Fasano Seeks Oversight – Will bells toll for quasi-public agencies?

February 24, 2017

Column by Ken Dixon as it appeared in the CT Post

In the canon of literature, Quasimodo, the hideous, bell-ringing Hunchback of Notre-Dame, is a misunderstood freak of the 19th Century whose deformity and deafness made it impossible for him to win the woman he loved. An expert in the architectural ins and outs of the landmark Paris cathedral, he nimbly escaped the reactionary mob, for a while.

In Connecticut, quasi-public agencies such as the Connecticut Lottery Corp., Connecticut Innovations, Inc., the Connecticut Housing Finance Authority and the State Education Resource Center, have their own levels of deafness. Set up to be apart from state government red tape and touted for their “nimbleness” in the marketplace, more legislative leaders are wondering if they are becoming governmental freaks that need stricter oversight, if not a forced return to full government control.

Senate Republican Leader Len Fasano has been fuming about the issue for months, miffed over six-figure severance agreements that the Lottery and Housing Finance Authority gave to departing agency heads. He spoke to the legislative Government Administration & Elections Committee last week in favor of a bill that would require the state attorney general to approve any deals over $100,000 in value.

“That’s taxpayers’ money,” said Fasano, of North Haven. “That’s a significant amount of money and we don’t know anything that’s going on. We gave birth to these quasies. It’s under our privilege that they exist. Then we kind of push them off shore and we get busy with other things and we never hear from them again until something goes awry and somebody picks it up in a newspaper article.”
Fasano told the committee that he has detected a level of arrogance in the agencies.

“Maybe it’s a good deal. Maybe it’s a bad deal, but it should see a little bit of sunlight and have a little bit of conversation by the AG’s office and by the committee that reviews,” said Fasano, who has added clout now that the Senate has an equal number of Republicans and Democrats after 20 years of a solid Democratic majority.

“The bottom line is very simple,” he said. “We create these quasies. We have a fiduciary responsibility to our taxpayers. We have a fiduciary responsibility to the state. There’s no harm in casting some light on this. There’s no harm in looking at these issues to determine whether it’s a good deal or a bad deal. A lot of these quasies, and they have every right to, cut out the attorney general’s office for legal opinions. But when they bind the state to financial obligations, contracts or otherwise, I think our AG should review them.”

Sen. Michael McLachlan, R-Danbury, co-chairman of the committee, noted that the Housing Finance Authority submitted testimony against Fasano’s proposal, warning of “unintended consequences” and possibly and delaying CHFA’s ability to act quickly.

“Having the AG’s office is a nominal period of time to wait, in my perspective,” Fasano replied. “I don’t think there is a tremendous delay when these take place. I would argue that the little time delay is less important than our obligation to the state to ensure that our tax dollars are being spent appropriately.”

Sen. L. Scott Frantz, R-Greenwich, a committee member, supports Fasano. “It’s high time that something like this was put into a bill and ushered efficiently through the process,” Frantz said. “The quasies, we all know, were set up many years ago to have a certain amount of independence, but not too much independence.”

Then Fasano went off on the Lottery. “I talked to a few of the board of directors who basically said ‘look, we run it as a business. We’re making money for you. Why are you complaining about this severance?’ You’re the lottery. By definition you’re making money. You’re not doing anything to say to me as a representative that ‘I don’t have to answer your questions because I’m making you money. Stay out of my way.’ But that speaks to the audacity of the committee to believe they are totally autonomous from the state of Connecticut. They are not.”

“You raise some very valid and important points,” said another committee member, Rep. Cristin McCarthy Vahey, D-Fairfield.

The next day, the argument for tightening the leashes on quasi-publics came in the form of a scathing state auditors’ report on the governor’s vaunted Department of Economic and Community Development, a traditional Executive Branch agency that has spread hundreds of millions of dollars in pro-business grants and loans.

Auditors found a litany of problems. Grant recipients were allowed to hold unspent state money for “excessive” amounts of time. Employees were paid overtime or compensatory time without proper authorization. Eight out-of-state trips were not reported to the governor’s budget office. And semi-annual progress reports on Manufacturing Assistance and Urban Act projects “were not submitted to DECD in a timely manner or were not submitted at all.”

If the DECD has these kinds of problems, the bell towers of the “nimble” quasi-publics surely need more state oversight.