Foley’s Charges

Here is an accurate transcript of a conversation between Dennis House of Face the State and former Ambassador to Ireland Tom Foley. Mr. Foley hopes to secure the Republican Party’s nomination for governor. Neither Mr. Foley nor Governor Dannel Malloy has as yet formally announced their respective bids for the governor’s office.

A great deal of commentary – most of it critical of Mr. Foley’s comments -- already has preceded the posting of a transcript. But it’s always a good idea to put first things first: First the transcript, then the commentary:

DH: You also said something rather provocative on Tuesday. You suggested that the governor may be trading favors and when a reporter asked you for specifics, you did not. Can you do that today?

TF: Yeah, absolutely. You know last spring I was working with Senator Markley to introduce a bill to raise the ethical standards at the Capitol. And I've just been really disappointed by what goes on at the capitol and what I've learned about the relationships up there, the conflicts of interest. I’m concerned and in some ways disgusted, and I think the governor in some ways contributed this. I think he had an opportunity when he was elected to talk about transparency and to set a standard, and he hasn't. In fact, he may have taken it to a new level, so…

DH: What kind of examples can you offer us today?

TF: Well, first of all, I’ll give you some examples, but first let me preface it by saying I’m not a news organization. I don’t have a staff to look into these things and investigate them. But these are all things that have been told to me by more than one reliable source, and so it meets a journalistic standard. And they’re things that are believed, so they’re a problem whether they’re true or not. It seems that there are (sic) some substance to them, but I can’t confirm that they’re true. So, let me give you some examples.  Umm, Dan Esty. Dan Esty is the head of a consulting firm…

DH: The Commissioner of DEEP…

TF: Yeah, he is now. But this is going back before the election. And it’s believed, or I've heard, a lot of people believe, that at his consulting firm, Esty…. Umm, Environmental Partners, I believe it’s called, or some entity that he controls, was compensating Dan Malloy…

DH: As a candidate?

TF: Well, not as a candidate, but either with consulting fees or compensation or something of value. And in fact it was not a (unintelligible), so that’s a problem in itself. So, this might have been prior to his declaring himself a candidate or during the time he was a candidate. (Unintelligible) I hope not, I don’t know. So, as soon as Governor Malloy is elected, he’s made a commissioner of DEEP. So, to me, that’s improper. It’s a conflict of interest; it’s a favor for something that was done. And in that instance, if that was the case, that potentially is an illegal contribution. When I ran against Governor Malloy, he was fully engaged in the race. So there was no way he was performing any work for Mr. Esty, if he was being paid anything. So it was… should have been a contribution if it was during the campaign. So anyhow, this is something I've heard and that people believe. I welcome the governor coming out and explaining, saying either that it’s not true, or explaining that it’s different from what I am describing.  So let me give you another one. Roy Occhiogrosso. You know Roy huh?

DH: Oh yeah.

TF: He was the governor’s campaign manager and, I think, ran communications and was a spokesman in the administration. Earlier this year, Roy Occhiogrosso left the administration and went back to his political consulting firm, the Global Strategies group. And very recently, they’re awarded a very significant contract to handle, I believe, communications and PR for the Health Exchange for the state, which is a quasi-government entity, but their website is “pt.gov,” so clearly a government entity. Totally improper, if this is the case of what happened, to me, that somebody leaves the administration and turns around and within a very short period of time a company that he’s a partner in receives a very lucrative government contract. Umm, Andrew McDonald, a very close buddy of the governor, now on our Supreme Court, was a partner in a law firm called Sullivan and… excuse me, (Pullman and Comley), and they do a lot of legal work for the municipalities that issue bonds. It is commonly believed among first selectmen that I know that if you don’t use Pullman and Comley for your bond issue, it's much less likely that the governor is going to approve it, and he has sole authority to approve all bond issues. And so they tend to use that firm to make sure that their bond offering goes through. Whether that’s true or not, the mere perception that that’s the case is creating a distortion in moving business to a firm improperly. Finally, I got one more. Do you want to know…

DH: No, go ahead…

TF: It’s been publicly reported that there’s been issues with the governor’s travels. He took two trips to the World Economic Forum in Davos, Switzerland -- It’s quite an expensive trip -- and another trip to China. And it’s publicly reported, and I think the governor’s office has publicly admitted that some of the expenses of this trip was (sic) paid by the UConn Foundation. The UConn foundation is primarily a private funded organization. People who make those kinds of contributions assume that they are providing money for UConn, for the education of the students at UConn and making the program as good as it can be. It’s an improper use of the funds. And I also understand that at least one board member was called by a very senior member of the administration. A lot of pressure was put on them, and they were (sic) reluctantly agreed to provide these funds. So these are examples of things that I consider improper. If I were governor, no one would even think these things were possible, because would set a standard that was so high that even the perception of a conflict, or a friend, or someone in your family getting business as a result of your holding office wouldn't be believed.

DH: We obviously don‘t have the staff here at Face the State to confirm these allegations in the course of this program. I’ll obviously have to look into them. Are there any names of first selectmen and selectwomen you can offer who have made these allegations to you?

TF: Not that I want to share. Obviously, I wouldn't want to share. But there’s more than one; let me just say that. And let me also say that I call on the governor to address these issues, because if they… I hope they’re actually not true, because it would be good for the citizens of Connecticut if they were not true. But these are things that are commonly accepted at the Capitol as being true. And people are: Oh, that’s just the way things are around here, or that’s the way the governor does business.  I think the governor should come out and explain to us whether or not these things that people believe are true. And if they are, and if here’s an explanation for them that would make sense to reasonable people, explain that too. And if he doesn't, I hope the media will go and look into these things. The media has the resources; that’s one of their roles. And let’s get to the bottom of this.

DH: [Well, certainly after this] we’ll look into the allegations. And I know that other reporters certainly will who are watching this program. If these turn out to be false, these allegations, do you think it damages your credibility as a candidate?

TF: No, because I think that the perception that this administration does not have high ethical standards, that favors are being done for friends and family, is there. And the mere fact that it’s there is a problem, whether these things are happening or not, and a good leader doesn't allow that perception to exist. They set a standard, and their own behavior makes people understand that these things couldn't be true. So, if I were governor, no one would be believing these things about my administration.

DH: Do you believe Dannel Malloy to be an unethical governor?

TF: Well, if these things are true, he certainly has a very low ethical standard. Some of these things may or may not be illegal, but they certainly, to me, get nowhere near the threshold of solid leadership and ethical standards that should be present in Connecticut’s government.

The commentary so far is pretty much what might be expected from a media that is left of center and overly protective of Governor Dannel Malloy. The chief concern of a media that lists to the left lies in shoring up the left.

Some commentators may take Mr. Foley’s remark that his representations during the face the State interview met a “journalistic standard” as very far from the mark. But it is clear from his remarks that Mr. Foley was addressing the standard of a “plausible charge.” He said he had more than one unidentified “reliable source,” and the charges, as he outlined them, were far from amorphous. Indeed, they were specific enough to arouse the wrath of Malloyalists both inside and outside Democratic Party precincts.

The preface to Mr. Foley’s charges is not unimportant: “Well, first of all, I’ll give you some examples, but first let me preface it by saying I’m not a news organization. I don’t have a staff to look into these things and investigate them. But these are all things that have been told to me by more than one reliable source, and so it meets a journalistic standard. And they’re things that are believed, so they’re a problem whether they’re true or not. It seems that there are (sic) some substance to them, but I can’t confirm that they’re true.”

Mr. Foley here is not playing the part of a lawyer prosecuting a case. He is issuing an invitation to the media to take up and investigate assumed improprieties.

Now, a charge of impropriety must begin somewhere. Charges at the beginning of an investigation must meet a standard of plausibility; certitude concerning the charge follows an exhaustive ongoing investigation.

Here’s an example: Before anyone in Connecticut was certain that former Governor John Rowland had committed improprieties, there were rumors of improprieties circulating throughout the General Assembly.  Some plausible charges were tossed on the desktop of a number of investigative reporters, reporters pursued leads and an official investigation was opened at the conclusion of which Mr. Rowland pleaded guilty to a single charge of conspiracy to steal honest services. No reporter in the state refused to investigate the presumed improprieties swirling about Mr. Rowland because they were mere unproven allegations.

Here are the first two paragraphs in a story covering Mr. Foley’s face the State appearance:

“Escalating his attack in a campaign that technically hasn't begun, Republican Tom Foley blasted Gov. Dannel P. Malloy Sunday as a chronically unethical leader.

“Foley, who says he has not yet decided whether he is running for governor, offered a blistering, unsubstantiated, indictment of Malloy as running an administration of back-slapping insiders ‘getting special deals.’ Appearing on WFSB's ‘Face the State’ Sunday morning, Foley declined to offer on-the-record evidence to back up his charges, saying that his allegations meet ‘journalistic standards.’"

Well now, a charge made by one politician of another is very far removed from an “indictment,” a legal term that presupposes a definitive investigation. Legal indictments generally are presented by legally convened and sworn grand juries that have considered and passed on evidence preceding a trial. All pre-investigatory charges are by definition “unsubstantiated.”

At this point, Mr. Foley has merely challenged Mr. Malloy to answer his charges: “And let me also say that I call on the governor to address these issues.”  He acknowledges he has not the resources of a newspaper at his command: “Well, first of all, I’ll give you some examples, but first let me preface it by saying I’m not a news organization. I don’t have a staff to look into these things and investigate them.” He hopes the rumors and innuendos are not true: “I hope they’re actually not true, because it would be good for the citizens of Connecticut if they were not true.” But he cannot deny that the charges, if true, are consequential.  At the very least, the charges made by Mr. Foley rise to a level above that of water cooler gossip, but his repeated pleadings that the media should investigate what one reporter dismissively termed “back-slapping insiders ‘getting special deals’” is infused with the desperation of a man who senses that Connecticut’s investigatory apparatus will not oblige him.       

“FOR DRIVING PURPOSES ONLY”

There are dozens of questions concerning the bill awarding to illegal immigrants special licenses marked “FOR DRIVING PURPOSES ONLY,” some of which were discussed, others not, as the bill wended its way through the General Assembly .

Just to begin with, the notation on the license is at least in one respect like the Jewish star pinned on clothing during the Nazi period, the purpose of which was to alert authorities that the wearer was a doubtful-citizen slated for special treatment – or, as it turned out, mistreatment.

Legal immigrants, once they are embraced by their chosen country, simply disappear into the patriotic woodwork; they become citizens. “Undocumented immigrants,” having been documented with a license that singles them out as “the other,” do not therefore become citizens invested with the full panoply of citizens’ rights. They cannot use their licenses to vote, for example, which seems to be the primary reason their license will be marked “FOR DRIVING PURPOSES ONLY.”

Senator Joe Markley lightly fingered the point when he explained why he opposed the bill: “I oppose this legislation because I believe firmly in the essential importance of citizenship. And I believe there is no other ground on which we can meet, but as citizens of the United States. As citizens, we are equal. We stand on the same principles. We stand devoted to the same flag. We are subject to the same laws."

Illegal immigrants do not become legal immigrants simply because Connecticut, possibly the most progressive state in the union, has chosen to invest illegals with documentation that sets them apart from other citizens.

Governor Dannel Malloy, who used to be a prosecutor before he began to dabble in politics, issued a brief statement after he had signed the bill into law:

“This bill is first and foremost about public safety. It’s about knowing who is driving on our roads, and doing everything we can to make sure those drivers are safe and that they’re operating registered, insured vehicles. There’s a reason these measures have been supported by local police and city leaders, and that other states are taking similar common-sense steps.  They’re changes that benefit everyone taking a car out onto our roads and highways.

“It should also be noted that, like many issues, action on the federal level would address this problem in an even more comprehensive and sensible way.  I continue to support those broader efforts at national reform, and urge Congress to follow the example being set by Connecticut and other states.”

The other states that have taken the “similar common sense steps” mention by Mr. Malloy are few in number. Only five states have passed a law similar to the one signed by Mr. Malloy. These few states, we are to understand from Mr. Malloy’s media release following passage of the bill, are blessed with legislators who are blessed with “common sense.”  The slim numbers confirm the common suspicion that “nothing is so uncommon as common sense.” We are left to ponder the proposition that the 45 states that have not passed similar legislation are populated by arrant dreamers. The “police and city leaders” in other states less cutting edge than Connecticut who have not yet been thunderstruck by commonsense are, however, in the majority.

How will the special licenses be distributed? Does Connecticut have a list of undocumented, about to be documented, illegal immigrants? Will those awarded the license – hopefully after passing driving tests – be required to show they have purchased insurance before the licenses are handed out? Will the insurance and registration documentation similarly be marked to show that the holder is not invested with full citizenship rights? Will the insurance and registration cards be marked “FOR DRIVING PURPOSES ONLY?” If not, can the insurance or registration documents be presented to poll watchers as proof that the bearer may legitimately vote in federal, state and municipal election and referenda?

Mr. Malloy has noted that the federal government could address the issue of quasi- citizenship “in an even more comprehensive and sensible way.” But of course it has not, and the difference in treatment creates a certain moral and legal stress in Connecticut. What are the obligations of ordinary citizens presented with documentation that certifies the holder is in the country illegally? Is there a legal obligation to report such persons to federal authorities and may the person who fails to do so be cited? If a police officer pulls over for a driving infraction an undocumented immigrant who has no “FOR DRIVING PURPOSES ONLY” license, must the officer report that person to federal authorities for deportation? Will the record of illegal immigrants eligible to receive special licenses in Connecticut be shared with a) Connecticut enforcement officials and b) federal enforcement officials?

The process written into law in Connecticut not only creates a quasi-dual citizenship; it also creates – since federal and state laws are now in opposition to each other – dual legal obligations. Common sense would suggest that citizens of Connecticut should not be torn thus between the state Scylla and the federal Charybdis.

A Citizen’s Case Against The Malloy-Lawlor Early Release Program

When the Democratic dominated General Assembly perhaps unwittingly passed Bill HB 6650 establishing a Risk Reduction Earned Credits program for some prisoners incarcerated for violent crimes, the opposition from Republicans was nearly instantaneous. Then State Senator Len Suzio took the lead in agitating against the program. He was not alone.

In a June 6, 2011 media release,State Senator Joe Markley said that the program “amounts to a jail break.” Mr. Markley went on to list the categories of violent prisoners eligible for early release under the program:

Manslaughter in the first degree (with intent to cause serious injury)

Sexual assault in the first degree (sex with someone under the age of 13)

Kidnapping in the first degree (intent to inflict physical injury)

Arson in the first degree (intent to destroy an inhabited building)

Employing a minor in an obscene performance

Importing child pornography

Contaminating a public water supply or food supply for terrorist purposes

Injury or risk of injury to, or impairing morals of, children

Abandonment of child under the age of six years

Firearms trafficking (knowingly giving a firearm to someone barred from firearm possession)

Cruelty to animals (possessing an animal for fighting, intentionally killing a police dog)”

After two credited criminals celebrated their early release by murdering two shopkeepers, one in Meriden and one in Manchester, some media outlets began to take notice of deficiencies in the program. But even so, the drumbeat against early release was hardly ear-shattering. Mr. Lawlor and Mr. Malloy hunkered down and hoped for a reduction in the decibel level.

Connecticut Victims Advocate Michelle Cruz stirred the pot when, representing the interests of victimized families -- her job -- she publically petitioned for an end to the program after the early release of prisoner Kezlyn Mendez, charged with the murder of a store clerk in Manchester. Ms. Cruz’s job was put on the auction block by Mr. Malloy, and she has now been replaced by Garvin Ambrose, a political operative from Cook County, Illinois, murder capital of the United States. Mr. Ambrose was cited by a victims advocate group in Illinois as having been insufficiently concerned with the rights of crime victims.

The early release of Frankie “The Razor” Resto, so called because in freedom he was known for shaking down drug dealers with a razor, proved somewhat difficult to justify.

Mr. Resto was, by all accounts, an incorrigible prisoner. Behind bars he dealt drugs, racked up a disciplinary record that should have made him ineligible for early release and burned his mattress. The Lawlor-Malloy early release program was applied retroactively to the violent prisoners noted above in Mr. Markley’s press release, which means that in many cases accessibility to the program did not depend on good behavior. While serving time for a 2006 robbery conviction, Mr. Resto was allotted 199 days of credits toward early release. In Mr. Resto’s case, a violent prisoner was rewarded with early release credits for behavior that should have extended his sentence. The Lawlor-Malloy program was all carrot and no stick. Once out of jail, Mr. Resto illegally acquired a gun and murdered Ibraham Ghazal, the co-owner of an EZMart store in Meriden, according to arrest records.

The ham-fisted attempt by the Malloy administration to sanitize the predictable effects of its flawed early release program by ridding the political stage of opponents pointing to the blood on the floor may not succeed.

After political operatives in the General Assembly bound by party ties to the governor successfully smothered Republican introduced bills to eliminate the program and bills introduced by Senators Paul Doyle of Wethersfield and John Kissel of Enfield to exclude violent prisoners from the program, Senator Joe Markey forced the Judiciary Committee to draft and schedule legislation for a public hearing by resorting to a petitioning procedure authorized in the General Assembly’s joint rules.

A bill conceived by Mr. Markley and state Representative Alfred Adnolfi of Cheshire that first proposed to prevent the violent convicts categorized above from participating in the early release program has now been redrafted and resubmitted. Mr. Lawlor recently told the Waterbury Republican American that he "had no problem" accepting a bill adding language to the current legislation clarifying that violent offenders cannot earn credits towards early release. On other occasions he has said that that the early release program would not work if his program allowing credits to the categories of crimes listed by Mr. Markley were to be altered. A citizens’ petition designed to catch the eye of those legislators who, perhaps unwittingly, have facilitated two murders in Connecticut communities may be found here.

A citizens’ petition designed to catch the eye of those legislators who, perhaps unwittingly, have facilitated two murders in Connecticut communities may be found here.

Governance in a Constitutional Republic, particularly when it impacts the safety of citizens, is too important to be left to artful politicians. The petition should be widely circulated and signed. The hearing should be well attended. When good citizens are silent, liberty and safety are put on the auction block.

Courant OK’s Defective Risk Reduction Earned Credits Program

The Hartford Courant has ignored its own admittedly unscientific poll, which asks “Should inmates be able to earn early release with re-entry programs?”

Of the 508 responses received by the paper, 89 percent of respondents answered that question “No.”The number of those answering “Yes” was a slender 11 percent. On the basis of a recent editorial,“Give Inmates A Better Chance On The Outside,” one must assume the Courant editorial page editors fall among the 11 percenters.

Markley Joins Call for Suspension of Controversial Early Release Program

Sen. Joe Markley (R-Southington) has written to Gov. Dannel P. Malloy urging the governor to suspend the state’s new program which enables violent felons to be released early from prison.

In the letter, Sen. Markley cited the recent case involving Frankie Resto, who is charged with the June 27 murder of 70-year-old Meriden small business owner Ibrahim Ghazal. Resto, a violent felon, had been released early from prison under the state’s new Risk Reduction Earned Credit (RREC) program.

“Serious questions about the implementation of the RREC program and the threat to the safety of the public make the situation urgent,”Sen. Markley said. “The non-partisan Office of Victim Advocate agrees that there appear to be major flaws in the program that need to be investigated before another tragedy occurs.”

Sen. Markley said that Resto received jail time in 2007 for convictions stemming from two armed robberies. While behind bars he earned 199 days’ worth of credits toward early release by taking counseling and self-help courses. Without those credits, he would have been locked up until this fall. Sen. Markley noted that despite successfully completing several treatment courses while in prison, Resto earned only 199 of 309 possible early release credits because he was not a model prisoner. Resto was cited in September 2006 for stealing from another prisoner and getting into a fight. He was cited for conspiring to possess contraband in January 2007; assaulting others in October 2007 and May 2008; fighting (again) in July 2008; and being cited for disobedience in February 2009, intoxication in March 2011, and causing a disturbance in September 2011. Resto was identified as a gang member in early 2009 and placed in a special security risk group as a result.

During a 2010 parole hearing, the state's Board of Pardons and Paroles Chairman told Resto, “You’ve got nine disciplinaries ... you set fire to a mattress, you’re a Latin King, you’re not working when you’re on the outside, you’ve got no sponsor. I don’t know, the future don’t look too bright outside for you. You’ve got to change your lifestyle, Mr. Resto. You can’t keep robbing people, you’re robbing people on the street.”

“Failure to be a model prisoner should be enough to trigger a ban of that inmate from earning any credits,” Sen. Markley said. “Yet, this individual, whose history involves violent crimes and who was disciplined further while already in jail, was deemed eligible for 199 days of credits. This law failed the Ghazal family. It is endangering public safety, and action must be taken quickly so that it doesn't fail other families and victims.”

The Department of Correction (DOC) has reported that 7,589 inmates - including Resto - have been released through the RREC program since it began September 1, 2011. Independent State Victim Advocate Michelle Cruz has discovered that many of the offenders are being granted RREC for simplysigning up for a program rather than completing the program. Cruz also found inmates have been denied parole for failure to complete required programs while at the same time earning risk reduction credits for enrolling in programs they do not need. For example a sex offender who refuses to sign up for sex offender treatment as required, is instead signing up for programs such as study of the Philippines. Once they sign up they are receiving credits to get out early.

“It has been noted that in passing the program, the General Assembly blew on a dandelion full of seeds that will take root everywhere in Connecticut, not only in Meriden,” Sen. Markley said. “That is why I am urging the governor to suspend the early release program immediately. It is time to put victims first and time to stop coddling violent criminals.”

The following is a partial list of criminal convictions eligible for reduced prison sentences in Connecticut under the early release law:

Rape.
Kidnapping.
Arson.
First-degree manslaughter.
Assault of a pregnant woman.
First-degree assault.
Second-degree strangulation.
First-degree threatening.
Having sex with someone under the age of 13
Assault of a blind or disabled person.
Animal cruelty.

The Resistance, A Self Interview

Q: Whither the Connecticut Republican Party?

A: It’s good question. I put up a blog recently that was a review of a Chris Shays interview with Dennis House on “Face the State.”

Mr. House asked Mr. Shays whether he thought Connecticut had drifted so far to the left as to make it impossible for Republicans to win a seat in the U.S. Congress. Mr. Shays is running as a Republican for Senator Joe Lieberman’s seat. Mr. Shays said “Absolutely,” he thought the state had moved very far to the left.

The blog produced a response from Jon Kantrowitz, a liberal commentator who is himself an articulate unabashed progressive. “By the way,” Mr. Kantrowitz wrote, “it's true - the state has gone too far to the left to elect a Republican - and thank goodness for that!”

There are some few Republicans about who are not as thankful as Mr. Kantrowitz, though it is difficult to disagree with the major premise of his proposition -- namely that the state has moved very far to the left. The entire U.S. congressional delegation is Democratic. The state’s safer districts are occupied by unapologetic progressives like Mr. Kantrowitz, now moving up within the national Democratic caucus food chain. U.S. Reps Rosa DeLauro and John Larson are both pull-no-punches progressives. In what used to be called swing districts, congressional Democrats are a bit more cautious. In the General Assembly, state Democrats had until just recently a veto proof margin in both houses. And during the last election cycle, the Democrats captured the gubernatorial office, previously held by moderate Republicans and one ex-maverick Republican, former senator and governor Lowell Weicker, the father of Connecticut’s income tax. In addition, all the state’s constitutional officers are Democratic. So, I think it is safe to agree, along with Mr. Kantrowitz, that Democrats pretty much own the whole political kit and caboodle, while disagreeing with him sharply that we ought to thank God for this turn of events. While God may not be a Republican, one likes to believe He is no political plutocrat.

Q: Where does that leave Republicans?

A: In a resistance posture. The point of a party surely is to offer resistance to the reigning power. History has not dealt kindly with parties that have cooperated with the prevailing regime. The one party state, like a rolling stone, gathers no moss, but the single party state is an invitation to corruption; which is why, come to think of it, God created the two party system.

Q: Why haven’t Republicans been able to offer effective resistance to what you have characterized repeatedly in your Connecticut Commentary as Connecticut’s one party state?

A: Because Republicans have too often cooperated with the prevailing regime. You cannot cooperate without being coopted. It is important to understand that Mr. Kantrowitz is partly right. The Republican resistance has been washed away in Connecticut. Here and there, one finds brave blades of grass shooting through the concrete. During the last elections, two Republican conservatives – state senators Len Suzio and Joe Markley -- won office, both of whom may be considered part of a resistance vanguard. When Bill Buckley, who used to live in Stamford, started National Review, he proclaimed that the mission of the magazine would be to stand athwart history yelling “Stop!” Rolling stones don’t like that sort of thing.

I’ll give an example. Len Suzio, a conservative Republican who won his seat in a special election, has lately come out against deal made between Mr. Malloy and Jackson Laboratory. The Laboratory is to be attached to the UConn Health Center (UCHC), a business black hole that has absorbed millions of dollars in tax bailouts. Shortly after his budget passed muster with SEBAC, Mr. Malloy handsomely rewarded UCHC by giving it about a billion dollars.

The laboratory, apparently a successful non-profit enterprise that will itself generate no tax revenue, will absorb tax money from both federal and state grants. Mr. Suzio’s objection to the deal was forceful: “This is a lose-lose situation for Connecticut taxpayers. All the risk money is coming from the state of Connecticut. ... We don't get a nickel of interest in the technology that they develop. That is stupid."

Senior advisor and chief spokesman for the governor Roy Occhiogrosso responded that the project was a solid investment in personalized medicine and bioscience. This was a smart rather than a dumb risk: “There's a difference between taking a smart risk and a dumb risk. This is a smart risk. Taking a risk that 10 football games a year will turn the economy around is not that smart. The next thing you know, Senator Suzio will go on the radio to try and convince the people of Connecticut of his view on the flatness of the world. No matter how he tries to spin it, this is the best thing to happen to Connecticut in a long, long time.''

Mr. Suzio did not mention the “B” word on this occasion: Connecticut is broke, broke, broke. But the important political point is this: Even if Mr. Suzio is right, it will not matter – because Mr. Malloy has the votes in the General Assembly to do whatever he likes. If Mr. Malloy wanted to build a Ziggerat in Farmington – which, by the way, would produce a momentary spurt of jobs – he could do it, because the Republican resistance has no battalions. Napoleon’s quip to a pope who offered him a mild resistance was to ask: How many battalions has the pope? Answer: Not enough to resist the prevailing power of the day.

And THAT is the problem for Connecticut.

Mr. Malloy passed his budget through the General Assembly without being put to the inconvenience of discussing the matter with leading Republicans who, unlike union representatives, were wholly shut out of the process. The governor’s budget figures were such as to produce what I have called in the blog and in columns an artificial surplus of about a billion dollars. Real surpluses are produced when taxes are not increased but the state never-the-less realizes an increase in revenue owing mostly to increased business activity. Mr. Malloy’s artificial surplus is now flowing into a series of crony capitalist projects. Mr. Suzio is right about the UConn Health Center: It’s a budget busting black hole the state – which is broke, broke, broke -- can little afford to support. Attaching a non-profit, non-tax generating research center to the UCHC does not make the combination more profitable. This may be the first time in Connecticut’s history that a serviceable neck has been draped around an albatross.

Q: So, What’s wrong with crony capitalism?

A: Glad you asked. Anyone who is a proponent of the free market must be an anti-monopolist. I am here using the word “monopoly” to indicate existing monopolies, many of them stamped “Made in Washington D.C.” – Fannie Mae and Freddie Mac come to mind -- as well as political systems that tend towards monopoly. This is why the free marketer must be an anti-monopolist: Monopolies, which are cornered markets, frustrate competition, and competition is the economic virtue par excellence of a truly liberal society.

In the modern period, monopolies have been facilitated by governments. In a truly free market that fosters competition, cornered markets are less possible. It is when companies are given an opportunity to use government as a tool to gain an advantage over their natural competitors that monopolies flourish.

The process that produces state sponsored monopolies is called “crony capitalism.” The crony capitalist and his facilitators tilt the playing field in favor of large monopolistic enterprises by using presidents, governors and legislators to gain an advantage denied them in a free and fair competition.

This unfair advantage has its analogue in the sports arena. Americans, who like to see the best man or team rise to the top in a fair competition, would react disapprovingly, I like to think, to any “fixed” competition in which the presumed impartial judgment of a referee has been purchased by one side or another; and yet this is precisely what happens when a single political party has captured control of a congress or an executive department or a city or a state or a town.

There are signs all about us that singe party states and governments are infested with corruption. Alert politicians and – as I like to think -- wide awake journalist will be able to read the signs of the times. There is no reason to suppose that reporters, editors and commentators in the legacy media are comfortable with monopolies of any kind, political or economic.

There is an old biblical saying: By their fruits shall ye know them. We are familiar with the bitter fruits of crony capitalism. What applies to business monopolies applies as well to political monopolies.

The government of China, for example, is as much a political monopoly as – just to reach for an example – the government of, say, Bridgeport Connecticut. Of course, the consequences of corruption in China are more severe because there are in that country no mediating democratic institutions, such as a critical press, to soften the iron fist of an unquestioned authoritative regime. The arc of monopolistic political regimes bends towards fascism; they corrupt absolutely because they needn’t worry that their political customers will be able effectively to demand a better service or a better product. Within the one party state, any hope of political competition has been effectively abolished. Political monopolies are nursery beds of corruption, because they permit governments to rent to favored groups instruments of government power that ought to be used for the benefit of all.

The legislature is overwhelmingly Democratic. And it may seem to some who are paying attention that the remarks made several times by Governor Dannel Malloy to unions to the effect that he will never forsake them – “Oh, my darling” -- indicate that unions need not tailor their interests to the general interest, so long as both the governor and the General Assembly have their back. Indeed, it seems that unions were not made for the state; the state, rather, was made for unions. The very last party to sign off on Connecticut’s budget was not the legislature, the preeminent organ of government in democracies and republics, but SEBAC, a coalition of state unions that one commentator has called Connecticut’s fourth branch of government.

So then, we have in Connecticut a Democratic governor, a General Assembly dominated by Democrats – one of whom, Speaker of the House Chris Donovan, himself unusually friendly to union interests, is running for the U.S. House in the 5th District – a media blithely undisturbed by the prospect of a one party state, and a U.S. congressional delegation composed entirely of Democrats.

That is a recipe for, among other things, crony capitalism and its attendant corruptions.

In connection with politicians – the crony capitalist makers – the age old question arises: Qui Bono? Or to put it in the modern idiom: What’s in it for them?

Lots. They are given an edge on their competitors, usually smaller fry, and they have arranged with the politicians to share sacrifices: Taxpayers will share in the paying of their debts when their companies fail; and they will take the lion’s share of profits. Given these arrangements, is it any wonder that the public has soured on businesses too big to fail and those politicians who have contributed their mites to the creation of monopolistic enterprises?

I’ve been amused by the notion that Republicans have a lock on millionaires. Within the Democratic Party, we are invited to think, there are no millionaires: no Dick Blumenthals or Rosa DeLauros, both of whom are millionaire Democrats coasting along in seemingly impregnable Democratic districts.

According to the myth peddled by Democrats, businesses in the United States prop up Republicans with generous campaign contributions – but rarely Democrats. Nothing could be further from the truth. The late Senator Ted Kennedy could depend on regular infusions of campaign cash from captains of industries in the United States: Ditto former Senator Chris Dodd, showered for years by financial groups that he was supposed to be regulating as chairman of the banking committee. Mr. Dodd has now cashed in on his many years of experience in the U.S. Senate by becoming a lobbyist for Tinsletown. Mr. Dodd’s Hollywood adventure began only a few weeks after he had shaken the dust of the U.S. Congress from his feet, about a month after he had told his supporters on the left that he would never, ever become a lobbyist.

Money continues to be the Mother’s Milk of politics, and mouths are everywhere. So long as crony capitalists feel that they can be assisted in cornering markets by politicians, they will continue to buy politicians. In the last Republican-Democratic campaign in the 1st District, the incumbent Democrat, John Larson raised $2.7 million, much of it from financial interests; his Republican competitor, Ann Brickley, managed to get along with a slender $250,000.

If one may be so bold as to measure the wealth of a politician by the contributions he receives, we should conclude that Mr. Larson was the millionaire, while poor Mrs. Brickley was in financial campaign rags. Mr. Larson was in this race – and indeed, in all his races – the Mr. Bumble of the Democratic workhouse, while Mrs. Brickley was Oliver Twist, begging for more workhouse gruel. It’s wonderful – to me anyway – how desperately people who have been writing about politics in the state most of their adult lives cling to these myths, the work, for the most part, of ideological ad-men and Orwellian spin-masters.

In late September, as FBI agents were carting boxes of information from Solyndra -- the environmentally friendly, technologically advanced, politically correct, and now bankrupt company into which the Obama administration had poured its heart, soul and taxpayer money – administration officials, including the president, were avoiding comment. We may wonder why. The media, so far, has focused its attention on the vast sum of money “invested” in the now bankrupted solar panel producer. That focus is not misplaced. But we ought not to forget several other important points.

The e-mails now pouring out of the scandal suggest that the whole business was an improperly vetted photo opportunity for the president and vice president. Any kid selling lemonade from a lemonade stand might have told any one of the financiers in the Obama administration now busing themselves with ending a seemingly intractable recession that when a product’s cost of production exceeds the amount of money one expects to receive through sales, the company is incurring a risk of bankruptcy. In an S-1 filing a year ago, Solyndra reported its average sales price was over $3.20 a watt, about 65% more than leading crystalline-silicon PV manufacturers. Its cost of manufacturing was an astounding $6 a watt. These figures are irreconcilable.

Solyndra was not one of those companies in the United States deemed too big to fail, and so it failed – which means, a bankruptcy judge will be assessing the company’s assets and selling them off, parceling out a portion of redeemed value to the company’s investors. In Solyndra’s case, about a half billion dollars of tax money was frontloaded into the collapse. The Solyndra loan was part of a $38.6 billion program to aid green energy that the Washington Post says has created exactly 3,545 jobs, about $10,888,575 in loans per job – all vanished. Perhaps, with the FBI on the case, someone will go to jail. In the case of Fannie Mae and Freddie Mac, the tax money was both frontloaded and backloaded; the company is now bigger than ever, and no one went to jail.

The government financing of select companies it chooses as prospective winners in a competitive market place is wrong for multiple reasons. Government intervention in decisions generally made by consumers distorts demand signals and creates moral hazards for investors. Government is notoriously inept at choosing winners; increases in the price of stamps have not prevented the U.S. Post Office from painful consolidations. But the most objectionable feature of Crony capitalism is this: It funnels profits to private investors and shifts debts to taxpayers.

Somehow, something in my bones tells me that millionaire Democrats in safe districts like Mr. Larson, or private business- punishing former attorneys general like Senator Dick Blumenthal or tax the millionaire proponents, who continually deny that our country and state are beset with a spending rather than a revenue problem, do not pass their days worrying about such things. But the people of Connecticut should – because we are living in a time in which our problems will kick in our front doors if we ignore them. They are coming to sleep with us in our beds; they will be sitting in a chair next to us at our work sites. They will be sitting in the passenger seats of our cars.

We no longer have the comfort of ignoring them.

The chief difference between Republicans and Democrats in the coming campaign will be this: Republicans are interested in increasing prosperity through a series of painful but necessary reforms. They want small, efficient and responsive federal, state and municipal governments and an expanding economy. Democrats want to expand the range of influence the government has over our lives. One party would shrink the private sphere and expand the public sphere; the other would do the opposite. We must never forget that in democracies and republics the citizenry gets the kind of government it votes for. Having crossed the bar to the 21st century, we should wonder and worry whether the challenge thrown down by Ben Franklin at the founding of the republic will be properly answered. When asked by a woman what kind of government the founders at the close of the Constitutional Convention of 1787 had given to the country, Franklin said, “A republic madam – if you can keep it.”

We are under a moral obligation to those who came before us and to those who will succeed us – to keep it.

The No Way Busway

Governor Dannel Malloy’s notoriously expensive busway proposition – on completion, the rapid transit project from New Britain to Hartford spanning 9.4 miles will cost more than $573 million, about $952 per inch – has engaged the interest of a few penny pinching legislators, among them state Senator Joe Markley and Rep. Whit Bette, both of whom have co-signed a letter written to House Speaker John Boehner urging Mr. Boehner to reject $460 million in federal funding for Malloy’s folly.

The busway is a prime example of politicians leveraging federal dollars: The federal government announces the availability of funds for a state project, say $460 million to build a ziggurat in New Britain. The governor is asked to pony up a modest $113 million, at a time when the state has accumulated crippling deficits and is bleeding jobs. Turning the proposition over in his mind, the governor, always alert to charges that he has fiddled while his state burns, decides to swallow the proposition, as they say, hook, line and sinker.

A good deal, right? We get $460 million from the feds on an expenditure of $113 million.  Who could be so impertinent to object? So what, really, if the busway is a waste of money. It is a waste of other people’s money -- federal money. What has that got to do with us? If the Feds want to throw money out their windows in the direction of Connecticut, should we not grab it?

Now, along come critics of the deal. And in this case, the critics are not merely members of the chattering class whose business it is to blow hot and cold in columns that may concern the state. They are two state legislators. How to handle this delicate situation?

Best to ignore them until the embers burst into flame.

The Hartford New Britain busway is a political streetcar named desire. It is visible proof of an arcane proposition that in times of recession and national humiliation salvation must trickle down from beneficent congressmen in Washington, to be gratefully received by local politicians who in the past have not escaped the notice of influential writers:

Will Rogers:  "This country has come to feel the same when congress is in session as when a baby gets hold of a hammer…It is awful hard to get people interested in corruption unless they can get some of it."

H. L. Mencken:  "If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner."

Mark Twain: "There is no distinctly native American criminal class except Congress… We have the best congress money can buy."

William F. Buckley, Jr.: "No one since the Garden of Eden -- which the serpent forsook in order to run for higher office -- has imputed to politicians great purity of motive." 

Thomas Sowell: "Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default. ... The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously."

G. K. Chesterton: "It is terrible to contemplate how few politicians are hanged."

Judge Gideon J. Tucker, 1866: "No man's life, liberty or property is safe while the Legislature is in session."

Joe Markley: ““I am not concerned about leaving federal funds on the table. Federal or state, it’s all our money, and we shouldn’t waste it. Projects like this shouldn’t even be entertained until we get our fiscal house in order. I find it ironic that we are in the midst of a $6.2 billion deficit and the Governor is asking the legislature to spend more money we don’t have.”

All of the writers cited above were or are Americans, with the exception of Mr. Chesterton, here quoted simply because the sentiment he expresses, humorously but forcefully, is as American as apple pie. The point in choosing the remarks cited above, almost at random, is to show that that caustic commentary on the foibles of politicians is itself as American as apple pie.

So then, why have we seen so little rip roaring commentary in connection with Mr. Malloy’s redundant busway, an outrageously expensive people carrier that would be prohibitively expensive had we not swallowed the tempting fable that the cost of the project will be assumed by altruistic strangers?

Mr. Betts noted in the letter he signed jointly with Mr. Markley, “This is a boondoggle and a waste of taxpayer dollars. In the end the annual cost to the state is expected to be $11 million, ticket sales estimates are $4 million leaving a $7 million hole. I am against spending state money for a transportation project that is expected to incur losses. ”

And Mr. Betts is not here tickling a funny bone. One wonders how many legislators in the Democratic dominated General Assembly are more than willing to finance a project “that is expected to incur losses?”

The answer is: Nearly all of them. That answer would not surprise any of the political commentators cited above. On September 12, Mr. Markley will be the guest speaker addressing attendees at a Talk of Connecticut Dinner With Dan (Lovallo) at the Stonewell Restaurant in Farmington. The subject of Mr. Markley’s remarks will be the busway to and from nowhere, and Mr. Markley is known to have a charming sense of humor. The cost of the dinner, at $25, will be considerably less than the cost of the busway boondoggle.

Those who wish to attend the event may do so by calling for reservations at (860) 677-8855

The Surplus State

Zach Janowski, the Yankee Institute investigative reporter singled out by incompetent SEBAC leaders in their baseless complaint to the attorney general’s office as a “so called” investigative reporter, has disclosed in his latest report that Connecticut has collected “$1.1 billion more taxes than expected last fiscal year, the same day that Gov. Dannel Malloy’s $900 million retroactive income tax increase went into effect.”

Although the Malloy administration failed to reach by some $400 million the $2 billion in cost savings measures it initially had demanded from SEBAC, the coalition of state unions authorized to negotiate contracts with the administration, the tax increases the administration imposed upon nearly everyone in the state as a part of its “shared sacrifice” effort has, perhaps unsurprisingly, yielded an “unexpected” surplus.

The Malloy surplus, made possible in part by an ex post facto income tax charge, should not astonish those commentators in the state who have previously reported on state budgets. Surpluses were common in the budget years following the imposition of the Lowell P. Weicker Jr. income tax.

The predictable announcements of surpluses during these years of plenty followed an almost religiously observed rite, beginning with an declaration of a possible deficit, followed by an agonizing appraisal of the likely damage done to Connecticut’s fragile social services net should the legislature be so unwise as to insure savings necessary to balance their budget through prudent cuts, followed by a last minute announcement that an unanticipated surplus had magically materialized, obviating the need for cuts and permitting legislators to return to their districts and there proceed to hand out state distributed goodies before their next election.

This budget year, the usual dance varied, but not much, from the usual formula.

Mr. Malloy, the first Democratic governor in more than 20 years, had been wafted into office on a promise that as governor he would not resort to the same discreditable budget persiflage as his predecessors – two Republican governors and another, Mr. Weicker, of indeterminate party status -- all of whom had produces surpluses to avoid raising taxes or cutting costs.

GAAP would be instituted, Mr. Malloy vowed during his campaign, to prevent wily politicians from drawing revenue from future budgets and dragging them into the current year, while at the same time pushing costs into succeeding budgets. The state’s current Comptroller, Kevin Lembo, recently advised that the state’s antique computer system is not prepared to handle such accounting changes; which is all very well and good -- because Mr. Malloy had postponed implementation of the new accounting procedures for a couple of years. And there is no need to fudge figures in any case, because wily Democratic legislators – Big surprise here! – had embedded into the Malloy budget an artificial surplus that would relieve the pressure put upon them to cut costs.

All this spelled frustration for Republicans and others who were trying unsuccessfully to force Democrats who control the legislature to cut costs by denying them revenues. The presence of red ink in a budget usually is a persuasive spending disincentive for rational legislators. But time-serving progressive ideologues committed to wealth transfers from productive workers in the private marketplace to unionized state workers are addicted to reflexive spending. So long as the General Assembly’s table sags with surpluses, crapulous senators and house members will continue to feast on fare taken from the more modest tables of productive workers. Surpluses, which are tax overcharges, are anti-stimulants for anyone who is not a tax consumer. While prudent tax cuts – a prospect far beyond the intention of the average spendthrift politician – stimulate the economy, wealth transfers stimulate the ungovernable appetite of spendthrift politicians who, unlike the fascists of a bygone day, lack in a functioning democracy the means of making the trains run on time.

A handful of legislators in the General Assembly, Sen. Joe Markley of Southington among them, get all this.

“The enormous tax hike,” said Sen. Joe Markley of Mr. Malloy’s tax boost, “was the sad result of our addiction to spending, which we still haven’t kicked. The bigger the tax increase, the more dire its affect will be on our state economy. I’d love to see Malloy call us back and undo some of the new taxes in light of this surplus, but I don’t expect it – big-government types generally celebrate such surpluses, rather than feel ashamed of them.”

A few more Markleys in the General Assembly may save Connecticut the embarrassment of a rapid decline, followed by default.

Markley, The Fly In The Ointment

Newly elected State Sen. Joe Markley has now officially become a fly in the ointment.

"For a guy who has got a $3.3 billion [deficit] in next year's [budget], $647 [million] in this year's would be a concern, I can assure you. I am well aware of it," said Governor Dannel Malloy of himself while making his rounds of towns on his listening tour.

Mr. Markley’s suit, which is centered on a tax/fee Connecticut has attached to electric bills, is holding up bonding money and, for this reason, the state has asked Connecticut’s Supreme Court to expedite its decision.

State Treasurer Denise Nappier has delayed issuing bonds to cover the deficit in the current fiscal year until the matter before the court is decided. It would be necessary to disclose pending litigation in any official statement sent to potential bond investors, and this is the sort of ash sprinkled on a dessert that would discourage bond buyers from scooping up the delicacies.

Mr. Markley’s suit is somewhat embarrassing because the charge on electric bills, a disguised tax, is somewhat embarrassing to an administration that has promised Connecticut taxpayers that budget sleight of hand would not be tolerated in an honest and transparent government.

Initially, the charge on electric bills was levied as a “fee” that would serve as surety for bonds issued to pay for the cost of energy deregulation. Deregulation has been marginally successful in reducing energy costs, but the effort to deregulate the energy market in Connecticut would pay more impressive dividends to energy users if the state were more serious in eliminating energy regulations – which is what deregulation really means. So far, the state has sought to lower energy prices on the demand side through energy conservation. The quicker and more efficient way to lower energy costs is to increase the energy supply and reduce unnecessary regulations that serve as a bar preventing energy suppliers from peddling their wares in Connecticut.

The “fee” was to elapse after the bond money had refreshed state coffers and the costs associated with deregulation had been discharged. But in the meantime the state had accumulated a massive deficit, and it was decided to extend the so called fee indefinitely. Since the now altered fee was designed expressly as a vehicle to transfer money from electric ratepayer’s pockets into the state treasury, the form of the attachment had become, in Mr. Markley’s estimation, an undisguised tax. His suit questioned the authority of the Department of Public Utility Control to collect a tax, and the same suit claimed the tax was inequitable since some rate payers, depending upon which suppliers they had chosen, never paid the fee assessment and would not be charged a tax.

The energy tax would amount to about $100 a year for the average family, but the tax would run into thousands of dollars for businesses and municipalities, which would be recovered by municipalities in the form of higher taxes and by businesses in the from of higher prices for their products and services.

Mr. Malloy has said the Markley suit, if successful, will punch a hole in this year’s $19.2 billion budget of $647 million, the amount of money the state hopes to realize through its surreptitious tax. It is also possible that the suit, provided it is not speedily settled at the Supreme Court level, will be dragged through the courts much in the way Hector was dragged by Achilles around the doomed wall of Troy, making it more difficult for State Treasurer Denise Nappier to issue bonds that will cover the current fiscal year’s deficit.

Mr. Malloy, who railed against the use of bonds to pay off budget deficits in his successful gubernatorial campaign, has said, “I think the fee was fair. I think it was misguided. It's not a public policy I would have otherwise promoted or supported. If you're asking do I believe it to be legal? The answer is yes.”

Mr. Markley – who believes an honest government should approach its debts honorably through its constitutionally authorized taxing powers – admits that his suit would not permit the state to meet its debts dishonorably through fees designed to dupe the electorate; and he acknowledges that his suit, if successful, will open a hole in the budget. Tough love is always tough.

"I feel about it,” Mr. Markley says, as “I would watching a friend, who had been drinking all evening, go back to the ATM one more time to take more money out of the bank. Yes, you might think this is a good idea right now, but when you wake up in the morning, you're going to wish you hadn't taken out any more money."

Connecticut’s highly politicized State Supreme Court, for ill or good, may decide the question of law presented by Mr. Markley’s suit. It can not, and ought not, to decide the political question embedded in it: How crooked and irresponsible do we want the taxing authority in the state of Connecticut to be? That question can be decided only by an awakened citizenry.

Energy Needs And The Collapse Of Connecticut

Energy is that stuff used to drive commerce. It is costly here in Connecticut, so we are told by suddenly cost conscious legislators. There are three ways to bring down the cost of energy: 1) the supply may be increased; 2) the demand may be reduced; 3) the attorney general may put pressure on the relevant regulatory agency to disallow price increases. The second is insufficient; the third is disruptive and laughable.

In 2000, it was thought deregulation would reduce the price of energy in Connecticut by expanding the number of suppliers offering energy to the state. To this end, a bill was produced facilitating deregulation. The two major energy producers in Connecticut, Connecticut Light & Power and United Illuminating, were asked how much the deregulation effort would cost. The cost was pegged at about $1.7 billion, and the legislature set about raising the funds to pay for deregulation. The General Assembly decided to pay the cost by issuing bonds, the bonds being securitized by a self elapsing fee attached to energy bills. The legislature also told the two Connecticut energy companies they would no longer be energy producers. Under the new arrangement, they were to become energy distributors. The bill also provided that the companies were to reduce the cost charged to their customers by 10%.

It all went swimmingly for about a year and a half. It was then discovered that the 10% decrease in the price of energy could not be sustained; that provision was adjusted to allow a 10% increase in price. Deregulation didn’t work in Connecticut, among other reasons, because the measures taken by the legislature did not significantly reduce regulations – which is what deregulation should entail. The fee the legislature attached to energy bills as surety for the bonds – really, a hidden tax – far from disappearing on schedule, was extended by the legislature, provoking Sen. Joe Markley to issue a suit to snuff the hidden tax.

Shortly thereafter, the economic house of cards came tumbling down. Nationally, former President George Bush and later current President Barack Obama decided to buy their way out of a deepening recession. Washington went into debt. The current national debt is about $15 trillion. The states went into debt. Connecticut’s budget deficit is about $3.5 billion per annum.

Connecticut quickly became number one in the nation in per capita debt. Its unfunded pension liability ballooned to between $51 to $81 billion, according to estimates provided by the Yankee Institute. The state began to use bonding to reduce its budget deficit. The bond rating agencies frowned upon the practice and lowered the state’s bond rating. Attorney General Richard Blumenthal, now Sen. Dick Blumenthal, sued the bonding agencies, and his suit had the same effect on bond rates as did Xerxes whip on the rising tide. Investors are now fleeing municipal bonds. In a new report issued by Moody’s Investor Service that combines tax supported debt and pension liability figures, four states, Connecticut among them, rate highest in debt and pension funding needs

The ability of Connecticut and its hard pressed taxpayers to pay for the rising price of energy is decreasing in direct proportion to a decrease in the supply of energy. High energy costs can no longer be recouped by what has been called energy conservation. To put it in plain terms, the price of energy will not be driven down any time soon through a reduction in the use of energy – the desideratum of most conservationists, including suit happy attorneys general.

Conservationists, generally, are untroubled by higher energy prices because they perceive high prices as a means of forcing states to develop what has been called clean energy sources. When the price of a commodity increases, the high price itself forces the free market to search for and develop alternative sources such as wind power. When the price and use of a gas guzzling car exceeds the price and use of a more ecologically acceptable battery powered car, consumers will make rational choices and buy the more ecologically acceptable vehicle. High taxes at the gas pump are good, according to this view, because they nudge consumers in a less destructive direction, and the gas pump tax is a means of tipping the cost scale in the direction of green energy. Taxes, in a command economy, are used to destroy products considered harmful by political directors and construct out of whole cloth replacement industries considered beneficial.

The downside to this Eden is that governmental directors, who make economic decisions chiefly for political reason, quickly change. Unpredictable change causes flutter in free markets. Sometimes politicians quickly change their minds. Before he left office, then attorney general Richard Blumenthal changed his mind on wind turbines in Connecticut. When clean energy producer BNE Energy, Inc., recently sought to build to build two wind turbines in State Representative Vicki Nardello’s district, the Democratic co--chairwoman of the legislature’s energy committee, a clean energy enthusiast, underwent a reverse conversion and began to protest that turbines produce “flutter,” sharp disturbing slaps on the retina of light and shadow.

Indeed, “flutter” might be an appropriate word to use in connection with command economy decisions made by politicians that, in their absence, would be more efficiently and rationally made by a vigorous and competitive free market. When the “invisible hand” of the free market is replaced by such as Mr. Blumenthal and Ms. Nardello, the consequences are nearly always irrational, indeterminate, costly and ruinous to everyone but politicians and their pet industries.

The Markley Suit And Fake Taxes

The legal ball that state Senator-elect Joe Markley tossed into the Superior Court has been batted by Judge Henry Cohen back to the Department of Public Utilities Control (DPUC).

Mr. Markley, striking a blow for Connecticut citizens and good government, filed a suit in October against the DPUC for having permitted a fee to appear on energy bills that anyone with half a brain would recognize as a disguised tax.

In 2000, the state legislature initiated energy deregulation in Connecticut. Having made inquiries of the state’s two largest energy distributors concerning the cost of deregulation, legislators were told the bill would run about $1.7 billion. Rather than raise the money for deregulation though a forthright tax, it was decided to pay for deregulation through bonding. The bonds used to pay the cost were securitized by the imposition of a fee on electric bills amounting to about $15 per month. The Competitive Transition Assessment (CTA), which has been appearing on electric bills for a few years, was set to expire in 2011 for one company and 2013 for another.

Through a combination of impudence and imprudence, Connecticut in the meanwhile had accumulated a budget deficit of some $3.5 billion in each of the next two years and beyond. The governor and the legislature, lacking the courage to raise taxes before an upcoming election, as usual stuffed the 2011 budget hole with temporary and dubious fixes, one of which is a brand new tax to be applied as a fee on energy bills. This one -- a so called “fee” with lipstick on it designed to look like Marylyn Monroe, though it is an obvious tax pig – the legislature, with a bow to George Orwell, called the Economic Transition Charge (ETC). Having received no political push back the first time when the legislature secreted a tax in the form of a “fee” in energy bills, a repeat was in order.

Who says you can’t fool all the people all the time?

When Mr. Markey noticed the imposture, he filed a suit contesting the imposition on two grounds: The DPUC, he argued, lacked the authority to implement the tax; and the tax was also inequitable because ratepayers in several districts would not be required to pay it. Judge Cohen recently decided that Mr. Markley had not exhausted all the administrative remedies available to him before filing suit and, while making no decision on the merits of the case, ruled that Mr. Marley should exhaust himself by first seeking a remedy from the DPUC, which is on the order of seeking a missing chicken from the full bellied, satiated and smiling fox in the henhouse. In oral argument, Mr. Markley characterized this route as “a matter of theatre,” showing that there is room in legal pleadings for searing poetry.

To people unused to artful legal subtleties, it may seem obvious that the legislature, suffering from a lack of courage, delegated the DPUC to implement a tax used to securitize bonds the proceeds from which would be dumped into the state’s depleted general fund. Assessments collected from citizens and transferred to the general fund to pay off debts incurred by legislatures are taxes, though these collections have cleverly been styled as “fees” to dupe citizen the legislature has tapped out with taxes.

Perhaps in Utopia one might expect from judges clear, courageous and constitutional rulings. But Connecticut is very far from Utopia. The usual outcome in cases involving taxes is to allow the taxing authority as much liberty as needed to fill state coffers; the whole governmental apparatus, judges being a principle part of the Republic’s tri-partite structure, feeds at the same public trough. Empty bellies and possible joblessness within the public sector are powerful inducements, sometimes more persuasive than measures that truly advance the public good.

According to a luminous story in the Ridgefield Press written by Carrie Schmelkin and Macklin Reid, Mr. Markley, not at all intimidated, has said he intends to press on with his suit. State Senator Toni Boucher and state Rep John Frey, both representing Ridgefield, have placed themselves on the side of the angels and overtaxed citizens. They are certain to be joined by other conscientious legislators courageous enough to confront chicanery and call it by its right name.

The case made by Mr. Markley against this odious hidden tax -- paid by everyone, by the way, including the 80 year old mothers of editorial writers who have not yet muckraked this obvious imposture -- should not be permitted to whither on the judicial vine, even if the courts should decide in favor of legislative duplicity. Preeminently, this subterfuge is a political matter and should be resolved at the voting booth by those people in Connecticut -- Republican, Democratic and Independents -- who refuse to allow themselves to be fooled all the time.

At the very least, these controversial and inappropriate “fees” should figure prominently in upcoming campaigns for legislative seats opened when Governor-elect Malloy reached into the legislature to fill important positions in an administration that he has promised countless times would be forthright, transparent and honest.