Yehyun Kim /
Kosta Diamantis, who resigned this week, had overseen the state’s school construction financing program

Gov. Ned Lamont returned oversight of the state’s massive school construction financing program Friday to the Department of Administrative Services, ending a controversial two-year experiment that had placed the venture within his budget office.

The reversal came one day after deputy budget director Kosta Diamantis of Farmington — who directed the school construction unit — retired in the face of an investigation for unspecified misconduct.

“Given the departure of the former director of the office of school construction we felt it made the most sense to bring the team back to DAS [Department of Administrative Services,] said Josh Geballe, Lamont’s chief operating officer.

The program, which sends hundreds of millions of dollars annually to municipalities to help build new and renovate existing schools, had long been located within DAS. And with Diamantis’ departure, Geballe said, the department is best positioned to manage the program.

Max Reiss, Lamont’s director of communications, declined to discuss specific allegations against Diamantis with the CT Mirror on Thursday night, writing only in a brief statement that: “The Governor’s Office removed Mr. Diamantis because of a personnel matter that is still under review.”

Diamantis denied any wrongdoing and said Lamont’s top aides have been disrespectful to his former boss, Office of Policy and Management Secretary Melissa McCaw, who is Black.

McCaw, who is Lamont’s budget director, surprised legislators in November 2019 when she announced Diamantis, a former state representative who’d led the school construction program for years within DAS, would be joining the budget staff — and bringing the construction unit into OPM with him.

Top lawmakers from both parties balked at the Lamont administration’s decision to make this move unilaterally, since the legislature had placed the school construction unit within DAS by statute decades earlier.

And Republican leaders questioned whether the Democratic governor had slipped up in a political sense as well.

Because of OPM’s immense authority — it executes much of a governor’s agenda as the state’s chief fiscal, planing and labor relations agency — it generally is viewed by legislators as more partisan than other departments and agencies within the Executive Branch.

The school construction program historically is seen as immune from partisan politics. Communities receive construction grants that reimburse between 20% to 80% of project costs based solely on wealth, population and other empirical data.

The Lamont administration insisted at the time that the move was about increasing efficiency and said there was no intention to change the operations — or the nonpartisan nature — of the school construction oversight process.

And while leaders of the legislature’s Democratic majority said in late 2019 that they wanted, at a minimum, to revisit the program transfer and clarify the matter in statute, nothing was enacted in 2020 or in 2021.

Leaders of the legislature’s Republican minority repeated Friday the objections raised two years ago, and said the latest controversy is indicative of the majority’s laissez-faire attitude when it comes to the governor.

The Democratic majority repeatedly has extended Lamont’s expanded, emergency authority throughout the coronavirus pandemic, much to the GOP’s frustration. And Senate Minority Leader Kevin Kelly said Friday that the Democrats’ unwillingness to stop the school construction shift immediately after it happened was — along with the emergency power issue — part of a larger problem.

“There is a culture of acquiescence,” Kelly said, “where the majority has been very comfortable letting the governor handle everything and that’s what’s landed us at this point. … Where are the checks and balances? Where are the protocols?”

House Minority Leader Vincent J. Candelora of North Branford said Lamont’s unilateral shift of the construction program “reeks of politics” when it happened. And before the administration announced its reversal Friday, Candelora already had called for the General Assembly to formally reassign the program via statute to DAS.

“That was unprecedented, that was highly political,” Candelora added. “Certainly my worst fears came to fruition.”

Democratic legislative leaders didn’t comment on Diamantis’ departure, but did recommend Friday that it was time for the legislature to get more involved.

“The General Assembly should clarify where that agency is statutorily,” said House Majority Leader Jason Rojas, D-East Hartford.

But both Rojas and Senate President Pro Tem Martin M. Looney, D-New Haven, said that while Lamont needs to work with the legislature to realign agencies, moving the construction program from one department to another — even to the budget office — was neither unprecedented nor inherently wrong.

The school construction unit sent about $330 million to local school districts in the fiscal year before its transfer to OPM, and Looney noted the budget office understandably has a close relationship with any program handling such large amounts of money.

“They are all part of the same administration,” Looney added.

With Diamantis’ departure, DAS Deputy Commissioner Noel Petra will oversee the school construction program until a permanent replacement is selected, Geballe said.

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.