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As AG Tong investigated $523,000 fee, Lamont's team paid it

One surprise to me from Attorney General William Tong's disclosure last week, that he's been investigating whistleblower allegations about a $523,000 success fee paid to the company of a former board member of the Connecticut Port Authority, was the strange time frame of his inquiry.

The whistleblower complaints, which Tong is fighting the public release of in a pending case before the Freedom of Information Commission, were made in 2019 or earlier.

He's still investigating? What could possibly take so long?

I put this question to Tong's office this week. It said it won't comment on pending investigations.

What's especially troubling about Tong's molasses-slow investigation, one no one even knew about as the fires of scandal at the port authority have roared all this time, is that nothing has apparently been done to flag ongoing related transactions.

Tong said, for instance, in his surprise announcement last week, that the success fee paid to an affiliate of Seabury Capital, which employed former authority board member Henry Juan III of Greenwich as a managing director, was part of the whistleblower complaints about port authority management misuse of funds conveyed to his office by state auditors.

The original Seabury contract was organized in the spring of 2018, just months after Juan left the authority board.

But the now-controversial success fee was not authorized by the port authority board until July 2020, when board members agreed in a 10-3 vote to pay it.

Three members of the board not affiliated with state government voted against the payment and declined to give their reasons when a reporter from The Day asked at the time.

The yes votes to paying the success fee included all the representatives of the Lamont administration, including delegates from four different state agencies. The representative for Treasurer Shawn T. Wooden also voted yes to the $523,000 payment.

The $523,000 was actually a negotiated settlement of a larger success fee being sought by Seabury, based on the investments in the port it claims to have arranged.

Shouldn't the attorney general have spoken up at the time, if he was investigating a whistleblower complaint about the success fee, before it was actually paid?

I equate this with a police detective investigating a plot for murder not speaking up as the plot unfolds and an attempt at murder actually occurs.

Tong's office argued against release of the port authority whistleblower complaints in a session last summer before a hearing officer of the FOI commission, saying release of the complaint could lead to disclosure of the identity of the whistleblower, which is protected by law.

I hope the full commission rejects this bid for secrecy for whistleblower complaints, which are not specifically exempted from public disclosure in state statutes.

If you can sweep it under the rug when someone blows the whistle, what's the point? It was, after all, in recent history, the disclosure of a federal whistleblower complaint that led to the first impeachment of Donald Trump. The identity of the whistleblower was protected.

There seem to be lots of issues regarding the success fee to investigate, not the least of which is the disputed payment of more than a half-million dollars to a company that employed a recent authority insider at the time it was hired.

There was another bidder for the contract that Seabury won, and that bidder did not propose a success fee, although David Kooris, port authority chairman, said this week the other bid did suggest additional fees could result if the project were to evolve.

Kooris says success fees are routinely paid in the industry and provided examples in response to a question from The Day.

Seabury said in its 2018 letter of introduction that it had done work for Delaware's Port of Wilmington in its effort to privatize.

Curiously, by the time the port authority signed a second amendment to Seabury's contract, with the success fee included, the Associated Press was already reporting about a lawsuit in which Seabury was trying to collect more than $10 million in a disputed success fee regarding the Delaware port, which claimed it did not owe anything beyond $1.7 million it had already paid.

So there's lots to investigate, things the port authority might have done differently, though I don't know why that investigation should take years.

Most worrisome to me about the success fee is the way it apparently drove the process in selecting a port operator that runs the competing private, non-union port of New Haven. It looks like Seabury might have steered the competition toward a choice that would secure the largest success fee, and not necessarily the one that would produce the best outcome for Connecticut.

Why else shut down the state's public deepwater port to traditional cargo and give that business to the competition, when there was another bidding operator willing to keep the port open to cargo ships while also developing it for wind turbine assembly?

Alas, the attorney general has said he is not interested in investigating the anti-trust implications of turning the management of the port in New London over to its competitor, who promptly shut it down.

This is the opinion of David Collins.


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