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The embattled CEO of the state’s aborted education partnership is seeking unspecified damages through arbitration from her former employers  – the coalition that includes the state of Connecticut and hedge fund billionaire Ray Dalio’s philanthropic arm.

Mary Anne Schmitt Carey of Greenwich filed a demand Tuesday for arbitration against the Partnership for Connecticut with the American Arbitration Association, according to her Manhattan attorney, Aaron M. Zeisler. She warned state officials in writing earlier this month she would take action for breach of contract and defamation of character that was based on a “flotilla of lies.”

Schmitt Carey also alleged defamation in a lawsuit filed Thursday in New York seeking $2.5 million in damages from the Dalio’s charitable foundation and from another previous employer, Say Yes to Education. In the lawsuit, Schmitt Carey also says her real responsibility as CEO for the partnership was to “rubber-stamp” projects planned by Dalio’s wife, Barbara.

“Your actions are especially regrettable in light of the fact that Ms. Schmitt-Carey has devoted her professional life – spanning more than 30 years – to youth and community development,” Zeisler wrote earlier this month to Gov. Ned Lamont, Barbara Dalio, and other state officials who served with them on the Partnership for Connecticut’s governing board. “The concerted effort to run her out of The Partnership based on a flotilla of lies has damaged Ms. Carey-Schmitt’s reputation.”

Max Reiss, Lamont’s communications director, declined to comment Thursday on the pending legal actions.

Dalio Philanthropies issued a written response to Schmitt Carey’s claims. “Anyone can make outlandish accusations,” it states. “The evidence will be presented and judged fairly following the legal process. That is when the truth will come out.”

Zeisler declined to comment on the arbitration. But an aggrieved former employee typically files for arbitration rather than a lawsuit because both sides have stipulated at the time of employment that conflicts will be resolved out of court.

The partnership, which was slated to invest a minimum of $200 million over five years in Connecticut’s low-performing school districts — half provided by the Dalios and half by the state — dissolved on June 5, about one year after its creation.

Schmitt-Carey, a former CEO of Say Yes to Education with three decades of experience in education and nonprofit work, was hired to lead the partnership on March 23. But just six weeks later, on May 4, she was confronted by Barbara Dalio, partnership oversight board chairman Erik Clemons, and a Dalio Foundation staffer during a phone call and asked to resign. This occurred days before state officials sitting on the partnership’s board were informed of any problems.

Schmitt Carey charged the public-private partnership violated her contract and state employment law when it placed her on administrative leave on May 7 and that it damaged her reputation when partnership officials subsequently discussed this in public.

Zeisler also asserted earlier this month that despite Schmitt Carey’s vehement denials of unfounded allegations, “The Partnership made no independent investigation of these claims, in flagrant disregard of the board’s duties and governance protocols.”

Besides Lamont, other elected officials on the partnership’s governing board include House Speaker Joe Aresimowicz, D-Berlin, House Minority Leader Themis Klarides, R-Derby, Senate President Pro Tem Martin M. Looney, D-New Haven, and Senate Minority Leader Len Fasano, R-North Haven.

Barbara Dalio at the second meeting of the Partnership for Connecticut. To her left is Gov. Ned Lamont, a member of the private public partnership board. Erik Clemons, who was chairman of the board, is on the right. Kathleen Megan / CT Mirror

The lawsuit, which Schmitt Carey filed with the New York Supreme Court, focuses more on an alleged scheme to ruin her reputation by her former employer, Say Yes to Education, and partnership officials.

Shortly after she was hired by the public-private partnership in Connecticut, Schmitt Carey charges, Say Yes to Education employees began to spread malicious lies and rumors about her to partnership officials.

A representative of Say Yes to Education could not be reached for comment Thursday.

During Schmitt-Carey’s brief, six-week tenure with the partnership, she charged in the lawsuit, “it soon became apparent that representatives of Defendant Dalio Philanthropies had no desire for The Partnership to be led by a professional President and CEO as the board of directors intended.”

Rather than having Schmitt Carey develop and implement a strategic plan for the partnership, which was tasked with assisting students in Connecticut’s lowest-performing districts, her role was “to rubberstamp the silver-bullet programs chosen unilaterally by Dalio Philanthropies figureheads Ray and Barbara Dalio – despite those policies’ dubious efficacy,” the lawsuit states.

According to the lawsuit, when partnership officials asked Schmitt Carey to resign on May 4, Barbara Dalio’s aide, Andrew Ferguson, accused Schmitt Carey of “wildly inappropriate behavior.”

The charges leveled against her included “combining personal and professional financial interests, having family travel paid for by Say Yes, and receiving kickbacks from hired consultants,” Schmitt Carey’s lawsuit states, adding that all allegations were “completely and utterly false.”

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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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