Monday, January 12, 2009

Blumenthal’s Whimsy

Consider the strange case of Charles Klewin.

According to a story in the Hartford Courant written by Jon Lender, a reporter on the paper’s investigative desk who has written extensively about former Governor John Rowland, if Klewin had not hired Rowland “as a $5,000-a-month consultant in 2004 after Rowland had resigned while facing impeachment proceedings, Klewin’s construction company might be $1.2 million richer today.”

The tenacious Kewin, Lender tells us, almost had the money that was owed him in his hands, but it has been snatched away largely because of the efforts of the tenacious Richard Blumenthal, Connecticut's Attorney General and chief robber barron.

Klewin, according to Lender, “was never drawn into the criminal acts that landed Rowland in jail,” and both the state and Connecticut courts have acknowledged that the state owed Klewin $1.2 million for work he had done to expand the Manchester Community College Campus. Klewin claimed the state owed him $3 million or more on a $20 million contract for extra work his construction company had done on the project. The state agreed to settle the matter by paying Klewin $1.2 million in late 2004, and, according to Lender, “Gov. M. Jodi Rell and Blumenthal later authorized payment of the claim.”

“In November 2004,” according to Lender, “Rowland contacted a UConn official to settle a dispute over a different Klewin construction contract (italics mine) at UConn,” revelations that led to a hearing in May 2005 by a legislative committee “which said that the consulting deal might have violated the state’s revolving door law banning former officials from immediately going to work for companies hey dealt with in office.”

The committee issued subpoenas to compel testimony from Klewin executives about Rowland’s consulting work, but the executives chose instead to question the subpoenas in court. At this point, Blumenthal, who had authorized payment of the claim, requested that the unrelated payment be withheld.

Klewin then sued to compel payment. Superior Court Judge Joseph Shorthall ordered payment in September 2006. The judge said “Mr. Rowland had nothing whatever to do with” the settlement.

The state Supreme Court struck down Shorthall’s order in October 2007.

Klewin claimed that statutory law created “a mandatory duty in a department official to pay a settlement of a disputed claim.” The Supreme Court ruled that the statute under which Klewin sued for injunctive relief created no “mandatory duty in a department official to pay a settlement of a disputed claim.” Therefore, the court determined, state officials did not act in excess of their statutory authority when they failed to effect the payment to the plaintiff pursuant to the governor’s authorization, and the plaintiff’s claim does not fall within the exception to sovereign immunity.”

Klewin then re-sued the state, “claiming that it’s suit was permitted by a law specifically applying to public works construction. However, [Judge] Shapiro ruled Jan 2 that Klewin had not provided sufficient factual documentation of its claims that state public works officials had ‘badly designed and administered’ the Manchester project, causing delays and cost increases.”

In effect, the Supreme Court decided, on narrow legal grounds, that when the state agrees to pay a disputed claim – both the governor and the attorney general signed off on the claim – the state, asserting the right not to be sued under sovereign immunity, may cancel the payment because the statute under which Klewin had sued the state did not require the state to pay the agreed upon claims.

It would appear that Blumenthal withheld payment of a claim he had signed off on because the attorney general wished to force testimony from Klewin executives before a legislative committee investigating the business dealings of Rowland that, another judge had determined, were unrelated to the settlement.

So then, to recapitulate: There is not a court or an attorney general or a governor in the state of Connecticut that does not agree that the state owes Klewin $1.2 million for work he had done to expand the Manchester Community College Campus. Blumenthal wanted Klewin executives to testify under oath before a legislative committee on a matter that a judge had determined had nothing to do with the payment Blumenthal and the governor had agreed that the state owed to Klewin. Blumenthal then denied payment, it may be supposed, to compel testimony from Klewin executives. And Klewin cannot claim injunctive relief because the relevant statute, strictly interpreted, does not require that the state is mandated to make payments it has agreed to.

Very nice.

Other Connecticut and out-of-state businesses no doubt will want to take notice of the case when they enter into contracts to perform work on state projects. The statute that seems to assure businesses that the state will honorably pay its bills does not in fact require the state to do so. When the state whimsically stiffs a business and claims sovereign immunity, the business cannot expect state courts to remedy the injustice. The whimsy of the state's attorney general apparently is dispositive.
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