State stops Amistad payments; Sailfest appearance unclear [The Day]

July 11, 2014

By Joe Wojtas | The Day

The state will not make any payments to Amistad America until a new funding agreement is negotiated and executed, according to the governor’s office.

This news comes amid a storm of controversy surrounding the organization that operates the schooner Amistad. Amistad America said late Thursday that it will try to send the ship to Sailfest after Gov. Dannel P. Malloy urged in strong terms that it honor its commitment to the New London festival.

Malloy’s strongly worded letter came after Amistad America Executive Director Hanifa Washington angered some state officials and residents this week by saying she was backing out of the ship’s commitment to attend Sailfest, in part because of The Day’s coverage of how the organization has spent $8 million in state funding.

“We will exhaust every resource in our effort to attend Sailfest,” Amistad America said in a statement. “Next to upholding our mission, our priority has to be the safety of our crew and compliance to maritime regulations. If we can satisfy these requirements, we will gladly participate.”

The ship is currently berthed in New Haven, its homeport. The three-day Sailfest festival starts today in New London.

Malloy did not address current support in a letter sent Thursday to Amistad America, but urged the financially troubled organization to bring the ship to Sailfest or jeopardize its nearly $400,000 in annual state funding in the future.

However, the governor’s office said that when it became clear a state audit of Amistad America would not be done by June 30, it instructed the state Department of Economic and Community Development not to make any payment to organization in the new fiscal year.

In his letter, Malloy wrote, “I believe it is wholly unacceptable for Amistad America to break its commitment to a festival that brings hundreds of thousands of people to southeastern Connecticut. I write to strongly urge you to reconsider the decision and to make any and all necessary plans to send Amistad to New London.”

He added that ensuring the ship is at Sailfest should be among the most basic annual fulfillments of the organization’s promise to make the schooner available to Connecticut residents.

“Failure to bring the Amistad to New London would force me to reconsider support of additional state funding when negotiating future budgets with the Connecticut General Assembly,” the governor wrote.

Malloy told Washington there may be issues that she thinks would prevent the ship from coming to New London but he fails to believe there are problems that could not have been raised “in a more public manner” months ago.

Also today, State Sen. Leonard Fasano, R-North Haven, wrote a letter to Malloy asking for support of his suggestion to suspend all future direct payments to Amistad America until the state’s financial audit is complete and there is an understanding of how the organization has used taxpayer funds, a move that the governor’s office said has been made.

“The organization has been using state funds with little to no accountability to the state,” Fasano wrote. “Until the state is more fully aware of how taxpayer money is being spent, we should not blindly fund this organization.”

He said financial transparency is a necessity if the state wants to truly protect and preserve the ship, which he called “a huge national treasure” and “an important piece of Connecticut history.”

Fasano said that he had not heard from DECD, which has oversight of the program that funds Amistad America, after he asked the department Monday to immediately halt all payments to the organization.

The governor’s letter was welcomed by State Rep. Diana Urban, D-North Stonington, who has long pursued an accounting of how Amistad America, which lost its nonprofit status for failing to file three years of federal tax returns, spent the $8 million in state funds. She has also urged the organization to pay off its debts to small businesses and organizations, some of which have placed liens on the ship.

Urban has pushed for an accounting of how the money was spent by former Amistad Executive Director Greg Belanger, who signed over operation of the boat to the Ocean Classroom Foundation in Maine, an organization he now heads.

“I can’t thank the governor enough for stepping up for the taxpayers of Connecticut. The buck stops with him,” Urban said this afternoon. “I’ve worked long and hard on this, so it makes me feel good that someone else is paying attention to it now.”

Urban vowed to continue her efforts to get small businesses repaid by Amistad America.

Meanwhile, the firm hired by the state continues to conduct the audit of Amistad America’s finances. That audit was due seven months ago.

Fasano also wrote a letter to the state Office of Policy and Management secretary, Benjamin Barnes, saying the delay in completing the audit is unacceptable and he hopes OPM can resolve whatever issues are delaying its completion.

He asked for the status of the audit, what is causing the delay and when the results are expected.

The Day reported two weeks ago that the auditors are now looking into a $280,000 loan that Amistad America received from TD Bank. The bank placed a lien on the boat in July 2010 after the organization did not make payments, but filed a satisfaction of the lien seven months later, according to Coast Guard records.

The Coast Guard said today the ship’s license is in effect until October.

“Amistad America has not been held accountable for how they are using taxpayers funds for far too long,” Fasano wrote, adding that the audit is the first step to ensuring taxpayer money is spent appropriately.

Barbara Neff, the executive director of the Downtown New London Association, the host of Sailfest, welcomed the news that the governor is urging Amistad America to fulfill its commitment to attend the city’s premiere summer festival.

“We would definitely welcome them,” Neff continued, explaining that Amistad’s decision to back out of Sailfest left the organizers with only one schooner at the three-day festival.
“We always try to have at least two tall ships here,” she said, adding that there will be a berthing spot available for Amistad at City Pier.

Staff writer Ann Baldelli contributed to this report.