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