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Connecticut Port Authority Investigated For Paying $500K 'Success Fee'

Courtesy: CT Port Authority
An artist's rendering of improvements to the New London state pier, proposed by the Connecticut Port Authority.

Connecticut Attorney General William Tong disclosed Thursday that his office is investigating the quasi-public Connecticut Port Authority and a more than $500,000 fee it paid to a consultant.

The investigation involves the Port Authority’s 2018 contract with a subsidiary of New York-based Seabury Capital Group that received more than $700,000 from the authority, Tong said in a letter to Republican state Sens. Kevin Kelly and Paul Formica. The amount included a $523,000 “success fee” for work that included finding an operator to run the New London state pier.

The senators have questioned the amount of the fee and asked Tong last week to investigate. Kelly, of Stratford, is the Republican leader of the Senate, and Formica, of East Lyme, is the deputy GOP leader.

Tong’s office began investigating the Port Authority after receiving two whistleblower reports from the state auditors, Tong said in the letter.

“We are aware of public allegations concerning the so-called ‘success fee’ paid to Seabury Capital and possible conflicts of interest, and we will investigate those allegations,” Tong wrote.

The Port Authority said in a statement released late Thursday afternoon that it is “neither surprised nor alarmed that the Attorney General would review information it has received from the State Auditors of Public Accounts or other sources. The CPA is committed to cooperating fully and providing timely responses to any requests for information.”

The authority said there have been “several operational shortfalls” brought to its attention by whistleblowers, auditors, the public and the media. The agency entered into an agreement in 2019 with the state Office of Policy and Management in which OPM oversees all financial decisions made by the authority, evaluates its practices and helps implement improvements, the statement said.

Since the agreement was signed, the authority said its board and staff have taken action to “fill any policy, procedural, and training gaps.”

Seabury Capital did not return a message seeking comment.

The Port Authority has previously faced questions about its operations. A state audit in 2019 raised concerns about the authority’s lack of statutorily required policies, including processes for using surplus funds. A prior audit noted that the authority operated for a period of time without accounting records that detailed bank transactions.

The authority, which markets and coordinates development of the state’s ports, also came under scrutiny in 2019 for paying a former board chairperson’s daughter $3,000 for office art. Quasi-public state agencies like the Port Authority are state-chartered, privately managed organizations that take on public missions.

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