The aftershocks keep coming from a 2017 scandal that led to the resignation of Nivea Torres as superintendent of the Connecticut Technical High School System (CTHSS), after her agency paid millions of taxpayer dollars to a local marketing firm in a three-year spending spree later branded as illegal.
The latest reverberation is a new “Memorandum of Understanding” — or MOU — under which Commissioner Dianne Wentzell of the state Department of Education agrees to several remedial procedures that the watchdog State Contracting Standards Board says are needed to avoid further costly failures of internal financial controls.
Among those procedures — as outlined in the three-page MOU that was ratified unanimously Friday at a meeting of the watchdog board — are:
Education department officials who wield authority over purchasing and contracting will have to undergo training “on general business acumen and on proper purchasing procedures … concerning procurement with an emphasis on ethics, fairness, consistency and project management.”
The education department “will submit its in-house training program to the [contracting standards board] for approval” and will “maintain internal documentation of the … completion of training” by each affected employee.
Education officials will “electronically report to the [contracting standards board] on a quarterly basis all new, renewed and extended contracts entered into … for the period of December 1, 2018 thru June 30, 2020.” The reports would include the contract number, a brief description of work to be done, start and end dates and copies of any requests to waive competitive bidding.
The agreement was drafted in recent weeks as the watchdog board, in pursuing an inquiry it started in mid-2017, was ready to summon officials to a hearing that could have led to an attempt to restrict the education agency’s ability to enter contracts for services. The hearing had been scheduled for Friday, but the MOU averted that.
Discussing the MOU at Friday’s meeting, the board’s executive director, David Guay, said he was reminded of a continuing-education catalog he’d seen that offered a class called “Fraud and Abuse in Not-for-Profit Entities and Government: Stealing from Everyone.” The course description said: “When not-for-profit entities and governments fall prey to fraud and abuse it breaks the hearts of donors and taxpayers” and lowers public confidence.
“That reference to government is why we are here today,” Guay said, adding that the education department “fell prey to abuse in contracting … and has this board concerned about the contracting process in the department.” But, he said, “this MOU, I hope, meets the test of the continuing education course … and keeps the confidence of our citizens.”
Board members and the education department’s legal director, Peter Haberlandt, said they’d arrived at the agreement by “working collaboratively.” Later Friday, education department spokesman Peter Yazbak issued a statement: “We look forward to continuing to work together in a spirit of shared purpose, mutual support and productive collaboration.”
‘Thought-leader’
The tech-school scandal erupted after the disclosure in early 2017 that a marketing and public relations firm in Rocky Hill, The Pita Group, was paid about $4 million from 2014 to 2017 by the CTHSS on the basis of 13 contractual “letters of agreement” signed by Torres. The agreements were for services that included promoting the system and building an image of her “as an inspirational, next-generation education thought-leader.” Pita even wrote Torres’ tweets.
The agreements — all written on The Pita Group’s letterhead stationery, unlike customary state contract documents — “were not approved or even known about” by state education and procurement officials for more than two years, the Department of Administrative Services concluded last year.
Torres resigned in April 2017 after the DAS, at the request of Wentzell, began investigating the payments to The Pita Group. Also, a top Torres subordinate who dealt extensively with Pita, Athanasula Tanasi, was suspended without pay for eight weeks and demoted.
Pita was removed from the state’s list of vendors for the kind of work it had done. Its attorney, John Droney, has said the firm did nothing wrong and only complied with directives of tech school officials.
At the time of the scandal, the tech school system was part of the education department. But under recent legislation, the agency has a new name — the Connecticut Technical Education and Career System — and becomes independent in 2020.
The contracting watchdog board’s investigation has turned into a sort of test case for the tiny agency’s authority to rein in huge government departments. The contracting board was created by the General Assembly in reaction to the 2004 corruption scandal involving state contractors and then-Gov. John G. Rowland, but it has had continual brushes with extinction in the adoption of state budgets during Connecticut’s never-ending fiscal crisis.
It is tasked with assuring that state contracts with outside vendors are cost-effective, and that the services provided by the vendors couldn’t be performed better and more cheaply by in-house state employees. It has a strong organized labor representation in its composition, and has been feisty and vocal at times, but often seems to be fighting uphill.
But in this case, it’s gotten a major state agency to agree to remedial measures rather than face a hearing that would drag all the unpleasantness back out into the public spotlight long after it happened.
‘CONFIDENTIAL & PRIVILEGED’
As recently as September, Haberlandt, the education agency’s legal director, was questioning how much authority the watchdog board had in the matter.
“Where … a state contracting agency acts reasonably in response to the improper contracting decisions of its employees, the [contracting board] does not have an appropriate legal basis to take action against the contracting agency,” he wrote Sept. 10 in a letter that was labeled “CONFIDENTIAL & PRIVILEGED – – FOR SETTLEMENT PURPOSES ONLY.”
Despite the labeling, the contracting board made the four-page letter into a public record by bringing it up at an open meeting.
The education department has invoked attorney-client privilege elsewhere, as well. It did so in another prominent matter where Wentzell has admitted that the department’s internal controls failed — the case of James Mindek, a high-ranking information technology administrator in the department who was found to be involved improperly in the hiring of his son and a co-worker’s daughter as temporary IT workers.
Mindek was suspended without pay for 60 days in late 2016, but appealed to the State Employees’ Review Board, which last May ordered Mindek’s suspension retroactively reduced to 30 days and criticized the department. The board said department leaders didn’t discipline Mindek after an internal investigation in early 2016, but then launched a second investigation in August of that year after receiving a Courant request for embarrassing documents that led to a Government Watch column.
“But for the newspaper activity, the second investigation may never have been pursued,” the board said.
Education officials claimed attorney-client privilege in blocking the employee review panel’s access to a March 2016 memo sent to Haberlandt by a subordinate lawyer, whom he’d ordered to look into the alleged nepotism.
The Courant requested a copy of the same memo, in an effort to learn why the department took no action in early 2016 and then moved to discipline Mindek after the newspaper asked about the alleged nepotism. But the education department again withheld it claiming attorney-client privilege. The newspaper complained to the state Freedom of Information Commission — which denied the complaint in October based on a law that says government lawyers’ communications with each other fall under attorney-client privilege.
As to the tech schools scandal, Yazbak said that “the MOU also highlights the corrective actions CSDE has taken thus far, including: “conducting its own extensive audit activities and notifying the Auditors of Public Accounts”; suspending all work by, and payments to, the Pita Group; requesting the investigation by DAS and “taking significant personnel action”; the “recovery of $107,000 from the Pita Group”; and “retaining an outside audit firm to perform a forensic audit to assist CSDE in identifying any additional amounts of state funds that could potentially be recoverable.”
Meanwhile, Torres has been working since September 2017 as executive director of the Kindergarten Readiness Collaborative in Vero Beach, Fla.
Jon Lender is a reporter on The Courant’s investigative desk, with a focus on government and politics. Contact him at jlender@courant.com, 860-241-6524, or c/o The Hartford Courant, 285 Broad St., Hartford, CT 06115 and find him on Twitter@jonlender.
