Melissa McCaw: ‘Broader steering’ concerns ‘never came to my knowledge’

Mark Pazniokas

Melissa McCaw says she saw a bid dispute — and no inkling of scandal — in a contractor’s complaint to her on April 29, 2020.

The contractor, Stamford Wrecking Company, complained that her agency, the Office of Policy and Management, was undermining competitive bidding laws on school demolition and hazardous-material disposal contracts. Specifically, the contractor said, OPM urged the town of Groton to set aside open bidding in favor of hiring from the state’s limited emergency bid list of approved contractors.

The response was delegated to legal staff and McCaw’s deputy, Konstantinos Diamantis — the official in charge of school construction grants.

Today, the Stamford Wrecking complaint made in the spring of 2020 is colored by recent revelations that the FBI is investigating school construction and other programs overseen by Diamantis and allegations by officials in several towns that Diamantis pressured them to hire certain contractors — including one that employed his daughter, Anastasia Diamantis.

McCaw, speaking about the allegations regarding her former deputy for the first time, said the Stamford Wrecking complaint narrowly focused on the propriety of OPM urging the use of a state-approved list for hazardous-material abatement, often a wildly unpredictable expense in school construction.

“What is now coming out in the press, which I’m extremely disturbed by, it’s far beyond that,” said McCaw. “At no point had any municipality or superintendent ever raised to my attention concerns about broader steering. It never came to my knowledge.”

Despite state law placing the function in the Department of Administrative Services, responsibility for overseeing state-reimbursed school construction came from DAS to OPM at her insistence late 2019. It was a condition of Diamantis, the director of the Office of School Construction Grant and Review (OSCGR), becoming her deputy.

Diamantis, a Democrat who represented Bristol in the state House of Representatives for 14 years before losing a primary in 2006, arrived at OPM with a reputation as an aggressive and sometimes caustic bureaucratic infighter. He had been overseeing construction at DAS since 2015.

To accommodate McCaw, the Lamont administration signed off on a memorandum of understanding that temporarily removed OSCGR from DAS and grafted it onto OPM, despite objections by state lawmakers. They saw the move as potentially politicizing state reimbursements that largely had been set by formula.

“The reasons for keeping school construction at DAS were clear,” said Sen. Cathy Osten, D-Sprague, co-chair of the Appropriations Committee. “It would not be perceived as a political function, where OPM is far more perceived as a political function.”

Now, the move engineered by McCaw has entangled her in a scandal from which she is trying to keep a distance.

McCaw said Diamantis never told her that his daughter, Anastasia Diamantis, had been hired by a school construction management company that worked on one of the state-reimbursed school projects.

Diamantis was fired as her deputy on Oct. 28 — not by her, but by the governor  through his chief of staff, Paul Mounds. That night, Diamantis cast his dismissal as a consequence of his defending McCaw against what he characterized as disrespect towards a Black woman by Mounds and Josh Geballe, the chief operating officer.

The OPM position held by McCaw did not have the same status in the Lamont administration as it did in others. Lamont’s creation of the chief operating officer’s position, then designating Geballe as the coordinator of the state’s COVID-19 response, was a source of tension between McCaw and the governor’s staff.

McCaw never disavowed Diamantis’ characterization of her being disrespected, not in October or in an interview with CT Mirror over the weekend.

“As the deputy secretary, he was privy to interactions and the work of the agency. He saw a lot. He certainly was a witness to what it has been like for me as the first Black female OPM secretary,” McCaw said. “And I’ll leave it at that.”

When Diamantis was fired as deputy secretary at OPM, a political appointment, and retired from his civil service job in charge of school construction rather than accept a suspension, the issue was his role in the July 2020 hiring of Anastasia Diamantis as an executive assistant to Chief State’s Attorney Richard Colangelo Jr.

At the time he hired the daughter, it was later revealed, Colangelo was lobbying the father and others at OPM for help in securing raises for senior prosecutors. 

Colangelo filed for retirement on Feb. 9, a week after the release of an investigative report commissioned by Lamont and produced by former U.S. Attorney Stanley A. Twardy Jr. It concluded that Colangelo had not been truthful in his account of her hiring.

McCaw said she learned from Twardy when he interviewed her that Anastasia Diamantis also had been working part-time for Construction Advocacy Professionals, or CAP. Tolland’s school superintendent has said Kosta Diamantis had pressured the town to hire CAP.

McCaw said she has not questioned Diamantis since his departure about the allegations against him.

“I have expressed my displeasure about what I’m seeing,” McCaw said. “I’m the first Black female OPM secretary, and I’ve worked very hard to build my career and to bring significant progress to the state of Connecticut. So obviously I’m not happy at all with what is going on and any perception that it gives to my leadership. And he’s heard that from me directly.”

She declined to directly answer when asked if her view of her former deputy has changed.

“Look, I have built my career on work, ethics, integrity and competence. And what I will say is that I am deeply disturbed by the allegations at hand,” she said. “I’m going to respect the process. I will participate in the process to ensure we get to the bottom of this.”

Diamantis has said any suggestion that municipalities use the emergency list of approved demolition contractors was intended to save money, not assist a favored few.

Emails show OPM officials responded to complaints

Emails recently obtained by CT Mirror show that the Stamford Wrecking complaint was not ignored.

The complaint from Irving Goldblum, the president of Stamford Wrecking, was addressed to McCaw and Geballe, the latter in his capacity as the commissioner of DAS, a job he continued to hold after Lamont also named him as chief operating officer.

Ray Garcia, a lawyer representing the contractor, forwarded a copy of Goldbum’s complaint by an email sent at 1:10 p.m. May 4, 2020 to Gareth D. Bye, the director of legal affairs at OPM.

“May we have a conversation about this before it becomes a full blown formal dispute,” Garcia asked Bye. “I think the process is not authorized by any statute of which I am aware and circumvents the public bidding statutes generally. But, as I said, I would like the benefit of OPM’s thoughts before we take more formal action, or decide not to take action.”

Bye responded at 2:15 p.m., telling him that Diamantis manages the school construction grants and Kevin Kopetz runs the legal unit that handles school construction issues.

With Diamantis, the OSCGR personnel physically relocated from DAS offices in a state complex on the riverfront in downtown Hartford to OPM’s offices on Capitol Avenue, a short walk from the Legislative Office Building and state Capitol.

Bye copied Diamantis and Kopetz on his reply to Garcia. A conference call with Garcia was scheduled for the next day. Participants in the call said the tone was cordial, with both sides acknowledging the challenges in controlling hazmat removal costs.

“It was great to meet you, even on the phone, and hear your thoughts on school construction. In many instances your views are identical to mine and I come from the Contractor’s side of the industry,” Garcia told Diamantis in a follow up email. “I look forward to meeting you in person and as I said I am always willing to help out, speak and come and listen or furnish research or otherwise participate at any level of government to to make our great industry more responsive to the biggest user of construction services.”

But Garcia and his client did not change its view that open competitive bidding was required for the work, whatever the motivation for taking a shortcut of allowing municipalities to hire from the emergency bid list, which had only four contractors. Garcia eventually was assured the policy would be clarified.

On Dec. 23, 2020, Goldblum wrote again to McCaw and Geballe, as well as to Kopetz and Manchester Mayor Jay Moran, with a new complaint that Manchester was using the emergency bid list instead of open competitive bidding hazmat work at Buckley Elementary School.

“It is our belief that the State of Connecticut, through OPM, has directed that Manchester skip the public bidding requirement and utilize the emergency response list,” Goldblum wrote.

On Saturday, Dec. 26, Geballe emailed Diamantis, asking him to address the concerns raised in the letter. Copied on the email were McCaw, Kevin Kopetz and Bob Clark, who then was the governor’s general counsel.

Diamantis wrote to Goldblum on Jan. 27, 2021, denying OPM had directed Manchester to skip open bidding.

On Feb. 2, 2021, Garcia asked Attorney General William Tong to intervene, saying his client had information that OPM directed municipalities to hire contractors off the limited emergency bid list for at least six school construction projects.

“We objected to that for several specific projects and OPM has advised us that it stopped the practice,” Garcia said. “However, we have been advised that OPM now advises municipalities that the State will not reimburse the municipality for certain work unless the municipality utilizes a contract off the State’s emergency asbestos abatement contractor list.”

The governor’s office said a clarification issued on March 2, 2021 by Diamantis resolved the matter to the satisfaction of Garcia’s client. McCaw also said she was advised by legal staff that “those matters had been addressed through the collaborative work of the AG’s office, DAS, OPM counsel and the former director,” Diamantis.

Garcia said that assessment was incorrect.

“We disagree with the Secretary,” Garcia said. “We continued to raise our concerns to the AG’s office and the governor’s office through correspondence and meetings. We believe tens of millions of dollars have been steered to one contractor by use of this practice, notwithstanding the policy.”

Garcia said they have information that the emergency list was used in lieu of open competition in New Fairfield, New London, Manchester, Norwalk and Bridgeport, in addition to other municipalities mentioned in news stories.

States to feds: Don’t tell us how to spend infrastructure money

Alex Brown | Pew Stateline

State and local leaders from both parties are at odds with the Biden administration over how billions of dollars in new infrastructure money should be spent.

Republican governors are upset over a federal memo seeking to limit dollars for highway expansions. Western states and some progressive cities don’t like the feds’ plan for how to deploy electric vehicle chargers. Some construction groups fear that labor guidelines included in certain programs could hurt red states without a strong union presence.

And more conflicts are likely to surface as federal agencies continue to roll out details for the bill’s programs.

Last year’s $1.2 trillion infrastructure law was hailed by state leaders on all sides as a much-needed investment in roads and bridges, broadband internet, water systems and other priorities. But while the feds are signing the checks, state and local governments largely will decide how to funnel the money to specific projects—and they’ll need to put up some matching funds of their own. 

As local officials wait for the money, some worry that federal agencies will focus on priorities not specifically authorized by Congress that could limit their ability to use or access the funds.

Highway funds

The most high-profile dispute centers on an internal Federal Highway Administration memo, distributed to top officials in that agency in December, that urges federal officials to prioritize existing repairs, public transit and bike lanes over new highway expansion projects.

Last month, 16 Republican governors sent a letter to the Biden administration asking agency leaders to “defer to the states and confer maximum regulatory flexibility.”

“Your administration should not attempt to push a social agenda through hard infrastructure investments and instead should consider economically sound principles that align with state priorities,” wrote the group, led by Tennessee Gov. Bill Lee.

While only Republican governors signed the letter, several states led by Democrats, including Washington, Nevada and North Carolina, also have prioritized highway expansions.

Tennessee officials say the state already is poised to meet many of the priorities outlined in the federal memo, but they raised philosophical objections about federal agency attempts to direct the funding.

“The law lays out what the funds can be used for, and that’s the flexibility that Congress gave states,” said Preston Elliott, environmental and planning bureau chief with the Tennessee Department of Transportation. “To have a memo that is not in law sends a conflicting message. It’s just the sheer point of adding additional perceived restrictions to something that Congress didn’t really tell them to do.”

Last week, U.S. Senate Minority Leader Mitch McConnell, a Kentucky Republican, told governors to ignore the memo about highway projects. 

“Nothing in the [law] provides [the Federal Highway Administration] with the authority to dictate how states should use their federal formula funding, nor prioritizes public transit or bike paths over new roads and bridges,” McConnell wrote in a letter to governors, along with GOP U.S. Sen. Shelley Moore Capito, the West Virginia Republican who is the ranking member of the Environment and Public Works Committee.

Federal officials have since said that the memo is not equivalent to a mandate, nor does it explicitly forbid new highway or bridge construction. Still, some groups that supported the infrastructure package say the memo caused confusion and undermined the efforts of the bipartisan coalition that came together to pass the bill.

“The law is very clear,” said Ed Mortimer, vice president of transportation and infrastructure at the U.S. Chamber of Commerce. “States have wide latitude to invest in the projects they need to invest in. [State transportation officials] want the flexibility to do what’s best for their state.”

Susan Howard, director of policy and government relations with the American Association of State Highway and Transportation Officials, said states won’t risk losing funding if they ignore the federal memo. 

“We share a lot of these priorities, and states are doing a lot in these areas already,” she said of the Biden administration’s priorities. “But a policy memo is fundamentally different than a change in the law. States have to use the money at their discretion.”

EV chargers

Some leaders also have expressed concern over the Biden administration’s plan to spend $7.5 billion on electric vehicle chargers.

Officials with the federal Joint Energy and Transportation Office announced last week that the program’s first year of projects will prioritize federally designated alternative fuel corridors, focused on interstate highways. Those corridors are highway segments, nominated by state and local governments, with infrastructure to support charging stations and other alternative fuels.  

Some state and local leaders have said that strategy doesn’t fit their needs. 

“The guidance around the alternative fuel corridors program might not fit with what will need to be accomplished,” said Melissa Savage, environmental program director with the state transportation officials’ group. “In some areas, those corridors are built out. … Some states will need more flexibility.”

The federal agency’s guidance urges states to submit more highways for corridor designation, and it says focusing on the corridor strategy will “build out a convenient, reliable, affordable, and equitable public charging network.”

The corridor program requires charging stations at 50-mile intervals, which poses a challenge for rural states.

“A number of western states have experienced challenges in meeting these defined metrics due to lacking electric infrastructure and suitable charging locations in sparsely populated areas,” the Western Governors Association, comprised of 19 states in the region, wrote in a policy resolution submitted to federal transportation officials in December. 

The cities of Seattle and Denver also submitted comments to the feds asking for funding to be used beyond the federal corridor program. Seattle’s letter also asked officials to prioritize areas that use power from renewable energy sources to charge electric vehicles. Most of Seattle’s power is supplied by hydroelectricity, which would put it at an advantage over regions that rely on natural gas or coal.

Other conflicts

Some construction industry groups have noted that other federal funding program guidelines, including some included in the infrastructure law, encourage project labor agreements, known as PLAs, that could benefit unionized contract companies. Such agreements are collectively bargained pre-hire terms for a specific project. 

Democrats often praise PLAs as a way to ensure strong labor standards and prevent work stoppages. Republicans claim the agreements are designed to steer contracts to union-friendly firms. Twenty-four states prohibit government-mandated PLAs for state and local construction projects. 

“This is sleight of hand by the federal agencies to boost union membership,” said Ben Brubeck, vice president of regulatory, labor and state affairs with Associated Builders and Contractors, a construction industry association. “They’re attaching strings to this outside of the legislative process, and it’s designed so that this money goes to blue states that support union labor.”

Republican governors, in their letter to the Biden administration, also cited union memberships, equity and climate as factors that should not be considered in awarding infrastructure funds.

Speaking to McClatchy news service late last month, Biden senior adviser Mitch Landrieu, the former mayor of New Orleans who is overseeing implementation of the infrastructure bill, expressed optimism that state and federal leaders could find common ground.

“Whatever challenges we have, whether they be politically or ideologically, the mission is to get this done,” he said. “We’re going to figure out a way to do it come hell or high water.”

More infrastructure disputes are likely. Federal guidance is still being crafted for many of the programs in the bill, especially the new ones. Howard, with the state transportation group, said many states are eager to see federal plans for implementing new climate resilience and carbon reduction programs. 

“There are questions and concerns about some of the programs,” she said. “There’s going to be no shortage of questions about eligibility and how this interacts with current practices.”

Developer returns with smaller hotel proposal for West Street in Southington

Jessica Simms,

SOUTHINGTON — A developer has returned with another proposal for a hotel on West Street parcel. 

Jaymin Mehta of Canton, in association with GLNK LLC, has applied to develop a new hotel at 17 West St. 

“He feels there’s a need in this area,” said Sev Bovino from Kratzert Jones and Associates, who is representing the applicant. “This will work well for a boutique hotel.”

The property is 47,676 square feet and has served as a parking area for many years, according to minutes from the Feb. 3 Conservation Commission meeting. The maximum lot coverage allowed in the area is 50 percent and the applicant is proposing a 7,500 square foot building, quite a bit less than what is allowed, the minutes said. 

Bovino said the proposed hotel will be a colonial style building that is three stories high. 

“The zone in this area allows the height to be up to 65 feet, but we’re not doing that, we’re doing a three story, which confirms more with the surrounding area there,” Bovino said.

In 2019, Bovino represented the applicant in another proposed hotel at the same location. However, the application was withdrawn because zoning officials were concerned about the size of the building.  

“That proposal was for a five story building, this is a much smaller three story one which meets the zoning standards,” Bovino said. 

Lou Perillo, the town’s economic development coordinator, said he is supportive of a hotel on the site.

“The proximity next to the (I-84, I-691) interchange is great, the proximity to the future distillery, the existing brewery in the area and the downtown Plantsville could add to it,” Perillo said. “Hotels are some of the highest tax paying businesses for an acre of land, so we’re very supportive of a hotel on that site.” 

The Feb. 3 meeting minutes state that the applicant is proposing to disturb 8,000 square feet of wetlands, which is mostly pavement and scrub brush.

This will allow for the construction of the building and its driveway. 

“To protect the wetlands, they are proposing silt fence and mulch longs along the west bank,” according to the minutes. 

Bovino said the next step is local approvals, including the Planning and Zoning Commission. If approvals are received, then comes design and financing.

“Right now we have a schematic and elevation view of the building with an idea of what we’re doing internally, but the building doesn’t get designed until everything is approved,” Bovino said.