As if we needed any reminders, there’s a reason why business people rarely make good politicians or public servants. It’s practically an immutable law of physics that when well-to-do denizens of the private sector venture into the public sector, something will go terribly wrong.
A high-profile example of that simple maxim was on full display last week when billionaire Ray Dalio and his wife, Barbara, disbanded a nine-figure public-private partnership that would have invested hundreds of millions of dollars in Connecticut’s lowest-performing schools. It’s a shame that it had to happen, but it didn’t take a crystal ball to see that this union was bound to fail.
You could call it a clash of cultures. Government policies are made by elected officials and essentially carried out by bureaucrats. Under pressure from voters, those officials do the state’s business mostly in the open. As the Washington Post’s new motto aptly states, “Democracy Dies In Darkness.”
That was one of the precepts taken to heart by the late Ella Grasso, who campaigned for governor in 1975 promising to pass our landmark Freedom of Information law. Grasso, who had served in Congress at the height of the Watergate scandal, was horrified at “the impact of clandestine government run amok” in the nation’s capital, says Colleen M. Murphy, executive director and general counsel of the state Freedom of Information Commission.
Some in government are reflexively secretive, but they are in the minority. My experience is that most elected officials in Connecticut who are familiar with the law believe exceptions to it should be precisely that: exceptional.
Enter the Dalios, who, through their charitable foundation last year, generously offered to put up $100 million to help the state’s neediest schools and students. The state would then match it with an equal amount of taxpayer money, along with another $100 million from “other philanthropists and business leaders.”
So $100 million becomes $300 million. I used to be in fundraising and I know that major donors love it when their gifts can be leveraged to encourage others to give at the highest levels possible, so the Dalios weren’t trying to squeeze Connecticut taxpayers; they were trying to lead – and it sounded like a good idea at the time.
But trouble soon surfaced when the General Assembly decided to exempt the board overseeing the initiative from FOI laws, even though the panel included several public officials. Worse yet, the exemption, presumably granted under pressure from the Dalios, was tucked into a massive 567-page budget bill, giving the impression lawmakers were so ashamed that they wanted to hide it.
That exemption did not go over well with two prominent Republican legislators on the Partnership for Connecticut board, even though a compromise was later reached to remove the exemption for lawmakers on the panel.
Last week, the matter came to a head after an internal email was leaked to The Courant from the embattled $247,500-a-year executive director of the partnership stating that she was threatened with termination as a result of “false and defamatory allegations.”
The parties had had enough. Gov. Ned Lamont spoke of a “breach of trust,” while Barbara Dalio complained of “political fighting” and a “broken political system.” Sorry, I’m not buying that. Unlike the partnership’s CEO, elected officials don’t report to the Dalios. They’re independent operators who are accountable to voters. In most cases, their constituents don’t appreciate it when decisions on how to spend taxpayer dollars are made behind closed doors.
A number of you asked me to explain what the political environment was like that led my wife and I to pull out of public-private partnership to help disadvantaged high school kids in CT pic.twitter.com/k25FbZJHDy
— Ray Dalio (@RayDalio) May 23, 2020
A few days later, Ray Dalio released a statement on Twitter that he said he wrote in response to numerous inquiries. Without mentioning her name, Dalio singled out partnership member and House Minority Leader Themis Klarides, R-Derby, whom he characterized as “one bad Republican” who “regularly broke confidences and leaked distorted stories to some media folks who wanted to write sensationalistic stories.” Other board members, Dalio said, “were horrified by her behavior.” Dalio, who also alluded to Klarides’ purported gubernatorial ambitions, complained loudly about “dysfunction and damage” caused by politicians and the media.
If the political system is really as fractured and decayed as the Dalios claim, then they were profoundly naive to think that the partnership could possibly work, for Connecticut’s dysfunctional government has been an open secret for decades.
Turns out that broken system has worked out pretty well for Bridgewater Associates, the world’s largest hedge fund headed by Ray Dalio. Bridgewater, you may recall, received in 2012 from the Malloy administration a $25 million forgivable loan and up to $80 million in urban renewal credits from the state for building a new corporate headquarters in Stamford. As for the partnership’s lack of openness, Dalio himself has long advocated for what he calls “radical transparency” in the workplace (irony intended).
The reason the system became broken is that the Dalios insisted on avoiding the one thing that truly makes the government accountable to the people: transparency. And that fatal error gave an ambitious Republican the opening she needed to wound the man she wants to replace in 2022. Welcome to the public sector, Ray and Barbara.
Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at CTDevilsAdvocate.com and is managing editor of The Berkshire Edge in Great Barrington, Mass. Follow him on Twitter @terrycowgill or email him at tcowgill90@wesleyan.edu.
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