This story has been updated.

Gov. Ned Lamont called for Sen. Doug McCrory, D-Hartford, to “step back” from his leadership roles in the Connecticut General Assembly after a forensic audit showed McCrory used the Blue Hills Civic Association, a nonprofit in the north end of Hartford, to distribute millions of dollars in state funds to individuals and organizations of his choosing.

The audit, which was commissioned by the state Department of Economic and Community Development, found that McCrory dictated how Blue Hills spent more than $15 million that was given to the organization in the past five years.

[Audit: McCrory controlled how Hartford nonprofit spent state money]

And the auditors stated that the nonprofit’s “willingness to process large payments without due diligence not only facilitated possible fraudulent activity but also exposed BHCA to significant reputational and legal risk.”

McCrory, who is also the subject of an ongoing federal grand jury investigation, did not immediately respond to a phone call for this story.

But Lamont said the potentially fraudulent spending patterns uncovered at the Blue Hills Civic Association raised serious concerns and should prompt McCrory to “step back.”

During a press conference Wednesday, Lamont said the Senate should be “very strict” with McCrory.

“Look, as soon as DECD started hearing about some irregularities regarding Blue Hills, they put in place an audit,” Lamont said. “We got the results of the audit, and I think we’ve got to be really strict about this. I have zero tolerance for this type of stuff. I’m not sure he should stay in the positions he’s in right now.”

Lamont said he’d leave the consequences of the audit up to the Senate, but if it were him, he’d want the Democratic senator to “step back.”

Asked to specify whether he thought McCrory should step down from leadership positions or from the Senate entirely, the governor said, “I think he should step back.”

With more than two decades of experience in the legislature, McCrory holds significant sway in the General Assembly.

He is currently a chairman of the legislature’s Education Committee. He is also a member of several state boards that are in charge of deciding how to spend millions of dollars.

That includes the state’s Minority Business Initiative Advisory Council and the Community Investment Fund, which is in charge of divvying up hundreds of millions of dollars in distressed communities throughout Connecticut.

The Senate Democratic leadership, which has not made any public comment about the FBI investigation of McCrory, were not eager to respond to the governor’s comments.

But Senate Minority Leader Stephen Harding, R-Brookfield, said he concurred with the governor’s call for McCrory, at a minimum, to step back from any role in leading a committee or advocating for grants in the budget process. 

“That report is extremely damning and, unfortunately, based upon that, I don’t see how he can stay in office. At the very least I would suggest the Senate leadership of the Democratic Party strip Sen. McCrory of his committee assignments,” Harding said.

Senate President Pro Tem Martin M. Looney, D-New Haven, has sole authority over whether to suspend McCrory as as committee co-chair or member.

As he was entering a meeting at the governor’s office on Wednesday, Looney acknowledged that the audit raised “many concerns” about how state grant money was used.

But he said he saw no reason to remove McCrory from his committee chairmanship or his position on the Community Investment Fund board.

“We’re going to have a number of discussions, but obviously there is nothing that is in evidence right now that would indicate that there is anything that would suggest that there has been a criminal offense,” Looney said.

Meanwhile, Sen. Bob Duff, the Senate Majority Leader, said he had not read the audit that scrutinized McCrory’s relationship with Blue Hills employees.

The forensic audit, which was conducted by the firm Clifton Larson Allen, specifically stated that the review of Blue Hill’s finances “reveals pervasive governance failures, systemic internal control weaknesses, and patterns of conduct that strongly suggest potential fraud and misappropriation of public funds by BHCA and related parties.”

The governor said the state police could investigate, if necessary, to learn whether any state laws were broken in McCrory’s dealings with the nonprofit.

If the Senate decides not to take action against McCrory, Lamont said, “there’s an election coming up in less than a year.”

The audit commissioned by DECD covered more than five years of spending at the Blue Hills Civic Association, but many of the findings were focused on more than $1.7 million that McCrory and Blue Hill’s executive director directed to businesses owned by Sonserae Cicero.

Cicero is also a focus on the ongoing criminal investigation by the FBI, which is asking questions about her relationship with McCrory.

Ayana Taylor, a Democrat who challenged McCrory in a 2024 primary and has filed to run against him again this year, said the audit and the ongoing FBI investigation make it difficult for him to properly serve the voters and residents in the state’s 2nd Senate District. And she said she agreed with Lamont that McCrory needs to step back.

“I chose to run, you know, because I no longer trust the leadership serving in the 2nd district right now, and a lot of people feel the same,” she said.

Taylor said people shouldn’t turn a blind eye to allegations of corruption.

“There’s a dark cloud over the district, and people don’t need that,” she said. “It’s a distraction from the issues, and when you have all those things going on, how could you properly lead?”

“Regardless of whatever decision Sen. McCrory makes for himself, the voters will have the final say this,” she added.

Rep. Maryam Khan, D-Windsor, has filed an exploratory committee to run for the 2nd Senate District.

“The findings of this audit are deeply troubling and an unfortunate distraction for the people in our district who deserve more from their leaders,” Khan told the CT Mirror. “A major goal for my exploratory campaign for state senate is to promote an alternative vision for our constituents, one based on trust, transparency and accountability. Trust has to be rebuilt and that is going to take new, yet still experienced, leadership.”

CT Mirror reporter Mark Pazniokas contributed to this report.