Port Authority paid $700,000 to employer of former board member
The State Contracting Standards Board, in revealing its preliminary review of Connecticut Port Authority contracts, expressed concern last week over one that included a puzzling $523,000 "success" or reward fee.
The port authority, in the contract it signed in May 2018 with a division of Seabury Capital Group, eventually paid more than $700,000 in fees, including the "success" fee, which one contracting board member said the port authority has yet to explain, despite a request that it do so.
It turns out the strange and remarkably lucrative contract with Seabury was signed just a little over three months after Henry Juan III of Greenwich, who identified himself as a managing director with Seabury at the time, resigned from the port authority board.
I only learned about Juan's connection last week, the incredible awarding of a contract to a recent board member's employer, but I have to say that even after all the reports I've seen from the port authority, of the hiring of friends, abusing credit cards and expense accounts and ignoring accounting and procurement standards, this one really stands out.
Even more alarming than the amount of money paid out to a venture capital firm linked to a port authority insider, is that the contract was for consulting services in selecting an operator for State Pier in New London.
One contracting standards board member noted that there was no reason to pay a fee like that at all, since the state's Office of Policy and Management would be available to assist with such procurements.
I'm more troubled because it casts an even longer shadow over the very questionable awarding of the management of the state's port to the competing private port of New Haven. Turns out the profitable deal to help the money managers now running the New Haven port was engineered by a venture capital firm with insider ties to the port authority.
It's the underlying basis for spending tens of millions of state money on the port. It's a rich stew of public money being stirred by bankers and money managers collecting fees.
It seems to clear to me that Gov. Ned Lamont's sweeping of port authority corruption under the rug has missed some of the worst of it. The whitewash isn't sticking.
Not only did the port authority board sign a strange and lucrative contract with venture capitalists to help sign the New London port away to a competitor, but another board member, John Johnson of New London, continues to participate in votes and discussion of State Pier while he stands to profit by industrial property he owns nearby.
State Democrats are deep in this quagmire.
Scott Bates of Stonington, a prominent Democrat who was chairman of the port authority board when the Seabury contract was granted, continues to serve as deputy to Secretary of the State Denise Merrill, who supported him as the scandals involving his stewardship of the port authority unspooled over the last year.
Nancy DiNardo, chairman of the Democratic party in the state, served on the port authority board at the same time as Juan, while Bates was chairman, and she voted soon after he left the board to give the strange and rich consulting contract to his employer, Seabury.
I tried to speak with DiNardo Monday but she did not return specific phone messages about Juan and her time on the port authority board.
I wanted to ask her how she or any other board member could not have known about Juan and his employment by Seabury before they voted to give the company such a lucrative contract. And how would any of them have any credibility as board members now?
I attribute all the official Democratic weight behind the port authority maneuvering to Attorney General William Tong's reluctance to do anything, ignoring specific anti-trust complaints about the lack of competition.
In fact, Tong, in refusing to release whistleblower complaints about port authority corruption, appears to be part of the whitewash. One wonders if the muzzled whistleblowers might have said anything about a half-million-dollar success fee paid to the company of a former board member.
I couldn't reach Juan Monday for comment. His current Linkedin page says he has worked as a managing director at Seabury from February 2017 to the present. Messages left for him at Seabury Capital were not returned, and the company did not respond to a request for comment about the port authority contract.
There are provisions in the state ethics code that would prevent board members from any official actions that would benefit them financially. There are rules about revolving doors and a one-year deadline for not representing anyone before your former agency for compensation.
A spokesperson for the state Office of Ethics said they cannot comment on any enforcement action that may be under way.
Contracting standards board members wisely suggested that alarming problems of the port authority and the state's other quasi-pubic agencies are the creation of the legislature, which needs to impose a solution.
And that should be very soon, I'd say. That big pot with all that public money is still being stirred at the port authority, with more pouring in all the time, in increments of tens of millions of dollars.
This is the opinion of David Collins
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The attorney general said he has been investigating a whistleblower complaint about a success fee paid to the employer of a former port authority board member.