Corporate Crime Reporter

18 Corporate Crime Reporter 3(8), January 19, 2004


In Connecticut, Governor John Rowland’s administration is being threatened with the worst public corruption scandal in the state’s history.

Three Connecticut mayors and the state’s treasurer already have been sent to prison.

The Governor’s former deputy chief of staff pled guilty to accepting gold coins in return for government contracts.
He reportedly buried the gold coins in his back yard.

Governor Rowland has confessed that he allowed private corporations to renovate his cottage in Litchfield.

He first told the citizens of Connecticut that he paid for the hot tub and the cathedral ceilings – but later admitted that he lied.

He didn’t pay for them – the state contractors paid for them.

The state legislature has organized to investigate the Governor for a possible impeachment.

Bill Curry, the Democratic gubernatorial nominee who lost to Rowland in 1998 and 2002, now calls Connecticut “the most corrupt state in the nation.”

"We were the Constitution State," Curry told the Hartford Courant last month. "We were the home of New England town meeting democracy, and now we're Louisiana with foliage."

Curry should know. He leveled charges of corruption against Rowland in 2002, but hardly anyone blinked an eye. Now, everyone wants Rowland to resign.

We interviewed Curry on January 13, 2004.

CCR: What are you doing these days?

CURRY: I'm writing a book on the Clinton Presidency.

CCR: You are a lawyer. Are you practicing?

CURRY: I'm not practicing right now. When the book is out, I'm going to sit down and decide whether I'm going back into law or politics.

CCR: What would you run for?

CURRY: It's clear that given what has happened here in Connecticut, I have the option of running again.

CCR: For Governor?

CURRY: That would certainly be the office that is most attractive to me. It is the place where you can get the most things done. I need to think about it all, something I really haven't done in the year since I lost to Rowland.

CCR: Give us a sketch of your education and what you have been doing since you last graduated.

CURRY: I graduated from Georgetown University in 1974. I graduated from the University of Connecticut Law School in 1977.

I practiced law in 1978 and ran for the Connecticut state senate and was elected. I was re-elected in 1980. I was the Democratic nominee for Congress in 1982. I lost a close, tough election to Nancy Johnson. Toby Moffett had vacated the seat that year to run against Lowell Weicker for Senate.

I then went to work for the Nuclear Freeze. We formed a political action committee called Freeze Voter, of which I was national director. I was there two years supporting members of Congress who supported bilateral arms control and trying to defeat Reagan. We were better at the first than at the second.

I returned to Connecticut, practiced law and did business successfully for a few years in a firm that I founded. In 1988 and 1989, I was a fellow at the International Center in Washington, D.C.

I did work in a number of developing countries having new democracies – El Salvador, Nicaragua. I met with Castro in Cuba. I was in East Berlin the week the Wall came down. I met and worked with Willy Brandt in Geneva.

I now chair the board of the International Center. I returned to Connecticut in 1990 and ran for Comptroller of the state of won, defeating an incumbent of my own party at the convention and then winning a close election against the Republican.

In 1994, I became the first person ever to win a Gubernatorial nomination by primary in either party. Then in a divided four-way field, I lost a very close election to Rowland. The other two candidates were Eunice Groark, who had been Lowell Weicker's Lt. Governor and Tom Scott, a populist conservative, running on an anti-income tax platform.

CCR: You were hurt by both?

CURRY: Yes. In all polling, both Scott's and Groark's voters named me as their second choice by fairly substantial margins. The Scott votes were mostly Reagan Democrats coming out of old industrial towns.

They knew that I was different from Tom on lots of issues, but they understood
that I was a lot more likely than Rowland to stand up for them on other stuff that mattered to them, like health care, property taxes ad rooting out corruption. The Groark vote was mostly suburban professional liberals, a vote we otherwise won by a wide margin.

CCR: What did you lose by?

CURRY: Three points. That was in 1994. Right after that, Bill Clinton called and offered me a job at the White House.

I began work for him here in Connecticut while I was still comptroller and went to the White House in January 1995 serving as counselor to the President and working on a wide range of domestic policy issues. I came back to Connecticut in 1997, did a stint as a fellow at the Yale School of Management and began work on what later became this book on the Clinton Presidency.

CCR: What's the title?

CURRY: Unfinished Business. In 1998 I thought of running for Governor, filed a committee, went about the state. When Barbara Kennelly announced her candidacy, I withdrew in her favor. She lost to Rowland by a quite a lot, getting about 37 percent of the vote.
In 2002, I again ran again against Rowland and lost to him. I had a little over 44 percent of the vote.

We started out 43 points down and closed it to 9 in September while being outspent about 5 to 1. I eventually got 44% of the vote. Since then I've been working on the Clinton book.

CCR: What do you mean by Unfinished Business?

CURRY: It refers to the unfinished business of the administration and the country. It's about what happened to the progressive ideal in American politics in the Clinton years. Clinton came along in 1992 and said – Hi, I'm a new Democrat.

I can cut you taxes, shrink your government, work with corporations, devolve power and still extend a social contract -- heal cities, fix schools, expand employment, extend health care. The most interesting question to me about his presidency is – did you really think you could do that or were you just kidding?

Was it truly a strategy of governance, or merely of self-presentation, a campaign hustle? In 1992, Clinton presented a fairly broad populist agenda – universal health care reform, welfare reform, campaign finance reform, a massive public works program for the cities. Clinton got many things done as President, but not those things. The book tries to answer the question of why things turned out that way and explore how we might do better.

CCR: Is he going to like the book?

CURRY: I don't know. I hope everyone likes it. On some level, I hope people see it as a thoughtful defense of his Presidency. You can argue back and forth whether we could have done better. Some of the President's defenders would argue that this was a time when conservatives were in the saddle and it wasn't possible to advance a more dramatic and more sweeping agenda. I disagree with that.

This book certainly makes the argument that in fact the window was open then and still could be now.

CCR: Who are you supporting in the upcoming election?
CURRY: I'm not.

CCR: You are writing an article about Governor Rowland that will appear in newspapers around Connecticut tomorrow. What will you say in a nutshell?

CURRY: The title is "Last Chance for Legislators." I note in the article that in matters of impeachment and corruption, public opinion drives the agenda. At the outset of the Lewinsky scandal, Democrat and Republican Congressional leaders alike were preparing to dispose of Clinton. Sam Donaldson was speaking for the whole town when he said Clinton was “toast.”

Then something odd happened. The polls started saying that the public – by a 2-1 margin – opposed impeachment. People deplored what Clinton had done but regarded impeachment as unsuitable for such a personal trespass. So, public opinion saved Clinton's presidency. Public opinion is again driving the process in Connecticut. But here it's in many ways the opposite situation.

All Rowland's misdeeds are clearly of a public rather than private nature. But here Democratic and Republican leaders, even when confronted with Rowland's confession of serial violations of the public trust, stood frozen like deer in headlights. The public on the other hand, as soon as they heard Rowland admit he had taken things that were not his to take and then repeatedly lied about it, knew instantly that they wanted him out of that office.

CCR: What is Rowland accused of doing?

CURRY: Everything wrong he possibly could: Taking money from sweetheart economic deals set up by people who do business with the state. Taking gifts, free travel, vacations, suits, wine, repairs to a cottage in Litchfield, quite possibly a boat and a car from people who were his employees or who did business with the state.

Letting a political hack who was a state contractor and a Rowland appointee manipulate a nature conservancy in Litchfield whose board the hack chaired, into selling Rowland a cottage. It was a private sale – just for Rowland.

The price was $110,000. Litchfield is a lovely town. Property there is very expensive. This was lakefront property in a nature conservancy in Litchfield and he bought it for $110,000, $5,000 down, the rest covered by a subsidized mortgage from the nature conservancy.

This goes to the very heart of laws governing non-profit. The mortal sin of non-profits is siphoning off assets to the benefit of insiders and their cronies. Many of us cried foul at the
time but the attorney general, who oversees charitable organizations, declined even to ask questions.

CCR: In your two runs against him, you never accused him of being corrupt, did you?

CURRY: Actually I did. It was one of the two main arguments of the 2002 race. One of the amazing things to watch now is everything I talked of then coming true. One example is the CRRA/Enron deal. I said at the time it was clear that Rowland had transacted an illegal deal to benefit a private company – Enron, if you can believe it-- in exchange for campaign contributions to the Republican Governors Association, which Rowland then chaired.

CCR: What is CRRA?

CURRY: It is the Connecticut Resource Recovery Authority (CRRA), a quasi public authority, operating under the state of Connecticut, then run by the Governor's Chief of Staff, a man named Peter Ellis, who apparently as chief of staff didn't have enough to do. Rowland assigned him this hobby, running CRRA, so he could control the authority to steer business to his own and his cronies' advantage. And he did. The first major deal was Enron. The authority made the illegal loan of 220 million dollars to Enron just before Enron went belly up. The state never recovered a dime.

That was in 1997 to 1999. We hammered that home. Unfortunately for us, once again the Attorney General of the state, Richard Blumentahl, a Democrat allied himself with Rowland and announced that he would represent rather than investigate Enron.

He appeared with Rowland at a press conference announcing they were going to sue the accountants and lawyers in New York who they said had deceived the state. It was so much blather.

They knew the people of Connecticut would be 1000th in line going after the bankrupt Enron and its lawyers and accountants after one of the greatest corporate meltdowns ever. It was such an obvious trade of taxpayer dollars for campaign contributions to the Republican Governor's Association.

CCR: How much did Enron put into the Republican Governors' Association?

CURRY: Enron raised about $1 million for them when Rowland was either the number one or number two guy at RGA. The deal was a complete scam on taxpayers. The paperwork made it appear Enron was buying energy from state regulated utilities. It wasn't. The whole thing was like a shell game with no pea. The state's $220 million loss was the largest single financial transaction and of course the largest single financial loss in state history.

The Governor denied ever having met with Enron, but it turns out that he met with Ken Lay himself and had numerous meetings with Enron officials.

And then there was the massive bid rigging. For this scam, Rowland arranged to have changes made in state statute regarding competitive bidding. Ella Grasso, Connecticut Governor in the mid-1970s, had brought us into the modern age with competitive bidding statutes. Under that law, you could forgo competitive bidding only in a real emergency.

"Emergency" was carefully defined. If water was coming over the levee, and you needed more sandbags, you didn't have to go out to bid. Otherwise, you had to play it straight. Rowland went from that standard, to one where the commissioners of his departments could just
declare an emergency.

In our campaign, we looked at those projects, and it turned out the commissioners had only declared emergencies where the contractor was the Governor's largest donor, the Tomasso family from New Britain and their associated companies. No other emergencies had apparently arisen with respect to any other contractors.

We took those contracts – I believe there were four at the time totaling over $100 million – and we brought them to industry analysts who said they had come in 15 to 20 percent over what was then the going rate in our market. That's 15 to 20 percent over a normal, reasonable profit. That somewhere between $15 million and $20 million into the pockets of that one family just for those projects.

This is the same family that bought the Governor a car, provided many of the free vacations and travel, provided the free improvements to the cottage he got at the private sale with a subsidized mortgage from a nature conservancy. I held a press conference on September 24, 2002 and laid out the scheme.

CCR: It didn't catch on back then. Why did it catch on now?

CURRY: Maybe the press has to smell blood, political defeat, before they will take this kind of thing as seriously as they should. If you're only covering the horse race, the first call you make is not whether something is important or not but only whether you think it will affect the outcome of the race. After a while you start to lose the ability to recognize what's important. Not one editorial board wrote one editorial about that press conference.

CCR: Did the newspapers run stories about your press conference?

CURRY: In the Hartford Courant, one story ran on the front page of the second section. That was about as well as we did. A reporter named Paul Hughes of the Meriden Record Journal understood the points I was trying to make. The New York Times editorial board along with the Meriden and Willimantic papers got it. Paul Bass of the Advocate. I name them because to me it's kind of an honor role. I'm probably leaving out someone, but that was about it. The rest of the state press slept through the corruption story.

CCR: Why did this story start breaking this year?

CURRY: Well, perhaps someone at the U.S. Attorney's office in Hartford did read my press release. At any rate they began investigating the bid-rigging.

CCR: Who is the U.S. Attorney in Hartford?

CURRY: It's an interesting story there. At that time, I, alone except for one newspaper, the New Haven Register, had opposed the Governor's choice for U.S. Attorney, a lawyer who had never been to court, let alone in a criminal matter, but who had been on the Governor's top staff for years. His name is Brendan Fox. Rowland recommended him to Bush and pushed hard, with the support of our Democrat U.S. Senators, who got on board with Rowland immediately despite knowing nothing about his nominee.

Among Fox's responsibilities with Rowland was doling money out to the various municipalities, many of which were then under indictment or investigation.

We're the most deeply indebted state in the nation and a big reason is that Rowland borrowed so much money for downtown redevelopment projects.

To date these projects have produced more criminal convictions than real jobs. In Bridgeport and Waterbury the mayors, both now in jail, were under indictment or investigation. The Governor's hand picked state treasurer was under indictment.

Fox had worked with all these people and under the canons of judicial ethics would have been forced to recuse himself from nearly every major case in his office. Ultimately he didn't get the job.

In the end, the civil service professionals of the Justice Department were able to make the
argument within the Department and stop his appointment.

Not even John Ashcroft was willing to give him the go ahead. Rowland then proposed a lawyer, who was the husband of one of the Governor's legal staff. His name is Kevin O'Connor. He got the job. And he is now the U.S. Attorney. He has recused himself from the Rowland cases, because of that connection.

So the civil servants in that office have essentially brought these cases on their own. They have been heros. There is one assistant U.S. Attorney in the office named Nora Dannehy. I have never met her. Along with a handful of her colleagues she has brought all these cases. Somebody should give this woman a plaque. We are now without doubt the most corrupt state in the nation and that one office has been fighting it all alone.

CCR: When you say – all of these cases – you mean which ones?

CURRY: The Governor's deputy chief of staff has pled guilty to taking bribes in exchange for state construction contracts in the form of gold coins which he buried in his back yard. His name is Lawrence Alibozek. He awaits sentencing.

The former Treasurer of the State, his name is Paul Silvester, is in prison for taking bribes in exchange for state business. Silvester had met with Fox to plan fundraising.

The fundraising included bringing the Governor down to New York to raise money from the various companies Silvester placing state funds with.

When it all came out, Rowland said he remembered going to New York with Silvester to raise money but had no idea that the people ponying up the dough did bussiness with the state. Oh, the governor's choice for Secretary of State also awaits sentencing.

CCR: Then there are the mayors –

CURRY: Two mayors of Waterbury who were in jail at the same time Joseph Santopietro and Phillip Giordano. Santopietro for corruption. Giordano turned out to be like Caligula. He's in jail for horrid sexual crimes committed against minors right in the mayor's office. The feds haven't even been gotten to charges from the corruption investigation during which they stumbled over the sex felonies. Santopietro is out on community release. The Mayor of Bridgeport, Joseph Ganim, is in prison for corruption.

CCR: Based on those five, you say Connecticut is the most corrupt state in the union?

CURRY: Three mayors, a state treasurer, a deputy chief of staff, and there are indictments expected for the rest of the Rowland entourage. The most widely expected indictment are those connected to Alibozek, the man who buried the gold in his yard.

The Governor's chief of staff and the Governor's largest donor are odds on favorites to enter the criminal justice system real soon. Certainly no one here can think of a case in New England where the top echelons of government have all gone marching off together like this to jail.

CCR: You are saying that what turned this case around from the public not caring to the public demanding the Governor's resignation is the action of assistant U.S. Attorneys?

CURRY: Absolutely. There is a kind Lois Gibbs/Erin Brockovich aspect to this story, about how one person can not only beat but imprison city hall.

CCR: Are you saying that a whistleblower stood up and did the right thing? Or is it someone at the U.S. Attorney's office who connected the dots?

CURRY: The U.S. Attorney's office for sure but almost certainly some whistleblowers as well. Let me say I don't know what their sources are. I have no lines into that office. I haven't sought any, I'm sure they wouldn't allow me any. Until they tell their stories, we won't know all their sources. I have some theories about it. Some of it I think I know. But we'll see.

CCR: Republicans are calling on Rowland to resign. There are calls for impeachment. Who controls the state legislature?

CURRY: The Democrats do. Leaders of both parties have done nothing but dither and equivocate. As I said it's like it was with Clinton only different. With Rowland the politicians are all confused and the public is as clear eyed as can be. The politicians are so useless because government in Connecticut has been of, by and for political insiders for so long.

CCR: What are the odds that there will be an impeachment?

CURRY: Overwhelming.

CCR: What are the odds that he will resign in disgrace first?

CURRY: I don't know. When the polls came out, the rank and file legislators – Democrat and Republican – began to break and run. The polls showed over 80 percent of the public feels the Governor is dishonest and untrustworthy. Something like 70 percent feel he should
resign. A substantial majority supports impeachment.

CCR: If people outside of Connecticut know anything about the case, they have heard that he said that he paid for the renovations to his cottage, when in fact he didn't pay for it himself. He lied about it. It's a Capone kind of thing — you commit egregious acts, but are hung for lying or filing false tax returns.

CURRY: That is almost always the way it is. They end up getting these guys for the smaller things they can actually catch them out at. Rowland is looking at the possibility of a Capone like prosecution – income tax evasion. That would be the easiest case to prove.

Sometimes it is hard for people to grasp just how much they've been victimized by a hustle like the one Rowland and Tomasso ran on state bidding. A massive story of pandemic corruption that costs the state tens of millions of dollars is before the public.

But it is slightly abstract. On the other hand, a free hot tub at the cottage, with a new kitchen and cathedral ceilings and then lying about it.

Obvious and improbable lies about going to a store and buying stuff himself – that's stuff people understand. The lies were so flagrant. It was so humiliating when he was caught. Rowland is a compulsive and casual liar about matters large and small. What is most interesting about this case is not what he did, but how we let him get away with it for so long. How did so many institutions fail? How did so many decent people become the enablers of corruption?

CCR: Would he have gotten away with it had it not been for this cottage deal?

CURRY: I don't think so. Rowland's popularity dropped 20 percent the Friday after his election victory over me. On that day, he admitted that he had been lying through his teeth all year about the state's fiscal condition.

It was the same problem Gray Davis had. Because our real fiscal condition wasn't just poor but horrible and because he'd lied about it so relentlessly, people were outraged. He only holds office now because we don't have a recall procedure in Connecticut.

Then a few months later, his deputy chief of staff made his made for cable TVmovie admission of burying gold coins in his backyard – coins he had gotten from a major contractor for awarding him state business. It was then that the public began to suspect there was a decent chance not only that Rowland had lied about the budget but that he was deeply corrupt as well.

Out of that investigation came the news that Alibozek, Tomasso and others, who the feds were investigating for the bid-rigging, had been visiting the Governor's cottage and treating him to a new kitchen, a new living room, a deck, a hot tub, and other substantial home improvements.
Then too the news broke that he had been taking free vacation travel from state contractors and had charged $50,000 on Republican Party credit cards for his own personal use. So the cottage story didn't hit in a vacuum. If it hadn't been that it was bound to be something else.

The feds were bearing down and there had been just too many lies. When Rowland woke up to how much trouble he was in he did what came naturally to him. He told even more lies with even less forethought. By this time the prosecutors knew he was lying even as the words were leaving his mouth. He was cooked.

CCR: Who is the Governor's lawyer?

CURRY: William Dow from New Haven.

CCR: You said that Connecticut is the most corrupt state in the nation. We have completed a report on public corruption in the United States. It is based on a report that the Justice Department just released on public corruption convictions over the last decade state-by-state. The report documents a corruption rate, based on number of public corruption convictions per capita. Connecticut's corruption rate is 2.16 convictions per 100,000 population over the last ten years. That brings it in at number 32 – with number one being the most corrupt and number 50 being the least corrupt. Now again, these are just statistics covering 1993 to 2002. Louisiana comes in third with a corruption rate of 7.05.

CURRY: Let me suggest some methodological problems. One – you leave out 2003 and 2004, the years in which I would assert that my theory is being proved true. There were lots of convictions last year and there are lots more convictions to come this year. Second, look who is going down – the Governor, the Secretary of State nominee, the State Treasurer, mayors, commissioners, the chief of staff, the deputy chief of staff. With all due respect to Louisiana and Mississippi can they really match that?

CCR: You say Connecticut is the most corrupt state and you call Connecticut "Louisiana with foliage." The people in Louisiana are not happy.

CURRY: Yeah, but by and large they concede that they are an inevitable touchstone in matters of public corruption and fall back on what they see as their strongest argument-- that I'm underestimating their foliage. I still say New England for foliage and New Orleans for Mardi Gras. And I'm working to hand the corruption crown back to them.

CCR: How has the Rowland scandal changed your life?

CURRY: In most ways not at all.

CCR: But if you decide to run for Governor again, it will have changed your life.

CURRY: Sure. Throughout the year, more than ever before in my life, I've been getting back just wonderful feedback from the public. Rowland admitted to such a big lie about the budget just three days after the polls closed. The only campaign commercial I had money to run on broadcast television was a commercial with the tag line - "Governor Rowland what did you do with all of that money?"

In my debates, in my speeches, in all my editorial and other interviews, I pounded home that we were in terrible fiscal shape and that a big part of the reason was that the governor and his friends were looting the treasury.

When it all turned out to be true the state came down with the worst case of buyer's remorse you ever saw. People have been wonderfully affirming of me ever since. But while it was a real consolation, it's not the same as getting
the job.

CCR: Which you might get next time.

CURRY: I'm going to finish this book, take a deep breath, and make a decision in the spring. I do not feel as if I'm done with elective politics. I still believe this is the single job in which one person can do the most good for others.

CCR: If he is impeached or resigns, what is the provision in Connecticut law for an emergency election?

CURRY: There isn't one. It's one of the questions I've raised with people in the last few weeks. As in most states, the Lt. Governor takes over. I think that's a mistake. I think we designed the offices of vice president and Lt. Governor with an eye to the death or incapacity of the President or Governor.

I believe that when a chief executive is marched out of office for impeachable offenses, we should have an election to fill the remainder of the term. The idea that a member of Rowland's posse simply follows in Rowland's footsteps is a bad one.

CCR: Has the Lt. Governor, Jodi Rell, been implicated?

CURRY: When her son was found by state environmental officers to be running a stolen property ring out of her basement for Skidoos, the environmental officers who made the arrests had their careers threatened.

They suffered until it hit the press and then the administration backed off. She denied any involvement in the retaliation. Again, Connecticut's extraordinary unwillingness to investigate the apparent corruption of its own elected officials saved her from further public embarrassment.

In any event, she has been a happy, willing partner and an insider in the Rowland administration for nine years.

CCR: The next election is scheduled in 2006.

CURRY: Right.

CCR: What is the impeachment proceeding like in Connecticut?

CURRY: It's a lot like the federal system. There has only been one impeachment ever here, against a probate judge. So there's uncertainty about what House committee would conduct the investigation and under what rules and procedures.

And unlike a Presidential impeachment, the impeachment of a Connecticut Governor requires the Governor to step aside while the investigation is going on. When the investigatory committee is convened, the Governor must take leave of the office, the Lt. Governor takes over and the Governor doesn't return unless and until he is acquitted.

CCR: And finally, what is your read on what is going to happen?

CURRY: I think indictments against the Governor's chief of staff and his largest donor for bid-rigging will come down soon – probably in a matter of weeks, not months. Here's a man with the lowest favorability ratings ever recorded in either major state poll for any public official. Over 80 percent of the people now characterize him as a liar and untrustworthy. When the sonic boom of the bid rigging indictment story hits the papers, I believe he will then be gone within a very few days.

CCR: This is a headline yet to be written.

CURRY: That is correct.

[Contact: Bill Curry, 119 Town Farm Road, Farmington, Connecticut 06032. Telephone: (860) 676-1106. E-mail: [email protected]]



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