Teri Buhl: Are Hearst CT Newspapers shilling for Blumenthal?

By Teri Buhl

Our local newspapers think they have a ‘big exclusive” story out today explaining that Connecticut Attorney General, Richard Blumenthal, is  asking for an investigation into a well known international financial services firm for questionable answers on a 35 year contract the DOT awarded. It looks like the only reason it’s an exclusive is because Hearst is the only news organization that thinks the CT AG’s publicly available letter to the DOT asking them to investigate their choice of The Carlyle Group for a winning contract to revamp around 20 CT highway rest stops – is a signal that the man running for U.S. Senate has the fortitude to go up against the financial services industry.  While reporter Brian Lockhart, who reports directly to top Hearst CT News editor David McCumber, is actually one of the only skilled investigative reporters the news organization has, did a fair job of telling us both sides of the story, the whole idea of the piece reeks  like a planed press strategy from Team Blumenthal.

Here’s why, McCumber told me excitedly while I was working for his paper that he’d met with the AG and Blumenthal had told him he’s working on a few investigations having to do with financial services firms. I kindly reminded McCumber who’s still new to the CT political landscape, that our AG isn’t exactly known for going after the Wall Street business in his home town for any serious wrong doing- a fact that is noted by basically every national finance journo I know. Just recently it took a Fortune Magazine investigative story, which highlighted the Manhattan D.A., was investigating Greenwich-based Plainfield Asset Management for shady lending deals, to get him off his cushy seat and announce he’d also look into the hedge fund in case you know they screwed over any Connecticut investors. In fact, I can’t think of one recent case that the CT AG, who’s got one of the largest backyards loaded with financial services firms to investigate, initiated a case that he didn’t read about first in an investigative news report or was first initiated by another government agency.

In today’s story, that ran on the front page of all four Hearst CT newspapers, all we get from the piece is that Blumenthal thinks the DOT needs to go back and seriously challenge statements made by a subsidiary of The Carlyle Group, called Carlyle Infrastructure Partners, on its winning bid for the rebuild of our highway rest stop stations. Carlyle Group, the private equity firm and parent company of CIP, got itself into some trouble with the Cuomo (NY AG) investigation into kickbacks paid to guys running state endowment funds in return for investments in the private equity fund. Carlyle ended up quickly settling for $20 million and some of the government guys involved are going to jail. The Hearst news story says Blumenthal thinks Carlyle, the parent, knew about the investigation while it was filling out those rest-stop bid documents in December 2008 and should have made sure that its sub, CIP, told the DOT that in the last five years a government agency had investigated their parent company. Instead they answered NO, because the CIP guys claim no one ever told them about it – and Carlyle guys told the DOT they’d sign an affidavit swearing that’s the truth. Carlyle didn’t agree to settle with Cuomo until May 2009. But Blumenthal – who can’t actually make the DOT do anything – wrote them an advisory letter – basically suggesting they needed to look harder at Carlyle’s truthfulness on how they represented themselves in the bidding process. DOT says they did investigate way before Blumenthal ever suggested it and Carlyle is all A-OK by their standards.

Which leaves us questioning what in the heck the AG is trying to accomplish with his little late to game inquiry and why he’s leaking this move to the local newspaper? Is he trying to show voters that he’s not a lap dog to the financial services firms that fuel Fairfield County’s economy and tax revenue – that sounds about right? What I find most troubling here is the local paper goes along with it and turns a simple letter of advisory into some kind of ‘big exclusive’ investigative news event. Notice they even tell you under the reporter’s byline that their once political reporters are now ‘investigative reporters’. While we are glad to see the local paper trying to punch above their weight and attempt to investigate the inter-workings of our government agencies and Wall Street this just smells of something of a whole other nature.

Instead I might suggest they take a harder look at what Carlyle scored in the details of the financing and future profit taking on the deal. You see our cash strapped State choose to have the contract winner pay for all the renovations(committing to spend $185 million) without the aid of CT taxpayer money in return for giving up revenues from the gas sales as they had in their previous contract. The old contract gave the State 11 cents off every gallon of gas sold. CT can still garner sales tax off concession sales from the rest stops but the rest of the earnings will go to the group rebuilding the rest stops. The notion that Carlyle Infrastructure Group might have lied on their bid docs about something their very large parent company was being investigated for (before Cuomo had even charged anyone) seems small compared to the fact that they just got a 35 year deal to reap a lot more revenue off the state hwy stops than the previous operator. It’s a move that shows how free markets can work when state budgets are economically challenged and a story that could make for a much better ‘big exclusive’.

Plainfield Article here


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5 responses to “Teri Buhl: Are Hearst CT Newspapers shilling for Blumenthal?

  1. Anonymous

    Brava! Teri.

    I had a somewhat queasy feeling after I read the GT “exclusive” article today. Now I know why.

    Thank you!

  2. Dan

    This is an other clear example of why it would be foolish to allow Blumenthal to represent us in the Senate.
    Well done Teri!

  3. Walt

    Weasel Boy –
    I read this twice, and was about to rag on you for your illiterate prose, when I saw the Teri McBeal byline. I thought for sure you wrote that incomprehensible crap.
    Were you sitting on her lap and blowing in her ear when she wrote this? You dawg. Just saying. Now don’t get all pissy on Old Uncle Walt because he criticized your fantasy love dolls writing. She is a “pro”. She can take it.
    Your Pal,

  4. Carolyn

    Bravo! “Uncle Walt in comment #3 gave you a fantastic compliment. Grand to be able to clarify the Hearst article.

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