Attorney General William Tong on Tuesday announced his office had closed a whistleblower investigation into the Connecticut Port Authority and determined there was nothing illegal about the $523,000 “success fee” paid to a contractor, Seabury Capital, whose co-founder was a former port authority board member.

The investigation dates back to 2020, when the Connecticut Auditors of Public Accounts received allegations from a whistleblower about potentially improper and unethical conduct by port authority employees, board members and a contractor, New York-based Seabury Capital, also known as Seabury PFRA, LLC. The auditors reviewed the complaints and reported the findings to the attorney general’s office, which in turn opened an investigation.

“Our investigation did not substantiate the whistleblower’s allegations of impropriety regarding ‘success fees,’ but it did substantiate allegations of unethical behavior, as well as develop evidence of multiple alleged violations of both the Code of Ethics for Public Officials and the Code of Ethics for Lobbyists,” Tong said in a statement.

In 2023, the Office of State Ethics determined Seabury, the company hired by the port authority to find an operator for State Pier in New London, violated the code of ethics for lobbyists by spending money on items like food, drinks and overnight lodging between 2017 and 2019 for port authority employees that included its former Executive Director Evan Matthews. Seabury paid $20,000 to settle the violation with the Office of State Ethics.

Henry W. Juan, a former port authority board member and Seabury managing director, paid a $18,500 fine in a settlement over allegations he illegally lobbied the port authority. Juan did not admit any wrongdoing as part of the settlement. In 2022, former port authority employee Andrew Lavigne was fined $750 and suspended for two days for accepting tickets to a hockey game.

Tong, in a statement, said the success fees paid to Seabury, which were criticized as a potentially illegal “finder’s fee” by the State Contracting Standards Board, were in fact payments contained in an agreement between the port authority and Seabury. The $523,000 success fee was part of a $700,000 payment to Seabury in 2020 for the work the company performed.

“Those success fee provisions were both legal and sanctioned by the CPA Board of Directors,” Tong wrote. “The success fee provisions in the Agreement were legal because, although the success fees could be considered ‘finders fees,’ they were compensation for the provision of ‘financial advisory services,’ ” Tong wrote.

Acting on recommendations of the State Contracting Standards Board, legislators passed a law last year that bans the port authority from entering into contracts with success fees. The legislation was championed by State Rep. Christine Conley, D-Groton, and State Sen. Cathy Osten, D-Sprague.

Aside from codes of ethics violations, Tong’s investigation did not develop evidence of additional illegal conduct, Tong said in a statement.

“The agency tasked with enforcing Codes of Ethics violations ― namely, the Office of State Ethics ― did just that,” Tong said. “We thank the OSE for its hard work and dedication to enforcing Connecticut’s ethics laws.”

The Connecticut Port Authority issued a statement after news from the attorney general’s office: “While the CPA has no comment regarding the AG’s press release, the CPA is proud of the professional administration of its policies, procedures and financial management over the past few years, which should give our citizen’s confidence that the foundation for future success is in place.”

A spokeswoman for Gov. Ned Lamont deferred questions to Tong.

Senate Republican Leader Kevin Kelly, R-Stratford, issued a statement questioning the attorney general’s opinion.

“The work of the Attorney General and his team is appreciated, and we thank the Office of State Ethics for enforcing our ethics laws,” Kelly said in a statement. “However, this may require a closer look at the legislative level. People on Main Street – working and middle class families - view this situation as both unethical and improper. They want accountability. A review of our state statutes in this area may be in order.”

g.smith@theday.com