A health clinic is favored, and the FBI asks why

It is a mystery that the FBI is trying now to unravel: On the last day of the 2012 session, how did legislators come to create a $15 million pool of bond money exclusively for a chain of non-profit clinics operated by Mark Masselli, a political supporter of then-House Speaker Christopher G. Donovan?

On April 3, the legislature’s Finance, Revenue and Bonding Committee endorsed a $199 million bond package that included $20 million for a competitive grants program to finance the renovation and expansion of community health centers that serve more than 300,000 patients annually.


Masselli Flinter

Mark Masselli and his vice president, Margaret Flinter. They have a weekly health show on WNPR. (WNPR photo)


But by the last night of the session on May 9, that $20 million pool open to all 14 of the state’s community health organizations had morphed into $30 million, divided into equal pools of $15 million. The bond package won final approval minutes before midnight on the final night.

One $15 million pool was open to the 13 members of the Community Health Center Association of Connecticut.

The other was available to Community Health Center Inc., the non-profit that Masselli founded in 1972 with a single clinic in Middletown and developed into a statewide chain with revenues of $66 million.

“We don’t know exactly how it happened,” said Deb Polun, director of government affairs and media relations for the association.

It is unclear if the FBI knows. But they have been asking, looking in legislative documents and in interviews for evidence that the bonding for Masselli was tied to his support of Donovan’s unsuccessful congressional campaign last year. Masselli and his wife gave $6,300 to Donovan’s campaign and assisted in fundraising.

In subpoenas served on the General Assembly’s Office of Legislative Management in October and November, according to documents recently made public by legislative officials, the FBI has demanded all documents and records created or maintained by the House speaker’s office relating to the bond package.

The subpoenas showed for the first time that the FBI’s investigation into fundraising by Donovan’s congressional campaign last year had moved beyond an attempt by smoke shop owners to illegally influence tobacco legislation to the development of the bonding package.

Two potential witnesses interviewed by the FBI told The Mirror that agents quizzed them on the evolution of bonding for community health centers.

“They came to the Capitol,” said Rep. Betty Boukus, D-Plainville, the co-chairwoman of the legislature’s bonding subcommittee. “They asked the same questions you’re asking.”

Boukus said she told the FBI the same thing she told The Mirror: She could not recall a conversation with Donovan or anyone else about creating separate funds for Masselli’s organization and the others. Given the support previously extending to the clinics, the bonding amount raised no red flags.

“I was just blown away by the work they do,” Boukus said.

Another potential witness, who asked not to be quoted by name, said the agents seemed well-versed on legislative procedures, and they pushed for any details on who directed the increase from $20 million to $30 milion, divided between two pools of funds. Like Boukus, the second witness said he did not know the answer.

Donovan, who did not seek re-election to the General Assembly from his Meriden district, saw his congressional campaign fatally wounded last May and June, weeks after the annual session ended, by the arrests of his campaign finance director and former campaign manager.

Federal authorities accused them of conspiring to accept $27,500 in campaign donations, the source of which were illegally hidden by the use of straw donors, in return for help killing legislation that would impose significant fees on the roll-your-own tobacco business, which the courts had concluded were exempt from the tax on ready-made cigarettes.

Four people connected with smoke shops have pleaded guilty.

No evidence has emerged that Donovan was aware of the scheme. Damaged by the scandal, he lost a Democratic primary in August to Elizabeth Esty, who went on to win the seat in November.

The $30 million in bonding for the health centers began with a pitch by the association to the administration of Gov. Dannel P. Malloy before the start of the 2012 session. Like governors before him, Malloy was supportive of the health centers, which care primarily for the uninsured and those on Medicaid.

Malloy did not include the funding in his budget, but it is normal for the legislature to add items to the bond package, which often includes funding for non-profit groups, especially those that provide a community service.

There is nothing unusual about government support for community health centers, which were created with government assistance beginning with the federal government’s war on poverty in the 1960s and continuing through the passage of President Obama’s Affordable Care Act.

Donovan, whose city of Meriden was served by one of Masselli’s satellite clinics, also was as long-time supporter of various efforts to provide better access to health care for the poor and uninsured.

But the question is why did the legislature ultimately create two identical funding pools, one for Masselli’s non-profit and one for everyone else?

Donovan, who has not answered questions about the investigation, did not answer a call for comment.

Masselli declined to be interviewed, leaving questions to Andrea Obston, a public-relations consultant whose advertised services include crisis planning and management.

In a statement, Obston responded generally to the issue of state funding for Community Health Center, not the specific question of the rationale for two identical bonding pools:

“Over the years, Community Health Center Inc. has experienced bipartisan support to expand access to care to the neediest of people. Increasingly, this population has lost their access to care. With high unemployment levels, the number of people relying on our services has grown. CHC operates primary care sites in thirteen cities, and also provides primary care in many schools and homeless shelters. This requires an enormous of investment of capital to meet the needs of these underserved populations. And we are grateful for the bipartisan support that we have enjoyed over the years.

“The Community Health Center, like other non-profit organizations, is eligible to receive bond funds from the state of Connecticut. When CHC, Inc. receives such funds, they are used for building, renovating, or expanding its primary care facilities in low income neighborhoods. They are not used for administrative purposes. The state of Connecticut has used bond funds for many years to support the work of Connecticut’s health centers and other nonprofit health and social service organizations, which have limited options for financing capital projects.”

Masselli has many fans in government, impressed by the network of clinics, some of which were recently renovated or expanded using bond funds made available during the administration of Malloy’s predecessor, Gov. M. Jodi Rell.

In many ways, his clinical operations reflect what policy makers hope health care will look like in coming years, using electronic records and a coordinated, team-based approach to care known as a “medical home.”

According to a review of publicly available tax returns, Masselli is the highest paid chief executive of the community health centers in Connecticut, with a compensation package that more than doubled from 2009 to 2011.

His total compensation rose from $306,477 in 2009 to $363,703 in 2010 to $629,073 in 2011, but Obston said the 2011 number was an anomaly. His base salary was $330,435, but the non-profit’s board gave him a one-time payment of $273,210, mostly  to compensate for the fact the group had no retirement benefits until 1989.

Ben Barnes, the governor’s budget chief, said the state Department of Public Health is now formulating guidelines for the awarding of grants from the $15 million available to members of the Community Health Center Association of Connecticut.

It has no plans to move forward on the $15 million pool available to Masselli’s organization.

Arielle Levin Becker contributed to this story.