The Register Citizen (Torrington, CT)
Dalios blame politics, pull out of partnership
Barbara and Ray Dalio are exiting the Partnership for Connecticut, ending the arrangement that was touted in 2019 as a unique way to reach troubled youths, although they will maintain their commitment to the cause with at least $100 million.
“Today we are announcing our intent to withdraw from The Partnership,” Barbara Dalio said in a written statement released Tuesday. “We’ve tried hard over the past 15 months to make this unique model work, but it has become clear that it’s not working because of political fighting. I am not a politician and I never signed up to become one. I only want to help people. Through this experience I’ve learned about our broken political system and I don’t see a path through it to help people.”
The partnership, announced in April 2019, was plagued by problems almost from the start including criticism that Gov. Ned Lamont and the General Assembly made it exempt from Freedom of Information and state ethics laws.
In the same release Tuesday, issued jointly, Lamont expressed disappointment and said the partnership would dis
solve.
“Boards that are designed to accomplish significant goals must have a foundation of trust. It has been made clear since the inception of this Partnership that breaches of trust were part of the norm. The Dalios have lost confidence in this board structure, and I totally understand why, and together we have decided to dissolve the Partnership,” Lamont said.
At a live news conference at the state Capitol, Lamont said the state’s contributions would end and that he would work with the General Assembly to dissolve the partnership. The plan called for the state and the Dalios to each contribute $20 million a year for five years — and each has already put in $20 million.
Dalio aimed barbs at two Republicans.
“Our dream of working together in a bipartisan way to help the disengaged and disconnected youth of Connecticut came to an end because politicians like the two leading Republicans of the House, Rep. [Themis] Klarides and Rep. [Vin] Candelora, want to fight in the media rather than debate issues and resolve them with other board members,” she wrote. “They sought to sabotage The Partnership. It can’t go on like this, so I suppose they ‘won.’ ”
Candelora, R-North Branford, said, “Overall, I think this was well intentioned but it came into existence under a cloud. The way it was crafted, I wouldn’t make it a partisan issue. Democrats had some of the same concerns that we did . ... It’s frustrating for me to hear. This was never about politics but about policy and being an open and transparent process.”
Klarides, R-Derby, the House minority leader, said she too does not believe the issue is political, but blamed a lack of trust in the partnership due to the structure and effort to limit public information. Klarides said she has always supported the mission of the partnership and the private philanthropy work of the Dalios.
“This began and ended with public trust and unfortunately that was never something we had,” Klarides said. “That was our issue all along and this was never about politics ... Lack of clarity, lack of information, leads to a lack of trust and that’s all it was.”
Senate President Martin Looney, D-New Haven, said he thinks it is wise of the governor and the Dalios to end the partnership due to the concerns over the entity’s structure and transparency. Looney thanked the Dalios for their generosity and encouraged them to stay involved in the state, particularly in the education sector.
“It was wise of the governor to not let this linger and fester in a somewhat wounded condition,” Looney said. Still, he praised the governor for his attempt to make a public-private partnership work.
“From the beginning, there were obviously questions about this public-private mix and all of that so I think the governor is to be lauded for trying to find a way for government and private entities to work together in close partnerships but when you do have a mix of people who are subject to greater transparency rules, it does create a difficulty,” Looney said. “Perhaps we need to do a study of some kind to make sure that these types of issues don’t occur with these relationships in the future ... In practice, I think there was quite a bit of transparency, but I know there was concern if this hybrid entity is going to be regarded as public because of the public money involved and I don’t think that issue was ever satisfactorily resolved.”
The Dalios said they will put the money back into the same efforts through Dalio Philanthropies. That organization, based in Westport along with the hedge fund Bridgewater Associates that Ray Dalio founded, has been supporting Connecticut public schools for more than a decade under Barbara Dalio’s direction.
That means the Dalios’ commitment of $100 million over five years will continue. They just won’t be doing it in partnership with the state.
The breakup comes exactly as the partnership celebrates its first success, the distribution of 60,000 laptop computers, loaded with software, to students in underperforming districts — at a cost of $24 million — for at-home schooling in the coronavirus shutdown. The first 2,000 of those went to New Britain students starting Monday and more are being handed out this week in other Connecticut cities.
The Dalios will pay $20 million of that $24 million cost. When the partnership dissolves, Lamont spokesman Max Reiss said, the state will receive $14 million to $15 million in return, which will be applied to the state budget deficit.
The news comes a week after conflict between the governing board and the partnership’s newly hired chief executive officer became public. Mary Anne Schmitt-Carey, who was hired in March and began work April 1, was placed on administrative leave by board chairman Erik Clemons earlier this month for undisclosed reasons.
It was unclear Monday whether the board would move to fire Schmitt-Carey.
In an interview in April with Hearst Connecticut Media columnist Dan Haar, the Dalios said their commitment to Connecticut remains strong. They said they have donated $166 million to state causes since 2004, and are giving about $45 million a year, mostly for education.
The joint venture was announced in a crowded high school gym in East Hartford. The Dalios, in a rare public appearance, sat on stage alongside Lamont and his wife, Annie. Students spoke about the difference the commitment would make and teachers and principals cheered.
It still is the largest known philanthropic donation to benefit the state in Connecticut’s history, and was a culmination of 12 years of work by Barbara Dalio to support struggling youths in the state and their teachers.
The partnership envisioned raising an additional $100 million from other private sources, but criticism on several fronts apparently hindered that effort.
It came from people who recalled the a similar philanthropic effort in New Jersey in 2010 — $100 million from Facebook CEO Mark Zuckerberg and $100 million in other philanthropy — to improve public schools in the city of Newark. The plan failed.
While legislators were always clear they were grateful to the donation from the Dalios, they were hesitant about using state money to match it. Klarides, who would later be appointed to the board of directors as a legislative leader, openly criticized the use of state dollars since the inception of the Partnership for Connecticut — although she always supported the mission of targeting those most at-risk students.
The exemption from state ethics and disclosure laws apparently came at the request of the Dalios. In an interview in March, Barbara Dalio explained in an interview with Hearst Connecticut Media that the laws would prevent the partnership from raising outside money, discussing sensitive family issues and searching for new and different ways of helping teachers and students.
Legislative leaders who sit on the partnership board have frequently been at odds with the private citizens who sit on the governing board. Members of the board who are public officials are still subject to the Freedom of Information Act in their roles with the partnership, however, and board meetings have been generally public.
As a result, legislators have frequently been left out of some of the operating discussions behind the scenes, they’ve said.
“Politicians are putting their political objectives above the children and the state,” Barbara Dalio said in her statement.
But she ended on a hopeful note. “Through this journey, I have been inspired by the people I’ve met and the stories I’ve heard. There are heroes in every Connecticut community who work hard every day to help young people succeed. They deserve our support. Honestly, Ray and I consider it a blessing that we have the resources to help and we are committed to seeing it through.”
Staff writer Ken Dixon contributed to this story.