Fasano: Democrats are “brazenly disregarding the intent of the law”

October 19, 2015

Hearst Connecticut Media

Connecticut’s clean elections law prohibits those who do business with the state from contributing to the campaigns of politicians who could award or influence state contracts — including the governor and legislators.

But that hasn’t stopped the relentless flow of state contractor cash. It has merely diverted it.

A Hearst Connecticut Media investigation into the Democratic State Central Committee’s federal account, which has no restrictions on who can contribute, shows it is filled with money from those on the state’s banned contractor list.

Nearly 25 percent of the money collected in the Democrats’ federal account since January 2013 has come from more than 460 builders, lobbyists, lawyers and others who are prohibited from contributing to statewide and/or General Assembly races, the investigation has shown.

Of the $4.8 million the Democrats’ federal PAC raised in those 32 months, $1.1 million came from businesses and individuals who are on a state list of 5,500 outlawed contributors, according to Federal Election Commission records.

And yet, just days before the election last year, the Democrats raided the fund for more than $318,000 to pay for mass mailings supporting Gov. Dannel P. Malloy. This spending is the focus of a Republican complaint to the State Elections Enforcement Committee and a lawsuit filed by Democrats to stop the investigation. The case is headed for trial starting Oct. 27 in state Superior Court.

National election watchdogs say the use of the federal account is simply a backdoor system of pay-to-play.

“This is an old game,” said Meredith McGehee, policy director at Washington-based Campaign Legal Center. “Strip away the legalese and this money comes from a party that intends to curry favor with public officials. Politicians are just as complicit. Contractors feel like they’re in a shakedown.”

The Hearst investigation found that in recent years, fundraisers for Democrats, who have majorities in the state House and Senate, have stepped up their pace. They are now raising millions of dollars more annually than before Malloy, the state’s first Democratic governor since 1990, took office in January 2011.

Tactics include party loyalists who scour lists of lobbyists and their clients. Democrats also pay professional fundraisers in Boston and New York thousands of dollars each month.

“It’s all so aggressive now,” said Stephen Coan, president and CEO of the Mystic Aquarium, adding that political fundraising activities seem to have changed in recent years.

Coan, of Pawcatuck in eastern Connecticut, wrote a $10,000 check to the Democrats’ federal account in 2014. His connection was U.S. Rep. Joe Courtney, D-Conn. Coan said he gave the money for events in the state involving President Barack Obama, Vice President Joe Biden and former President Bill Clinton, who came to support Malloy’s re-election. In 2013 and 2014, the Aquarium received $589,106 from the state.

A challenge to clean elections

Connecticut’s campaign-finance reforms were created after John G. Rowland, the disgraced former governor, was sent to prison for taking kickbacks from companies that won lucrative tax breaks and contracts.

Michael J. Brandi, executive director of the SEEC, noted it was 10 years ago this month that the bipartisan Campaign Reform Act of 2005 was signed into law.

“So far it’s been enormously successful and we’re committed to seeing it succeed for a long time into the future,” Brandi said in a statement. “But it’s also had a lot of challenges along the way, and this current lawsuit is another direct challenge to its survival.”

Under the rules of the Citizens Election Program, candidates for governor who want public funding must agree to limit their campaign spending to a set state grant after raising $250,000 in small contributions. Candidates who accept public financing and then take outside money face penalties ranging from fines and forfeiture of their grants to criminal prosecution.

Traditionally, state parties’ federal accounts were not used for state races at all, but only congressional and national campaigns. Democrats last year, however, facing a tough challenge from GOP gubernatorial candidate Tom Foley, decided to take the chance and transfer hundreds of thousands of dollars for Malloy’s endgame push.

Generous contributors

The Hearst investigation has found that among the big check signers are officials from HAKS Engineers, a major design firm that is banned from contributing to both statewide and General Assembly races. Executives at the New York and Connecticut-based company contributed at least $75,000 to the Democrats’ federal account, including $32,500 from Husam Ahmad, president and CEO, and his wife. HAKS had more than $8 million in state contracts in 2013 and 2014, according to state records.

The owners, employees and families at Viking Construction in Stamford, which has done major state-financed work throughout Southwestern Connecticut, and is also prohibited from statewide and General Assembly campaigns, contributed $77,500 to the federal account. The firm is currently part of a consortium awaiting the go-ahead on a half-billion-dollar contract to rebuild the Stamford train station, led by the JHM Financial Group, whose president, John H. McClutchy Jr., of Darien, and his family, contributed $65,000 since 2013.

Officials from HAKS, Viking Construction and the JHM Group did not respond to multiple requests for comment. James A. Manafort Jr. president of Manafort Brothers Inc. of Plainville, declined comment on $14,000 in family contributions to the DSCC. The company had 91 state contracts, mostly with the Department of Transportation, in 2013-14, totaling $29.1 million.
The contractors’ contributions are legal. Individuals are allowed to give up to $10,000 a year to the federal account.
But, if any of the $318,000 transferred from the federal account that was used to supplement Malloy’s $6.5-million public-financing grant including contractor funds, as Republicans allege and as the SEEC wants to investigate, the Democrats could have violated the law.

Democrats say the mailing in question was a legal Get Out The Vote (GOTV) flier that happened to feature Malloy and required funding from the federal account. To stonewall the SEEC’s investigation, which would reveal tactics and strategy in their high-stakes campaign fundraising operation, the Democrats filed the lawsuit.

But Senate Minority Leader Len Fasano, R-North Haven, who joined the complaint with the SEEC, said the Democrats were being hypocritical.

“There’s a reason why we banned state contractors from giving money to candidates,” he said. “But since 2013, the Democrats in this state have been intentionally circumventing the law and taking state contractor money anyway. The Democratic Party stood in victory when the campaign finance bill was passed and now they are brazenly disregarding the intent of the law.”

Few among more than a dozen executives contacted for this story returned calls seeking comment.

First Amendment right

Paul Antinozzi, of Woodbridge, the president of Antinozzi Associates architecture firm in Bridgeport, said that he couldn’t remember events that led to his writing three checks totaling $5,350 to the state Democrats’ federal account in 2013 and 2014.

“I do recollect that I had reservations because of the state contract, and was very concerned that this would fall outside the realm of a donation that was legal,” Antinozzi said in a recent phone interview. “I think I actually called somebody and felt it was OK. We understand the need for funding for these efforts and I’m not sure who exactly asked or what the circumstances were.”

Antinozzi said that the firm, which most recently designed the new Roosevelt School in Bridgeport, currently has only one contract with the state, the renovation of the Eli Whitney Vocational-Technical High School in Hamden. State records indicate the firm was paid $322,827 for seven contracts in 2013 and 2014.

Leigh Appleby, communications director for the Democratic State Central Committee, defended use of the federal account, saying the committee took the “extraordinary step of segregating state contractor money within our federal account to avoid even the appearance of impropriety.”

“We believe that we were not just allowed to, but required, to use federal funds for mailers when there is a federal candidate on the ballot when we engage in GOTV activities,” Appleby said in an email. “And because there were federal candidates on the ballot, we were required to pay for the GOTV mailer with federal funds.”

Craig Holman, government affairs lobbyist for Public Citizen, the consumer and election advocacy organization in Washington, disagreed.

“I would not say this was a legal transaction. ” Holman said. “No matter whether you send money to China, if it comes back to Connecticut and is used by an authorized committee for the benefit of the state candidate, that is a violation of the state’s pay-to-play law.”

A way to get attention

Manish K. Gupta, vice president of the Glastonbury-based GM2 Associates, an engineering firm, said that in February this year — four months after the GOP complaint to the SEEC — when he wrote a $5,000 check to the state Democrats’ federal account, he was told by party officials that the money would not be used for in-state elections.

“I was given absolute assurances that I was not running afoul of the law,” Gupta said in a phone interview last week. “Myself, I definitely want to be engaged in electing the congressional delegation that represents our state and the only way to participate is to steer away from the state account. It’s not atypical for us to express our First Amendments right.”

The son of parents who emigrated from India, Gupta said he has led a political action committee to support immigrants. Once he wrote the check to the Democrats’ federal account, his role was complete.

“I don’t know what money they used and didn’t use,” Gupta said. “I am not privy to that from a donor standpoint. Unless you’re supporting the process, our delegation might not necessarily pay attention to you.”

According to state records, GM2 Associates had 30 contracts with the state totaling $3.6 million in 2013 and 2014.

McGehee, of the Campaign Legal Center, said even the suggestion that businesses have to give in order to get state work taints the clean elections law.

“It’s not based on merit, but on how you gave rather than compete in the business marketplace,” she said. “It should be shocking to the state of Connecticut, but the average citizens know the system is rigged.”