Send Amistad creditor bailout plan to the bottom
State Rep. Diana Urban deserves credit for helping to uncover the lack of oversight that allowed the state to keep providing funds to the nonprofit group operating the Amistad, ignoring clear evidence of the organization’s managerial negligence.
However, her proposal that the state should now borrow money and repay Connecticut businesses that were stiffed by the Amistad Group, which managed the ship, is a terrible idea.
Connecticut authorized construction of a replica Amistad schooner to celebrate a part of its history. The ship and crew were to serve as good-will ambassadors and educators on the issue of race relations.
In 1839, African captives, headed for slave markets, rebelled against their captors and took control of the ship, which ended up off New London. In a landmark case, the U.S. Supreme Court ruled the 35 survivors were not anyone’s property, but free men who could return to their native land.
Great story, but the state Department of Economic and Community Development failed to assure that Amistad America was using the $360,000 in annual payments to tell it. Ultimately, the ship ended up in receivership, the mismanaged organization’s massive debts liquidated in the process. A new nonprofit group, Discovering Amistad, is developing education programming that will keep the schooner primarily in Connecticut.
Numerous businesses that sold goods and services to Amistad America went unpaid. Urban proposes legislation to bond state money and repay the Connecticut businesses. She estimates that cost at $250,000. Add in out-of-state merchants and the bill comes to $2 million. Urban only wants to repay state businesses, a dubious distinction legally.
Sorry, but no one should be repaid, not with taxpayer dollars, anyway. The transactions were between the businesses and the nonprofit Amistad America. Sometimes a business sells goods to an entity that fails, and so goes unpaid. That is what happened here.
Urban argues that businesses selling goods and services for the operation of the Amistad would assume the state backed it. It’s Connecticut’s official flagship, she notes.
“This is an incredibly unique situation,” Urban said.
But here’s the rub; any such assumptions were wrong.
Even if this rescue mission did make sense, which it doesn’t, doing it when the state is in difficult fiscal straits would be particularly outrageous.
Connecticut frequently provides grants and incentives to businesses or nonprofits it wants to help grow. Some will fail, leaving unpaid bills. The legislature should not set a precedent for bailing out such creditors.
What the legislature should do is scuttle Urban’s proposal.
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