State Senator Paul Formica (R-East Lyme) attended the unveiling of a new Veterans Wall at Harbor Village Rehabilitation and Nursing Center in New London on Thursday July 12, 2018. The new wall honors the center’s resident veterans as part of their Veterans Initiative Program, in collaboration with Wayne Rioux from Hartford Healthcare at Home.
“It was an honor to attend this event to recognize the many veterans who reside at Harbor Village,” said Sen. Formica. “Thank you to all those who worked hard to make this day possible and for serving those who bravely served our nation.”
The Veterans Initiative Program has provided staff training on veterans best practices, identifying veterans’ needs, veterans’ benefits & eligibility and medal recovery.
Also in attendance were Thomas Saadi, Commissioner of Veterans Affairs; Manny Meneses, Veterans Service Representative for Senator Joe Courtney; and Mayor Michael Passero of New London.
Naugatuck’s mobile food pantry is open the second Thursday of the month from 5:30 to 6:30 p.m. at the event center, 6 Rubber Ave. The pantry is hosted by Naugatuck Partnership for Children, United Way of Naugatuck and Beacon Falls, and the Ion Bank Foundation. Volunteers are needed and welcome to help at the pantry. Once a month, CT Food Bank mobile food truck comes to Naugatuck with approximately 5,000 pounds of food (mostly fresh produce, dairy). Officials at the CT Food Bank estimate this location to be the largest in the state after the numbers at first opening.
Editorial as it appeared in The Day
Sooner or later, the region will be dealing with the consequences of life without the Millstone Nuclear Power Station. Competition from abundant and cheaper natural gas supplies is undercutting profits for nuclear plants. Emerging zero-carbon energy generation sources like wind, solar and hydro eventually will make nuclear and fossil-fuel power plants obsolete.
The timing of a future without Millstone — and how smooth the transition to get there — are hot topics. The issue of the moment involves an upcoming bid proposal for a zero-carbon electricity supply auction conducted by the state Department of Energy and Environment (DEEP).
Dominion Energy, owner of Millstone in Waterford, has argued successfully that it should be included in the zero-carbon-emission regulated energy market. Millstone has been competing solely in the deregulated market with the fossil-fuel power suppliers, where natural gas providers have been claiming ever-greater market share. The natural gas surge has forced early closure of five nuclear plants across the country, and more are expected.
State Sen. Paul Formica, R-East Lyme, led a coalition of Millstone supporters in January when the General Assembly and Gov. Dannel Malloy instructed the regulators to review whether to include nuclear power in the zero-carbon electricity supply auction. In February, regulators approved allowing Millstone to compete with the zero-carbon suppliers.
Millstone’s competitive bid advantage would improve further if regulators consider the nuclear plant to be “at-risk” of ceasing operations. If Millstone is declared at risk, the regulators can consider non-price benefits of the nuclear plant, such as its ability to deliver a stable energy supply and avoid greenhouse gas emissions. Millstone currently supplies about 50 percent of Connecticut’s total electric power and about 95 percent of the state’s zero-carbon energy. If Millstone is deemed to be not at risk, it must compete on price alone with solar, wind and hydro.
Regulators will make a final determination of Millstone’s at-risk status in October. However, the bids from the energy suppliers are due by mid-September. Under that calendar, Millstone will be making a bid to supply energy without knowing under what criteria the bid is being judged.
Last week, DEEP tipped its hand when it submitted a preliminary draft of its request for proposal energy bids. DEEP stated that energy plants can only be considered at-risk during an “at-risk time period” that they said would not begin until June 2023: five years from now.
That language aroused an angry response from Dominion Energy CEO Paul Koonce. The CEO went nuclear with a letter insisting that “Millstone is at risk now.”
“Dominion Energy must face critical business decisions regarding the future of Millstone, irrespective of the consequences those decisions might have on Connecticut and New England,” Koonce warned. Translation: If Dominion can’t earn a good return on investment with Millstone, they will close here and invest somewhere else with better profit potential.
This newspaper believes Koonce’s blunt statement is no idle threat. In 2012, Dominion shuttered its nuclear plant in Wisconsin. In the last decade, the company has shed all but three of its “merchant” power generating stations — privately-owned plants that sell their power in open markets. Millstone represents about one percent of Dominion’s business; the company owns many plants in other states.
Millstone generates 2,100 megawatts of energy. By contast, the Deepwater Wind project to be constructed 65 miles offshore from New London will deliver 200 megawatts to Connecticut when it becomes operational in 2023.
Connecticut is years away from energy independence without relying on Millstone. Premature closure would cause more pollution from fossil-fuel sources needed to replace Millstone power generation, higher electrical bills for residents, and economic hardship for southeastern Connecticut because of job and property tax losses. These are the predictions of the consultants hired by DEEP to study Millstone.
That gives Dominion increased leverage today in its negotiation with Connecticut, leverage that will diminish over time as renewable energy sources increase capacity. The company is seeking to maximize profits from Millstone to justify extending the plant’s operation.
Similar negotiations are unfolding in New York, Illinois and New Jersey where regulators are wrestling to keep nuclear plants functioning until renewable energy sources can replace them.
The day will come when Millstone ceases operation. That day can either come suddenly with chaotic consequences, or it can come gradually, in an orderly manner, with advance planning and fewer disruptions.
We urge DEEP to grant Millstone at-risk status now to qualify for the September proposal deadline.
Senator Len Fasano updates Brad Davis of the Talk of Connecticut on Governor Malloy’s announcement of a $10 million forgivable loan to Seven Stars Cloud as part of his First Five Plus Program. Sen. Fasano recently wrote to the administration to find out why they agreed to this loan when the company is failing and their own audits raise questions about their future stability.
Letter to the Editor as it appeared in The Day
There will always be unavoidable tragedies within the state’s Department of Children & Families, yet a recent column in the Day downplayed how Commissioner Joette Katz’s actions have put children in harm’s way.
For years she ignored the data, warnings and recommendations from child advocates, resulting in the agency repeating mistakes that led to abuse, neglect and death of far too many children.
Last year, a federal audit found DCF failed to protect children from abuse and neglect in nearly half its cases. Multiple reports have shown a distinct decline in agency performance.
Yet she continues to fight oversight.
Gov. Malloy recently vetoed legislation that would have established an independent DCF oversight council. Democrats refused to challenge the veto, despite supporting the measure weeks before.
Last year, Commissioner Katz tried to force through a plan her own counsel negotiated, without consulting the Attorney General’s office, to remove court oversight of the agency, establish an unprecedented court order controlling all agency funds, and eliminate the legislature’s ability to implement reforms. A group of bipartisan lawmakers opposed this plan. The Attorney General negotiated a new agreement that smoothed a path to exit through agency improvements.
Connecticut’s children clearly deserve better. The first step to improvement is being honest about how and why the agency has failed the most vulnerable. The next step is finding a leader that will put people before politics and ego.
– Len Fasano
Article as it appeared in the Hartford Courant
State Senate Republican leader Len Fasano raised questions Thursday about a $10 million incentive package the state has offered a financial technology company planning a global hub at UConn’s former West Hartford campus.
Seven Stars Cloud Group Inc. is set to receive a $10 million loan through Gov. Dannel P. Malloy’s First Five Plus program, which helps large businesses relocate, expand and create jobs in Connecticut.
But Fasano said he has concerns about the stability and revenue of the blockchain and artificial-intelligence company, which stands to see its loan forgiven if it meets certain job targets.
A digital financial technology company, Seven Stars Cloud Group, plans to move its global headquarters for technology and innovation to the former UConn campus in West Hartford, Gov. Dannel P. Malloy announced Tuesday.
“Upon further investigation and analysis by staff and concerned taxpayers, I’m perplexed regarding DECD’s decision,” Fasano said, adding that he was seeking more information on the state Department of Economic and Community Development’s vetting of SSC, which he claims “does not earn any money and is less stable than originally reported.”
SSC, a New York-based company led by a Chinese billionaire, has said it plans to create 330 jobs over five years at the nearly 58-acre campus.
The UConn Board of Trustees approved the $5.2 million sale of the campus on July 6. The sale and purchase agreement is expected to be signed this week, with the closing expected in September, though SSC will later need West Hartford’s approvals for the proposed development.
Fasano said he was “cautiously optimistic” when he learned about SSC’s decision to build its North America technology and innovation headquarters in Greater Hartford.
He now says SSC seems to be “on borrowed time, something their auditors have emphasized and noted.”
“I am very concerned about the soundness of this deal, especially against the backdrop of DECD’s spotty record,” he said, referring to a recent audit that found the agency understated tax credits for several projects and provided inaccurate data about job creation.
“The fact of the matter is SSC does not make money, lacks capacity to invest seriously in innovation, has multiple unfavorable ratios and is burning through whatever cash it and its shareholders have at a rapid pace,” Fasano said.
Chairman and CEO Bruno Wu has said the campus will become a $283 million hub for the creation of new banking and financial services technology platforms based on artificial intelligence and blockchain, a secure, powerful digital ledger that tracks digital transactions and is the technology behind cryptocurrencies like Bitcoin.
Wu said he welcomes open conversation about his company’s plans and will respond to Fasano on Friday. He says Seven Stars Cloud is in the early stages of transitioning all of its legacy business — of which Wu was an investor — into next-generation fintech services. Even recent financial filings are not an accurate reflection of the company, he said, adding that SSC expects to see $35 million in net profit this year, before interest, taxes, depreciation, and amortization. “All of [Fasano’s] references in the letter are pertaining to the public financials of the past,” Wu said. “That’s SSC yesterday, versus SSC today and tomorrow.”
In SSC’s annual report in March, it said it was in the process of considerable changes, and noted that its future success was not guaranteed.
“It is uncertain whether these efforts will prove beneficial or whether we will be able to develop the necessary business models, infrastructure and systems to support the business,” the filing said. “This includes having or hiring the right talent to execute our business strategy.”
Fasano said this disclaimer was troubling, as was an auditor’s note that recurring losses from operations, along with liabilities and debt, “raise substantial doubt about its ability to continue” meeting its long-term obligations.
“Although the Company believes it has the ability to raise funds by issuing debt or equity instruments, additional financing may not be available to the Company on terms acceptable to the Company or at all or such resources may not be received in a timely manner,” the report said.
But DECD Commissioner Catherine Smith said Fasano has a “fundamental misunderstanding” of the proposed project and the state’s economic development efforts.
SSC is in a growth mode, and brought in $185.9 million in revenue in the first three months of the year, up from $33 million during the same period of 2017, according to its filings with the Securities and Exchange Commission.
“It is in the process of purchasing other companies and entering into new joint ventures as well,” Smith said. “It is not uncommon for a company to be making significant investments to drive future new revenue growth, and as such, to experience losses on an income statement as those investments are made.”
In March, SSC launched the OilCoin, a digital token based on the crude oil market, in the Greater China region. SSC plans to expand its Digital Oil Asset Index tokens to other regions, and launch three to four more digital commodity tokens, and at least one currency, this year.
In April, SSC announced that all of its future tokens will have their own exchange and trading platform on GT Dollar, a Singaporean-based e-commerce app.
And just this week, SSC entered into a licensing agreement with Fundamental Interactions, a New York-based company that provides enterprise market center technology.
Smith defended the state’s assessment of the company, and it’s financial agreement, which is secured by a letter of credit from a U.S. chartered financial institution.
“This project is a win-win and will accelerate our efforts to create a technology and innovation hub that will attract similar companies and talent to the Hartford region and the state as a whole,” Smith said.
A New Name And Mission
SSC is the latest iteration of a more than 20-year-old media company.
It was originally founded in the 1990s as Gallery Rodeo international, then rebranded over the years as Sierra Rockies Corp., Alpha Nutraceuticals, Alpha Nutra Inc., China Broadband and finally You On Demand Holdings, which launched its legacy video on demand service in 2010, according to SEC filings.
It was renamed Wecast Network in 2016 and Seven Stars Cloud in 2017, to align with the brand of one of its top investors and incoming chairman and CEO, Wu, a 51-year-old Chinese media tycoon.
Wu has various brands under his and his wife’s Sun Seven Stars Investment Group, including Seven Stars Sun Media Group, Sun Enterprises Group, Sun Publishing Group, Sun Culture Foundation and Seven Stars Energy, according to SEC filings.
When Wu became leader of SSC in 2017, the company claimed 15 to 20 corporate customers worldwide in its various businesses, including video on demand, consumer electronics, smart handheld device design and supply chain management, according to the SEC.
In May, it announced its new corporate headquarters in New York City’s Financial District.
And in July, it announced its plan to build a technology hub in the Greater Hartford region.
Instability, Or Growing Pains?
Among Fasano’s concerns is a claim that SSC does not make any money, and that it’s “burning through” what little money it has.
The company is still building its blockchain business services, which is replacing a legacy media division, according to Wu.
SSC generated $144 million in revenue in 2017, and netted $7.15 million in profit. In 2016, when it was primarily a media company, SSC reported $35 million in revenue and a net loss of about $365,000.
The company has an accumulated deficit of $129.9 million as of March, up from $125.9 million at the end of 2017 and $115.7 million the year before. Wu says this money is not owed to anyone.
Fasano also said SSC lacks the capacity to invest seriously in innovation. Reached by phone Thursday, he said he was referring to the company’s ability to build a technology hub in West Hartford, but added that he thought the company had measly spending on research and development in 2017.
The company spent $406,000 on research and development last year, 2 percent of its $16.9 million operating budget, according to SEC filings. In the first three months of 2018, it spent another $46,000 on R&D.
SSC has taken several other steps in the past year to position itself as a next-generation technology company, including:
Fasano said he was not aware of those acquisitions and projects and could not comment on them. He said he still wants to know that the state did its due diligence to ensure SSC can afford the $283 million project it’s promising.
“Where’s that money coming from?” he said. “If they’re bleeding at the gills, where’s the money coming from? How do you know they have the wherewithal to pull this off?”
Leigh Appleby, Malloy’s press secretary, also responded to Fasano’s criticisms, saying the senator was “throwing stones from the sidelines rather than offering any solutions whatsoever.”
“It’s equally sad that it appears to be so hard for him to welcome good news of the creation of hundreds of paying jobs and great use for a vacant UConn campus.”
HARTFORD – Senate Republican President Pro Tempore Len Fasano (R-North Haven) released the following in response to DECD Commissioner Catherine Smith’s statement regarding concerns about the state’s $10 million investment in Seven Stars Cloud.
“I look forward to receiving the thorough assessment Commissioner Smith claims was performed and hope that it will provide more answers than she was able to provide in her press statement today. The fact that this company is still operating at a loss, even with their 500% jump in revenue for the first quarter which was a result of them playing the stock market in crude oil trading, underscores the need for a deeper investigation by the state of Connecticut. Seven Stars Cloud’s net income loss over that same period of time was a shocking $4.2 million. The administration trying to spin this company’s growth in crude oil trading as a positive raises even more concerns and questions about their vetting of SSC. I would think Connecticut would want to partner with a company that is showing growth in a field at least somewhat related to the business they are supposed to be bringing to our state, not growth because of their involvement in oil trading – growth which still is not even enough to support a positive cash flow. In addition, letters of credit backing planning and zoning projects have universally been rejected because of the inability to rely upon these letters as adequate security for developments. For the state to now rely upon a letter of credit as a means of backing a loan seems at best a paper promise, or at worst grasping at straws to bolster this deal. Taxpayers deserve answers.”
The following is a statement from SSC’s Q1 2018 OPERATING RESULTS Press Release Issued on May 15, 2018:
“Revenue for Q1 2018 was $185.9 million as compared to $33.2 million for the same period in 2017, an increase of approximately $152.8 million, or 461%. The increase was primarily due to our expanding business in crude oil trading which began in October 2017.”
Earlier this week on Senator Kissel and Friends I had the opportunity to sit down with the new Police Chief in Enfield, Chief Alaric J. Fox.
The son of a career Hartford Police Officer and raised in Windham Center Connecticut, Chief Fox has had an outstanding career both in our great state and beyond.
After high school Chief Fox earned a Bachelor’s Degree, cum laude, in Criminal Justice/Enforcement Administration from the University of New Haven. He then went on to earn his Juris Doctor Degree – from my alma mater – magna cum laude from Western New England University School of Law; while also studying for one semester at Cambridge University in England. Chief Fox juggled all of his school work while working as a Willimantic Police Officer – often taking the graveyard shift.
Following graduation Chief Fox worked for the Federal Bureau of Investigations as an FBI Agent. After discovering the FBI wasn’t the greatest fit and practicing law privately for a few years, Chief Fox returned to his Connecticut roots and began his service with the Connecticut State Police.
Throughout his service with the Connecticut State Police Chief Fox served in a variety of capacities and ranks for a total of 24 years – the last two years as the Colonel of the Connecticut State Police and the Deputy Commissioner of the Department of Emergency Services and Public Protection.
On March 12, 2018 Chief Fox was sworn in as the 15th Chief of the Enfield Police Department – a job that he says will allow him to be close to his family, while continuing his career in service to the people of Connecticut – specifically the residents of Enfield.
Chief Fox was quick to point out that his career would not have been possible without the loving support of his wife and children – a sentiment that I also share about my own family
I also got to learn a little bit about his personal endeavors too – specifically that Chief Fox is quite the avid runner, most mornings running before the sun even rises.
I think I speak for many when I say Enfield is lucky to have this new addition to our Police Department and I look forward to watching his career continue right here in Connecticut.
This episode of Senator Kissel and Friends is set to air on Channel 15 throughout the month of August 2018.