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Quasi-Public Agencies R Us!
September 30, 2005: Or R they? In New London, Connecticut some might beg to differ. Where city officials have discovered how tough it is to fire the heads of their local quasi-public development agency. Despite the fact that the quasi-public agency in question, the New London Development Corporation (NLDC), is supposedly subject to the will of city government. As in-- the elected voice of the people.

Quasi-public development agencies can be found across the nation. But the NLDC is more notorious than most. Being the quasi-public agency that in concert with New London city officials, and in order to enhance an expansion of the Pfizer Corporation, launched a state funded but private development plan for office complexes and luxo housing which required the eminent domain destruction of the modest neighborhood of Fort Trumbull. Where property owners enlisted the aid of the Castle Coalition (an organization whose bete noir is abuse of eminent domain) and fought the case all the way to the U.S. Supreme Court. And lost.

Or did they? Post decision the NLDC has had nothing but trouble in the Thames River city. First, their victory was reviled by an over-whelming majority of Americans. Who rightfully understood that when one person's property can be taken by government to advance another person's private development project, you're talking land grabs and abuse of power. Second, the Supreme Court, though it ruled in favor of the NLDC and its municipal cohorts re this particular instance, left states free to make their own laws about eminent domain. And Connecticut lawmakers, like those in other states, are rushing to seem supportive of small property owners. In July a moratorium on the use of eminent domain in Connecticut was declared (though not officially) until existent laws could be reconsidered. The NLDC appeared to agree. But shortly afterward moved to evict some of the 7 remaining Fort Trumbull property owners. Without notifying city or state officials. Since funding for the New London project comes from Connecticut's Department of Economic and Community Development (DECD) the latter seemed particularly rude.

City officials, with the apparent agreement of Governor Jodi Rell, demanded the heads of the heads of the quasi-public agency that did the will of the city and state when they initially tried to use eminent domain on Fort Trumbull's citizens. But NLDC President Michael Joplin and Chief Operating Officer David Goebel hunkered down in the NLDC bunker. Seeking succor from X-land in the form of an alt plan. Their quasi-public posse was 100% behind them. NLDC board member and former Pfizer executive George Milne announced* the board was mulling whether Joplin and Goebel should fade away into less visible roles at the quasi-public agency; with others at the NLDC becoming the face of the Pfizer enhancing Fort Trumbull development project.

Mayor Jane Glover and the city council seem sincere in their wish to be rid of Joplin & Goebel. Not only because of the sneak attack on Fort Trumbull or the overall eminent domain fiasco, but because the NLDC has allegedly bungled dealings with the Fort Trumbull project's preferred developer, Corcoran Jennison. (Though by many accounts Corcoran Jennison itself is a problem child.) Plus the NLDC has treated city officials to a string of missed meetings and deadlines and a general attitude of dis. On September 20th the New London City Council, with the active support of Mayor Glover, delivered a vote of no-confidence on the NLDC. And even threatened that should Joplin and Goebel remain in place after one week, the city would dissolve the entire NLDC. But that was then-- and this is 10 days later.

A great deal of dithering is taking place as it dawns on city officials what ditching the NLDC would mean. The NLDC may be quasi-public but it's woven into many New London development projects and is the conduit for a great deal of public money. State and federal. Plus the NLDC controls the titles to all the land and businesses it condemned for redevelopment in Fort Trumbull. Would those titles pass to the city? And if the NLDC is evicted, the city would have to take sole responsibility for its development projects, or designate another entity to fill the NLDC's shoes. The latter would cause the greatest legal tangle at the state level. But all of the above would cause more delay on a project already as old as the reign of X Governor John Rowland. The circa 1997 prime mover behind the Pfizer related, New London development plan.

If New London decided to become master of its own development domain, the city would be bucking what's become the urban norm in Connecticut. According to Michael Cicchetti** undersecretary at the Office of Policy and Management, the fully public agency which oversees the State Bond Commission and helps fund quasi- public development entities through the Department of Economic & Community Development (DECD), the rationale for putting agencies like the NLDC at the helm of local development projects has been that it "allowed the state to channel funds to urban projects without overburdening city officials or allowing the monies to become stuck in existing municipal bureaucracies". And: "setting up an entity whose sole purpose is getting these things done just streamlines the process."

Yes indeed. The NLDC has been a streamlining ball of fire. Battling 7 property owners in assorted courts for years rather than working out a compromise to include their small properties in the projected redevelopment was particularly swift. As for "overburdening city officials" how can our public servants ever learn to cope if quasi-public agencies are always standing by providing a scapegoat when policy decisions go awry? As any parent can tell you, children need to be able to take responsibility for their own actions. And while it's certainly good that public monies not get stuck in municipal bureaucracies those same monies often wind up stuck in other places when funneled through quasi-public agencies.

X Governor Rowland, during his 10 years in office and before trundling off to prison in 2004 for selling access to his office for personal gain, was gung-ho on quasi-public agencies. As regards both urban and statewide initiatives. Rowland's X Co-Chief of Staff, Peter N. Ellef, currently facing 15 corruption counts of his own, was Rowland's liaison to a slew of quasi-public agencies at the urban and state level. As well as some public ones. Such as the DECD. Where from 1995 to 1997 he served as Commissioner. As DECD commish, Ellef was instrumental in launching New London's redevelopment plans for Fort Trumbull and in building up the NLDC. His involvement continued after he became Rowland's Co-Chief of Staff. In 1997 Ellef also became Chairman of the Connecticut Resources Recovery Authority (CRRA) a quasi-public statewide waste management authority. An alchemical entity that turns garbage into energy gold. Under Ellef, the CRRA loaned the Enron Corporation $220 million-- while Rowland had fun with fundraising via Enron and the Republican Governors' Association. When Enron went bankrupt Connecticut taxpayers were caught holding the quasi-public Hefty. They paid with state issued bonds. Though the CRRA, with help from the state attorney general (a thoroughly public servant) did recover some of the loan in bankruptcy court.

Governor Rowland treated state business like a piggy bank for himself and his friends. Peter Ellef was an alleged major player among a group who profited from crony ridden development deals and rigged state contracts. Ellef & crew are also said to have worked their insider knowledge and/or manipulation of state deals for investment gains. As example, in 1999 Ellef bought stock in the CuraGen Corporation, a biotech company based in New Haven. A year later the company received a major state tax break. In the same period CuraGen announced a 2-for-1 stock split and Ellef's holdings doubled. Though Ellef filed the required State Ethics Commission disclosure of his CuraGen holdings in 2000, he did so in the confidential addenda section. Which by law can only be viewed in an official investigation. The feds found Ellef's CuraGen holdings when digging into all things Rowland.

Over roughly 10 years CuraGen received not only state property tax breaks but generous subsidies and loans. From several state sources, including the quasi-public Connecticut Innovations Inc. (CII). An entity started with state bonding money and which works closely with the DECD. Also helpful to CuraGen was the nonprofit Connecticut United for Research Excellence Inc (CURE). Governor Rowland made CURE the promoter for what he called Connecticut's "bioscience cluster". Which sounds like something that if found on your body, would need to be removed ASAP.

The president of CuraGen was a member of CURE's executive board. Another member was a senior vice president of the Bayer Corporation. Which owns 3.1 million shares of CuraGen. CURE encouraged the Connecticut State Legislature to underwrite $40 million dollars worth of funding for new facilities in New Haven. The funding to be managed by the quasi-public CII. Tenants in one of the buildings would include CuraGen and CURE. The building housing the cure-alls was owned by Robert V. Matthews, a close friend of Governor Rowland. Matthews paid $500,000 for the property in 1996. In 2001 he sold it for $27.5 million. Robert Matthews has received millions of dollars of state backed loans for assorted business ventures. In 2004 Matthews testified before the state's House Select Committee, when it was weighing whether to impeach Governor Rowland. (Rowland resigned before the decision was made.) It was Matthew's testimony that to many painted the most damning portrait of Rowland. In the same year a federal subpoena was issued seeking 9 years of records re Matthew's dealings with the Connecticut Development Authority (CDA). A quasi-public state development agency where at one point, Paul Silvester was among the 3 chairman. Silvester, who served as Connecticut State Treasurer during the Rowland administration, recently wrapped up a stint in federal prison for pay-to-play deals with state pension fund investments.

Conn-fused? Connecticut's tangle of public, quasi-public and private relationships, plus its myriad federal investigations, are difficult to follow. (For one thing, so many acronyms begin with "C".) The events described above are only a tiny part of the picture. Several Connecticut newspapers have published excellent guides to the players and plots. Problem is, new twists keep coming. And with Peter Ellef due to go on trial in November and with a batch of federal convictions in Bridgeport (total so far 15) and Waterbury freshening up some ongoing municipal investigations, matters are bound get murkier. But one thing is crystal clear. Quasi-public places are crony cozy.

Connecticut isn't the only state where pols & cronies are hopping the quasi-public gravy train. Drawn by freedom from the level of public oversight and rule of law to which actual government agencies, as established by democratic process, are answerable. Sure, the oversight and rule of law are sometimes only theoretical. But they work well enough to make some want to streamline right past them.

As for the rationale that government bureaucracies, municipal and otherwise, can inhibit growth-- no argument here. Government in general has become way too large, intrusive and costly. And private projects that would benefit the public and which used to get built in a few years, can now bog down for decades. But the quasi-public option isn't the answer to either problem. The aficionados of quasi-public development agencies love big government and public money-- but mask it with free market rhetoric. Invoking "investment" and "revitalization" while using the power of government to transfer wealth (most typically the assets and income of low and middle income people) to their own pockets; dodging the actual risks of real free enterprise by having taxpayers cover their bets. Furthermore, after viewing the super attenuated mess the New London Development Corporation has made of the Fort Trumbull project who can believe that quasi-public guarantees timely accomplishment?

The most disturbing aspect of quasi-public development agencies is how powerful they've become. To the point where they can take and hold private property, direct the flow of huge amounts of public money and be extremely difficult for elected officials to control. Just like in New London.

As said, city officials in New London are dithering after demanding the heads of the heads of the quasi-public NLDC. And Governor Jodi Rell, who last week was pawing the earth, has dispatched a mediator (for the second time in a year) to try and settle the dispute between the property owners of Fort Trumbull, the city and the NLDC. One of the solutions Rell is said to favor is for some of the remaining Fort Trumbull structures to be moved to a consolidated residential property. Kind of like a little reservation. And the plan whereby Michael Joplin and David Goebel would play a less visible role re the NLDC and Fort Trumbull is receiving some support. But who knows? Anger in New London over the arrogance of the NLDC, and for that matter, the dithering of city government, is running deep and wide.

In one of their attempts to turn public opinion against the resisting Fort Trumbull property owners, the NLDC revealed that the most prominent protestor, Susette Kelo, actually owned several other houses in Connecticut. The NLDC claimed her Fort Trumbull home wasn't her primary residence but merely an investment property. Despite the fact that her neighbors said they saw her sitting on her front porch in Fort Trumbull every day. The NLDC also claimed another resistor wasn't an actual resident of Fort Trumbull but an absentee landlord. The man in question is indeed a landlord-- one who rents primarily to his relatives. But even if Kelo's house wasn't really her home, or if the landlord rented only to strangers, it's downright weird for an entity called the New London Development Corporation to try and demonize people for engaging in business.

Maybe if the folks in Fort Trumbull claimed to be a bioscience cluster their ventures would get more respect. Not to mention-- but I will - millions of non-quasi public dollars.

Carola Von Hoffmannstahl-Solomonoff

Related News

Eminent Domain: In Camden, New Jersey, the Cramer Hill Residents Association plans a demonstration against eminent domain at the Cramer Hill Community Center at Rivers and Reeves avenues on Saturday, October 8th starting at 11 a.m. For more info call (856) 964-2465. An in-depth history of the eminent domain situation in Cramer Hill can be found at "Property Theft in New Jersey's Poorest City".

Thoroughly Public Servants: Connecticut's top FBI agent Michael Wolf, architect of a corruption team that put a gaggle of crooked pols behind bars, is leaving to take charge of the Virginia-based Critical Incident Response Group. Among those convicted during Wolf's time in Connecticut are Governor John Rowland, State Treasurer Paul Silvester, Waterbury Mayors Joseph Santopietro and Phil Giordano, Bridgeport Mayor Joseph Ganim and state Senator Ernest E. Newton II of Bridgeport. Plus a host of lesser figures. Inquiring minds in other states want to know-- can the Wolfman be cloned?


*NLDC Board is Looking to End Rift With City Council, Ted Mann, The Day, 09/27/05

**City Faces Legal Maze To Cut Ties With NLDC, Ted Mann, The Day, 09/25/05

Sources Include:

"Council Idle on NLDC: A week of brinkmanship and theater," Stephen Chupaska, Shore Publishing, 09/30/05

"Mediator Will Attempt To Settle Dispute Over Fort Trumbull Plan," Ted Mann, The Day, 09/29/05

"State's top FBI agent leaves legacy of corruption fighting," Associated Press/Stamford Advocate, 09/21/05

"The High Cost of Reform," Kevin Rennie, Hartford Courant, 09/18/05

"There'll be more after Newton," Michael P. Mayko, Connecticut Post, 09/05

"Ellef kept secret stock in state-backed startup," Don Michak, Journal Inquirer, 04/01/05

"Excerpts from the report of the House select committee on the impeachment of Rowland, The Untold Story of how Rowland escaped Justice," CottageCoalition.org, 03/30/05

"Grand Jury Returns 15-Count Indictment Alleging Public Corruption in Connecticut State Government," United States Attorney's Office District of Connecticut press release, 09/23/04

"Businessman Testifies at Rowland Hearing," John Christoffersen, PhillyBurbs.com, 06/15/04

Feds Subpoena Records Relating to Rowland Friend, NBC 30 Connecticut News, 01/30/04

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Copyright (c) 2005 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.


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