City Treasurer Wants Money From Pension Account For Grand Jury Lawyer

Sept. 03--HARTFORD -- City Treasurer Adam Cloud is seeking payment from a Hartford pension fund account for attorney's fees related to a federal grand jury investigation, a request that has concerned some city officials who say Hartford is already paying a lawyer for work related to the probe.

Cloud submitted invoices to Hartford's finance department requesting payment for the services from a pension account, Albert Ilg, the interim finance director, wrote in a letter to Pension Commission Chairman Peter Stevens earlier this month. Invoices show the treasurer is seeking $40,765 for the services.

"The requests include consultation regarding matters involving the Treasurer's Office, but seem to indicate they do not involve Mr. Cloud within his role and pertaining to duties regarding the Pension Commission," Ilg wrote. "It is my understanding the City of Hartford is already providing counsel for the treasurer in regard to the Federal Grand Jury subpoenas."

The city hired attorney John Droney to represent Cloud in connection with a federal grand jury investigation into an insurance controversy. But Ilg said in the letter to Stevens that another attorney, William P. Beccaro of Essex, has been hired to provide services.

"To the best of my knowledge there is no other inquiry against the Pension Commission arising from the grand jury," Ilg wrote. "As you know, the Pension Commission can only spend Pension Fund resources for legal and other matters that relate to actions by Mr. Cloud in his role as the secretary to the Pension Commission."

In addition, he wrote, neither the treasurer nor the pension commission has the authority to hire an attorney without the approval of the city's top lawyer. "As of this date," Ilg said, "corporation counsel has only authorized the services of Attorney Droney."

Beccaro attended pension commission meetings, made phone calls, reviewed grand jury subpoenas and bidding documents, researched "applicable federal and state statutes," responded to Freedom of Information requests, and examined sections of the city charter, according to the invoices.

Beccaro also brought on an investigator to try to locate a former city official, Julio Molleda, who had been the head of the finance department, among other services. The investigator's work cost nearly $2,500, documents show.

"An outside investigator was engaged to locate and question Mr. Molleda and to process FOIA requests to the City of Hartford, and communications relating to the payment of premiums," Ilg wrote. "This possible duplication of services by attorneys is one of the reasons that corporation counsel authorizes and monitors the activities and invoice submissions of attorneys."

Ilg said he has requested "a more detailed break out of these invoices," to determine what services relate to the pension commission, the general fund or other obligations.

The city has paid Droney about $40,000 so far for representing Cloud, officials said.

Cloud could not be reached for comment Tuesday.

"We routinely retain outside counsel for a variety of matters. In this case, the Pension Commission retained counsel to represent it, not Adam Cloud, as separate counsel to consult with the Pension Commission regarding liability insurance contracts, subpoenas served in October, 2013 and related matters," Stevens wrote in an email to The Courant. "The Pension Commission specifically approved these legal bills, and submitted them for payment."

But Marc Nelson, the employee representative to the pension commission, said Tuesday: "I've reviewed the invoices which Treasurer Cloud submitted for payment from the pension fund. There is absolutely no connection whatsoever between the services rendered and the investment and management of plan assets. Mr. Ilg is absolutely correct to ask for a more complete explanation."

FBI agents in October served city hall with subpoenas seeking records from a number of Hartford offices -- including Cloud's. City officials said that $670,000 in insurance premiums have been unaccounted for since Cloud's office wired the money to an insurance broker for the city, Hybrid Insurance Group, in July 2013.

Cloud asked employees to wire the money directly to Hybrid's chief executive officer, Earl O'Garro Jr., after O'Garro sent letters to the city saying its policies were under threat of cancellation. O'Garro never forwarded that money -- premiums for the city's excess liability coverage -- on to insurance carriers Starr Indemnity and National Casualty.

Cloud has said that Molleda authorized the wire transfer. Efforts to reach Molleda have been unsuccessful.

City and school finance officials said the transfer violated basic operating protocols. In the city's financial management system that tracks spending, Hybrid was not listed as a vendor that could receive payments, records show.

It was later revealed that Hybrid Insurance was located in a building on Lewis Street in Hartford that is owned by Cloud, his brother and father.

The state in October filed an 11-count complaint against O'Garro outlining numerous allegations of missing premium payments and possible fraud. Later that month, federal authorities notified O'Garro that he is the target of a grand jury investigation.

In November, the state revoked O'Garro's insurance license. Cloud's ties to O'Garro have been questioned.

The lease between O'Garro and Sanford Cloud Jr., Adam's father and a former state legislator, for 5,100 square feet of space in the Lewis Street building was signed not long before the pension commission approved hiring Wentworth, DeAngelis & Kaufman Inc. as its agent and Hybrid as its broker, documents show. Adam Cloud has said that he recommended Wentworth and Hybrid to the pension commission.

O'Garro also had a $30,000 contract with Christopher Cloud, Adam's brother, for lobbying services, according to public records.

The treasurer, who received campaign contributions from O'Garro and members of O'Garro's family while running for office in 2011, has denied that a personal relationship had anything to do with the city's business involvement with Hybrid.

O'Garro last fall defaulted on two state loans, totaling more than $350,000, from the Department of Economic and Community Development.

The Clouds said they evicted Hybrid in November.

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