Sen. Somers, State Watchdog criticize CT Port Authority

February 4, 2022

From The Day of New London

The Connecticut Port Authority was already facing a public perception problem, having faced criticism and scrutiny from state lawmakers over past financial and personnel issues.

A new report issued by a state watchdog group, the State Contracting Standards Board, is unlikely to change that perception.

The board said it has identified issues and possible violations of state statute committed by the Connecticut Port Authority during its time working toward the redevelopment of State Pier in New London.

The board released a report on Friday with a list of recommendations and concludes, among other things, that the port authority should adopt ethics and communications standards to limit any real or appearances of conflicts of interest.

That specific recommendation stems from the board’s examination of the circumstances surrounding a $523,000 success fee that was part of a $700,000 payment to Seabury Maritime Capital, a contractor hired by the port authority in 2018 to help find an operator — Gateway Terminal, which also operates New Haven’s port — for State Pier.

Henry Juan, an employee of Seabury, was a port authority board member until about a month before Seabury was chosen by the port authority to conduct the work. Juan was present for discussions leading up to a vote to hire Seabury.

“While he abstained from the vote, he did not recuse himself and there are questions included in the report about whether or not he had any knowledge that would have changed or helped his company’s bid in that work,” said State Contracting Standards Board member Lauren Gautier, who authored the report.

Additionally, Seabury ultimately was paid a $523,000 success fee, which did not appear in the original solicitations for bids for the work but later was included in Seabury’s contract.

“Meanwhile other prospective bidders thought this wasn’t even an option,” Contracting Standards Board Chairman Lawrence Fox said. “It’s just terrible in terms of open, fair bidding. I mean, I can’t think of anything that’s less fair.”

The board also questioned if the success fee was even legal, since there is state statute prohibiting so-called finders fees.

“One could make an argument a success fee is a finder’s fee by another name,” Fox said.

And while the port authority officials argue success fees are common in their industry, the Contracting Standards Board in its report said it “does not believe that they are appropriate for government contract work.”

The board discussed the report at a meeting Friday and renewed a commitment to work with the port authority to develop comprehensive procurement procedures.

It already has compiled a draft manual in concert with the port authority.

The investigation taken up by the board was prompted by a 2020 complaint about the port authority’s practices and focused on the authority’s procurement procedures “and its accountability to the citizens of Connecticut” related to the State Pier development, a $235.5 million project that is well underway on the Thames River in New London.

The port authority is no stranger to controversy and was heavily criticized following a whistleblower complaint and reports of financial misconduct under former Executive Director Evan Mathews and former authority board Chairman Scott Bates.

The result was hearings, state oversight of the port authority and recent legislation that demands more reporting to the legislature as work at State Pier proceeds.

State Sen. Heather Somers, R-Groton, issued a statement critical of the port authority and said “there is zero excuse why a quasi-public entity cannot follow its own procedures.”

She said the report raises questions and requires further investigation and legislative reform to ensure compliance and prevent any misuse of funds.

“As lawmakers, we have worked in a bipartisan fashion to craft and pass legislation to reform the authority, but this latest report proves we have more work to do,” Somers said, in part.

“This is more than just not following simple procedures. This is about a few individuals entrusted with millions of taxpayers’ money, making crucial decisions which have long-term impact on our region and entire state. There is so much at stake … that it is without question the public must have confidence the CPA is following procedure to the letter of the law. The report clearly shows this is not the case,” Somers said in a statement