Former Conn. Governor Pleads Guilty
By MATT APUZZO and JOHN CHRISTOFFERSON, Associated Press Writers

NEW HAVEN, Conn. - Former Gov. John G. Rowland, driven from office by a corruption scandal, pleaded guilty Thursday to a single federal charge that carries a sentence of up to five years in prison.

After reaching a deal with prosecutors, Rowland pleaded guilty to one count of conspiracy to steal honest service, a felony that also carries a possible $250,000 fine.

The plea deal ends the two-year-long investigation into corruption in the administration of Rowland, who resigned July 1 after 9 1/2 years in office. Rowland's lawyer, William F. Dow III, acknowledged the former governor was "the recipient of certain gratuities."

Prosecutors told the judge that Rowland accepted $107,000 worth of vacations, work on his cottage and free flights from state contractors and others.

Assistant U.S. Attorney Nora Dannahey said the single charge also involves a conspiracy to defraud the Internal Revenue Service.

U.S. District Judge Peter Dorsey advised Rowland that as a convicted felon he would not be able to vote or hold public office.

"There was an effort being made to deprive Connecticut citizens of the honest services of its officials," Dorsey said.

Federal guidelines call for a sentence of 15 to 21 months in prison, the lawyers involved said. Sentencing was set for March. In addition to the possible sentence and fine, prosecutors said he could be forced to pay more than $35,000 to the IRS in unpaid taxes and interest.

"Obviously mistakes have been made throughout the last few years, and I accept responsibility for those," Rowland told reporters after entering the plea. "But I also ask the people of this state to appreciate and understand what we have tried to do over the past 25 years in public service."

The written plea agreement does not require Rowland to testify against others.

Gov. M. Jodi Rell, who took office after Rowland stepped down, said she felt "deep personal disappointment."

"While we knew that this day might come, we were never really prepared for the reality of it. Today the state of Connecticut was humiliated, and I, as John Rowland's former running mate and colleague, feel personally betrayed. When I first heard the news, I felt like I was punched in the gut."

Rowland, 47, was once one of the GOP's rising young stars. He became engulfed in scandal in December 2003 when he admitted accepting renovations at his lakeside cottage - including a hot tub and new heating system from employees and state contractors - and lying about it. Other gifts and favors soon came to light.

Rowland resigned amid legislative hearings that threatened to lead to his impeachment. Rell will fill the remainder of his term, which expires after the November 2006 elections.

In September, Rowland's former co-chief of staff and a major state construction contractor pleaded not guilty to charges they ran a criminal organization from the governor's office, trading contracts for gold coins, expensive meals and limousine trips.

A 15-count indictment accused former co-chief of staff Peter N. Ellef, his son Peter Ellef II and contractor William Tomasso of conspiring to steer state contracts from 1997 to 2003.

For months, Rowland has insisted he never did anything in exchange for the gifts. But the drumbeat of allegations sent his approval ratings plummeting and led to demands for his resignation from both Democrats and Republicans.

Rowland received cigars, champagne, a canoe and free or discounted vacations from employees and friends - including some with state contracts. The FBI (news - web sites) was even looking into whether Rowland skimmed money from low-stakes poker games he hosted.

One longtime friend, a state contractor, bought the governor's Washington condominium at an inflated price through a straw buyer.

During the committee hearings, the governor's lawyers criticized the investigation, arguing that the 10-member panel never set any standards for impeachment. Rowland fought a subpoena to testify on the grounds it violated the separation of powers between the legislative and executive branches. He announced his resignation days after the state Supreme Court ruled he could be compelled to appear before the committee.

The committee ended its investigation without deciding whether the governor had done anything that warranted impeachment.

GUILTY! Rowland Pleads To Federal Charge
December 23, 2004

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NEW HAVEN, Conn. -- Former Gov. John G. Rowland arrived in U.S. District Court Thursday morning and entered a plea of guilty to federal charges stemming from a corruption investigation of his administration.

Rowland plead guilty to one charge of stealing honest service, NBC 30 reported.

Rowland, a three-term governor, resigned on July 1 amid a federal probe and a legislative impeachment inquiry. The source, who spoke on condition of anonymity, said Rowland will plead guilty to unspecified charges to avoid indictment and end the two-year long investigation into corruption in his administration.

Gov. M. Jodi Rell, who replaced Rowland as governor in July, said that she was deeply disappointed in today's events.

"Today the State of Connecticut was humiliated, and I, as John Rowland's former running mate and colleague, feel personally betrayed. When I first heard the news I felt like I was punched in the gut."

Rell said that the news of his guilty plea left her more upset now than she was a year ago when Rowland first admitted his lies and actions.

" The irony of this happening during one of the most joyous seasons of the year adds bitter poignancy," she said.

Lt. Gov. Kevin Sullivan told NBC 30 Connecticut News that he was not surprised by the turn of events.

"This has been expected for a while, nevertheless, when it happens it really hits you," he said.

Sullivan told NBC 30's Janet Peckinpaugh that anyone who had a part in this corrupt episode should be brought to justice, no matter how long it takes.

"Corruption always unravels this way," Sullivan said. "It's amazing that people think they can get away with this."

Rowland, 47, was once one of the GOP's rising young stars. He was once the nation's youngest governor -- he was 37 in 1994. He is a former chairman of the Republican Governors Association and was rumored to be considered for several positions in the Bush administration. He became engulfed in scandal in December 2003 when he admitted accepting renovations at his lakeside cottage -- including a hot tub and new heating system from employees and state contractors -- and lying about it. Other gifts and favors soon came to light. Rowland resigned amid legislative hearings that threatened to lead to his impeachment. His lieutenant governor, M. Jodi Rell, was elevated to fill the remainder of his term, which expires after the November 2006 elections.

"Corruption always unravels this way. It's amazing that people think they can get away with this."
- Lt. Gov. Kevin Sullivan

In September, Rowland's former co-chief of staff and a major state construction contractor pleaded not guilty to charges they ran a criminal organization from the governor's office, trading contracts for gold coins, expensive meals and limousine trips. A 15-count indictment accused former co-chief of staff Peter N. Ellef, his son Peter Ellef II, and contractor William Tomasso of conspiring to steer state contracts from 1997 to 2003. Hugh Keefe, an attorney for Ellef, said Thursday that he was "surprised and disappointed" that Rowland planned to plead guilty.

"I thought he should try the case. Based on what I know about the case, it's a triable case for him," Keefe said.

Keefe said he was not sure how it would affect his client or whether Rowland would be cooperating with authorities as part of the deal.

For months, Rowland has insisted he never did anything in exchange for the gifts. But the drumbeat of allegations sent his approval ratings plummeting and led to demands for his resignation from both Democrats and Republicans. Rowland received cigars, champagne, a canoe and free or discounted vacations from employees and friends -- including some with state contracts. The FBI was even looking into whether Rowland skimmed money from low-stakes poker games he hosted. One longtime friend, a state contractor, bought the governor's Washington condominium at an inflated price through a straw buyer.

During the committee hearings, the governor's lawyers criticized the investigation, arguing that the 10-member panel never set any standards for impeachment. Rowland fought a subpoena to testify on the grounds it violated the separation of powers between the legislative and executive branches. He announced his resignation days after the state Supreme Court ruled he could be compelled to appear before the committee. The committee ended its investigation without deciding whether the governor had done anything that warranted impeachment.

January 2, 2005
CONNECTICUT
Guilty, He Said. Now What?
By AVI SALZMAN

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WHEN the word "guilty" was spoken by former Gov. John G. Rowland, it gave voice to the suspicions people inside and outside of government had harbored for a year. The governor had acknowledged criminal wrongdoing, agreed essentially to go to jail and had signed a document that said he and his underlings conspired to "deprive the state of Connecticut and its citizens of the intangible right to the honest services of its Governor" and other public officials.

But while the plea deal addressed such hot-button issues as the improvements made to the governor's cottage and the unpaid chartered flights he took, it didn't deal with others such as the condo Mr. Rowland sold at an above-market price to a Connecticut developer, or the role Mr. Rowland played in deals the state made with Enron before its collapse.

And it did not attempt to quantify the damage to the state and its residents.

"It's us he needs to account to," said Kuba Assegai, a protester who heckled Mr. Rowland as he left the courthouse after pleading guilty on Dec. 23. "We are the citizens of Connecticut and we want to know why you stole our money."

Mr. Assegai's is only one of a number of questions that remain about Mr. Rowland's case. If the state's citizens are the victims in this whole mess, did the plea address their grievances? Just what exactly did Mr. Rowland admit to and what was left unresolved?

Questions have been swirling around Mr. Rowland for more than a year, beginning in December 2003 when he acknowledged that he had lied when he said he paid for improvements to his Litchfield cottage. In February, a House committee considering whether to impeach the governor began issuing subpoenas about gifts Mr. Rowland received; public hearings started in June. But before the committee could issue its recommendation, Mr. Rowland resigned, effective July 1. For almost six months, he was simply another citizen of the state - until Dec. 23, when he pleaded guilty to one count of conspiring to deprive residents of "honest services," engaging in tax and mail fraud.

The charge is a felony, but does not include the word "racketeering," which carries even stiffer penalties and figures prominently in the trials of others named in the conspiracy case. The fraud and racketeering charges against Peter N. Ellef, Mr. Rowland's former chief of staff, his son Peter Jr., and William A. Tomasso, a New Britain businessman whose companies received millions in no-bid contracts with the state during Mr. Rowland's tenure, are still pending. All three have pleaded not guilty.

"However they arrived at that particular arrangement, there are a number of issues that don't seem to be addressed" in the plea deal, said John Wayne Fox, the Stamford Democrat who was co-chairman of the House committee that was considering whether to impeach Mr. Rowland. "There are a couple of glaring ones, it seems, that weren't dealt with."

Chief among those issues, as far as Mr. Fox is concerned, was the deal Mr. Rowland got for a condo he owned in Washington. Robert Matthews, a New Haven businessman with close ties to the governor, paid for his niece to rent a condo Mr. Rowland had purchased when he was in the United States House of Representatives, according to the impeachment committee. The rent, the committee found, was approximately triple that paid for similar apartments in the building at that time. When Mr. Rowland sold the condo in 1997, it went for well above market price.

Wayne E. Pratt, a Connecticut antiques dealer, acted as a straw buyer for Mr. Matthews on that purchase, prosecutors found, and Mr. Pratt pleaded guilty in March to supplying false tax information having to do with the condo. Mr. Rowland, meanwhile, had contact by telephone and in person with investors and businessmen who were considering deals with Mr. Matthews, the committee found. Mr. Matthews also received millions in state loan guarantees and state rent payments while Mr. Rowland was governor.

Committee members said they were troubled by the evidence about the condo sale, coupled with the personal attention Mr. Rowland gave to Mr. Matthews's financial dealings. Mr. Rowland's lawyers have denied any assertions of improprieties or criminal acts.

When revelations about the condo came out in court hearings and newspaper accounts, lawmakers said the disclosures had reached a new, more damaging level. House Speaker Moira K. Lyons, for instance, told a reporter that the initial "drip, drip, drip" of the scandal had become "like Niagara Falls. It's coming right at us."

But Mr. Rowland's plea deal doesn't mention the condo. Mr. Fox said he was puzzled as to why prosecutors stayed away from it.

"The D.C. condo was directly connected to the governor, directly to his benefit, and there was clearly an attempt to hide it," Mr. Fox said. "Of all the facts that we had heard that was probably the one that troubled me the most."

"For some reason, they didn't deal with it," he added. "Maybe we'll never know."

Other revelations that came out in news reports and impeachment committee hearings were not included in the criminal case against Mr. Rowland.

Diana S. Urban, a Republican state representative from North Stonington, said she still has major concerns about a business deal between the state and Enron that occurred during Mr. Rowland's tenure.

The Connecticut Resources Recovery Authority, a quasi-public entity that handles trash disposal, entered into a deal with Enron in 2001 that sent $220 million in taxpayer money to the doomed company.

The complicated deal, which Attorney General Richard Blumenthal called an illegal loan, was signed when Mr. Ellef was chairman of the authority. Mr. Ellef, the former governor's chief of staff, is now under indictment on racketeering and fraud charges. Mr. Rowland met with three Enron officials before the deal was signed, but told reporters later that he did not get involved in it. When Enron went bankrupt, the state's residents were literally left holding the bag, as trash dumping costs went up in towns throughout Connecticut.

At least one of the lawsuits filed to recover damages for the towns alleged that Mr. Rowland had profited through campaign contributions obtained at the time of the Enron deal.

Through other lawsuits, the state got back much of the money it had lost, but Ms. Urban said there are still many questions that have not been answered.

"I have always wanted to look at the $200 million Enron deal," Ms. Urban said. "It weighs on my mind. We need to get to the bottom of that."

"I hope that this is not the endgame," she said, adding that she hoped instead "that this is the beginning."

Messages left with the United States Attorney's office were not returned. Nora Dannehy, the lead prosecutor on the case, would not answer questions after the plea deal was announced.

William Dow III, Mr. Rowland's lawyer, would not comment on the case or the governor's deals with Mr. Matthews. Mr. Rowland's near future, he said, would be consumed by his coming sentencing hearing, scheduled for March 11.

"Between now and March 11, we're going to devote our efforts to providing Judge Dorsey with as much information about Governor Rowland as can be done in that time period," he said.

Lawmakers and experts said all plea deals demand compromises. Some said the prosecutors may have omitted certain issues from the plea deal for tactical reasons.

Arthur O'Neill, the Republican co-chairman of the impeachment inquiry panel, said he thinks the prosecutors did not want to reveal all of their evidence because they have cases pending against Mr. Ellef, Mr. Ellef's son and Mr. Tomasso.

"It doesn't reveal a lot about the government's case," Mr. O'Neill said, referring to the plea agreement.

Mr. O'Neill also said a probable reason prosecutors focused on the governor's free chartered flights, which sources said were flown by the Oxford company Key Air, was that that issue was not as complicated as many of the other elements in the case. During the impeachment hearings, the evidence was sometimes muddled about whether the governor himself had been involved in certain transactions, he said.

"The Key Air case is simple, it's self-contained and it doesn't force the feds to reveal a lot about the government's case in regards to other people," he said.

Mr. O'Neill said he expects a lot more testimony in the scandal, some of it potentially from Mr. Rowland. One reason the prosecutors didn't bring up all of Mr. Rowland's dirty laundry is that he does not appear to be the main target of the investigation, he added.

"I think the federal authorities, based on the way they've conducted this, that they don't necessarily view the top politician as the top person in this corruption scheme," he said. "I think they're shifting the focus from the political figures, who have long been the main targets, to the private entities like Tomasso."

Much of the testimony regarding the "racketeering enterprise" that federal prosecutors allege went on in Mr. Rowland's office will come out in later trials, Mr. O'Neill predicted.

Michael Lawlor, a Democrat who was on the impeachment inquiry committee, agreed.

"It's just another step in the process," Mr. Lawlor said of the guilty plea. "People, including me, hope there's a trial on this, of Ellef, Tomasso, or one of them," he said.

Mr. Dow said that Mr. Rowland will not likely take the stand in any other cases. "It's not expected that he will be testifying against anyone else," he said.

Judge Peter C. Dorsey, who will sentence Mr. Rowland, said during the hearing on the plea agreement that he will only consider ordering Mr. Rowland to pay restitution if prosecutors present a motion asking for it. Prosecutors did not indicate at that hearing whether they had ruled out that option. Even if they don't ask for restitution, the state is moving ahead with a civil suit to recover damages.

In September, Mr. Blumenthal sued seven people and four companies he accused of corrupting the bidding process to steer contracts to companies owned by the Tomassos. Mr. Rowland is not among the defendants.

The suit charges that numerous high-ranking officials in state government gave the Tomasso companies unfair advantages in securing a contract in 1999 to build the Connecticut Juvenile Training Center and a similar girls' facility in Middletown. State officials, Mr. Blumenthal charged, gave Mr. Tomasso an unfair advantage at securing the contract by taking him along on a trip to look at an Ohio school that would serve as a model for the Connecticut facility. The juvenile facility, which has been plagued with problems, cost $57 million. The girls' training school was never constructed.

The Tomassos, Mr. Blumenthal charged, gave gifts to Mr. Ellef and Lawrence E. Alibozek, the former governor's deputy chief of staff who has since pleaded guilty to steering state contracts in return for bribes. The suit seeks restitution for "any loss resulting from the acts or practices that violate the Connecticut Unfair Trade Practices Act," as well as a civil penalty of $5,000 for each violation.

"We will continue to pursue our investigation and take additional legal action to recover from anyone who has betrayed the public trust," he said.

Mr. Blumenthal would not comment on how he expects the state to get paid back by Mr. Rowland, whose personal financial troubles were showcased during his impeachment inquiry. He did say, however, that a person's financial troubles would not necessarily stop the state from taking action.

"A judgment can be used to collect from a defendant even if he has no present assets," he said.

There are also risks to prolonging this process, said Dr. Howard Reiter, the chairman of the Department of Political Science at the University of Connecticut.

"I think people are kind of tired of it," he said. "The risk you take in reopening the case is that people will want to move on from this wound."

Mr. O'Neill said he thinks that much of the most important evidence was already placed before the public during the televised impeachment inquiry.

"Our investigation gave more disclosure to more people of improprieties that probably would be the case in a full-blown trial," Mr. O'Neill said. "The cameras wouldn't be in there, you wouldn't be able to see the witnesses."

And even if Mr. Rowland can walk out of the courthouse and portray his wrongdoing as essentially a charge of tax evasion, and not have to pay the state back, he has already suffered his most grave punishment, Mr. Lawlor said.

"In my view the biggest punishment has already been handed down, which is complete humiliation and the ending of his political career," he said. "Basically the governor was involved in corrupt relationships and his staff was, too. Everybody learned a lesson from it and we'll move on. In some cases, the most severe penalty isn't handed down by the court."