Friday, January 6, 2012

Malloy’s Gadfly

Even Greece at the height of its powers had a “gadfly.” The Greek term was used by Plato to signify the rather uneasy relationship between Socrates and the political scene in Athens. Plato described Socrates as the goad of Athens, a city he compared to a dimwitted horse. Athens, as we all know, had the last word in its dispute between the city’s most famous gadfly and city fathers who could not abide what Socrates himself called the sting of truth: “If you kill a man like me, you will injure yourselves more than you will injure me.” Socrates considered his role as that of a public critic whose purpose it was “to sting people and whip them into a fury, all in the service of truth." Athens convicted Socrates of corrupting the youth of the city and forced hemlock upon him as a remedy to quiet his fearless outspoken tongue.

Not to put Senator Len Suzio in quite the same category as Socrates or even Jeremiah, the irritating prophet who compared Egypt to “very fair heifer” but noted, ominously, “the gad-fly cometh, it cometh from the north,” even so, Mr. Suzio has managed to cause some perturbation among the Malloyalists who surround Governor Dannel Malloy.

Mr. Suzio bit the heifer a little hard on the question of Mr. Malloy’s financing of the reinvented UConn Health Center, causing Mr. Malloy to explode in mock anger in Connecticut Post reporter Ted Mann’s 18th installment of the life and times of the state’s first Democratic governor since former Governor William O’Neill hit the skids, “’The world is flat! Flat! Flat! Flat!’ Dan Malloy slams his palms flat against the top of his desk, again and again. ‘Flat, I tell you! Flat! Flat! Flat!’”

One gets the impression that anyone in the Malloyalist contingent would be willing to administer the hemlock to Mr. Suzio, provided it could be done discreetly.

The final agreement between Mr. Malloy and Jackson Lab, however, suggests that Mr. Malloy had half an ear turned towards his gadfly critics. The governor evidently altered his initial agreement to accommodate some critics of the UConn-Jackson Lab deal, among them gadfly Suzio.

A new wing on the deal arranged between Mr. Malloy and Jackson Lab includes, according to one news account, “several provisions designed to protect the public's investment, including one that gives the state a slice of the royalties from any lucrative drug therapies born from the research.”

The slice on royalties is a very iffy proposition. In what Mr. Malloy calls “a unique intellectual property-sharing agreement," Connecticut will receive 10 percent of any net royalty proceeds up to $3 million and 50 percent of those royalties over $3 million starting in the 10th year and running for 15 years.

Assuming these best laid plans are not torn asunder, Connecticut will not pull even on the deal until Jackson Labs realizes earnings on it its intellectual property of $600 million. In 2010, the company’s financial report showed revenue of $129 million, excluding donations and government grants, and $170 million in expenses. Government support so far has kept the company above water. In arrangements such as that concluded between the Malloy administration and Jackson Labs, those financing the project – donors, federal taxpayers, and now Connecticut taxpayers – assume risks, while the corporation reaps the lion’s share of profits.

Gadfly Suzio, the Flat-Earther, said he was pleased that the final deal included a provision giving the state a piece of the royalty pie: “One of my explicit criticisms was if we're going to be risking taxpayer money in some sort of venture capital way, why would we not reap the potential benefits?''

The final deal obligates Connecticut to provide a $192 million contingent loan to Jackson Lab that the company will then use to purchase a new 250,000 square-foot building on the site of the University of Connecticut Health Care pink elephant in Farmington. The state also will award Jackson Lab $99 million in research money.

The contingent loan is “forgivable” provided Jackson creates within 10 years 300 direct positions including 90 for senior scientists. Once Jackson Lab creates 600 direct jobs, it may purchase the state-owned land for $1, a win-win prospect for Jackson Labs.

Those who assert positively that the Jackson Labs-Malloy deal is an unqualified win for Connecticut are not Flat-Earthers; it would be uncharitable to label them as such. But they are much in need of gadflies to keep their ungovernable optimism rooted in the real world.

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