Federal grand jury eyes Hartford’s $150 million Bulkeley High School project

EDMUND H. MAHONY

Federal investigators have subpoenaed records from Hartford and questioned a city engineer about a school construction project during which the city claims it was “required” by the state office financing the construction to hire two consultants to perform much the same work.

The grand jury subpoena is another on a growing list issued by federal prosecutors looking for possible irregularities in more than a billion dollars in state spending, most of it since 2018 under a program that finances public school construction across the state.

The state is financing almost all of the cost of multiple school projects in Hartford, but investigators have zeroed in on the $150 million overhaul of Bulkeley High School on the city’s southside, according to public records and interviews with more than a half-dozen people familiar with the project.

In particular, the investigators appear interested in whether Konstantinos Diamantis, the politically-influential former director of the state school financing program, persuaded Hartford to hire a second consultant and how that consultant, Construction Advocacy Professionals, was awarded the contract even though two competitors submitted lower bids.

Diamantis was deputy secretary of the state Office of Policy and Management and closely involved in school construction as the hands-on director of the Office of School Construction Grants Review — until Gov. Ned Lamont ousted him from both positions in late October, about a week after federal prosecutors served the state with a wide-ranging subpoena for spending records.

No charges have been filed.

The subpoena for state records demands more than three years of email and other electronic communications involving Diamantis. It also directs the state to search specifically for records associated with Construction Advocacy Professionals, known as CAP; its owner, Antonietta DiBenedetto-Roy; and Diamantis’s daughter, Anastasia. Roy hired Anastasia Diamantis at her father’s request, according to public records and other sources.

In addition to gathering records from the state and Hartford, the grand jury has issued subpoenas for records of school projects in at least two other towns, Tolland and Bristol. Diamantis was involved in both projects. In Tolland, several officials there have complained he used his authority over state financing as leverage to persuade the town to hire DiBenedetto and another contractor, D’Amato Construction, for an elementary school project.

Hartford will not discuss its subpoena, nor a subpoena to city engineer Frank Dellaripa, who was ordered to appear before the grand jury earlier this month and interviewed by federal investigators. Dellaripa could not be reached; others said the city has retained a lawyer for him.

Several Hartford officials said Diamantis pitched the idea of hiring a second consultant early in 2020 as what he suggested could be a long-term cost-saving measure. At the same time, they said he was critical of Arcadis/O&G/C&R, the joint venture Hartford hired a decade earlier as manager for its broader school building and renovation program.

Diamantis’s idea, the officials said, was to hire a smaller construction administrator solely for the Bulkeley project. His thinking, they said, was that a smaller, presumably nimbler and more efficient project manager could identify savings overlooked by a manager with a broader portfolio of projects. Diamantis also promised that the state would pick up the cost of the second consultant.

The Hartford officials said Diamantis did not suggest hiring CAP or even mention the firm, but one official said he referred to Roy more than once as a model for the kind of smaller consultant he had in mind. What’s more, one official said, Diamantis said Roy’s firm was woman-owned and that “it would be good if she could get a toehold on some of these projects.”

Most Hartford officials, wary of being drawn into a federal investigation, would not discuss Diamantis, his former Office of School Construction Grants Review, or CAP. Those who did would do so only in general terms.

“I had a conversation with the state of Connecticut Office of School Construction Grants Review regarding ways to save costs for the school construction program,” said Melvyn Colon, who chaired the Hartford School Building Committee in 2020.

“This included an idea from OSCGR regarding the hiring of construction administrators to oversee management costs, instead of a typical construction management process, which provides comprehensive services of high quality but can be very costly. Eventually, this idea gained enough traction for implementation at the Bulkeley High School project, with the understanding that the state would pay for it.”

Others said Diamantis not only wanted, but required the city to hire a second consultant. Since Diamantis’s office was reimbursing Hartford for almost all its construction costs, the city’s school building committee paid attention — especially when he agreed to pick up the cost of an additional consultant.

“Since the state is largely responsible for the funding of school construction projects, the committee followed the requirement of the state official responsible for school construction that the city hire an additional owner’s representative,” said Jesse Sugarman, senior advisor for Strategy and Institutional Advancement for Hartford Public Schools. “As has been previously reported, the committee was given assurances by that state official that those costs would be largely reimbursed.”

Mayor Luke Bronin said earlier this year that, “Since the state covers the overwhelming share of school construction costs, the city’s school building committee gave a great deal of deference to the state official in charge of school construction — including his direction that an additional owner’s representative should be hired to oversee project costs, at the state’s expense.”

One Harford official closely involved in the school building process said Diamantis compared his idea of hiring an additional, but smaller, construction administrator to an experiment in cost savings, with the city being the laboratory. If it saved money, it could be used elsewhere.

In February 2020, the Hartford School Building Committee instructed its existing consultant, Arcadis/O&G/C&R to prepare a request for proposals and solicited bids from firms competing to become construction administrator for Bulkeley High School job. It got four responses.

Records show that the bids ran from about $1.3 million to about $4.1 million. CAP bid about $2.4 million but revised that down to about $2.2 million before the close of bidding in March 2020.

During what’s known as a scope review process, when the school building committee and staff analyze bids and compare them against requirements of the job, CAP was told it had included in its bid the cost for a position — an assistant project manager/engineer — that wasn’t needed. The city told CAP it could remove the position if it chose, allowing for a more “apples to apples” comparison with proposals from competing bidders

CAP dropped the line item, cutting another $526,000 from its bid and reducing the total to about $1.77 million. There were still two lower bids, $1.3 and $1.74 million.

A Hartford official familiar with the bid and review process said a subcommittee of the school building committee narrowed the choice to two finalists: CAP and the slightly lower bid of $1.74. The official said CAP was hired because, in the subcommittee’s view, the company appeared best suited to complete the work and it was a woman-owned business, an important criterion in a city that strives for minority representation in contracting.

After Diamantis left his state jobs, the state rescinded his promise to Hartford to reimburse it for costs associated with hiring CAP because the state “will not reimburse any project for more than one construction administrator.” Hartford fired CAP after paying about half the cost of the contract for work already performed.

Some Hartford officials defended Diamantis’s work in the city. They said he could be blustery and abrasive with contractors who he suspected of wasting money, but spent long hours on Hartford projects and appeared sincerely interested in the city schools, which he thought have been short-changed by past state spending decisions.

Norm Pattis, Diamantis’s lawyer, said he would like to meet with federal prosecutors and explain how he ran the construction financing office.

“The grand jury is supposed to protect people’s reputations from unwarranted speculation,” Pattis said. “The U.S. Attorney’s office knows people are talking about it, and it won’t talk to us. So we extend the same offer to them that we have all along. Pick up the phone and call. We are not afraid to talk.”

In an hourlong radio interview on WTIC-AM last week, Diamantis defended his work, saying he never pressed towns to hire particular contractors and arguing that all of his decisions were designed to save money. He referred specifically to the Bulkeley High School project, saying his decision to include administrative offices in the rebuilt school saved Hartford hundreds of thousands of dollars.

He suggested the grand jury investigation is political and the result of a rift with the Lamont administration.

Groton data center vote postponed

Kimberly Drelich  

Groton — The Town Council is postponing a vote on a data center agreement scheduled for Wednesday after the developer agreed to give the town more time to address concerns raised by residents, particularly about sound.

The council still will meet at 6:30 p.m. Wednesday to hear comments from the public but will not take a vote, town officials said.

NE Edge, under manager Thomas Quinn, is seeking a host fee agreement with the town for an area south of Interstate 95 between Hazelnut Hill and Flanders roads. The agreement sets the parameters to potentially bring one or more data centers and establishes the annual revenue the town would receive. State legislation provides 20-to-30-year tax exemptions for qualified data centers.

The developer also would need land-use approvals.

Quinn had requested the council take a vote this week on the agreement, because he said he is working with a data center company and preliminary decisions will be made soon. A majority of councilors had agreed, but Town Manager John Burt said that as "the week progressed and we neared a new draft" of the agreement, it become more apparent that more time was needed to properly vet the document.

Burt spoke to NE Edge by phone on Monday about the sound attenuation language in the draft agreement, and the company was told "additional time was necessary to review the draft sound attenuation details with a consultant," Quinn said in a statement.

"We agreed this is a sensitive issue and understand this may take some time to sort out due to the technical language," Quinn said. "This is clearly the most technical part of the agreement."

"We requested a later date subject to the council's schedule," he added.

Burt agreed, saying, "The stakes are too high to approve this before both the Town Council and our residents are comfortable with the agreement."

In an email to councilors on Monday afternoon, Burt said the town "drafted a very strong agreement," and the data centers "can be built green," but he doesn't "want to risk the neighbors having a sound issue."

"I am very supportive of data centers, but I personally cannot support the agreement without time to bring in a sound consultant to review the language to ensure there's not going to be a negative impact," Burt said.

In a follow-up email later in the afternoon, Burt wrote that he spoke with Tom Quinn and Chris Regan, an NE Edge partner, about the concerns, and Quinn requested the town cancel the vote to allow more time "to complete our due diligence."

"He would also like some time to propose a few additions to the agreement to help with concerns," Burt wrote about Quinn. "While the delay could diminish the interest of the current data center looking at Groton, Tom will do what he can to keep the interest going for as long as he can. If the Council is interested in continuing the process, I recommend we get a sound consultant to work with the Town."

Quinn recommended the council remove the vote on the development agreement from the agenda but may wish to still hold public comment "to allow as much input as possible."

Town Mayor Juan Melendez Jr. said in a statement that Burt convinced the developer to give the council more time to deliberate, and Burt "saved the day and deserves all the credit."

"I think the town should use the extra time to hire a noise consultant so we can truly understand what impact this building will have on the neighboring properties," Melendez said. "While no vote will be taken on the 16th, public comment will still be heard in person and on Zoom, and I encourage everyone to come out and give their feedback."

Town Councilor Portia Bordelon said in a statement that she was pleased with the decision to slow down the process and that there will still be a special council meeting to hear public comment, as she believes "the public perspective needs to be a prominent part of this process."

"In addition to the comments collected this coming Wednesday, I will continue to advocate for a full proper public hearing on the document in particular and the idea of data centers in town, at large," said Bordelon. She added that concerns over environmental issues and the close proximity to residential housing with wells need to be addressed more thoroughly.

The special Town Council meeting for public comment will be held at 6:30 p.m. Wednesday at the Groton Senior Center (Thrive 55+) and by Zoom. The Committee of the Whole meeting has been canceled.

Connecticut Gov. Lamont calls for 25-cent gasoline tax cut and one-week clothing sales tax holiday

CHRISTOPHER KEATING

HARTFORD — With gasoline prices rising sharply in an election year, Gov. Ned Lamont called Monday for cutting the state’s gasoline tax by 25 cents per gallon.

The cut would eliminate the excise tax on gasoline in the state’s complicated, two-pronged system. The gross receipts tax on gasoline, which is currently at the state-capped maximum of 26.4 cents per gallon, would remain.

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The excise tax would be eliminated until the end of the fiscal year on June 30 and would cost state coffers $90 million. The package does not include any cuts in the state’s diesel tax that is paid largely by trucks and large vehicles like a Chevrolet Suburban.

Lamont also called for a sales tax holiday on clothing and footwear under $100 in April — the same holiday that is traditionally held in August for back-to-school shoppers. That would save consumers a combined $3 million per week, and both holidays would remain for the 2022 calendar year. The plan also calls for free bus service for the month of April.

“There was strong consensus that now is the time to provide immediate relief,’' Lamont said after meeting with legislative leaders. “Speed is pretty important here, I think.’'

The tax cuts still require approval by the Democratic-controlled legislature, which could vote as early as Wednesday after caucuses of rank-and-file lawmakers in the House of Representatives and Senate.

As inflation has reached its highest level in four decades, gasoline prices were already rising before Russia invaded Ukraine. Now, the prices have gone even higher as the war continues. The average price for regular gasoline Monday in Connecticut was $4.46 per gallon, up sharply from $2.87 per gallon one year ago.

Republicans, who called last week for tax cuts, agreed with Lamont’s ideas, but said they want to do more.

“Do I think it’s enough? No,’' said Senate Republican leader Kevin Kelly of Stratford. “I think we can go further. We’ll take what we can get today, and we’ll be back tomorrow. ... I think the families across Connecticut need all the help they can get.’'

Lamont’s overall package would cost an estimated $100 million in the current fiscal year. Republicans said they believe the state has the ability to deliver tax cuts as high as $180 million this year, but the cuts are not unlimited because of the state’s spending cap rules. In addition, the state cannot use federal stimulus funds directly for tax cuts.

Lamont and lawmakers said it remained unclear Monday if the legislature could move quickly enough for a vote Wednesday. If not, it could be scheduled on March 23.

House Republican leader Vincent Candelora of North Branford said, “Ninety percent of this proposal is exactly what Republicans called for last week. So the lion’s share is what we wanted.’'

House and Senate Republicans called for temporarily suspending the state’s gross receipts tax of 26.4 cents per gallon, plus eliminating the federal tax of 18.4 cents. Overall, the cut would be nearly 45 cents per gallon if enacted.

The tax cuts are possible because the state has a projected surplus of $1.5 billion for the fiscal year that ends on June 30 and more than $1 billion next year. Connecticut also has a rainy day fund for fiscal emergencies that could reach more than $5 billion later this year if fiscal trends continue. But some of that money would then be redirected to pay down unfunded pension liabilities.

The once-troubled Special Transportation Fund, which contains $1.9 billion from gasoline taxes and various motor vehicle receipts, now has a projected surplus of $275 million in the current year.

Both Lamont and Democratic legislators had been talking last week about a possible rebate check that could be mailed by the state tax department. The cut at the pump, though, was deemed to be faster than mailing rebate checks to consumers.

Lawmakers, though, have concerns over whether gas stations would actually pass along the tax savings to consumers at the pump. Rep. Sean Scanlon, a Guilford Democrat who co-chairs the tax-writing committee, cited a study of more than 100 gasoline tax cuts in states nationwide, and only about one-third turned into actual relief at the pump because the cuts were not passed along to motorists.

“What these studies show is it doesn’t always get passed along to consumers,’’ Scanlon said recently. “It’s a hard thing to police at every gas station across Connecticut.’’

But lawmakers cited a 2012 Connecticut law that is designed to block price-gouging at a time of high prices. Consumers are being urged to contact state Attorney General William Tong if they see instances of price gouging.

“I worried a little bit that I provide a 25-cent tax cut, and who says the middleman will pass it all along to you at the pump?’' Lamont told reporters. “So we’re working on ways that we will be able to hold people accountable. More on that to come. ... We’re going to be able to put in place crowdsourcing that shows you those gas stations that provide a 25-cent tax cut, and if anybody is using this as a way to expand their profits, they’ll probably hear from the attorney general.’'

Besides gasoline taxes, Lamont has proposed a $336 million package that would reduce taxes on residential real estate and cars. Within income limits, the property tax credit would be restored to all residential property owners. Currently, the credit is limited only to those with dependents and those over the age of 65.

Under Lamont’s plan, an additional 500,000 people would become eligible for the property tax credit for the 2022 calendar year — they would receive the credit when they file their state income taxes in April 2023. The property tax portion of the plan would save taxpayers a combined $53 million, and the credit would be limited to single filers earning up to $109,500 and joint filers earning up to $130,500.