lazu, also was
arrested on charges relating to work done by Costa on Lazu's driveway.
Costa was charged in January, too. All three have pleaded not guilty;
jury selection for Perez's trial was scheduled to begin Sept. 9.
But it seems likely that trial will be delayed. Perez will be back in
court on Sept. 8 to be arraigned on Wednesday's charges. With him will
be Republican Councilwoman Veronica Airey-Wilson, accused Wednesday of
faking evidence to show that she had paid for work done on her home by
a city contractor. Again, the contractor was Costa; again, as with the
work he allegedly did on Perez's home, Costa said he didn't expect to
get paid by Airey-Wilson.
"The claim against Mrs. Airey-Wilson is not sustainable and will not be
proven by any standard of evidence, certainly not beyond a reasonable
doubt," said Steven Seligman, her attorney. "It is unfortunate that
after more than 18 months of investigation, requiring the expenditure
of more than a million and a half dollars of taxpayers' money, that the
mountain labored and brought forth only the molehill."
Also in court with Perez next week will be city businessman Carlos
Lopez, who allegedly voted in Hartford three times while living in
Farmington, according to a warrant for his arrest.
And then there will be Giles, 83.
"My client has taken the position he did nothing wrong, he committed no
crimes," said John Kelly, Giles' attorney. "I find this affidavit very
unusual. It relates a number of what appear to be legitimate business
transactions. My client is a businessman. ... Is it surprising that
among the people he does business with is the city of Hartford? No."
Giles And Perez
It's the relationship between Giles and Perez that drew the most
interest from investigators.
The picture the warrants paint is one of a mayoral candidate in need of
political support in a voting district where he thought he was weak.
Giles, a powerful figure in that district, is described as Perez's
possible vote-getter. Perez is pictured as a man trying to keep Giles
happy.
Perez critic and Councilman Kenneth Kennedy told the grand jury that
Perez could not win the 2007 mayoral election without Giles' support
and the support of his 5th District town committee. Matt Hennessy,
Perez's chief of staff, who recently announced his resignation, told
the grand jury that Giles did not support Perez in the 2001 election,
nor did he support Perez's council slate in 2003. But he did support
Perez in 2007.
What changed between 2001 and 2007, the warrant suggests, is that Giles
got special consideration from the city from early 2005 until the
spring of 2007.
The warrant outlines several scenarios in which Giles allegedly
benefited from the city — a no-bid deal with the city to operate a
parking lot, consideration to operate a second parking lot, an attempt
by the city to lease a Giles-owned warehouse, an increase in a fee paid
to Giles for evictions performed on behalf of the city, a city payment
of nearly $10,000 to empty a dumpster Giles was using, and the awarding
of a new moving-services contract to Giles.
In the end, though, the warrant charges Perez in just one scenario —
the failed real estate deal involving the so-called Butt Ugly Building
in which Giles was to get a $100,000 fee from a private developer,
Joseph Citino. For that, Perez and Giles were each charged with one
count of attempted larceny by extortion and conspiracy to commit
larceny by extortion.
Two years ago, Citino alleged in The Courant that he agreed to pay
Giles $100,000 because the mayor told him he had to "satisfy" Giles.
But the warrant goes further, adding another voice to the argument that
Perez was pushing for Giles to get taken care of.
Former Finance Director Thomas Morrison told the grand jury the
"implication" was that Giles needed to be satisfied by Citino before
the deal on the H.B. Davis Building on Main Street — the Butt Ugly
Building — was to move forward.
"Mayor Perez made it 'clear that he didn't necessarily want Abe Giles
unhappy coming out of this Butt-Ugly Building arrangement,'" the
affidavit quotes Morrison as telling the grand jury.
The warrant goes on to quote Morrison as saying that "if Citino wanted
the building and the city lot, he at least had to speak with Abe Giles
and, in a sense, make peace or, you know, come to some arrangement."
In an interview, Kelly, Giles' attorney, pointed the finger at Citino —
who the warrant says was convicted in 1988, 1989 and 1991 for selling
narcotics, selling a stolen firearm and transferring and delivering
counterfeit money.
"I'm intrigued by the fact that apparently a three-time convicted felon
is the state's main witness," Kelly said.
The warrant also appears to contradict some of Perez's public
statements in 2007 to The Courant.
In a February 2007 story, Perez said he was unaware that the Hartford
Parking Authority wanted to manage a parking lot he gave to Giles in a
no-bid deal.
But the warrant disputes that. Both Deputy Corporation Counsel Carl
Nasto and then-Chief Operating Officer Lee Erdmann told the grand jury
that Perez told them he didn't want the parking authority to operate
the lot at 1214 Main St. It also cites an e-mail from 2006 from Nasto
to Erdmann in which Nasto wrote, "The mayor told me he does not want
HPA [Hartford Parking Authority] to operate this lot."
When investigators spoke with Perez in June 2007, he denied that
Erdmann or Nasto ever told him about the parking authority's interest
in the lot. He also denied telling either of them that he didn't want
the authority to operate the lot.
'I Believe He's Innocent'
An hour after Perez turned himself in at Troop H, dozens of his backers
packed the function room at city hall. Many of them wore green ribbons
of support — as they had at the press conference following his first
arrest. Phil Knecht wore his ribbon proudly.
"I know the good he's done for the city and I feel strongly that he
should be given an opportunity to explain his side of the story,"
Knecht said.
Knecht acknowledged that he was called by Perez's family and asked to
attend the event, but said, "I would have come anyway."
Perez eventually entered the crowded room to a standing ovation and
roaring chants of "Eddie! Eddie! Eddie!" What came next were words of
prayer and praise from city clergy, business owners and an area
community activist.
Then came Perez, speaking of his family, his religion, his work for the
city and his rights. "Truth is on my side," he said. "I committed no
crime. … I want my day in court."
He also said he was frustrated that a trial had yet to start, and that
the scheduled trial on bribery charges scheduled for next week would
likely be pushed back.
"This has been a one-sided process. It's been a secret process. It's
been a trial in the media. It's been a trial of public opinion. All of
the facts, all of the facts are not before the public and not before a
court," Perez said. "Justice delayed is justice denied."
After Perez came his attorney, Hubert Santos, who said he would file a
motion to dismiss the charges against his client and to hold the office
of the chief state's attorney in contempt of an order of the state
Supreme Court.
This would be Santos' second motion to dismiss. He lost the first in
June.
"The state's attorney deliberately filed these charges intentionally to
defeat our ability to have a jury trial and vindicate the mayor of the
charges that are pending," Santos said.
Releasing the warrants while the grand juror's report was still under
seal was equivalent to "thumbing its nose at the Connecticut Supreme
Court. For that it should be held in contempt."
Kane's office declined comment.
Copyright © 2009, The Hartford
Courant
Link to
DAY editorial
Supreme Court To Hear Courant's Appeal
Of Decision To Seal Perez Report
The Hartford Courant
By JEFFREY B. COHEN
July 25, 2009
The state Supreme Court will hear an appeal by The Courant of a judge's
decision to seal his final report into the investigation of corruption
in the administration of Hartford Mayor Eddie A. Perez.
On Thursday, Superior Court Judge Dennis Eveleigh said he would seal
the parts of the report in which he finds probable cause because the
report's release could either damage a person's right to a fair trial
or a person's reputation.
In its appeal, attorneys for the newspaper argue that jury-questioning
and a change of venue could ensure a fair trial, while also arguing
that the report doesn't "establish facts of significant damage to
reputation or the element of uncorroborated information," attorneys
from the Hartford office of Hinckley, Allen & Snyder LLP wrote.
"In the balancing of access to a finding of the 18 months of work by
the [grand jury], against the possible embarrassment to individuals
referenced as having relationships with persons involved with criminal
activity, the public interest must prevail."
The newspaper filed its appeal late Friday afternoon; the Supreme
Court's clerk then notified the newspaper's attorneys that the court
would likely hold a hearing on the appeal Wednesday.
Perez has been the focus of state investigators since the beginning of
2007. For 18 months that ended roughly two months ago, Eveleigh served
as the lone grand juror in the state's investigatory grand jury probe.
Perez was arrested in January and pleaded not guilty to charges of
bribery, fabricating evidence and conspiracy to fabricate evidence
relating to allegedly discounted work done on his home by city
contractor Carlos Costa, who was also arrested and has pleaded not
guilty.
Eveleigh filed his final report in the investigation on June 29. Since
then, the question has been whether to release it.
State law says the report should be made public, unless state
prosecutors seek to keep it sealed. In this case, they did, and The
Courant opposed them. On Thursday, Eveleigh released his decision to
keep much of the report sealed. Eveleigh said state prosecutors have
not obtained new arrest warrants based on his report.
"The information contained in the report, records and findings, is so
damning that the publicity would affect the said individual's right to
a fair trial," Eveleigh said. But, the judge cautioned, all or some of
that information "may not survive the scrutiny of cross-examination."
What comes next is unclear. In his ruling, Eveleigh said that some of
his report — the parts that deal with the investigation's background
and scope — would be released after the 72-hour appeal period had
expired, "if no appeals have been filed."
As for the appeal itself, state law says that the appellate court
"shall provide an expedited hearing."
Judge
Seals 'Damning' Parts Of Report
On Hartford Mayor Eddie Perez
The Hartford Courant
By JEFFREY B. COHEN
July 24, 2009
The judge running a secret 18-month probe into allegations of
corruption in the administration of Mayor Eddie A. Perez has decided to
seal the parts of his report in which he finds probable cause that
crimes were committed, saying that the report's release could either
damage a person's right to a fair trial or their reputation.
"The information contained in the report, records and findings, is so
damning that the publicity would affect the said individual's right to
a fair trial," Superior Court Judge Dennis Eveleigh wrote in a ruling
released Thursday.
But, the judge cautioned, all or some of that information "may not
survive the scrutiny of cross-examination."
Perez has been the focus of state investigators since the beginning of
2007. For 18 months that ended roughly two months ago, Eveleigh served
as the lone grand juror in the state's investigatory grand jury probe .
Perez was arrested in January and pleaded not guilty to charges of
bribery, fabricating evidence and conspiracy to fabricate evidence
relating to allegedly discounted work done on his home by city
contractor Carlos Costa, who was also arrested and has pleaded not
guilty.
In a statement, Perez maintained his innocence.
"The judge's decision does raise the important point that this process
has been one-sided so far," Perez said. "I am confident that there will
be additional facts that come out in court that will prove I did not
commit any crime. I look forward to my day in court and to my ultimate
vindication."
State law says the report should be made public, unless state
prosecutors seek to keep it sealed. In this case, they did, and The
Courant opposed them.
Eveleigh's ruling confirmed that "no arrest warrants have been issued
as the result of the final report." Whether that ever happens, he said,
is up to the state's attorney.
The remainder of the report — which apparently includes the "background
and scope of the investigation" — could be available for viewing within
72 hours, he said.
In the ruling, Eveleigh took up the subject of those people for whom
the grand jury found probable cause to believe that crimes had been
committed. Their attorneys argued that releasing the report could
prejudice a fair trial.
"The fact that certain findings were made by a judge acting as an
investigatory grand jury, they argue, would lead people to believe that
the facts were true, they contend," Eveleigh wrote.
"It is argued that if this final report is disclosed it will seriously
affect the ability of those three defendants to receive a fair trial,"
Eveleigh wrote. "The investigatory grand jury agrees with this
argument."
The judge then said that releasing the report would cause damage to the
"lives and reputations of innocent persons."
"Where would they go to get their reputations back?" Eveleigh wrote.
William Fish, a lawyer representing The Courant , said "the public has
a right to know the particulars of the grand juror's report especially
given the comment in the decision about how damning some of the
information may be."
"I'm disappointed that, although the judge wrote a thoughtful opinion,
he didn't recognize the importance of public disclosure of this type of
information in the city of Hartford," Fish said.
Larson on the hot seat: FBI
investigating lobbyists who gave money to East Hartford pol
By Don Michak, Journal Inquirer
Published: Saturday, April 11, 2009 1:15 AM EDT
The FBI reportedly is investigating tens of thousands of dollars in
contributions two Florida men — a golf club marketing official and a
former hotel sommelier — made to dozens of federal lawmakers, including
U.S. Rep. John B. Larson, D-1st District.
But Larson on Friday said that no federal investigators had contacted
him or his staff about the money he got from the men, said to have been
used by a top lobbying firm to funnel campaign cash to members of
Congress.
The East Hartford politician, who went from state Senate president to
chairman of the House Democratic Caucus, added that he recently had
contributed to charity the most suspect of the contributions linked to
that now-defunct “government relations” firm, PMA Group.
He also said he was prepared to give away more, depending on the
outcome of the government probe.
At the same time, Larson defended his work on behalf of a PMA client, a
nonprofit corporation headed by his former chief of staff.
Arlington, Va.-based PMA shut its doors last month after the FBI, the
IRS, and military investigators raided its offices in November.
It was founded and run by a part-time Amelia Island resident, Paul
Magliochetti, a former congressional committee aide to Rep. John B.
Murtha, D-Pa.
PMA had touted the many federal contracts its clients received through
“earmarks” from Murtha and other lawmakers.
Murtha, who as a close ally of Pentagon brass was perhaps the
best-known critic of former President George W. Bush’s handling of the
war in Iraq, has been close to Larson, who also has been a prominent
war critic.
The veteran Pennsylvania congressman in the last election cycle
received a total of $775,000 in campaign contributions linked to PMA,
whose clients received $299 million last year in earmarks arranged by
Murtha and his colleagues, the Washington Post reported.
Larson, a
six-term incumbent who serves on the powerful House Ways and Means
Committee, obtained a $400,000 earmark for the Connecticut Center for
Advanced Technology, which last year paid PMA $25,000 to represent it.
The nonprofit
corporation located on the East Hartford campus of United Technologies
Corp.’s Pratt & Whitney unit is headed by former Larson chief of
staff Elliot Ginsberg and got the money for a project called “Catalyst:
Explorations in Aerospace and Innovation Education.”
Larson’s campaign committee and the congressman’s leadership political
action committee, Synergy PAC, collected a total of $42,350 from PMA
Group’s corporate PAC and from individuals linked to the firm,
according to the Washington, D.C.-based Center for Response Politics.
The database kept by the nonprofit campaign finance watchdog group
shows that over the last two years those contributors included PMA
founder Magliochetti and his wife, Rebecca K. DeRossa, identified in
Federal Election Commission records as the firm’s comptroller. The
former gave $1,000 to Larson’s campaign committee, while the latter
contributed $5,000 to his PAC.
Other contributors included Mark J. Magliochetti, identified as a PMA
lobbyist, and Leslie A. Magliochetti, identified as a “housewife”
sharing the same Virginia address as Mark Magliochetti. He gave $850,
while she contributed $1,500 to Larson’s campaign committee and $3,000
to the congressman’s PAC.
Jennifer Magliochetti, identified as a PMA “consultant,” also
contributed $1,000 to Larson’s campaign committee, as did Melissa
Koloszar, identified as a PMA “executive.”
Meanwhile, a half-dozen other individuals also identified as PMA
consultants each made contributions to Larson that were recorded on the
same day last year. They included Daniel R. Cunningham, Richard E.
Efford, and Richard M. Kaelin, who each gave $1,000, and John Lynch,
who gave $1,500. All six listed addresses in Virginia or Maryland.
Two other PMA “consultants” who each contributed $1,000 to Larson,
however, were John L. Pugliese and Jon C. Walker, both of Fernandina
Beach, Fla. Neither man appears to have been a regular lobbyist.
Pugliese is the former wine steward at the Ritz Carlton hotel on the
nearby resort island where Paul Magliochetti has a beachfront
condominium, while Walker is the director of marketing at the adjacent
Golf Club of Amelia Island.
The two men also are listed as partners with Magliochetti and his wife
in an apparent restaurant business, Firenze Partners LLC, whose address
is the condo, according to Florida state records.
With federal investigators reportedly focused on Pugliese and Walker,
Larson said Friday that he had donated their contributions to charity,
as had several other congressmen, including Rep. Pete Visclosky,
D-Ind., who got $16,000 from the two men.
The money went to the Salvation Army, the treasurer of Larson’s
campaign committee, Barry Feldman, said.
“What we’ve done from the outset, we’ve monitored this as soon as we
heard anything,” Larson said, referring to media disclosures about the
FBI investigation. “I don’t have any idea whether PMA said anything to
people or whatever, but we’re watching it and if anything turns up with
any contribution we are prepared to give it away.”
Larson added that he eventually may donate other contributions linked
to PMA, which he confirmed had held fundraisers for him.
He also confirmed that he had attended at least one dinner with
Magliochetti and several other congressmen held in a private room at a
Washington watering hole — occasions the New York Times recently
reported had aides worrying that prosecutors might consider a violation
of House ethics rules.
Larson said that while he knew PMA represented the group headed by
Ginsberg, the firm’s work on its behalf was “not what I would call a
heavy lift.”
He defended his earmark, saying it shouldn’t be questioned “unless you
think that getting science and mathematics instruction for
underprivileged kids in Hartford in a program that the state Department
of Education is fostering is a bad idea.”
He added: “I thought it was pretty routine, that it was standard in
terms of the kind of thing it was.”
Dodd
says he'll refinance Countrywide
loans
DAY
Posted on Feb 2, 11:53 AM EST
HARTFORD, Conn. (AP) -- Connecticut Sen. Chris Dodd says he'll
refinance two mortgages that he received through a VIP program from
Countrywide Financial Corp.
Dodd told reporters in his Hartford office Monday that the mortgages
for his homes in Washington and East Haddam, Conn. will be refinanced
with a different company.
The chairman of the Senate Banking Committee says a third party will be
involved in choosing the new bank.
Dodd has acknowledged receiving mortgages in 2003 through a VIP program
at Countrywide, which was sold to Bank of America Corp. earlier this
year and has been the focus of allegations that it gave favorable loan
terms to lawmakers.
Dodd says he's moving the loans in part because he was wrongfully
labeled a friend of Countrywide's former CEO, Angelo Mozilo. Dodd says
he never sought special treatment.
Tapes
May Tell Tale Of Dodd Deal
Hartford Courant
Kevin Rennie | NOW YOU KNOW
August 10, 2008
'This call may be monitored or recorded for quality assurance." That
warning sounds innocuous when a consumer contacts a business to make a
purchase, discuss a problem or apply for a mortgage. Who would ever
think a routine call could become evidence?
Sen. Christopher Dodd and his wife, Jackie Clegg Dodd, probably didn't
consider the implications of the comprehensive recording system at
Countrywide Financial when they got $800,000 in sweetheart mortgages
several years ago. After two months of stonewalling, the Dodds still
don't want to talk about their deals. Plenty of others do.
When news of the Dodds' discounted mortgages with Countrywide broke in
Conde Nast Portfolio in June, the senator issued a fiery written
statement expressing his outrage that anyone would think he would use
his office to snag a financial advantage. He refused to answer
questions that Friday afternoon and retreated to his Connecticut home,
"traveling and unavailable." A week later, he both denied and admitted
that he knew he was a member Countrywide's VIP program, dubbed "Friends
of Angelo" after Angelo Mozilo, the company's co-founder.
Dodd said at the end of July that he'd release his mortgage documents
"at some point." A month later, he told The Courant's Jesse Hamilton
that he'd disclose documents from his mortgages right after President
Bush signed the $300 billion mortgage and bank bailout bill.
Dodd insists "there ain't much to the story." It's an axiom of politics
that a politician who lapses into casual slang in public to describe
his troubles is probably in a panic in private. Bush signed the bailout
nearly two weeks ago, but Dodd has not disclosed any documents.
We know that Countrywide lowered the Dodds' interest rates shortly
before the transactions closed, saving them more than $70,000 over the
term of the loans. The lender also waived thousands in fees routinely
charged to other borrowers.
Last week, the 34-year Washington veteran disappeared. His office won't
disclose where he went at the start of the five-week congressional
recess, saying only that the senator is spending some time with his
family. Begosh and begorrah, Dodd usually makes no secret of visits to
his third home in Ireland.
Countrywide was a tough place to work. Workers knew they needed to keep
records because superiors often blamed subordinates when trouble
arrived. A VIP who got away infuriated the brass. They would review
recordings of phone conversations with customers to learn what went
wrong, according to Robert Feinberg, who handled the Dodd mortgages and
has emerged as the hero so far of this saga. His shrewd decision to
make copies of records and show them to Portfolio's Dan Golden brought
Dodd and others into a punishing spotlight.
One requirement of the VIP program was to tell borrowers at every
opportunity in writing, on the phone or by e-mail, that this special
deal came from Angelo. The loan officer's happiest moment arrived seven
to 10 days before the closing when he phoned the VIP and announced his
interest rate had been slashed. All hail Angelo.
Injured investors and borrowers will compare the deals given the
chairman of the Senate Banking Committee with those offered borrowers
without an exalted title. State attorneys general have been initiating
lawsuits against Countrywide claiming the company engaged in fraud and
discrimination. We know the Dodds paid no fees, but minority borrowers,
one suit claims, got charged extra. Connecticut Attorney General
Richard Blumenthal, usually eager to file suit, waited until Dodd was
out of sight to initiate action last week.
Shareholders, pension funds and others have lost billions in
Countrywide investments. Some of them charge that the company made
false claims about the finances of borrowers to induce the funds to buy
loans. Suits have expanded to include financial companies that
participated in the sale of Countrywide mortgages and still have some
money to pay compensation to the traduced. They aren't going away.
The Senate Ethics Committee is investigating Dodd's deals. It should
have moved by now to make sure no one invokes the spirit of Rosemary
Woods and starts fiddling with recordings. Since Dodd won't talk, let's
cut to the tape.
Double
Standard
Hartford Courant editorial
May 2, 2008
State Rep. Chris Caruso, once the leading voice on revoking the
pensions of corrupt government employees, is suddenly eager to protect
unionized public servants from such punishment.
With only a few days remaining in the session, Mr. Caruso and his
fellow Democrats will derail the landmark ethics reform bill if they
insist on this double standard.
The bill had passed the Senate but stalled in the House last week
because Mr. Caruso, co-chairman of the Government Administration and
Elections Committee, wanted to go back 10 years in revoking the
pensions of public officials convicted of using their offices
dishonorably. There are questions about the fairness and
constitutionality of heaping additional punishment on offenders who
have already been sentenced (and in some cases served their sentences).
House leaders settled the matter by agreeing to introduce his
retroactivity provision as a separate bill.
But Democratic House members were at it again Tuesday. They exempted
union members from pension revocation. Under the amendment, judges
could reduce the pensions of unionized employees — but only to repay
stolen money and pay fines, court expenses and the cost of imprisonment.
Mr. Caruso led the charge to water down the bill that he had wanted to
strengthen a week earlier. He argues that collective bargaining
agreements protect unionized employees from having their pensions
revoked. He is less clear on why those same union contracts do not also
protect employees from having their pensions reduced.
Pension forfeiture laws in Massachusetts and other states have survived
court challenges. The U.S. Supreme Court ruled in 1983 that when a law
serves a legitimate and necessary public purpose — as pension
forfeiture does — it may override any "impairment" to a contract.
The ethics measure contains other good features. It prohibits
legislative and gubernatorial chiefs of staff from soliciting campaign
contributions from staff. It criminalizes the failure to report a bribe
offer and bars contractors from offering jobs to state employees who
participate in securing them contracts.
But the last-minute amendment to favor unionized employees could delay
the bill until the legislative clock runs out.
Senate
Democrats to seek ethics
reforms
DAY
By Ted Mann
Published on 12/11/2007
Hartford -- State Senate Democrats will push for a slate of ethics
reforms when the legislature convenes next year, including
establishment of a code of conduct for legislators, and a permanent
bipartisan committee that will consider ethics violations and dole out
punishment.
The announcement by Senate President Donald E. Williams Jr.,
D-Brooklyn, comes on the heels of the resignation of the chamber's
former Republican leader, Sen. Louis C. DeLuca of Woodbury, in the face
of an inquiry into his dealings with an allegedly mob-connected trash
hauler.
And it also comes days after press reports revealed that a prominent
Democratic senator, Thomas Gaffey of Meriden, was dating the
legislative liaison for the Connecticut State University system this
year, even as CSU fought for and eventually was granted nearly $1
billion for a 10-year capital improvement campaign.
Williams, who announced the plans ethics bills alongside Sens. Gayle
Slossberg, D-Milford, and Ed Meyer, D-Guilford, said Gaffey had done
nothing wrong, but also said the legislators would consider tightening
restrictions on interactions with legislative liaisons, who act as
lobbyists for state agencies and commissions.
The Senate Democrats' plan would also mandate greater ethics training
for elected officials, and allow judges to revoke the pensions of state
officials convicted of corruption - a proposal that has been floated
but never passed over the past five years of corruption and ethical
scandal in Hartford.
The ethics plan will be drawn up and debated in the Government
Administration & Elections Committee, which Slossberg chairs, when
the legislature convenes its regular session in February.
Republican leaders said they were skeptical of the timing of the
senators' announcement, noting that it comes only days after the
revelations of Gaffey's relationship. The effect was to blunt news
coverage of the senator's potential conflict of interest, they said.
“It's tough to argue with any of what they've put forward here,” said
House Minority Leader Lawrence F. Cafero Jr., R-Norwalk. “The question
is the timing.”
Ethics
Board Names Temporary Director
By JON LENDER | Courant Staff Writer
September 28, 2007
The state's ethics board has named a former Superior Court judge as its
acting executive director while it seeks a permanent successor for
recently departed director Benjamin Bycel.
Former Superior Court Judge Beverly J. Hodgson, of New Haven, will run
the Office of State Ethics, starting Monday, for "a couple of months"
while the agency's supervisory panel, the Citizen's Ethics Advisory
Board, searches for a replacement for Bycel, agency General Counsel
Barbara Housen said Thursday. Hodgson was a judge for 15 years
before becoming a private mediator and arbitrator. Her interim
appointment was approved at a meeting of the advisory board on
Thursday.
The often controversial Bycel submitted his resignation in July - about
1½ years after arriving from Vermont to take the job - following
months of internal turmoil at the ethics office that included a letter
signed in May by five staff attorneys expressing "no confidence" in his
leadership.
Bycel, who was paid more than $120,000 a year, said when he resigned
that he would leave by Oct. 11, and his last day on the job proved to
be Sept. 13, Housen said. The ethics advisory board also elected
a new chairman Thursday - Robert Worgaftik of Avon, who had been vice
chairman - to replace Patricia T. Hendel, of New London, the chairwoman
who will leave the board when her term expires Sunday.
Ethics plan
facing rocky road in House
New Haven REGISTER
Gregory B. Hladky, Capitol Bureau Chief
09/14/2007
HARTFORD — State Sen. Edward Meyer, D-Guilford, called Thursday for
creation of a permanent bipartisan General Assembly panel to handle
allegations of ethical wrongdoing by members of the legislature.
The proposal comes as a special state Senate committee struggles to
look into questions about the relationship between Sen. Louis C.
DeLuca, R-Woodbury, and a trash hauler with alleged mob
connections.
Meyer’s concept has the support of Democratic leader Sen. Donald E.
Williams Jr. of Brooklyn, and Minority Leader John McKinney,
R-Fairfield. But the new ethics proposal could face problems in
the state House.
"I don’t know why we need another committee," said House
Speaker James A. Amann, D-Milford.
Amann said the Office of State Ethics already is charged with enforcing
legislative ethics and that, if necessary, the legislature could use an
existing committee to investigate. Amann had his own ethical
problem this year when state ethics officials ruled against his
long-standing practice of soliciting lobbyist contributions for the
charity that employed him as a paid fund-raiser.
DeLuca pleaded guilty this year to charges he conspired with Danbury
garbage magnate James Galante to threaten a man DeLuca claimed abused
his granddaughter. But Meyer said his proposal stems from a 2005
corruption case that led to the resignation of then-state Sen. Ernest
Newton II, D-Bridgeport, and a guilty plea that sent him to federal
prison on bribery charges.
"I started talking with my colleagues about this in early 2005 after we
got information about Ernie Newton and had no mechanism to deal with
it," Meyer said.
But, he said, it wasn’t until after DeLuca pleaded guilty in June that
Williams asked Meyer to "go forward with it."
"The Connecticut General Assembly does not have an adequate structure
to deal with certain forms of misconduct by its own members, be they
House or Senate members," Meyer said. "That vacuum results in both an
uncertainty of process and the loss of public confidence."
McKinney said he has consistently urged the legislature to create a
system to deal with ethical charges involving state lawmakers. "The
idea of a bipartisan, bicameral committee … is something I support," he
said, adding he plans to offer his own version this fall.
"We haven’t dealt with it well," McKinney said of legislative ethics
cases. "We don’t have a mechanism for that."
Newton resigned before the Senate felt compelled to investigate his
situation. DeLuca stepped down as Senate minority leader, but has
adamantly refused to resign his legislative seat. Senate leaders
named a six-person, bipartisan review committee to look into DeLuca’s
relationship with Galante.
McKinney said he hopes the process set up for DeLuca "is a pretty good
template" for a permanent General Assembly ethics panel.
Williams praised Meyer for his proposal. "It’s time to look at some
form of ongoing oversight for those times when discipline within the
legislature is necessary," Williams said.
Sen. Gayle Slossberg, D-Milford, co-chairwoman of the legislature’s
Government Administration and Elections Committee, also voiced support
for a permanent bipartisan ethics panel.
"Given the last several incidents with legislators, there are some
obvious holes in our ethics system in Connecticut," she said.
Galante has pleaded not guilty to federal charges that he was operating
a trash-hauling monopoly in affluent sections of Connecticut and New
York with the support of the Genovese crime family.
Politics
in CT mirrors this, we assume.
Critics: Grants Can Be Used As Political Reward Or Punishment
DAY
Published on 5/28/2007
Providence (AP) — The money may be short, but the political message can
be loud and clear.
That's what some critics are saying about the decision to approve — or
deny — requests by state lawmakers for grants for local projects.
While the grants can be as small as a few thousand dollars, they can
mean a lot to local voters, and the lawmakers who rely on voters for
re-election. Which is why critics are charging that some grants
are being denied for political reasons.
They point to the decision not to approve a $5,000 grant requested by
Rep. Rene Menard, D-Lincoln, for the Cumberland Public Library.
Menard was the only member of the House of Representatives to vote
against Speaker William Murphy, D-West Warwick, in January as he sought
to keep the most powerful seat in the House. Menard has requested
13 grants this year. None has been approved.
He is the only lawmaker not to receive any money from a system in which
the House speaker must sign off on every representative's
request. The vast majority of other grant requests made by other
lawmakers — from $1,000 for Big Sisters of Rhode Island to $2,000 for
he state Special Olympics — won approval by legislative leaders, for a
total of $2.3 million out of a $7 billion budget.
“That's what happens when you vote against the speaker,” Menard told
The Providence Journal in a recent interview. “For the most part the
grants are delivered based on political support.”
Murphy said politics isn't part of the equation. He said it's simply
impossible to honor every request for a grant.
“Members submit requests on behalf of their constituent agencies. They
then meet with leadership and outline their priorities, recognizing
that all requests cannot be honored given funding limitations,” Murphy
said.
Murphy also pointed to $130,000 Menard had asked for school
defibrillators, which was approved. Menard acknowledged the
money, but said it was part of the state budget, not the legislative
grant program. He said it was for a statewide school defibrillator
program after the 2005 death of a 14-year-old Lincoln boy on a baseball
field.
An analysis of the grants distributed so far this year shows that while
the number of grants is distributed relatively evenly among both
parties, the amount of money isn't.
There was just one grant of more than $5,000 given to a Senate
Republican, while 19 grants over $5,000 went to Democrats.
Legislators Raise Questions About Hiring Of Ex-governor ; Rowland takes
economic development post
DAY
By Susan Haigh , Associated Press Writer
Published on 3/19/2008
Hartford — Two state lawmakers want to know whether former Gov. John G.
Rowland will be interacting with state government in his new job as
Waterbury's economic development coordinator.
In a letter to Waterbury Regional Chamber of Commerce President Stephen
R. Sasala, released Tuesday, they also asked whether Rowland, who
served time in prison for a federal corruption conviction, will be
involved with public funds and who will pay his salary.
“Although we certainly agree that the decision to hire Mr. Rowland lies
with you and the city, we are concerned over his interaction with state
officials in light of his recent criminal history,” said Reps.
Christopher Caruso of Bridgeport and Diana Urban of North Stonington,
both Democratic leaders on the Government Administration and Elections
Committee.
GAE oversees state contracting and state ethics issues.
The two legislators want to know more about how Rowland's salary —
$95,000 plus benefits — will be funded. Both the city and the chamber
are covering the cost. The letter asks if chamber members and
nonmembers will be able to contribute and whether any of them have
contracts or are seeking contracts with the state.
“As legislators, it is our obligation to diligently protect public
funds,” the representatives wrote. “We're sure that you would concur.”
Waterbury Mayor Michael Jarjura, a former state representative who
approached Rowland about the job, questioned why it would matter if any
chamber members have or are seeking state contracts. Also, he said the
former governor will not be involved with any public funds and will not
be lobbying state government.
“His role is to meet with private sector developers and interests,”
said Jarjura, adding that Rowland has had many meetings and there are
“a number of indications where some people want to bring in millions of
dollars.”
Jarjura said he was disturbed by the lawmakers' letter and considers it
a threat.
“Why are these two senior legislators questioning whether individual
chamber members have contracts with the state of Connecticut? Why are
they even raising that if it wasn't to intimidate the private sector,”
he asked.
Jarjura said he also took the letter as a threat to the city, which is
seeking bond funds from the state for various projects. He said he left
a message for Democratic House Speaker James Amann, asking him to
renounce the lawmakers' conduct.
Calls were left seeking comment with Stephen R. Sasala II, president
and CEO of the Waterbury Regional Chamber of Commerce. In January, he
said Rowland's hiring would give the City of Waterbury and the Greater
Waterbury region “a major shot in the arm.”
Rowland, a Republican and Waterbury native who now lives in neighboring
Middlebury, resigned amid an impeachment probe in 2004 and spent 10
months in federal prison after pleading guilty to a corruption-related
charge.
The lawmakers' letter comes shortly after officials from Waterbury
asked the state legislature for $40 million in state bonding to
redevelop an industrial site, create a business loan program and
renovate the city's Silas Bronson Library. Rowland was not involved in
that request.
Ethics
Office Tries To Narrow Ruling;
Some Fear Amann Would