Roll Your Own Taxpayer

The Chris Donovan, “Roll Your Own” scandal is being judicially tucked to bed now that some principals in the scandal have been sentenced.  Most recently, Joshua Nassi, former state House Speaker Chris Donovan’s campaign manager, was sentenced to 28 months in federal prison by U.S. District Judge Janet Bond Arterton.

Mr. Donovan was running for the U.S. House in Connecticut’s 5^th District when his campaign was rudely interrupted by FBI wired singing canaries, prominent among them former corrections union official Ray Soucy, a character who might have done well for himself during the good old days of Tammany Hall and George Washington Plunkitt, the Tammany Hall boss who always was careful to make a sharp distinction between honest and dishonest graft.

Connecticut’s Roll Your Own tobacco shops seriously undermined the state’s effort to reduce smoking by making tobacco prohibitively expensive through punitive taxation. The Roll Your Own product could not have been punitively taxed unless the General Assembly designated such shops as “tobacco manufacturers.” Slapping that designation upon an operation in which cigarette purchasers used a machine to roll their own cigarettes was, as Mark Twain might have said, a bit of a stretcher.

Right from the start, however, the political stars were aligned against the Roll Your Own Tobacco shops, which were springing up like poisoned mushrooms all over the state. And, unforgivably, these mushrooms were not subject to the same exorbitant tax levied on Big Tobacco.

While the tobacco tax is the state’s most egregious example of punitive taxation, Connecticut’s tax on gasoline – the environmentally bad stuff people put in their cars so they might get to work and pay more taxes – is the highest in the nation. The gas tax is actually two taxes: a tax paid at the pump and a gross receipts tax, hidden from purchasers, levied when the product arrives in port, both of which were supposed to be sequestered in a special fund for road maintenance. The so called road maintenance tax has long since been dumped into the state’s General Fund. Some voices in the state’s Democratic dominated General Assembly lately have been raised to resurrect tolls to pay for much needed road and bridge maintenance.

Always starving for tax receipts to pay for a budget that has increased threefold since former Governor Lowell Weicker and Democrats in the General Assembly imposed an income tax on the state, a bill was put forward in the General Assembly to designate Roll Your Own tobacco shops as “tobacco manufacturers.” So designated, the Roll Your Own shops would be subject to the same exorbitant and punitive taxes levied on Big Tobacco. This is the bill that became the snare that caught Mr. Nassi and others in its iron and unforgiving jaws.

Punitive taxes are always imposed under a flag of concern and compassion. Smoking is bad for your health, and it increases the cost of health care. Why should people who are not addicted to smoking pay higher insurance premiums because smokers choose to pollute their lungs? Who would mind paying exorbitant taxes on gasoline, if they could be certain the taxes would be dedicated to road and bridge repairs? Cars that do not depend on gasoline are more environmentally friendly, and high gasoline taxes are a way of driving up the cost of gas guzzling cars so that future purchasers would be more inclined to “invest in” more environmentally friendly modes of transportation. Better still, these tax dollars can be used to make necessary “investments” in public transportation such as the New Britain to Hartford fast-track bus line.

Such is the irresistible zeitgeist in Connecticut: What fool could possibly object to high taxes if it can be shown that the taxes are used for benevolent purposes by a prudent and compassionate state? Taxpayers in Connecticut should know their public officials will use such punishing taxes wisely. The benefits of high taxes far outweigh the disadvantages of high taxes. Any idiot can see that. And any idiot can see that low tax Roll Your Own smoke shops kicked against the pricks

What? A low tax tobacco product in Connecticut?  You gotta be kidding me. Why, everyone knows that low tax products drive from the market high tax products. And they rob tax resources from a benevolent Peter who is robbing taxpayers to pay Paul. Why, dear me, think of the collapse of benevolence that would occur if state government were deprived of tax resources.  Just to begin with, Governor Dannel Malloy would not be able to supply dwindling tax resources to multimillion dollar Connecticut based companies in order to bribe the companies to remain in Connecticut and refrain from moving operations to low tax, low regulatory states. In a low tax, low regulatory environment, tax consumers would have to do more with less. Where would we be then?

Low tax Roll Your Own smoke shops fell to this remorseless logic. They were doomed from the beginning. It only took a slight nudge and a little canary-wiring from the FBI to topple them over the edge.   

The Silence of the Lambs

Speaker of the state House or Representatives Chris Donovan is the Democratic Party nominee for the U.S. Senate in Connecticut 5^th District. His former campaign finance director Robert Braddock has been arrested following a Grand Jury indictment on a series of charges involving campaign finance money laundering.

During an arraignment proceeding on Thursday in federal court in New Haven, charges were brought against other people involved with Mr. Donovan’s U.S. Senate campaign, among them former Donovan campaign manager Joshua Nassi,  Paul Rogers, affiliated with two roll-your-own tobacco shops in Waterbury, and union officials associated with the Department of Corrections.

Mr. Donovan appears to be weathering this brutal prosecutorial storm with a degree of calm indifference that has astonished some reporters and commentators familiar with other political corruption cases in Connecticut.

Leaders in the party of Jefferson, Jackson and Bailey, beginning with Governor Dannel Malloy, the titular head of the state Democratic Party, and including Mr. Donovan’s associates in the General Assembly, so far have not been sufficiently stirred to appoint an informal delegation of Democrat Party grown-ups to pay a visit to Mr. Donovan and suggest strongly that he withdraw from his race for the sake of his party.

Even within the Democratic Party, some are wondering -- why not?

There are two separate questions: 1) Was Mr. Donovan involved in campaign money laundering? Answer: We don’t know, yet. And 2) Should a politician whose campaign finance director – and now others -- arrested for campaign financing illegalities be running for the U.S. Congress?

Somewhat like God, the FBI doesn’t play dice with the universe; once they start a prosecution, it’s a pretty safe bet they’ve got the goods or will get them by squeezing all the singing canaries that come their way.

According to an FBI media release, birds in the cage now include Benjamin Hogan, a.k.a. “Benny,” 33, of Southington, an employee of Smoke House Tobacco, a Roll Your Own smoke shop with two locations in Waterbury; David Moffa, a.k.a. “Moff” and “Buffalo,” 52, of Middlebury, the former president of the American Federation of State, County and Municipal Employees (AFSCME), Local 387, representing employees of the Connecticut Department of Correction; Daniel Monteiro, 33, of Wolcott, an owner of a company located in Waterbury; Joshua Nassi, 34, of Fairfield [the former campaign manager for Mr. Donovan’s congressional campaign];  Paul Rodgers, a.k.a. “Paulie,” 39, of Watertown, a co-owner of Smoke House Tobacco, and George Tirado , 35, of Waterbury, a co-owner of Smoke House Tobacco.

So far, eight people have been charged in the case, but the FBI’s prize specimen may be Ray Soucy, a former state corrections employee and Treasurer of AFSCME, Local 387.

On July 24, Mr. Soucy pleaded guilty on one count of concocting a scheme to bribe a public official, one count of conspiring to make false statements to the Federal Election Commission (“FEC”) and one count of impeding the FEC’s enforcement of federal campaign finance laws.

While Mr. Donovan is not named in the FBI indictment, a conversation cited in the document between Mr. Soucy and Josh Nassi, Mr. Donovan’s former campaign manager, strongly suggests the Speaker may have been in the loop.

When Mr. Souci asks Mr. Nassi if the candidate (Mr. Donovan) was “good with this,” Mr. Nassi replies, “Yeah. I’m, you know, doing everything I can … you gotta just monitor this s**t all the time.”

That answer would seem to imply that Mr. Donovan approved a scheme to ferry illegal contributions into his campaign by means of proxy contributors. It is difficult to put any other construction on this telling conversation.  In addition, Mr. Soucy may have been wired when he spoke to Mr. Nassi and others, in which case the FBI may have in its custody other incriminating conversation not noted in its indictment.

Confronted several times by reporters in the course of his now underfunded congressional campaign, Mr. Donovan has refused on the advice of his council to discuss matters relating to the FBI’s investigation and prosecution of his former employees.

Possibly, the grown-ups in the Democratic Party do not yet feel that push has come to shove. If so, they are poor readers of the times.

House Grills Donovan

“Embattled” is a word you do not want waltzing around with your name on the eve of a U.S. Congressional election. “Embattled 5th District Congress candidate Chris Donovan,” the Register Citizen reported, “in a taping of WFSB TV’s ‘Face the State’ Thursday, said he has no plans to quit the race even if his campaign’s troubles start to adversely affect other Democrats and party leaders urge him to leave.

Mr. Donovan is under scrutiny by the FBI for campaign financing irregularities. His campaign finance director, Robert Braddock, is under arrest for having conspired to hide the identity of certain donors allegedly involved in influence peddling; and other Donovan connected officials, two of whom are directly connected with his U.S. Senate campaign, have been named in an affidavit supporting the arrest of Mr. Braddock.

Thanks to some impressive digging and nagging by manyreporters, the influence peddlers –tagged anonymously in the affidavit as CC1, CC2 and CC3 -- have now been identified as: Ray Soucy, a labor union activist and a vigorous supporter of Mr. Donovan lately suspended from his position as a correction industries supervisor at Cheshire state prison (CC1); a former “roll your own” smoke shop worker in Waterbury (CC2); and Joshua Nassi, Mr. Donovan’s fired campaign manager (CC3).

As the story unfolded, an uppity Governor Dannell Malloy, who has managed to shove his finger in many political and judicial pies, at first called upon Mr. Dovovan to make himself available to Connecticut’s media for questioning, demanding in rather stern tones that Mr. Donovan give “a full explanation of what he knows." Eventually, the governor calmed down.

Mr. Donovan and all the co-conspirators promptly lawyered-up. Stan Twardy, best known for his service in the administration of former Governor Lowell Weicker, the father of Connecticut’s income tax, was hauled in to conduct an in-house examination of the tangled web in the House Speaker’s office. Mr. Donovan hired a criminal lawyer, who advised her client that he was to respond to every media inquiry concerning the FBI investigation by saying he did not intend to comment on such matters, except to say, as he did repeatedly during the interview with Mr. House, that he was innocent of wrongdoing.

Apparently content that Mr. Donovan had done everything possible to satisfy the curiosity of Connecticut’s media – the same persistent interrogators who had forced the resignation from office of former Republican state Senate leader Lou DeLuca in a previous FBI sting operation-- Mr. Malloy, once an empathetic prosecutor, took a nap, convinced that Mr. Donovan had sufficiently teffloned himself. If Mr. Donovan were to excite among senators and the media the same sense of outrage that nudged Mr. DeLuca from office, the General Assembly would be burbling at this moment with whispers of hearings and impeachment.

"He's met the test of dismissing the individuals,” the governor said of Mr. Donovan.“He has said he had no prior knowledge. He's come forward to speak to the public," Malloy said. "I think the rest of it is up to the speaker and the public” … And Mr. House, who found himself face to face on Face the State with a political armadillo.

When Mr. House noted that neither the governor nor U.S. Representative Chris Murphy, whose seat Mr. Donovan hoped to commandeer, had endorsed him, the Speaker replied that Mr. Malloy was drawn to his Democratic primary opponent Elizabeth Esty, whose husband Daniel is Mr. Malloy’s Commissioner of the Connecticut Department of Energy and Environmental Protection (DEEP), and then he tossed Harry Truman at Mr. House: “If you want a friend in Washington, get a dog.”

Off in the distance, Leo Canty, one of the best know union operatives in the state, could be heard chanting, “There’s always people and events that will trip you up. This is just a slight trip in this race. … This is a hiccup and a glitch.” At an earlier union rally in Hartford, Mr. Donovan invoked the shade of Franklin Roosevelt.

“’I have my head held high. No one bought my involvement or my influence on any legislation, period,’ the embattled Speaker said. Touching on the controversy only in passing, Mr. Donovan said he wanted to talk about “fairness, dignity, respect. You take the first letter of each of them and what you get?-- ‘FDR.’”

Mr. Donovan boasted to Mr. House that he would win his primary against his two Democratic opponents, neither of whom is under investigation for possible influence peddling. When Mr. House gently prodded the Speaker, asking what would happen to his best laid plans should he be arrested, Mr. Donovan, according to Mr. House, “bristled.”