Gov. Ned Lamont’s budget director assured state legislators Friday the administration has no plans to strip enforcement authority from the state’s contracting watchdog board.
But Office of Policy and Management Secretary Melissa McCaw also told the Appropriations Committee that the administration and the State Contracting Standards Board still don’t see eye-to-eye on whether the watchdog should receive extra funding for investigative staffing.
“Now more than ever, you know, we want to ensure that [Executive Branch agencies] are fully adhering to expectations surrounding contracting,” McCaw told the committee during a hearing on administration budget proposals.
The spending and revenue plan Lamont delivered last week for the fiscal year that begins July 1 “does not modify any of [the contracting board’s] statutory role or any authorizations that they currently have in law.”
Contracting board Chairman Lawrence Fox disagrees.
A policy bill the administration proposed to complement the budget says the watchdog may refer issues of concern to the Auditors of Public Accounts — a longstanding agency within the Legislative Branch that periodically reviews the finances and practices of most agencies, quasi-public entities and certain other state programs.
Fox’s reading of the policy bill is that the contracting board also would lose its existing authority to suspend any agency procurement process if it’s deemed in violation of existing statutes or regulations.
Fox also said the board already can refer matters to the auditors’ office — which has no enforcement authority — and questions why any modification to existing law is necessary.
McCaw said Friday that all parties could work with legislative legal staff to resolve any confusion. “We look forward to working with the General Assembly over the course of the session on this issue,” she said.
“It’s good news, because we certainly don’t want our authority diminished,” Fox said, adding that the contracting board also would work with lawmakers to ensure the group’s powers remain as they were established more than 14 years ago.
The linchpin in the landmark “Clean Contracting” system was created in 2007 by the Democrat-controlled legislature and Republican Gov. M. Jodi Rell. The watchdog board was Connecticut’s response to the contracting scandals that drove Republican Gov. John G. Rowland from office amid an impeachment inquiry in July 2004. Rowland later served 10 months in federal prison after admitting he accepted about $100,000 in gifts from state contractors and his staff.
But the board never has been staffed with more than an executive director. And all legislatures and governors since then effectively have left it without resources to carry out its mission of ensuring state purchasing is cost-efficient, transparent, and enhances public services.
The two-year budget that legislators and Lamont adopted last June included just under $700,000 per year for the contracting board — the same level the board was supposed to have when it was launched 14 years ago. That included $450,000 in each year to fund additional positions.
But shortly after that was passed, legislative leaders, at the request of the Lamont administration, adopted a subsequent budget policy bill that effectively stripped the funding and barred the board from spending the extra $450,000.
The budget revisions Lamont proposed last week for the fiscal year that begins July 1 make no changes to that funding roadblock.
Rep. Lucy Dathan, D-New Canaan, who serves on the Appropriations Committee, said she believes a contracting watchdog with resources and enforcement powers represents “a really forward-looking opportunity” to ensure the state spends all taxpayer funds wisely.
McCaw noted Friday that the volunteer members of the contracting standards board — rather than professional staff — recently have been doing audit work. This should be performed, she added, by an agency with expertise, such as the auditors’ office.
The administration proposed adding $320,000 to the next fiscal year’s budget to add three new staffers to the state auditors’ office.
Contracting board members, some of whom have backgrounds in procurement issues, say they recently prepared their own analysis of the Connecticut Port Authority — even without the extra staff they asked for — because the matter was too important to ignore.
Lamont and the contracting board have bumped heads since 2019, when the latter took an interest in the port authority’s efforts to enhance the state pier in New London. The authority wants to make the pier an optimal staging point to help Eversource and its Denmark-based partner, Ørsted North America, develop an off-shore wind-to-energy project.
The contracting board specifically focused on $523,000 in “success fees” paid in May 2018 to Seabury Capital Group to help with search for a pier operator — three months after Henry Juan III of Greenwich, who was a managing director with Seabury, resigned from the port authority board.
Contracting watchdogs concluded those “success fees” were eerily similar to the “finder’s fees” scandal that sent a former state Treasurer Paul Silvester to prison in 2001. Lawmakers banned “finder’s fees” after Silvester admitted he had accepted kickbacks in exchange for steering investment of state-controlled pension funds.