AG Tong wants to expand investigative powers
Changes would allow control over construction fraud in state projects
HARTFORD — Attorney General William Tong wants to expand state regulations that date back to the scandals that forced a governor from office nearly 20 years ago, and allow his office to respond to construction fraud in state projects, including schools and other public works.
Tong’s office is currently limited to probing possible fraud in state contracts for health and human services, and he believes that taxpayers are losing out on the possible collection of millions of dollars in fraud that he cannot currently investigate.
Tong this week asked the legislature to expand the state’s false claims law, in a proposal supported by state labor unions but opposed by construction companies.
Ed Hawthorne, the head of the state AFLCIO, said that if the attorney general had the expanded power, Connecticut regulators would likely have spotted the corruption that led to the resignation of Gov. John G. Rowland well before the impeachment investigation that led first to his resignation in the summer of 2004, then his first federal felony conviction later that year.
Then-Gov. M. Jodi Rell, the lieutenant governor who succeeded Rowland, signed the current law in October of 2009, allowing whistle blowers to be rewarded for tips that lead to the prosecution of fraudulent contractors in the realms of health and human services contracts.
During a Monday news conference, Tong, the state’s top civil lawyer, said that about $181 million in fraud has been recovered by state and federal authorities among the nine state agencies he is allowed to monitor. There are more than 100 such state departments, offices and quasi-public agencies, though, while attorneys general in neighboring states, have broader authority.
“Every public dollar is entitled to strong, robust protection from waste, fraud and abuse,” Tong said.
“When they see families and people suffering from the opioid and addiction crisis, they expect and know that the office of the attorney general has the full range of consumer protection power and protection authority to go after the worst of the worst bad actors in the opioid and addiction industry,” Tong said. “They also expect that when they hear about waste, fraud and abuse in the spending of public dollars, that the office of the Attorney General can also take action. They are often surprised, however, that our ability to do that is limited.”
Tong pointed to the federal CARES Act pandemic relief fraud case in West Haven, which led to the resignation, arrest and guilty plea of a veteran state representative employed by the town council, as an example of a scandal in which his office had limited jurisdiction. “When questions were raised about school construction projects here in Connecticut and the conduct of contractors in school construction the office of attorney general could not take action under the false claims act,” he said.
A referral from the state Auditors of Public Accounts, where whistle blower complaints are first filed, allowed Tong to look into the cost overruns at the State Pier in New London.
State Sen. Mae Flexer, D-Killingly, and state Rep. Matt Blumenthal, DStamford, who lead the Government Administration & Elections Committee, voiced support for the bill. “This is authority that our attorney general should have,” Flexer said, adding that most state residents probably do not realize the limits on that office.
“For far too long our state False Claims Act has had a loophole in it,” Blumenthal said. “It is a loophole that has allowed fraud and waste and abuse to exist in the spending of our public dollars. No industry is immune from malfeasance or fraud or misconduct.”
Hawthorne, the state’s top union official, said that wage theft and other kinds of worker exploitation, could be pursued by Tong’s office. “It provides a further level of trust from the public with our state government, so we know that our tax dollars are spent wisely. It will help us continue to distance ourselves from the corrupt days of Gov. Rowland.”
About a dozen pieces of testimony were filed in opposition to the proposal, including criticism from Don Shubert, president of the Connecticut Construction Industries Association, who called the proposal an administrative overreach.
“It will change the risk profile on every state contract,” Shubert said in his written testimony to the committee. “It would pose real danger to even the most-scrupulous contractor. False claims acts have broad elements, low standards of proof, and high penalties and damages. The loose legal standards are remarkably problematical with the uncertain nature of construction disputes. There often is no clear meaning of “true” or “false” on a construction project.
Determining liability and calculating damages is never certain in construction disputes and often involve wide ranging opinions from accountants to engineers.”
The Connecticut Business & Industry Association also opposes the proposal.
The committee has until March 29 to act on legislation.