The Connecticut Port Authority was within its rights as a quasi-public state agency to enter into an agreement with Gateway Terminal, the chosen manager of the State Pier in New London, at least according to Connecticut Attorney General William Tong.
In a letter to the State Contracting Standards Board (SCSB) on Tuesday, AG Tong states that, in general, “to achieve its goals, the Port Authority is broadly empowered to enter into contracts, joint ventures, and partnerships with both governmental and private entities.”
The letter submitted on Tuesday does include language, however, specifying that, though it is a formal opinion, it does not constitute a legal opinion.
“This opinion does not speak to the legality, propriety, or ethics of any particular public-private partnership,” says the first footnote. “We do not assume that any specific project or development characterized as a “public-private partnership” is – or should be – a partnership within the meaning of chapter 55d of the General Statutes.”
The SCSB has been looking into the deals between CPA and its various partners since 2021, when a public complaint triggered a formal inquiry. In a report released by the Board in February of last year, members raised several concerns, including a primary concern that the CPA did not have the authority to enter into the Harbor Development Agreement (HDA) between the Authority, New England Offshore, and Gateway.
At issue was a statute that allowed agencies like the CPA to enter public-private agreements until January 2020, one month before the HDA was signed. After January 2020, public-private partnerships were required to be subject to a public hearing in the General Assembly, but no such public hearing occurred in this case.
The CPA argued, at the time, that the phrase “public-private” has many meanings, not all of which apply to the state statutes.
In his letter, AG Tong seems to agree with the opinion of the CPA.
“Some of these partnerships might be characterized – colloquially, in business documents, and by the General Assembly – as “public-private partnerships,” since they are literally partnerships between government and private entities, even though they are not created under the authority of Chapter 55d of the General Statutes,” it says.
The New London State Pier project has been under constant fire from the public, some lawmakers, and the press for its ballooning costs over the last four years. When it was originally announced, the entire project was assumed to cost around $93 million. That number increased to $157 million in the initial HDA and has since continued to grow to a current cost of $255.5 million.
The project has also been plagued by scandals and investigations both at the Port Authority and at other businesses or agencies associated with the project, including a federal investigation into former Office of Policy and Management Secretary Kosta Diamantis.
Meanwhile, the SCSB is also questioning the ethics and legality of awarding a $500,000 “success fee” to Seabury Maritime Capital for securing a contractor for the project. Should the fee be determined a “finder’s fee,” it would be illegal in Connecticut.
In a meeting earlier this month, board members said the Attorney General’s office hadn’t been able to comment on the success fee since it was part of an FBI investigation.
“What comes from us is the issues of public policy,” SCSB member Robert Rinker said during the meeting. “The question is if the Attorney General says that a success fee is not a finder’s fee and that it was appropriate then we may want to take a position as a policy of the board that we want to ban success fees.”
In July of last year, Seabury was hit with a $10,000 fine from the Connecticut Office of State Ethics for providing gifts totaling around $3100 to employees of the Port Authority.
Correction: An earlier version of this article stated that “A member of the CPA board at the time, Henry Juan, was a managing partner of Seabury and didn’t resign from his position on the board until months after that payment was made.” Mr. Juan resigned in February 2018. Seabury was selected in April 2018. The payment referenced was paid in July 2020. This is confirmed on pages nine and ten of this document.
