Amistad floats on red ink

Where did all the money the state gave for the schooner Amistad go?

You won't find the answer in the year-long audits of the now largely defunct Amistad America Inc., done, expensively - $78,000 more in state money down the Amistad hole - by the national accounting firm CohnReznick.

Indeed, the vague audits raise more questions than they answer.

In the year ending March 31, 2012, for instance, the audit says the organization had revenues of $495,939, much of that state money, while claimed expenses were $627,448.

Those claimed expenses included, among many inexplicable costs, $234,781 in salaries and $46,857 in professional fees.

Yet the ship sat at the dock at Mystic Seaport during most of that period, part of a two-year "hiatus," under canvas cover, no crew needed.

How could this be? It cost more than a half million dollars to let the ship sit dormant?

Well, in the narrative accompanying the audits, the auditing firm admits they are not saying it is all necessarily accurate. Some of it was based on "verbal" accounting. Honest.

"Invoices were not always obtained contemporaneously for expenses and reimbursements; accordingly disbursements were supported by written explanations instead of invoices," the auditors said in one of many cautionary caveats to the audits.

"Likewise, approval for payment and employee wage rates was often done verbally or through email."

In addition to noting the extreme lack of bookkeeping controls over many years, the disregard of state regulations regarding auditing, deficiencies in credit card documentation and sloppy or missing records, the auditors also remarked about the 2012 numbers: "Internally prepared financial statements were materially misstated."

They added they could provide no opinion about "whether Amistad America Inc.'s financial statements are free of material misstatement."

I take that to say, in non-auditor speak, we can't say if the information in these audits is true.

The questionable books were what you might expect from an organization that didn't file tax returns for three years, losing its nonprofit tax status, and failing to keep up its corporate registration with the state.

The audits also reveal the organization's reckless borrowing, the spending down of its endowment and the taking of hundreds of thousands in bank loans that were then ignored and left unpaid. They also did not bother to pay back any of the $150,000 they took from a New Haven community loan fund.

The combined federal and state revenue for the four years covered by the audits, including two years the ship was mothballed and out of service, was in the millions of dollars. Where did it go?

It's been a week since these long-awaited audit bombshells dropped from the sky, and barely a peep yet from the politicians responsible for the mess and cleaning it up: Gov. Dannel Malloy and Attorney General George Jepsen.

The architect of the Amistad's fade from accountability was Greg Belanger, the executive director who presided over a dismantling of the nonprofit that was given the ship after it was built by the state at Mystic Seaport. The organization no longer has a functioning board of directors.

Belanger, while still head of Amistad America, took a job running the Maine-based tall ship training program Ocean Classroom. He took Amistad with him to his new post, arranging a lease agreement.

Belanger continued this double dipping, running both organizations, with all its obvious conflicts, until I reported it last summer. He then appointed the ship's cook as the new executive director of Amistad America. Honest. No nationwide searches or interviews with board members here.

This is the "reorganized" entity the state kept wiring money to all last year, long after the publicly reported loss of its federal nonprofit status and the lack of a community-based board of directors.

Indeed, the ranking officer at Malloy's Department of Economic and Community Development in charge of the ship's continuing funding, said just this summer that maybe the reorganized Amistad America, the one under the leadership of the cook, needs more state support.

Meanwhile, Belanger's new home, Ocean Classroom, once a respected sail training organization, is also foundering, two ships of its fleet out of water, a $2 million bank loan unpaid, and scheduled to go out of business by the end of the summer. A pattern?

A private school in Fairfield County was scheduled to send some of its students this week on an Amistad trip out of New London, booked through Ocean Classroom. When I called to ask them if they knew what was going on, they did a quick study and canceled, apparently not interested in sending their kids to sea on one of the last trips of a dying organization.

The Amistad itself is probably not worth a great deal of money today, especially in the context of a state budget measured in billions of dollars.

But it is an important symbol, an ambassador ship for the state, one that still appears on many Connecticut license plates. The story it was built to tell, of the state's role in emancipation, is an important one to the state's black community and descendants of slaves, and the way this has been handled is a particular insult to them.

It was meant to be run by a community-based nonprofit with wide representation from the state's black community. Instead it was taken to Maine by a white guy.

And really, how embarrassing for the state to have the ship spirited away in broad daylight, right under everyone's noses, after a year of extensive reporting of what's going on.

It was the Malloy administration, under the leadership of Captain Dannel Duped, who kept funding the folly, even in light of the organization's obvious disregard of state rules for accounting for how public money is spent.

It is now up to Attorney General Jepsen, Admiral Wimp, to get the ship back and put it under the guardianship of some responsible organization - Mystic Seaport comes to mind - that can keep telling the story, with community involvement and participation.

He has proven his office not up to the task so far, powerless in taking on the brazen pirates.

One bright spot in the audit is a report that, even though the state, and its dozing lawyers, foolishly gave a lien release in 2010 for its mortgage on the ship, despite all the financial irregularities, the sloppy Amistad record keepers never filed it.

The lien is still in place, the auditors say.

That may be some open water that even Adm. George Wimp could manage to steer for.

This is the opinion of David Collins

Twitter: @davidcollinsct

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