Two companies named in a federal grand jury subpoena investigating former state official Konstantinos Diamantis were the primary beneficiaries of millions of dollars’ worth of hazardous waste abatement work on state buildings since 2017, records show.
Asbestos Abatement and Insulation Services (AAIS) Corporation and Bestech Inc. of Ellington are two of the four companies that the state Department of Administrative Services chose in 2017 to be on an exclusive list of contractors that would handle all abatement work on state buildings. The list was originally intended for state agencies and municipalities that needed emergency work done.
Since the contract went into effect, there have been 284 projects, each identified as a separate work order under the one contract, including abatement at college campuses and the former Seaside Sanatorium in Waterford.
Diamantis’ team was in charge of the contract, state officials said Friday. AAIS and Bestech were among the names that federal authorities asked officials to search for in a subpoena issued in October that centers on Diamantis.
The grand jury investigation has raised questions about whether Diamantis, who ran the Office of School Construction Grants & Review — first at DAS and then at the Office of Police and Management — pressured municipalities to hire specific contractors, construction managers and hazardous waste and asbestos removal companies.
An analysis by the CT Mirror shows that AAIS and Bestech got all but 15 of the 284 purchase orders issued by the state for hazardous waste disposal and demolition from fiscal year 2017 through 2022 — contracts that are paid for by the state and not tied to school construction jobs.
On Friday, after receiving questions about the arrangement from the Connecticut Mirror, the state abruptly canceled the contract, even though it was supposed to run until April.
In July 2021, state officials created a new contract, identified as “20psx0154,” to increase the number of contractors on the hazardous waste abatement list from the four on original contract “16PSX0110.”
DAS spokeswoman Lora Rae Anderson said Friday that state officials are going to amend the 2021 contract and “that guidance for both state and municipal use is going to be updated.” She did not give a timeline for that update or explain what it would entail.
Anderson said Diamantis’ school construction grant team was in charge of the hazardous waste and abatement contract.
Representatives from AAIS and Bestech, as well as Diamantis’ attorney Norm Pattis, did not respond to requests for comment last week.
Two companies, 98.8% of the money
The Mirror’s analysis shows:
· Since the 2017 fiscal year, the state has paid out about $29.2 million for hazardous waste and asbestos abatement work under DAS contract “16PSX0110.” AAIS received $20.6 million of that and Bestech $8.2 million, purchase orders show — about 98.8% of all the money spent through the contract.
· The state issued 284 purchase orders under the emergency contract.
· One of the contractors, Haz-Pros, got five jobs. Environmental Services Inc. got 10.
· AAIS was named on 214 purchase orders, including exclusive agreements to do work at all state colleges and vocational schools. Some of the work was assigned by other state agencies, such as the Military Department, but the majority were assigned by DAS.
· Bestech Inc. got the remaining 55.
“Wow, I had no idea it was that much money,” Raymond Newbury, Haz-Pros Asbestos Services Manager, said Thursday in an interview.
“We did not get that many” jobs, Newbury said. “I knew they (AAIS) were getting most of the work. I thought it was just the familiarity with the people that dealt with the contractors.”
‘I would call Mike’
Newbury said the contact for almost all abatement jobs was not Diamantis but Michael Sanders, who worked on the school construction grant team that Diamantis oversaw. Sanders had been doing state abatement contracts for years, first at the old Department of Public Works before moving to DAS.
Sanders died in December. The state medical examiner's office has ruled his death a drug overdose, but the investigation is still open.
“I would call Mike a couple times a year and tell him that I could really use some work,” Newbury said. “But you know, when I asked Mike, he would say that AAIS were just cheaper.”
A review of the pricing lists submitted by the four companies who were awarded the contract shows that while AAIS offered cheaper prices on asbestos removal for other jobs such as mold remediation and lead paint removal, the price ranges were very close among the four contractors.
Sanders is listed as the Construction Services Associate Project Manager in the "memorandum of understanding" that transferred the school construction program from DAS to the Office of Policy and Management in 2019. The grant program went to the oversight of OPM when Diamantis was named its deputy secretary.
Anderson said Diamantis and his team, specifically Sanders, were in charge of the hazardous waste abatement contracts.
"Municipalities are responsible for their own contractor procurement and contracting per state statutory requirements for bidding. Therefore, the Department of Administrative Services does not select vendors for towns," Anderson said.
Gov. Ned Lamont fired Diamantis from his OPM position on Oct. 28, days after the federal subpoena was served. When told he would be placed on administrative leave from his school construction job, Diamantis retired.
Diamantis had run the school construction grant program for more than six years. It’s unclear when Sanders joined the school construction grant team, but Newbury said Sanders was the only person he dealt with since the contract went into effect.
A May 2020 letter from Bristol’s former corporation counsel Dale Clift shows that Sanders was deeply involved in one hazardous waste abatement school contract in Bristol in 2020. According to Clift, Sanders advised the city to reject the lowest bid, from Select Demo Inc., and instead hire Bestech.
Clift’s letter said that the “directive” delivered by Sanders was issued by Diamantis.
“(Sanders) represented that you were directing all bids for abatement and demolition to be rejected,” Clift told Diamantis in the letter. “This directive came so late in the process and was so surprising, the project personnel sought and received verbal reinforcement and validation of your directive over the next several days.”
The city eventually hired the low bidder anyway.
Sanders worked in state government for 27 years until he died in December under what police described as “suspicious circumstances.”
Police found the 53-year-old’s body at a home in Old Saybrook on the evening of Dec. 17. Police arrested the man living in the house and charged him with risk of injury to a minor and possession of narcotics.
The state’s Chief Medical Examiner later listed Sanders’ cause of death as an accidental overdose tied to cocaine and fentanyl.
Manchester project questioned
Around the same time that Bristol officials say they were being pressured by the state to hire Bestech, a similar scenario was playing out in Groton — this time involving AAIS, who were not the low bidder for a hazardous waste disposal/demolition contract there.
Groton also eventually chose the lowest bidder, Stamford Wrecking, but only after that company’s lawyer — New Haven attorney Raymond Garcia — questioned why his client wasn’t getting the contract.
In January 2021, Garcia was contesting another contract in Manchester, which was in the process of renovating the Buckley Elementary School. In two letters to city officials, Garcia warned they needed to put the contract out to bid for everyone and not just the contractors on the state’s emergency list.
But assistant city attorney John F. Sullivan responded in a letter saying that Manchester was just following the state’s guidance.
”The contract in question is identified as State DAS Contract 16PSX0110. The Town is selecting a bid from one of the four contractors approved by the state for this type of work under this contract,” Sullivan wrote.
The city asked the contractors on the state’s list for bids, and three of them — AAIS, Bestech and Haz-Pros — submitted bids, with AAIS getting the contract as the lowest bidder, for $1.47 million.
After the Manchester contract went to AAIS without Stamford Wrecking getting a chance to bid for it, Garcia took his concerns to Attorney General William Tong on Feb. 2 in a three-page letter that outlined how the 2017 contract was being circumvented.
A new contract
The discussions among Garcia and state officials, including Diamantis and Assistant Attorney General Margaret Chapple, led to the issuing of a new directive to municipalities on March 2, 2021. The directive, signed by Diamantis, clarified when municipalities should use the state’s hazardous materials abatement contractors list for their school projects.
The directive states that if municipalities planned to use one of the companies on the so-called emergency contractor list, they needed to solicit a minimum of four bid proposals in order to be eligible to get state funding.
Then, in July 2021, state officials put the old hazardous material abatement contract, which was set to expire in April 2022, out to bid again in order to get more contractors on the list.
DAS contract “20psx0154” added more contractors to the emergency list. In addition to AAIS, Bestech and Haz-Pros, four new companies are included: Manafort Brothers Inc., New England Yankee Construction, Omni Environmental and Stamford Wrecking Company, which had been battling the state for nearly a year.
Newbury said he was notified about the new contract and did bid to stay on the list, even though he hasn’t gotten much work out of it.
“I think the contract is in effect, but I don't know anybody that's used it yet,” Newbury said.
State records show that only one purchase order has been issued under the new contract: a $1.45 million purchase order on Feb. 8 for a hazardous material remediation at Norwalk Community College.
The contractor is AAIS.