Attorney General Tong looks to expand investigation powers

Connecticut Attorney General William Tong is pushing for a bill to expand Connecticut’s false claims act, giving more power to his office to investigate “waste, fraud and abuse” by any entity receiving taxpayer funds. Currently, the attorney general’s office is limited to investigating only claims within health and human services.

Tong said House Bill 6826 would allow the attorney general’s office to investigate recent scandals within Connecticut state government, including the theft of COVID funds from West Haven by former state representative Michael DiMassa, the alleged funneling of school construction money to a consulting firm and various issues surrounding the State Pier project in New London.

“When we saw the alleged misuse of COVID CARES money in West Haven, the state was limited in its ability to take action, the Office of the Attorney General was limited,” Tong said during a press conference. “When questions were raised about school construction projects here in Connecticut and the conduct of contractors in school construction, the Office of the Attorney General could not take action under the false claims act.”

Tong added he was only able to investigate a particular issue involving the State Pier because he was given a referral by the State Auditors of Public Accounts. 

“People are always surprised to learn that I don’t have the same authority, the state doesn’t have the same powers they federal government has, or that our neighboring states — New York, Massachusetts, Rhode Island, New Jersey, Vermont — they all have strong, robust false claims laws that enable the state acting through its attorney general to take action to prevent waste, fraud and abuse of public dollars.”

Rep. Matthew Blumenthal, D-Stamford, said Connecticut’s current false claims law has “a loophole you could drive a truck through.”

The bill essentially eliminates the language in Connecticut’s false claims law that limits the attorney general’s office to investigate the state-administered health and human services programs and would vastly expand the attorney general’s reach across state government and private companies, non-profits and anyone else who contracts with the state.

Joining Tong for the press conference, President of the Connecticut AFL-CIO Ed Hawthorne said the legislation would enable the AG’s office to investigate construction companies for violating Connecticut’s prevailing wage laws, which set minimum pay and benefits for employees working on state and municipal projects, or misclassifying employees.

The Connecticut Department of Labor’s Wage and Workplace Standards division currently investigates such claims, but Hawthorne says the division is woefully understaffed and there are lengthy wait times for those claims just to be heard.

“That unit has been historically – it’s been so long, I think purposely – understaffed,” Hawthorne said. “If you go to the Wage and Hours investigative website now, there’s a six to nine month waiting period just for the claim to be heard. They do investigate but right now we’re looking to be more proactive, rather than reactive.” The division currently states the wait period is four to six months.

The bill is also supported by the Connecticut State Building Trades Council. Both the AFL-CIO and the building trades council represent unionized workers in the building and construction industries. 

However, the bill, which received a public hearing before the Government Administration and Elections Committee, drew heavy opposition by representatives of the construction industry, who say construction projects are often too complex to apply the false claims act and make doing business with the state riskier, potentially subjecting construction contractors to frivolous claims and expensive legal bills.

“It will change the risk profile on every contract. It would pose real danger to even the most scrupulous contractor,” Don Shubert, president of the Connecticut Construction Industries Association, wrote in testimony. “Questions of interpretation of contract provisions, specifications, drawings or other technical requirements may be matters of opinion on which reasonable minds may disagree without making a ‘false’ statement.”

“This poses a real danger to all construction companies working in Connecticut and to their hardworking employees,” Shubert testified before the committee.

John Butts of the Associated General Contractors of Connecticut said the expansion “would create an unbalanced business climate for building contractors considering the enormous damages and penalties, the high costs to defend even the most frivolous of claims, and the low standards of proof.”

“The nature of construction contracts and work leave most contractors particularly vulnerable to false claims actions,” Butts said in written testimony. “There is often no clear meaning of true or false on a construction project.”

Tong said that many construction contractors in Connecticut also work in neighboring states like Massachusetts where their attorney general has powers to investigate and that opponents argue that “a few bad apples shouldn’t ruin it for everybody else.”

“That’s no principled objection at all,” Tong said. “No accountability can never be the answer.”

Shubert said large contractors can afford to handle the risk of false claims enforcement, but it could severely affect smaller businesses. “This is a rather large change in the law,” Shubert testified.

A similar bill was passed by the Judiciary Committee in 2022 but never came to a vote in the House of Representatives or the Senate. At the time, the Office of Fiscal Analysis estimated the expansion of the AG’s authority would require additional staff, amounting to roughly $1.3 million in added costs for salaries and benefits.