Jury Slams Investment Firm For CT Treasurer Bribery Scandal

July 17, 2003 (PLANSPONSOR.com) - A Connecticut jury has convicted Triumph Capital Group and its general counsel on eight federal charges of bribery in connection kickbacks to former Connecticut Treasurer Paul Silvester.

The jury threw the book at Triumph and Charles Spadoni, the company’s attorney, on charges of racketeering, racketeering conspiracy, obstruction of justice, bribery involving federal programs, and four wire fraud charges.   However, the defendants were let off the hook for bribery and two mail fraud counts dealing with the work they did on Silvester’s unsuccessful 1998 campaign, according to news sources.

This stems from allegations that the investment firm and its lawyer illegally maneuvered Silvester into investing $200 million of state pension money with Triumph by giving $1-million job contracts to two of his cronies.   For his part, Silvester’s re-election pockets were lined from under the table, according to the allegations.

Damming Testimony

The former treasurer, who has already pleaded guilty to corruption charges, testified that he made the investment in part because the company had promised to donate $100,000 to the state Republican Party and because of the contracts for his friends. Otherwise, he would probably not have invested the state pension dollars with Triumph, Silvester said in his testimony.

Silvester had no problem flying under the radar either.   Under the Connecticut state constitution, the state treasurer has sole authority to direct the investment of state money, coffers which had about $20 billion when Silvester left office.

According to his testimony, with his unchecked ability dole out state funds, Silvester was able to invest, or consider investing, in companies for any number of reasons:   to land jobs for friends, helping his brother win a state judgeship, raising campaign money for the governor’s re-election bid, or simply to obtain huge “finder’s fees” for his political associates.   Among the who’s who of investment options listed at the trial:

  • Apollo Real Estate Investment Fund after the fund’s manager William Mack allegedly told him he would hold a fund-raiser in 1998 for Governor Rowland if the state invested with Apollo. Shortly after the investment was made, Mack raised $50,000 at a fund-raiser for the governor.
  • Pioneer Capital, a firm whose only apparent investment merit, according to Silvester was being “favored by the governor.” He described a decision to increase the state’s investment in Pioneer after some of his treasury department employees and campaign staff got state jobs.

Silvester, whom Connecticut Governor John Rowland picked to fill a vacant treasurer’s job in 1997 — and who appeared in the 1998 statewide Republican ticket with a candidate for secretary of state who has since been indicted — has been in prison since 2001. He said he testified in hopes of reducing his sentence.

Terms Of The Deal

Spadoni faces a substantial term in prison when he is sentenced by US District Judge Ellen Bree Burns on October 3. A racketeering conviction alone carries a maximum sentence of 20 years. Triumph, convicted as a corporate entity, faces the prospect of criminal fines.

However, charges were dismissed against the two for money they gave to the Connecticut state Republican Party and a contract they gave to Silvester’s mistress and former campaign manager, Lisa Thiesfield, which the jury said did not constitute bribes.

Triumph founder and Chairman Frederick McCarthy, Thiesfield and Republican operative and former NAACP Chairman Ben Andrews are scheduled to be tried on similar charges in September. Prosecutors in the September case were concerned a not guilty verdict could have weakened their case.