Dubious dealings by state loan recipient

The eviction of a small company in Hartford for failing to pay its October rent of $7,650 wouldn't normally warrant attention, but the eviction of the Hybrid Insurance Group from a building owned by a Hartford city official and his family is not exactly routine.

First, there's state taxpayer money involved. Hybrid, owned by 30-year-old Earl O'Garra Jr., had moved to Hartford from nearby Windsor just last year with the help of a generous state loan and grant. That alone raises questions about what appears to be a growing practice - giving state loans and subsidies to companies that simply move from one community to another. These transactions are supposed to create jobs and growth but it's not clear how they do it and to whose advantage.

But there's much more than that issue to this move, including a federal grand jury investigation into the disappearance of $670,000.

It all started when Mr. O'Garro received a $26,000 state grant and a $100,000 loan package from the Connecticut Department of Community and Economic Development to move the company he founded in 2010 from Windsor next door to Hartford. His new office was in a building owned by Hartford City Treasurer Adam Cloud, his father and his brother, Christopher, whose lobbying firm is employed by Mr. O'Garro.

After Hybrid moved in, the treasurer wrote a laudatory letter of recommendation for his new tenant, praising "the tenacity, knowledge and expertise that Hybrid Insurance Group brings to the table," according to reporting by Jeff Cohen of National Public Radio's WNPR.

Mr. O'Garro then proceeded to get some insurance business with the city, but Mr. Cloud told The Hartford Courant he "in no way" assisted Mr. O'Garro. Emails tell a different story.

In June, after Mr. O'Garro emailed Mr. Cloud that he was looking for still more business, the treasurer emailed the city's finance director, calling Hybrid a certified minority contractor that deserved a serious look in selecting insurance brokers for the city. Another email from Hartford's risk manager says Mr. Cloud recommended Mr. O'Garro's firm.

Since then, things have gone rather badly in both Mr. O'Garro's business and his relations with his former landlord and the city, much of it inspired by the case of the missing $670,000.

Media sources report the journey of the $670,000 began with an emergency call from the city's insurance broker, Mr. O'Garro, to the city treasurer, informing him the Hartford Board of Education's excess liability insurance policies were in danger of cancellation unless premiums were paid immediately to two insurers, Starr Indemnity and National Casualty. Mr. Cloud quickly notified the city Finance Department and the money was wired to Mr. O'Garro.

It was never seen again. State and federal investigators want to know what happened to it.

So, to recap, Mr. O'Garro gets a state loan and grant to move into an office owned by the family of the Hartford city treasurer, whose brother was Mr. O'Garro's lobbyist. The treasurer appears to lobby the City of Hartford to steer some city insurance business Mr. O'Garro's way. And $670,000 in city money sent to Mr. O'Garro's company, ostensibly to pay for premiums, disappears.

Oh, and Mr. O'Garro also defaulted on that state loan to cover his move. He owes the state's Small Business Express program $105,792.

In addition, the Cloud family has sent Hybrid the eviction notice and Mr. O'Garro is facing foreclosure on a home he owns in Marlborough.

The state is also investigating charges he owes thousands of dollars in wages to 14 employees of a failed restaurant he opened in Middletown in March. Mr. O'Garro gets around; in a Maserati, according to the Hartford Courant.

Mr. O'Garro's defaulted state loan comes from the DECD's two-year-old Small Business Express program, which provides loans and grants to businesses employing fewer than 100 "to spur job creation and growth," according to its website.

DECD spokesman Jim Watson said the program has provided $121 million in loans to 918 small businesses in the past two years and only seven of them have defaulted, making Mr. O'Garro's firm a notable exception.

But how closely is use of that state money monitored and how effective has it been in creating jobs? State taxpayers need to know.

Mr. Watson also said helping Hybrid move to Hartford was in line with the department's efforts to attract growing companies to the state's urban centers. That's a worthy goal, but it appears that potential aid recipients like this one should be examined more carefully, even at the risk of leaving them to grow, or wither, on their own in Windsor.

The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.


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