MENGACCI QUITS AGENCY; APPOINTMENT BY DEVELOPMENT GROUP SPURRED LEGAL CONCERNS
BYLINE: JON LENDER And MARK PETERS; Courant Staff Writers
John A. Mengacci returned to his former status as a state budget official Monday, less than a week after a story in The Courant raised questions about the legality of his April 12 appointment as the $175,000-a-year acting chief executive of a quasi-public economic development agency.
Mengacci, whose family has close ties to convicted ex-Gov. John G. Rowland, Friday submitted a letter of resignation to the quasi-public Connecticut Innovations Inc. In it he stated, ``I believe it is in the best interest of ... (CI) for me to return to my position as Undersecretary at the Office of Policy and Management (OPM) until this matter has been resolved.''
Those last six words left the door open for Mengacci to seek a return to Connecticut Innovations -- either in the acting capacity, or even as a candidate for the permanent position of president and executive director, for which he had said he was applying.
Mengacci was unavailable for comment Monday, the day his resignation from Connecticut Innovations became effective.
Elaine A. Pullen, chairwoman of Connecticut Innovations' board of directors, said she did not know Mengacci's intentions, adding that he was out of state this week to get married.
The decision to depart was Mengacci's alone, she said. Pullen spoke with Mengacci at length on Friday about staying on, but she said he felt it was in the best interests of CI to step down. The board accepted Mengacci's resignation at a meeting Monday afternoon.
``He is very sorry this came about. We all felt -- and still do -- that we did nothing wrong,'' Pullen said.
Mengacci's decision to walk away from a 53 percent pay raise -- his 2006 OPM salary, records show, was $114,191 -- came a day after The Courant published a story saying that Mengacci's years of service on Connecticut Innovations' board of directors could pose a legal problem.
Two recent opinions by state ethics lawyers say it is against state conflict-of-interest laws for members of an agency's governing board to accept a paid position at that agency.
That potential legal problem could affect not only his interim appointment, which the CI board approved April 12, but also the board's consideration of Mengacci for the permanent job. It also remained unclear if he would return to service as a board member; he gave up his spot on the board after his interim appointment.
After the issue arose last week, Connecticut Innovations' lawyer, Scott L. Murphy, said he believed it was legal to hire Mengacci because he did not serve on the board as a regularly appointed member. Mengacci was on the panel as a designee of the OPM secretary, who, by virtue of his office, is an ``ex-officio'' board member, Murphy said.
On its website, Connecticut Innovations did not distinguish between Mengacci's ex-officio ``designee'' status and that of the other board members who are appointed by the governor and legislative leaders.
Despite his position that the appointment was legal, Murphy wrote Thursday to the Office of State Ethics to request a written opinion. Pullen said Monday that Connecticut Innovations continues to believe its appointment of Mengacci was legal, and wants the ethics agency to issue the opinion even though he has returned to OPM, Gov. M. Jodi Rell's budget office.
Beyond the legal question about Mengacci's recent appointment is the Mengacci family's recent history during both the Rowland and Rell administrations.
Mengacci's brother, Joseph Mengacci, is a lawyer Rowland tried unsuccessfully to install as a state judge. His sister-in-law, Kathleen Mengacci, Rowland's friend and former personal secretary, was kept on the state payroll by Rell in another agency, working for Rowland's former legal counsel.
Another brother, James Mengacci, was part of an investment group hired nine years ago to invest state pension funds in politically motivated transactions pushed by Rowland and convicted former state Treasurer Paul Silvester.
John Mengacci is the latest resignation at Connecticut Innovations, which continues to have trouble keeping someone in the agency's top position. A year ago, banker Chandler J. Howard resigned as president of the agency after seven months on the job. After a lengthy search, the board of directors hired Frank Dinucci, a consultant and investment banker, who also left after a tenure of just months.
Mengacci, who has experience on energy issues but not investment banking or the technology industry, was supposed to bring stability to the agency after the loss of Howard and Dinucci. He also was helping CI in its quest to get as much as $50 million in new state funding.
``He was trying to help to calm the waters,'' said Pullen, the CI board chairwoman.
She said Mengacci won't take the salary for his two weeks at Connecticut Innovations.
The Connecticut Innovations board of directors said it is focusing on finding a permanent director, and not another interim director. Pullen said she hasn't discussed with Mengacci whether he still plans to pursue the permanent job.
The board says Peter Longo, CI's deputy director and executive vice president, will run the agency on a day-to-day basis while the search for a permanent director goes on.
Contact Jon Lender at jlender@courant.com.