Sen. Chris Mrphy
Sen. Chris Murphy says he is troubled by the idea of philanthropy funding government obligations like education. Above, Murphy talked to reporters this summer as Democrats gathered for a watch party on the final night of their national convention. Yehyun Kim / ctmirror.org

Connecticut’s aborted education partnership with hedge fund billionaire Ray Dalio demonstrated an important principle for other states and the federal government, warns U.S. Sen. Chris Murphy.

When officials rely on philanthropy, rather than taxing the wealthy, to fund a core public function like schools, the result is an elite few having far more influence than the average taxpayer — which rarely ends well, regardless of how laudable the goals, the Democratic senator said.

“When it comes to how dollars are spent through government, no billionaire should have more say than my poorest constituent,” Murphy told author and columnist Anand Giridharadas in an interview published Sept. 15 in The Ink — an online, public affairs newsletter.

“We’ve got folks who want to be very generous with their billions, but they want to have a big say in how their money is spent on good causes,” Murphy said. “I still believe in one person, one vote.”

Murphy, who discussed his comments Thursday with the CT Mirror, said they were offered in reference to Dalio, the founder and former CEO of Westport-based Bridgewater Associates, the world’s largest hedge fund.

Dalio and his wife, Barbara, backed out in May from the Partnership for Connecticut following media reports that they sought to remove the group’s CEO before state officials involved with the venture had been informed.

That incident was just one of a string of controversies that followed the partnership since Barbara Dalio first announced the couple’s unprecedented offer in April 2019. The Dalios pledged to contribute $100 million over five years to help low-performing districts provided the state matched that investment and worked with the Dalios to raise another $100 million in private contributions.

But just two months later, as legislators were poised to vote on the deal, they learned the Dalios wanted the partnership exempted from state disclosure and ethics rules. 

The exceptions were granted despite objections from news media, open government organizations and a statewide parent advocacy group. Significant portions of the partnership oversight board’s meetings were held behind closed doors.

And after Attorney General William Tong said state officials on the partnership’s oversight board still would have to make public any related documents, the Dalios then pushed to form a board subcommittee — with no state officials on it — that would administer most matters. Legislators on the partnership board blocked that.

When news of the attempted firing of the CEO broke in May, the Dalios accused some lawmakers and journalists of trying to sabotage the partnership.

“It has become clear that it’s not working because of political fighting,” Barbara Dalio wrote in a statement. “I am not a politician and I never signed up to become one. I only want to help people. Through this experience I’ve learned about our broken political system and I don’t see a path through it to help people.”

All of the conditions tied to the Dalios’ pledged contribution “probably created more trouble than it was worth,” Murphy added. “And I think that’s the conclusion everybody came to.”

Gov. Ned Lamont and Barbara Dalio at the first meeting of the Partnership for Connecticut in the fall of 2019

The Dalios earned praise in many school districts prior to 2019 for funding several smaller initiatives to help improve graduation rates, and Murphy said their vision for Connecticut schools was the right one. Even with the partnership gone, the couple has said they still will contribute $100 million to assist the state’s struggling schools.

“I didn’t have any beef with what the partnership was trying to do,” Murphy said. “I just think that … it’s better for us to get public wealth into good causes through taxes instead of through donations.”

But that runs counter to the philosophy of fellow Democrat Gov. Ned Lamont, an opponent of making Connecticut’s tax system more progressive. The governor, who insists higher tax rates on the rich would prompt them to flee the state, often argues that fostering more philanthropy from the wealthy is a better solution. For example, Lamont has denied nonprofit social service agencies’ frequent requests for a major hike in state support, instead urging them to step up their private fundraising efforts.

Lamont, who championed the partnership, also repeatedly defended the exemptions from disclosure and ethics rules upon which the Dalios had insisted.

One day after announcing the Dalios’ intentions to dissolve the venture, Lamont warned he still planned to collaborate with talented and wealthy private citizens — and was prepared to bend certain rules to accommodate them.

“I was one of the first non-politicians, more of a business guy, in a long time here,” Lamont said on May 20. “And I really wanted to get the private sector — big business, small business, academics, not-for-profits — more invested in their state.”

And the governor added that these talented private citizens were “folks who weren’t used to having every email scrutinized by the public.”

Lamont’s communications director, Max Reiss, noted that once the coronavirus pandemic began, the Dalios provided 60,000 laptops to children across the state.

“Now, Connecticut students are as prepared as any in the country for the uncertainty of the school year for learning from home,” Reiss said. “We need to welcome Connecticut residents to the process who are solution-oriented, want to work directly with local decision-makers and families and want to help.”

A representative for the Dalio Foundation did not comment Thursday.

But with income and wealth inequality at their most extreme since The Great Depression, both nationally and in Connecticut, Murphy said he also expects the Dalios’ offer won’t be the last of its kind in the years to come.

“When you have people with this much money, they obviously have the flex to spend it on different things,” Murphy said, adding that states and the federal government are squeezed for cash, in part, because so much wealth cannot be taxed.

“No matter how good-hearted the goals are on behalf of a wealthy donor, does it makes sense for one person or one family to have more influence over the expenditure of taxpayer dollars than any other voter?”

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Keith M. PhaneufState Budget Reporter

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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