Monday, May 03, 2010

Blumenthal Closes NEP Case: Questions Remain Open


Three press accounts appeared over the weekend that had Attorney General Richard Blumenthal as their subject, two in the Journal Inquirer by reporter Alex Wood, and one in the Hartford Courant by Kevin Rennie, a political columnist.

One of the Journal Inquirer’s stories by Wood (available through subscription) is likely to generate some interest because it includes what may be called, loosely speaking, a rebuttal to a press release issued by Mr. Blumenthal following the “settlement” of a case against New England Pellet. The rebutter is Jim Oliver, the lawyer for New England Pellet.

The story involves an objection by Mr. Blumenthal to an assertion by Mr. Oliver that Mr. Blumenthal’s inspector, Patrick Ahlquist, used a defective affidavit in the case and later offered perjured testimony in a deposition.

The charge by Mr. Oliver that Mr. Ahlquist perjured himself in a sworn deposition has yet to be put before a judge. Such being the case, it is partly true, as Mr. Blumenthal asserts in the Wood story that “No court or other body has found that Mr. Ahlquist’s conduct was in any way inappropriate.” It would be equally true to say that no court has found Mr. Ahlquist’s conduct was appropriate.

But why in the world should Attorney General Richard Blumenthal wait upon a judge’s decision before he determines that one of his employees, Mr. Ahlquist, may have done something inappropriate?

In the affidavit, signed by Mr. Ahlquist and used by Mr. Blumenthal to impound the business machinery and other assets of New England Pellet, effectively putting the company out of business, Mr. Ahlquist swore under oath he had reason to believe that Mr. Zaczynski, one of the owners of New England Pellet, either had or was about to fraudulently transfer assets.

This was the sole charge on the basis of which a judge, in an ex parte proceeding, authorized Blumenthal to impound Mr. Zaczynski’s business equipment. An ex parte proceeding is one in which the accused party – in this case, Mr. Zaczynski -- is not present to answer charges made before a judge against him.

His business effectively destroyed by Mr. Blumenthal and his assets tied up in litigation, Mr. Zaczynski at that point was unable to supply refunds to his customers. Before Blumenthal’s suit, NEP, scrambling to make good on its obligations, had already refunded $140,000 to its customers and offered to put funds in escrow to insure that their customers received refunds. Despite these attempts to salvage their business, Blumenthal, making his usual rounds of the television stations, claimed NEP was not co-operating. In fact, after Blumenthal lept on the stage, NEP offered to put in escrow $200,000, more than enough money to satisfy ever complainant, an offer declined by Blumenthal.

During his deposition, Mr. Ahlquist swore on oath that he had examined none of the relevant bank records, an inspection that is necessary to determine whether Mr. Zaczynski had or was about to fraudulently transfer assets.

In his sworn deposition, Mr. Ahlquist said, again under oath, that he had never read Connecticut’s Fraudulent Transfer Act and, most damningly, that he never had reason to believe that Mr. Zaczynski either had or was about to fraudulently transfer assets.

Now, it would be very simple for someone, not necessarily a judge, laying side by side both statements – the affidavit on the one hand, and the sworn deposition on the other -- to conclude that either one or the other statement was false, since the sworn claims made in both documents contradicted each other. And Mr. Blumenthal, no ordinary man on the street, is Connecticut’s attorney general. One must assume, since those in the attorney general’s office under Mr. Blumenthal’s’ supervision have in the past made the claim in other affidavits that his targets have or were about to fraudulently transfer assets, that the attorney general has more than a nodding acquaintance with Connecticut’s Fraudulent Transfer Act.

So then, with the Fraudulent Transfer Act in one hand and in the other hand Mr. Ahlquist’s contradictory testimony in his affidavit and deposition, it should be a simple matter for someone as well versed in the law as the attorney general to tell Mr. Wood whether he thinks his “inspector” had perjured himself.

Why must Mr. Blumenthal wait upon a judge to decide the matter – especially when Mr. Blumenthal knows that the specific charge made by Mr. Ahlquist in his sworn affidavit had alone invested Mr. Blumenthal with the legal authority to put Mr. Zaczynski out of business, thus making the prosecution of Mr. Zaczynski easier and refunds from Mr. Zaczynski to his customers unlikely until any pending litigations had been completed?

Mr. Blumenthal, deciding the matter somewhat in advance of a judge, also claimed in the JI story that “The contention that Mr. Ahlquist’s affidavit was improper is without basis.”

Mr. Blumenthal need not wait upon a judge to tell him whether a matter is “improper’ and “without basis.” Anyone – but most especially he -- can decide whether an assertion is baseless. Were this not the case, it would be impossible for Mr. Blumenthal to dismiss an employee who had made, in Mr. Blumenthal’s best judgment, a charge that was recklessly inappropriate.

The paragraph that follows below is what Mr. Ahlquist wrote in his affidavit, though here one is tempted to quibble a bit with the word “his,” because in his deposition Ahlquist acknowledged that he was not the real author of the affidavit he signed -- in the sense that Samuel Clemens was the real author of Huckleberry Finn. Mr. Clemens, who wrote under the pseudonym Mark Twain, dictated parts of his books to a stenographer; but it was Twain, and not the stenographer, who was the real author of the titles appearing under that name. The assertions in the affidavit that Mr. Ahlquist acknowledged by his signature were his actually were authored by an assistant attorney general in Blumenthal’s office. Having done little or no investigating, Mr. Ahlquist signed off on the document, leaving everyone to supposed, since Mr. Ahlquist was after all Mr. Blumenthal’s investigator, that he had investigated the claims made in the affidavit. Neither did the attorney general who composed the affidavit in consultation with Mr. Ahlquist investigate Mr. Zaczynski’s bank records; perhaps he had supposed this little detail had been taken care of by Mr. Ahlquist.

This is Mr Ahlquist’s sworn statement in “his” affidavit: “Based upon the circumstances of this case, including, inter alia, the Defendant’s actions as set forth in this affidavit, there is reasonable likeihood that Defendant Zaczynski is about to fraudulently dispose, hide or withhold, or has fraudulently disposed, hidden, or withheld property money or effects which should be liable to the satisfaction of Defendants debts (emphasis mine).”

This is Mr. Ahlquist’s sworn statement in his deposition; “Q” is Mr. Oliver and “A” is Mr. Ahlquist:

“Q. Okay. Let me ask you this, right off the bat: Who drafted this affidavit? Did you draft it?

“A. No, sir…

“Q. Okay. I'd like to direct your attention to paragraph 22 of the complaint -- I'm sorry – the affidavit.

“A. Yes, sir.

“Q. It reads as follows: ‘Based upon the circumstances of this case, including inter alia, the actions as set forth in this affidavit, there is reasonable likelihood that the defendant Zaczynski is about to fraudulently dispose, hide, or withhold, or has fraudulently disposed, hidden, or withheld property, money, or effects, which should be liable to the satisfaction of defendant’s debts.’ Did I read that correctly?

“A. Yes, sir.

“Q. Okay. Based upon the investigation that you conducted prior to your leaving -- strike that. Prior to your signing this affidavit, what property did you identify that Mr. Zaczynski had fraudulently disposed of, hidden, or withheld?

“A. In the past tense, none.

“Q. You didn't find any? You weren't aware of any at the time you signed this affidavit, that Mr. Zaczynski had fraudulently disposed of, hidden, or withheld property; correct?

“A. (Examining document.) The only area I would point out is, in regards to hidden, would be the – I don’t know where the funds were to satisfy the consumers.

“Q. Did you have access to the bank records of Mr. Zaczynski or NEP at the time you signed this affidavit, to know how much funds they had in the account?

“A. No, sir.

“Q. So you didn't know whether they did or didn't have the funds to satisfy the consumers?

“A. I didn't know what their account balances were.

“Q. Okay. So as of the date you signed this affidavit, you had no evidence whatsoever that Mr. Zaczynski had fraudulently disposed of, hidden, or withheld property to the satisfaction of the defendants' debts; correct?

“A. Yes.”
Perhaps in his next press conference in defense of the assertions he made to Mr. Wood – should it ever come to that, which is doubtful – Mr. Blumenthal will favor the rest of us with an explanation of what an honest and disinterested reader might well consider perjured testimony. Most importantly, Mr. Blumenthal knows full well that if he suspects an affidavit is insufficient, he has a legal obligation to withdraw it – not to defend it through a series of obfuscations and legal wrangling designed to cover up the bloody body he has left on the floor.
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