News Intelligence Analysis
December 19, 2003
Rowland's Links to Paving Contractor
Who Got State Work
By MIKE McINTIRE and ALISON LEIGH COWAN
Shortly after becoming governor of Connecticut, John G. Rowland
became a partner in a private development group that included
a paving contractor who has been awarded $1.3 million in state
work during Mr. Rowland's tenure, according to documents and
interviews.
Mr. Rowland, while governor, received regular payments from the group, First Development Group, a limited liability corporation that he joined in 1996, about a year after taking office. First Development's sole business appears to have involved buying land near Mr. Rowland's hometown, Waterbury, subdividing it into residential building lots and selling them.
The governor's decision to join the group was, in itself, somewhat unusual.
Though Connecticut law does not require it, candidates elected to high office generally take steps to disengage from personal business relationships that could pose a conflict, and avoid entering into new ones.
There is no indication that Mr. Rowland violated any state ethics laws by joining First Development.
But in Massachusetts, Gov. Mitt Romney, who is much wealthier than Mr. Rowland, put all of his financial holdings in a blind trust upon taking office last year, and he is no longer involved in the venture capital firm he founded. No members of Connecticut's Congressional delegation have reported joining private business partnerships while in office, according to their latest financial disclosure statements.
In a statement released late yesterday, in response to questions by The New York Times, Mr. Rowland said, in reference to the paving contractor, that he "had nothing whatsoever to do with that company obtaining any of those contracts."
Charles Lewis, executive director of the Center for Public Integrity, a nonpartisan government watchdog group based in Washington, said that as a sitting governor, Mr. Rowland was putting himself in "a danger zone" by getting involved in private real estate development partnerships with recipients of state contracts.
"It could be a conflict," Mr. Lewis said, "and is just another example of his astonishingly bad judgment when it comes to ethics."
Mr. Rowland disclosed his membership in, and receipt of income from, First Development on the annual statements of financial interest he must file with the State Ethics Commission. Those documents do not require the governor to report how much he was paid, only that the income exceeded the $1,000 threshold for reporting requirements, each year from 1997 to 2000.
Mr. Rowland said that he invested $7,200 during his involvement in First Development, during which he earned approximately $60,000 before the group was dissolved in 2001. His contribution was the smallest of any member of the group. It could not be determined whether Mr. Rowland's assistance to the group went beyond his cash investment.
The governor's annual financial disclosures do not identify Mr. Rowland's partners in First Development. The only public mention of the group's membership is found at the end of a 14-page mortgage document, filed in a records vault at a town hall outside of Waterbury in connection with First Development's purchase of property in November 1997.
The document reveals that one of the governor's partners was Anthony R. Cocchiola, who operates Cocchiola Paving Inc. Since 1995, Mr. Rowland's first year as governor, Cocchiola Paving has been awarded contracts for state work totaling $1.3 million, including paving at the State Capitol complex in Hartford, state records show. Details of the contracts and whether other bids were solicited could not be obtained yesterday. It also could not be determined yesterday whether the company had done work for the state before Mr. Rowland took office.
Cocchiola Paving also surfaced last week as one of several contractors that performed work at Mr. Rowland's private cottage in Litchfield.
According to a statement by Mr. Rowland, Cocchiola Paving hauled topsoil to the cottage grounds in 1997 at a cost of about $2,000, but was not paid until six years later, in September, when questions began circulating about unpaid renovations to the governor's lakeside retreat.
Another partner in First Development was Michael H. Cicchetti, a Waterbury lawyer whom Mr. Rowland appointed to the University of Connecticut's board of trustees. Mr. Cicchetti, a longtime friend of the governor, represented Mr. Rowland in his divorce from his first wife, Deborah, in 1994.
Calls to Mr. Cocchiola and Mr. Cicchetti over the last two days were not returned.
Mr. Rowland's response to questions about his involvement in First Development comes as he is attempting to overcome a growing controversy around his acceptance of free work on the cottage by contractors and state aides, some of whom are subjects of a federal investigation into possible corruption in the awarding of state contracts.
The governor has faced broad criticism since his admission last week that he was not truthful when he at first denied having accepted the work. He later admitted that he had, and turned over documents related to the work to federal prosecutors.
Yesterday, state officials announced that they had canceled a $37 million contract to build a juvenile detention facility that had been awarded to TBI Construction Company, a subsidiary of the Tomasso Group, the New Britain-based firm at the center of the federal corruption inquiry. Tomasso was also among the state contractors that Mr. Rowland has admitted performed work on his cottage.
Advocates of stronger ethical standards in government said Mr. Rowland's involvement in First Development raised questions about whether Connecticut's laws were strict enough. Under state law, public officials can maintain private business relationships as long as they disclose the relationships and do not use their official positions to benefit themselves or their partners.
Mr. Lewis, at the Center for Public Integrity, said that Connecticut was "probably in the upper third" of states in terms of ethics laws, largely because it has an independent ethics commission and has sanctioned rule breakers. In a study last year, the Better Government Association, a watchdog group based in Chicago, ranked Connecticut 13th among the states on ethics rules generally.
But in the category of rules concerning "gifts, trips and honoraria," the state was ranked 30th out of 50.
"If governors are engaging in business associations with people who are also receiving state contracts, I think that is a serious injury to public trust, though technically it may not violate the state ethics ordinance," said Susan L. Walker, the acting executive director of the association.
If not for the governor's involvement, First Development's real estate deal would appear unremarkable. According to Mr. Rowland's statement, First Development spent $500,000 in 1996 to buy and develop into housing lots a tract of hilly land in Naugatuck and Prospect, two towns outside Waterbury. The wooded acreage was subdivided into about two dozen building lots that were later sold as home sites for roughly $40,000 to $50,000 each.
One wrinkle in the public record of Mr. Rowland's role in the transaction involves a $150,000 bank loan that First Development used for the project. The promissory note for loan, which has been paid off, was signed by three of First Development's partners, but not by Mr. Rowland.
A space was provided for his signature, but he did not sign it, according to a copy of the loan document recorded in Naugatuck town records. The absence of Mr. Rowland's signature raises the question of whether the governor avoided the risks associated with being a signatory on the loan, while sharing in its benefits as a member of First Development.
In his statement, Mr. Rowland said that he signed all of the loan documents. He did not address why the document filed publicly did not have his signature.
Copyright 2003 The New York Times Company
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