AFL-CIO chief: Lamont would roll back contracting corruption safeguards

{Updated at 1:35 p.m. with comments from Gov. Ned Lamont’s administration.}

One of Connecticut’s highest-ranking labor officials accused Gov. Ned Lamont’s administration Monday of trying to roll back clean-contracting reforms enacted in response to the corruption scandal that forced the resignation of former Gov. John G. Rowland.

Connecticut AFL-CIO President Sal Luciano called certain aspects of Lamont’s proposal “reckless and shortsighted” and “a recipe for disaster that threatens the public trust.”

The bill introduced on Lamont’s behalf is “an alarming attempt to return us to the shadowy Rowland years in which the governor engaged in pay-to-play contracting and procurement, awarding lucrative state contracts to those who compensated him with expensive gifts, trips and home improvements,” Luciano wrote in testimony to the Government Administration and Elections Committee. “Rowland repeatedly and systematically used his office for personal gain and was ultimately convicted of corruption charges and sent to prison.”

The Lamont administration countered Monday that it is trying to transform state government and streamline spending as Connecticut faces unprecedented fiscal challenges.

“We respect Sal Luciano and the role he plays on behalf of his organization, but on this issue we wholeheartedly disagree and find this type of rhetoric alarmist and unconstructive,” Chris McClure, spokesman for the governor’s budget office, said. “Public-private partnerships hold the potential to play an important role in economic and infrastructure development, and the governor’s bill is his attempt to bring our state government into the 21st century in a way that doesn’t overly burden state taxpayers and enhances accountability and efficiency.”

Luciano’s testimony comes just a few weeks after the new governor said he would consider a public-private partnership to cover some or all of the capital costs associated with installing toll gantries on Connecticut highways — should legislators approve an electronic tolling system. The administration has estimated capital costs at $213 million and projected 53 gantries would be needed.

At issue is the so-called “Clean Contracting” system enacted in October 2007 to counter the contracting scandals that drove former-Gov. John G. Rowland from office amid an impeachment inquiry in July 2004. Rowland served 10 months in federal prison after admitting he accepted about $100,000 in gifts from state contractors and his staff.

Among the many provisions of that law was a new 14-member standards board, to be appointed by the governor and legislative leaders, as well as a staff consisting of an executive director and a chief procurement officer.

Another key component of the statute involved a series of rules governing when state agencies can hire the private sector. Before privatizing most services currently performed by state employees, agencies would have to develop a cost-benefit analysis that demonstrates at least a 10 percent cost savings, and no loss in quality of service.

The law also makes the presumption that a “core governmental function should not be privatized,” and any department’s cost-benefit analysis arguing that private contracting is necessary must demonstrate that the agency in question lacks staffing to do the job properly.

But that system has had a troubled history almost from its onset.

In the years immediately after its enactment, Govs. M. Jodi Rell and Dannel P. Malloy asked legislatures to approve minimal funding for the standards board as Connecticut fell into recession and struggled with a weak recovery.

At one point the contracting standards’ board’s annual budget was reduced to $10,001 — the minimum amount needed to retain a line item in the overall state budget, but not enough to employ full-time staff.

The chairman of the contracting standards board, Lawrence Fox, told the Associated Press last month that the state could save $174 million to $260 million annually it its relied more heavily on competitive bidding. Fox said the state waves the competitive process nearly 70 percent of the time in contract awards.

Still, as long-neglected pension funds pushed overall state finances into crisis over the past decade, Malloy and his budget director, Ben Barnes, argued the system made it too difficult to privatize government services and cut costs.

And Lamont inherited the same fiscal challenges that plagued Malloy.

Pension and other debt costs already consume nearly 30 percent of the annual operating budget, roughly triple what they did just 20 years ago.

Long-neglected pension and other retirement benefit programs are expected to grow dramatically in cost over the next 10-to-15 years. And legislatures increasingly are pressuring governors to close deficits without raising income taxes or cutting vital social service programs or municipal aid.

State finances, unless adjusted, will run $3.7 billion in deficit over the next two years combined, according to the governor’s budget office.

Lamont proposed legislation this year that would open the door for more public-private partnerships to streamline state spending.

The governor has developed a bill that would make several changes to the law, removing limits on:

• The number of major public-private partnerships that can be authorized. The current limit is five.
• The duration of such partnerships. The current limit is 50 years.
• The kinds of projects that can be undertaken with the private sector. Currently they are limited to early child care, health, housing and transportation initiatives.

Lamont also proposed that the governor no longer need to seek legislative approval to establish new types of services that can be delivered through the private sector.

Luciano, whose federation represents hundreds of local unions and more than 220,000 workers in the public and private sectors combined, also serves on the contracting standards board.

The labor leader told the CT Mirror he worries many at the Capitol are losing sight of corruption scandals that cost taxpayers millions of dollars in the early 2000s.

“I hope not, but I’m here to remind them,” he said. “We were a laughing stock. At one point we were called ‘Corrupticut.’”

McClure added that the administration remains ready to work with labor to find common ground.

“As we have with many issues, the administration has opened its door to Sal on this topic, making the commissioner of DAS (Department of Administrative Services) available to meet with him, listen and discuss each perspective. We won’t always agree, but we will disagree respectfully.”