DOT watching N.Y. indictments
Nothing has seemed amiss in downtown Stamford this year at the complex, multiyear project to replace the 19th century Metro-North bridge over Atlantic Street and rebuild the roads around and under it.
That’s because by all accounts the project has progressed smoothly, so well that no one from the public even bothered to show up at a March 22 update meeting for the next phase, my colleague Angela Carella reported.
That event was led by a project manager from HAKS Engineers PC, the Manhattan-based firm designing and overseeing the $75 million bridge replacement.
But less than a month after that meeting, HAKS, its founder and CEO, its chief financial officer, 11 other people and eight other companies — at least one of them controlled by the HAKS founder — came under indictment in a massive political corruption investigation by the New York district attorney, Cyrus Vance.
Husam Ahmad, the HAKS founder and a major political donor, mostly to Democrats including Hillary Clinton, the Connecticut state central committee and New York Mayor Bill de Blasio, left his post as CEO. He and the companies stand accused of business fraud, bribing New York City construction officials and corruption related to illegal campaign contributions to de Blasio in an alleged pay-to-play scheme.
Click here and here for details of the indictments and New York investigation reports.
HAKS, Ahmad and others in the case have pleaded not guilty to the charges. For the New York public construction industry, the accusations mark yet another corruption black eye with yet more calls for reform, all of which will play out for years.
And what about Connecticut? Will the indictments affect HAKS contracts here? The answer from the state Department of Transportation is not right away, but maybe eventually. Perhaps DOT should take a closer look now.
HAKS wasn’t just a one-time bidder in the Atlantic Street project, a $14.8 million job for the firm. With two of its 16 global offices in Bridgeport and Wethersfield, HAKS is one of the most prolific service providers for the DOT. It has had a dozen contracts totaling $105.9 million since 2008, according to the DOT.
For example, HAKS is halfway through a five-year contract to inspect hundreds of bridges, according to company’s website and DOT.
“Since 2004, HAKS has been providing biennial inspection and evaluation services on up to 250 bridges per year throughout Connecticut,” the website states. That includes work at the Pearl Harbor Memorial Bridge (the Q Bridge) along Interstate 95 in New Haven, the Gold Star Bridge over the Thames River between New London and Groton and the Arrigoni Bridge over the Connecticut River between Middletown and Portland.
HAKS also had an $8.6 million job to design and oversee replacement of a key stretch of overhead wires at the Metro-North line, completed last year.
There have been no public accusations of wrongdoing by HAKS or the other companies connected with their work in Connecticut, and there is no public indication of ongoing investigations here. HAKS referred questions to Howard Rubin, a lawyer representing the firm, who did not return a call seeking comment as to whether Connecticut is, or might be, separately investigating the New York charges.
In this state, under a 2005 reform that has been amended since, no principals of any vendor or contractor for the state can contribute to any candidate seeking state office. The law also bars contributions to state party committees.
But, legally exploiting a notorious loophole to that law, HAKS executives gave $75,000 to the federal account of the Democratic State Central Committee in the 2013-2014 election cycle, according to my colleague Ken Dixon, who reported the contributions in 2015.
That money must by law be used to advance participation in federal elections. The state party, however, used $318,000 of the $4.8 million in that federal account for mailers for the re-election of Gov. Dannel P. Malloy just before the 2014 election. On the eve of a trial a year later, the party settled for a $325,000 fine and did not agree to wrongdoing, but did agree not to use money from the federal account in the same way in the future.
HAKS was not accused of wrongdoing in that case, as its executives donated the money legally, including $32,500 from Husam Ahmad and his wife.
So, what should Connecticut do about a major contractor accused of fraud at the center of a web of accused companies? Among the charges in that state, Ahmad is alleged to have secretly held a controlling interest in a firm that claimed it was woman-owned.
Under the state DOT policy, the agency looks at each case individually when a contracting firm gets into trouble elsewhere.
“Generally speaking, the exit of key executives from a firm may impact a contract in Connecticut depending on the circumstances of their departure and their involvement in the work,” DOT spokesman Judd Everhart said in an email. “In this instance, none of the individuals named in the criminal charges were involved in the CTDOT contract work.”
DOT also issued a statement from Commissioner James Redeker suggesting the New York case could eventually lead to action here.
“Ensuring that work is completed as efficiently as possible — and that it is done so without reproach — is the DOT’s highest priority and that includes holding contractors to high personal and professional standards. These allegations are serious and troubling, and DOT will absolutely take them into consideration with regard to future projects,” Redeker said.
Others have a different view of what should happen in cases like this.
“You don’t give them any more work, and you see what work that they have — to disperse to the state workforce and to other contractors,” said Robert Rinker, a member of the State Contracting Standards Board. “That’s the only way you’re going to clean up contracting. ... I think you have to hold these companies to the highest standards for it, and if they lose business, it begins to raise the standards for them and all contractors.”
Rinker, a retired executive director of the Connecticut State Employees Association Local 2001, part of SEIU, was speaking for himself as a member of the board, not for the board, whose director was not available when I called Friday.
The board was established around the time of the state’s campaign finance reforms, partly in response to a contracting scandal that saw former Gov. John G. Rowland indicted and sentenced to a one-year prison term.
But there’s a broader, related aim, Rinker said: saving money, and potentially reducing corruption, by bringing work that has been outsourced to contractors back in-house at the DOT. By DOT’s own reckoning, routine bridge inspections, for example, could be done much cheaper by DOT engineers.
The standards board ordered that to happen at its June meeting, Rinker said — a change that could take years.
The board has not, however, ordered uniform administrative procedures in cases like the HAKS accusations in another state. That should happen, and at the least, DOT and other affected agencies should haul in HAKS’ new CEO and make him turn over records that would show the allegations in New York are not happening here.
Naive? Maybe. There’s no way to stop political corruption and there’s no way to prove its absence, of course, but Connecticut, with its own history of shenanigans, needs to be more active and vigilant when a red flag goes up in a neighboring state.