September 17, 2024
The Honorable Ned Lamont Governor of the State of Connecticut
State Capitol Hartford, Connecticut
Dear Governor Lamont, In response to your request, pursuant to Section 3-112(b) of the Connecticut General Statutes, my office has reviewed the activities of the Social Equity Council (Council) occurring in, but not limited to, the fiscal years ended June 30, 2023 and 2024.
The focus of this examination was on the Council’s financial management and governance practices, including adherence to relevant statutes and regulations; the process of awarding licenses, grants, and loans; and program effectiveness.
The following report contains a brief history of the Council, a summary of findings noted, recommendations for improvement, and a summary of the procedures performed by my office.
Sincerely, Sean Scanlon State Comptroller
These interviews revealed common and concerning issues with the license application process, and the Council’s management of it, including:
• Lack of communication from the Council;
• Unclear or contradicting guidance provided by Council staff;
• Frequent changes to the social equity plan criteria without sufficient notice;
• Delays in the review process, resulting in additional costs to applicants; and
• Lack of transparency and ambiguity in the evaluation process, leaving requirements open to interpretation and subjectivity by Council staff.
Several of the applicants indicated that the Council took advantage of the ambiguity, describing instances where Council staff stated that donation amounts were not enough, strongly suggested that applicants work with churches, denied plans because Council staff didn’t agree with what the Disproportionately Impacted Area (DIA) community was asking for, and showed preference towards helping or working solely with black and brown individuals rather than including other communities also impacted by the war on drugs in general.
My office also interviewed Council members and staff during the examination. These interviews disclosed a stressed relationship between Council members and the staff, confusion, lack of guidance, and a sense of uncertainty and dysfunction among Council staff. We also noted a lack of formal policies and procedures as well as a formal strategic plan. Overall, these issues seemed to be creating an unhealthy work environment within the Council.
News Times CT reports
HARTFORD — The state agency that determines the use of money to support communities impacted by the failed war on drugs and awards associated cannabis-related licenses was a dysfunctional workplace with little transparency and a lack of both procedures and a formal strategic plan, Comptroller Sean Scanlon said on Monday.
During a news conference that culminated a four-month investigation, Scanlon stressed that his office could not find alleged criminal behavior, but suggested that the “pause” ordered by Gov. Ned Lamont in the distribution of tens of millions of dollars from the Social Equity Council, remain in place until the General Assembly meets in January and develops better ethical and procedural guidelines.
“What we did find, however, was questionable business practices and procedures that were troubling, subjective and ambiguous,” Scanlon said. Applicants were kept off balance by changing rules and poor communications, often given verbally with no written record. The program for loaning money to Social Equity applicants had major failures getting started.
“They have the money and they should continue to have the money,” Scanlon said in the lobby of the State Office Building, stressing the need to restore public confidence in one of the hallmarks of Connecticut’s legal cannabis program: helping minority communities get into the legal cannabis industry. “What I am saying is that before they expend that money, they should have better practices associated with how they disperse money whether it is the $30 million they have now or the $60 million they’re going to have later.”
The council last year approved $6 million for a half dozen regional nonprofit social service agencies, including the United Way, NEST Waterbury and the Prosperity Foundation of New Haven that, in turn, awarded dozens of grants to local organizations. Lamont was prompted in stopping the SEC’s awards of funding by complaints from the legislative Black and Puerto Rican Caucus (BPRC) and ordered the SEC to suspend awards in June. A month later, Ginnie-Rae Clay resigned as executive director. She was recently replaced by Brandon McGee, a former state legislator.
Scanlon’s 15-page report, distilled from 1,000 SEC documents, indicates an unnecessary contract in excess of $1 million with a consulting firm that was hired to perform functions that the Social Equity Council was expected to undertake when the General Assembly approved adult-use cannabis sales. More than $90,000 was apparently awarded for “community outreach” without bidding documents. Scanlon said that at the start of the study, his office consulted both the U.S. Department of Justice and the Office of the Chief State’s Attorney to ensure it would not interfere with any criminal probe. He isn’t sure whether such investigations might now be underway.
“Thanks to Comptroller Scanlon and his team, we now have critical information to guide our next chapter and strengthen our approach to confronting the devastating impact of the war on drugs,” McGee said in a statement on Monday. “In the month I have been in this role, reviewing our policies, processes and procedures has been a top priority, and we have already taken steps the begin a strategic planning process. I’m eager to continue working with the Council and my team to ensure our efforts foster the systems change this critical effort demands.”
Read more at https://www.newstimes.com/politics/article/ct-cannabis-agency-failing-lamont-19785902.php
The Report
Comptroller-SEC-Report-FINAL
