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Lawmakers Want To Shield Contracting Watchdog From The Executive Branch

state-pier-new-london.jpg
State Pier in New London is tied closely into a battle to expand a contracting watchdog agency.

Given Gov. Ned Lamont’s reluctance to fund the State Contracting Standards Board, some lawmakers are exploring new legal options to insulate the watchdog agency from the governor’s control — including moving it from executive branch oversight to the legislative branch.

And after watching long-overdue funding for several new watchdog positions vanish at the last minute in June, the contracting board recently learned it will lose its only employee — Executive Director David Guay — to retirement next year.

“We need to make sure the contracting standards board has an ability to do the work that we’ve assigned them to do,” said Sen. Cathy Osten, D-Sprague, who co-chairs the Appropriations Committee.

The contracting board made headlines in June when, after nearly 14 years of minimal staffing and funding, it appeared poised to grow and fully meet its mission to safeguard state contracting procedures.

The new two-year state budget legislators negotiated with Lamont included $450,000 to fund five additional positions. Currently, the board’s only staffer is Guay, its executive director.

But shortly after that was passed, legislative leaders — at the request of the Lamont administration — included a provision in a subsequent budget policy bill that barred the board from spending $450,000 of its annual allotment.

Osten and others say the last-minute reversal stemmed from the contracting board’s growing interest in the Connecticut Port Authority and one very controversial contract.

Created by the legislature in 2014 to facilitate development of Connecticut’s deep-water ports, the authority’s highest-profile task right now is working with Eversource and its Denmark-based partner, Ørsted North America, to develop an offshore wind farm ultimately capable of generating 4,000 megawatt hours of electricity.

Lamont, who inherited the authority when he took office in January 2019, overhauled the quasi-public entity’s leadership and assigned his budget office to professionalize operations there.

But the contracting board took an interest in the spring of 2019 after learning that the port authority had selected Gateway Terminal to operate State Pier and remake it into a heavy-lift capable port that can accommodate wind generation equipment.

The contracting board specifically focused on more than $700,000 in fees paid to Seabury Capital Group to help with search for a pier operator. The Day of New London first reported that those payments included a $523,000 “success” or reward fee — and that this happened three months after Henry Juan III of Greenwich, who was a managing director with Seabury, resigned from the authority board.

The state auditors referred a whistleblower complaint regarding the port authority to Attorney General William Tong, who has an investigation pending. The auditors also were unable to secure all documents they sought from the authority regarding the search for a pier operator.

Legislative Branch oversight?

For Osten, one option is to remove the board statutorily from the Executive Branch and place it under the direct jurisdiction of the legislature.

“I think they could fit in very easily under legislative management, very much akin with what happens with the auditors,” Osten said. Though empowered by law to review programs and finances within all state agencies and quasi-public entities, the Office of the Auditors of Public Accounts is within the legislative branch, and its leaders are appointed by the General Assembly.

House Minority Leader Vincent J. Candelora, R-North Branford, said the legislature also should explore extending special budgetary protections to the board, such as those granted in the mid-2000s to three other watchdog agencies. Lawmakers specifically barred the governor from imposing emergency budget cuts and other funding adjustments after the fiscal year was underway on the Office of State Ethics, the Freedom of Information Commission and the Election Enforcement Commission.

“I think we need to have that conversation,” Candelora said.

Any proposal to revise the contracting board would go through the legislature’s Government Administration and Elections Committee. Rep. Dan Fox, D-Stamford, who co-chairs that committee, said no one has discussed any potential changes with him to date. But Fox did say the contracting standards board does have merit and should continue to function.

Part of the problem, Candelora said, is that while Lamont’s fellow Democrats in the legislature’s majority grumbled about the administration’s request to effectively remove the extra staffing for the contracting board, they weren’t ready to fight the governor publicly in June.

Candelora noted the contracting board was the centerpiece of the legislature’s response to the contracting scandals that ultimately landed former Gov. John G. Rowland, a Republican, in federal prison for 10 months.

Though enacted while another Republican, M. Jodi Rell, was governor in 2007, funding was quickly suspended in 2008 as Connecticut and the nation fell into recession and state government finances plunged into the red.

Democratic governors who’ve served since — Dannel P. Malloy from 2011 through 2018, and Lamont since 2019 — haven’t warmed to the contracting board.

The Lamont administration has said the board duplicates services already provided by other investigative agencies, even though Lamont pledged as a gubernatorial candidate in a 2018 union questionnaire that he would fully fund the contracting board.

“It was borne out of having a Republican governor, and it’s meeting its death with a Democratic governor,” Candelora said.

Sen. Paul Formica, R-East Lyme, another southeastern Connecticut lawmaker who wants to see the contracting board probe the port authority, said he also is open to any conversation to shield the panel from the Executive Branch.

“Now more than ever has proven that it’s a board that should move forward, he said. “It should be staffed to a level that makes sense.”

West Hartford Democrat Larry Fox, who chairs the contracting board, said the need for more funding recently has become even more urgent, considering Guay’s pending retirement.

Guay, 65, who has a nearly 30-year career in state government, told the CT Mirror he expects to step down in June or July. The governor currently has authority to appoint a successor.

“If there is a vacancy, Governor Lamont will fulfill his statutory duty and appoint a replacement,” said Max Reiss, Lamont’s communications director.

Osten and other advocates for the board have pledged to fight to restore funding for a full investigative staff in the regular 2022 General Assembly session, which runs from early February through early May.

But even if they’re successful, Larry Fox said, the clock is ticking if Guay is to pass his institutional knowledge onto other staffers.

“It’s extremely important to me that there be some overlap of time where it can become a major focus of his work, to provide training and orientation to them,” Fox said.

The contracting board chairman added that if legislators do carve out new rules to safeguard the panel’s funding, it would mean little if somehow the board’s power or scope of authority is curtailed.

For example, the state auditors within the Legislative Branch can comment on all agencies’ actions and make recommendations — but has no power to enforce them.

The contracting standards board, if it finds a contract has been improperly executed, can nullify it under certain conditions.

The leader of one of the state employee unions has been a strong advocate for the standards board.

CSEA-SEIU Local 2001 Executive Director David Glidden agreed Tuesday that more funding for the contracting board is essential, but legislators must be careful what they trade to get it.

“Every administration since the formation of the board has bristled under the scrutiny of the board, and they’ve wanted to minimize the ability” to act, he said, adding it would be a mistake if the panel became “just a recommending board.”