Jepsen: Audits of Amistad expected soon
With state representatives Diana Urban, D-North Stonington, and Ted Moukawsher, D-Groton, calling for him to immediately investigate whether Amistad America misappropriated
$8 million in state funding instead of waiting for completion of a long-delayed state audit, Attorney General George Jepsen said Monday he believes his office has taken the right course of action.
Jepsen said if his office started its own investigation, Amistad America would have "lawyered up" and not been as forthcoming with documents for the audit.
"I understand the frustration of the political leaders, and I understand the frustration of members of the broader community, but this is the right process," Jepsen said.
But Jepsen said his patience is not "unlimited."
"If audits aren't produced in the time frame that was represented to us, we would strongly consider taking legal action to compel disclosure of information that the audit should have disclosed or if the audits are incomplete we would consider taking legal action to compel disclosure," Jepsen said.
Jepsen said that they have been told that the audits for "at least some of the years" will be made available to them in days, not weeks or months. Gian-Carl Casa, spokesman for the governor's budget office said by email that it was "premature" to respond to questions from The Day about an investigation until the budget office sees the audits.
Once his office receives the audit, Jepsen said step two would be to make appropriate choices.
"That is where we would consider possible legal action to deal with Amistad's governance," he said.
The news that heightened local lawmakers' concerns about Amistad America, was that the Ocean Classroom Foundation, directed by former Amistad America Executive Director Greg Belanger, would close at the end of this summer.
The Maine-based nonprofit has been running educational programs for nearly 20 years and has a contract with Amistad America through July to provide insurance, crew and other marine services.
Belanger announced Friday that two of Ocean Classroom's three ships were in need of costly repairs and therefore could not take students out on the ships and collect revenue from the educational programs, according to reports in the Bangor Daily News.
Urban and Moukawsher, said on Monday that they would be sending a letter to Jepsen calling for him to investigate whether funds were misappropriated once they gathered more signatures from lawmakers.
"There is a disturbing pattern emerging," Urban said. "The Amistad had financial problems, he (Belanger) quit and becomes executive director of Ocean Classroom and takes it (Amistad) with him to tune of $5,000 a month of taxpayers' money. And then Ocean Classroom is going under."
Karen Gano, assistant attorney general, said Amistad America Inc.'s officers and directors, who have the title to the ship and complete fiduciary responsibility for the ship, with state oversight, have assured her that the ship is secure. They have a crew and some time to assess the situation, Gano said.
The ship is not "at any particular risk of being incapable of operating because of a debt, which might be owed to any particular creditor including Ocean Classroom," said Deputy Attorney General Perry Zinn Rowthorn.
Jepsen said that two factors persuaded his office to wait for the results of the audit before taking legal action.
First, he said state officials have provided his office with clear evidence that "they were really taking over day-to-day finances so cash was being cut directly to vendors so the ship was for the time being was being operated appropriately."
Second, he said, this case "appears not to be a case of financial self-dealing, but one of incompetence and negligence so that speaks to a more measured process - the kind that we have engaged in as part of a charity's unit."
He said had there been a "hint at all that there was actual fraud or state money being taken or at risk" as with nonprofit South Arsenal Neighborhood Development Corp., or SAND, which was involved in housing and job training in North Hartford, or the Doc Hurley Scholarship Foundation, which provided scholarships for students to attend college, his office would have taken appropriate legal action. The attorney general's office and the state's Department of Consumer Protection investigated the two nonprofits.
In Connecticut, the Attorney General doesn't have criminal jurisdiction. But if the Attorney General's office finds what it believes to be criminal activity, it refers it to the state's attorney office. The Attorney General's office referred information about SAND's executive director, Karen O. Lewis, to the state's attorney. Lewis was arrested nearly two weeks ago and charged with first-degree larceny for allegedly stealing from the nonprofit.
"At this point, we are not aware of any evidence of criminal activity by Mr. Belanger," Jepsen said.
The Attorney General's office tries not to take legal action just to take legal action, Jepsen said. Legal action frequently tears things apart and "we try to do is be forward thinking."
"We don't want to take any steps that would make it more difficult to bring Amistad back as a visible piece of Connecticut's heritage," he said.
Stories that may interest you
On Jan. 10, U.S. Rep. Joe Courtney, D-2nd District, read a statement describing Desmonds' life and service into the Congressional Record, and a small road behind the high school gym has been designated as Desmond Way with a memorial.
Wednesday is expected to be much milder, with highs in the mid-40s during the day.
Council members will gather in the Council Chambers on Thursday at 6 p.m. to vote on the second list of proposed American Rescue Plan funded expenditures.