Colchester’s process for spending federal funds sparks ethics debate
Last year, Colchester officials appointed a handful of local residents to a special committee and charged them with advising the town’s elected leaders on how to spend more than $4.6 million in federal stimulus funding from the American Rescue Plan Act.
But in recent months, several of those same committee members submitted applications to the town asking for a portion of that federal money, either for their businesses or for other organizations they run.
Those potential conflicts of interest have raised questions in the small community about whether local officials did enough to solicit input from town residents and why a select group of people got to determine how the public funds are spent.
The growing dispute highlights the local politics and influence that are at play throughout Connecticut at the moment as municipal boards, commissions and councils decide how to spend millions of dollars in one-time funding.
Connecticut’s 169 towns and cities are set to receive a combined $1.5 billion in federal aid through the American Rescue Plan Act, which federal lawmakers passed in 2021. For many municipalities, that money offers a once-in-a-generation investment in their communities to help them rebound from the coronavirus pandemic.
The federal rules for that funding give local leaders broad leeway in how to spend the money. The funds can be used on things like vaccination efforts, food programs, job training opportunities, financial aid to businesses, education assistance, affordable housing, water and sewer improvements and other public infrastructure projects.
But as Colchester shows, the federal money flowing into municipalities can bring with it an increased level of scrutiny.
Greg LeRoy, the executive director of Good Jobs First, a national group that has advocated for more transparency around the ARPA funding, said citizens should question how their local governments are allocating the federal money and who is actually benefiting from that spending.
But in order to do that, Leroy argues that the federal government needs to do a better job of sharing and distributing information about how local governments are putting the money to use.
“We’ve got this very screwed up lack of federal leadership on the disclosure of the awards and the ultimate disposition of the money,” he said. “And, of course, crazy state and local stuff is going to happen when that is true.”
Following the rules
Three of the five current members of Colchester’s special ARPA committee reported potential conflicts with the money they are overseeing.
Dave Koji, the committee’s chairman, is part owner of a local appliance shop that asked the town for $25,000 in federal funding to help replace the store’s heating and cooling system.
Greg Barden, another committee member, requested another $25,000 to pay for membership drives and local advertising campaigns for the Colchester Business Association, where he serves as the group’s treasurer.
And Jack Faski, another business owner on the committee, asked the town to allocate $25,000 to his realty company so that he can make improvements to the driveway, sidewalks, decking, lighting and landscaping at a historic building near the center of Colchester, which serves as an office, bed and breakfast and his personal residence.
Those requests drew the attention of a small, but vocal, group of residents in Colchester and ignited a political debate about the town’s ethics procedures and its plans to distribute up to $1.25 million to local businesses and nonprofits.
The three committee members said they were fully transparent about their personal entanglements during the public meetings and did everything that was required of them under the town’s ethics code once they or their business associates submitted an application for part of the federal funding.
They recused themselves from the individual votes on any application they could benefit from, they said, and they all filed formal ethics disclosures with the town in mid-April outlining those potential conflicts.
“Being involved and active members of the community will invariably lead to an overlap with our civic and professional duties,” Koji said. “We took steps to ensure we eliminate any conflict.”
The focus of the committee, Faski said, has always been to help as many businesses and nonprofits as possible, and he said it was discouraging that anyone would question the motives of him or the other volunteers.
“All I and this committee were trying to do was give out money set aside by the federal government allotted to our town,” said Faski, a well-known member of the community. “We wanted to help all the local businesses we could and for the town’s infrastructure and nonprofits to utilize that money with the least amount of difficulty and to get it to them as fast as possible.”
“There has not been one moment of bias or preferential treatment for anyone throughout the process,” added Barden. “People can feel free to question our process, or criticize our decisions, but to question members’ integrity is extremely disappointing.”
Others, however, argued the three committee members did not do enough to avoid the appearance of a conflict.
“There is certainly nothing illegal about people on the committee applying for money so long as they recuse themselves,” said Jason LaChapelle, a Republican member of Colchester’s Board of Selectmen. “However, we should never be in a situation, in my opinion, where the citizens feel the need to even question it.”
The committee members, LaChapelle said, may not have the final say over who receives money, but they played a role in developing the criteria for the grant programs and determining what type of documentation the businesses and nonprofits need to provide to the town.
The members of the ARPA committee have also recently recommended a funding formula that will help determine how the town divides up $1 million between more than 90 local businesses that requested a combined $1.8 million in assistance.
“Whether they like it or not, they are now public officials,” LaChapelle said. “They are in the public space, and their actions are open to scrutiny by the public. I respect anybody who volunteers their time to public service. But it doesn’t mean you are above criticism.”
A volunteer government
Several other members of Colchester’s Board of Selectmen disagree with LaChapelle. They argue the committee members are being unjustly criticized after helping to organize the new federal grant programs and volunteering their time to review more than a hundred applications from other businesses and nonprofits.
Rosemary Coyle, a Democratic selectwoman, said the fact that three members of the committee have ties to businesses or organizations that submitted grant applications is part of the reality of operating a small town government with a limited full-time staff.
Colchester and its roughly 15,000 residents, Coyle said, frequently rely on local volunteers, business owners and civic leaders to staff the town’s committees and commissions.
The individuals who agreed to serve on the town’s ARPA committee, she added, should not be excluded from the federal money just because they assisted the town in managing that money.
“Without these volunteers serving on our boards and commissions, Colchester would not be able to function as a town,” she said. “The individuals you cite are pillars of the Colchester community and give back to the town and its citizens over and over again in so many ways.”
Coyle attributed the complaints about the committee members to the hyper-political environment in town following the bruising municipal elections last year. And she said she is worried that the criticisms of the three ARPA committee members will dissuade other town residents from volunteering to help in the future.
“I’ve served on the board of selectmen since 2007, and I’m very saddened by the attacks on our volunteers by a small group of individuals who have a political agenda,” she said.
Coyle and Denise Turner, another Colchester selectwoman, emphasized that the ARPA committee has very little control over which businesses and nonprofits are ultimately awarded federal money — even if the panel is making recommendations.
The town hired an independent consultant, they said, to screen all of the applications and determine whether each business and nonprofit is eligible under the federal rules. And the final decision to award an organization money rests solely with the town’s five elected officials, they pointed out.
That was evident last week, when the board of selectmen voted to reject the grant application from the Colchester Business Association after the ARPA committee recommended it for approval.
The loudest critic of the ARPA committee members and the town’s process for distributing the federal money has been Deanna Bouchard, a Colchester resident who runs a Facebook page that frequently delves into the town’s politics.
Bouchard, who asked to be appointed to the ARPA committee last year, said she believes many town residents have been “locked out” of the process. And she is upset that town officials didn’t do more to solicit input from the public, either through town-wide surveys or public hearings where people could pitch ideas for how to utilize the federal funding.
“My biggest angst with all of this is they never asked the people how we wanted to spend this money,” she said.
Other Colchester residents, however, have complained during public meetings that Bouchard was just looking to cast aspersions.
“For those working to undermine the system under the guise of accountability, you are creating a level of frustration that puts our way of life here at risk,” Cindy Praisner said at the last board of selectmen meeting. “Who will want to step up and volunteer?”
“I’m not suggesting anyone be allowed to slack or do wrong,” Praisner added. “But the desire of a few to attack and disparage fellow community members — our neighbors — should not be accepted.”
Avoiding the optics
Andreas Bisbikos, Colchester’s new first selectman, made the grants to businesses and nonprofits a top priority of his administration this year. He views the new grant programs as the fulfillment of a campaign promise.
Bisbikos, a Republican, said town officials have worked hard to ensure the grant process is transparent and “above board.” And he said the ARPA committee members did everything that was expected of them by disclosing their personal conflicts and stepping aside on votes that involved the businesses or organizations they were affiliated with.
The criticisms leveled at the committee members, he argued, are largely the result of the spotlight that the town finds itself under as it appropriates millions of dollars in federal assistance.
Even so, Bisbikos recognized the “optics” of three of the five current committee members submitting applications for the grant programs they are helping to administer.
Bisbokos said he advised his own parents, who own a pizza restaurant in Colchester, not to apply for a business grant from the town in order to avoid any appearance that he was influencing the process in favor of his family.
“This is a highly politically charged world we live in, and everything we do will be highly scrutinized,” he said.
Leroy, the director at Good Jobs First, said town officials in Colchester could have considered placing similar restrictions on the ARPA committee in order to ensure that each grant application was decided through an “arms-length transaction.”
There would not be the potential for a conflict, LeRoy said, if town officials had made it clear to the committee members from the beginning that they, their family members and their business partners would not be allowed to apply for the money.
Another strategy to avoid those types of ethical questions, LeRoy said, would be to spend the ARPA money on public investments, like infrastructure projects or educational programs, that benefit the community at large instead of a select group of people like business owners.
“It would be much wiser and lower risk, frankly,” he said. “It could be anything that broadly benefits lots of people in the community and has proven long-term effect.”