The issue regarding the actions of Hartford Treasurer Adam Cloud and the wire payment to Hybrid Insurance is now playing out through the media and potentially a Federal Grand Jury.
How the matter originally came to light and what the motivation was still seems to be a looming question for many. Through e-mails obtained through a Freedom of Information request to the Hartford Schools, some pieces of the puzzle may be coming together.
The timing of the incidents involved may lay some of the groundwork These are only my opinion but as we try to make sense out of this matter, a lot of things are starting to add up.
Sometime during the late summer, the attorney hired as the City of Hartford's Bond Counsel raised concerns to Treasurer Adam Cloud as to how Bond money, specifically "CIP" dollars ( Capitol Improvement Project) were being used by the Segarra Administration. CIP dollars were apparently being used to offset spending for items and purchases out of the City of Hartford General Fund.
These purchases were the subject of Finance department e-mails and warnings were also issued that they could potentially be violating Federal law in doing so.
In a string of e-mails between Hartford Comptroller Leigh Ann Ralls , Treasurer Cloud and India Cicero from DPW, the matter was discussed.
In one e-mail Ralls states that "He (Molleda) was told that we can't allow operating expenses in the capital projects. Bond money has to be used for the intent purpose stated in the bond documentation" According to sources , this had become a regular process to balance Hartford's General Fund Budget by floating CIP money to cover everyday expenses.
In one e-mail from DPW's Cicero to Comptroller Ralls Cicero states "I wish he knew this before the budget was adopted b/c now we have so much that isn't funded, where will the money come from now/" . Apparently floating the CIP money had become a regular budget balancing process at City Hall.and was counted on to facilitate everyday purchases such as truck tires and transmissions and supplies.
After being advised of the potential problems by his Bond Counsel, Treasurer Cloud requested an investigation into the use of the CIP funds. The Internal Audit Commission is apparently investigating the matter at this time.
It didn't make a lot of sense how the Hartford Schools and Altieri figured into the CIP matter until I began reviewing the e-mails I requested through FOI. These same e-mails were also requested by the subpoenas for the Federal Grand Jury.
In an e-mail from Board of Education member Richard Wareing to Hartford Schools CFO Paula Altieri, Superintendent Kishimoto, and Board Chair Matt Poland., Wareing states that "My sources inside City Hall tell me that the City is going to ask us for $3-5million to close out FY-13"
Further e-mails explain how the Hartford Schools would be asked to give over $3 million in General Fund money from their budget back to the City to allow Mayor Segarra and COO Saundra Kee-Borges to balance the City budget.
In return, Segarra and Kee- Borges would provide the Hartford Schools with approximately $3 million dollars in CIP money to make up for the money they gave back. Again, CIP money is only supposed to be used for the specific intent it was received for, not to float around to offset budget gaps in the General Fund.
One source familiar with Bond law and Federal Regulations stated that such use outside of the intended usage could be a violation of Federal law and jeopardize the tax free status of bond sales which would severely hamper the City's ability to obtain funding in the future.
The swap plan to balance the City budget moved forward. and Paula Altieri apparently spoke with Kishimoto about the scheme "about her comfort level with exchanging operating dollars for CIP dollars. she was on board" according to Altieri's e-mail. Altieri went on in her e-mail to call the scheme a "win win" "it gives the City some flexibility to help aid in the budget gap"
Another e-mail from Wareing to CFO Altieri refers to unused payroll questions raised by former Finance Director Julio Molleda. Apparently Molleda was questioning their budget numbers for payroll and the possibility that the Board may have a "secret surplus of "millions" of dollars.
After the matter became public, CFO Altieri was apparently very upset that the matter was being played out in the media.. She expressed those concerns in an e-mail between herself and Richard Wareing on October 14, 2013. Altieri stated that " I , as well as John, ( John Griffin) did as directed to do in this matter" .
I think an important question would be "what were you directed to do?" and by who? Altieri claims in the e-mail it was to "prepare a brief". She apparently also claims that after the "brief' was released", she received anonymous calls at her home stating "you are in danger". Wareing replied that he was "sorry that this got into the press , I have suspicions but no evidence".
We probably won't know what the motiviation is or was until hopefully the Federal Grand Jury is done. In the meantime it seems pretty clear that there is enough blame to go around for the original Hybrid mess, but it may just have uncovered far greater issues at City Hall.
Much more to come on this.
