Former state budget official indicted for bribery and extortion

The arrest follows a two-year grand jury investigation into potential bid rigging by Diamantis, who ran Connecticut's school construction program and oversaw other projects for the Lamont administration.

John Craven and Associated Press

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May 16, 2024, 3:23 PM

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Updated 218 days ago

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Kosta Diamantis was once one of the most powerful men that you’ve never heard of. As a top state budget official, he oversaw tens of millions of dollars in school construction grants.

But on Thursday, Diamantis was indicted on 22 counts of bribery, extortion, conspiracy and lying to federal investigators. His arrest comes after a two-year FBI investigation into alleged bid-rigging.

SHAKE DOWNS AND BRIBERY

After being led into a courtroom in shackles, Diamantis pleaded not guilty. As he walked out of the federal courthouse in Hartford, he stayed quiet.

A reporter asked, “Is there anything that you would like to say about this?”

Diamantis replied, “Nothing at this time.”

But according to a 22-count indictment, Diamantis had plenty to say to two contractors and two school districts. The former Office of School Constructions Grants and Review director is accused of shaking them down for cash – in exchange for being awarded multimillion-dollar school construction projects in Hartford and Tolland.

The indictment claims Diamantis received up to $31,000 from two contractors, Acranom Masonry and Construction Advocacy Professionals (CAP). In one case, prosecutors accuse him of “threatening to terminate Acranom from school construction projects funded by the State of Connecticut.”

According to the indictment, Diamantis threatened to have Acranom kicked off a project at Birch Grove Elementary in Tolland unless he was paid $40,000:

“I will wait til Monday for him to give you 40. If not then I think [Contractor-2] needs to find a new mason for tolland then we will see how real the job was … I’m no beggar and did my part.”

Three alleged co-conspirators already pleaded guilty earlier this week, according to federal prosecutors – including Acranom President Salvatore Monarca and Vice President John Duffy, as well as CAP owner Antonietta Roy.

“Constructing and renovating schools is an important, and very expensive, endeavor for our state and municipalities, and corruption within a program that manages and funds them adds cost, seriously erodes trust in government, and raises questions about work quality and the potential harms to students and educators in the classroom,” U.S. Attorney Vanessa Avery said in a statement.

DIAMANTIS’ DAUGHTER

The arrest warrant says Diamantis ordered CAP to “pay him bribes and employ his daughter at an inflated salary” or they “would be blackballed in the construction industry.”

Diamantis’ daughter, Anastasia, was later at the center of a hiring scandal that brought down former Chief State’s Attorney Richard Colangelo. The top prosecutor hired Diamantis’ daughter at the same time he was lobbying her father for staff raises. Colangelo denied any wrongdoing, but agreed to retire as a state oversight commission considered whether to hold termination hearings.

“No comment at this time,” Diamantis’ attorney, Vincent Prozenzano, told reporters outside the courthouse. “We just got the indictment. We’re going to look at the facts of the case and fight for our client's innocence.”

TWO-YEAR INVESTIGATION

Diamantis’ arrest caps off a sprawling FBI investigation, which served subpoenas on Gov. Ned Lamont’s office and several local school districts.

In March 2022, state officials received a federal grand jury subpoena seeking electronic communications dating to Jan. 1, 2018, involving Diamantis and the “planning, bidding, awarding and implementation” of school construction projects, upgrades at the state pier in New London and hazardous material abatement projects.

Oversight of school construction grants was originally administered by the Department of Administrative Services (DAS) before Lamont’s former budget director, Melissa McCaw, moved it to the Office of Policy and Management (OPM). It’s now handled by DAS again.

Diamantis resigned in October 2021 on the same day he was placed on paid administrative leave pending a misconduct investigation, according to a letter from the state's personnel office.

He was suspended and then resigned about a month after a Hartford Courant columnist wrote about Diamantis’ daughter being hired for a $99,000-a-year position in the Division of Criminal Justice “without any evident competition.”

Diamantis, who submitted his retirement paperwork when he resigned, is earning a $72,514 a year from a state pension, according to state records.

An attorney for Diamantis has previously said his client “broke no law” and “many of the claims of undue influence and so forth are people who simply don’t understand the state bidding process.”

LAMONT RESPONSE

Lamont has insisted that he was not aware of the allegations against Diamantis until the feds got involved – even though contractors had complained about the bidding process a year earlier.

“No, not that I remember,” Lamont told News 12 Connecticut in Feb. 2022. “You know, sometimes a disgruntled contractor, but I never heard anything like that, no.”

In 2020, a demolition company warned Lamont administration of “an effort to circumvent the lawful public bidding requirements.” And an internal memo from the Connecticut State Building Trades Council pointed to “a shroud of secrecy.”

Following Diamantis’ indictment, Lamont’s office issued this statement:

“Governor Lamont appreciates the work of the U.S. Attorney’s Office and federal agencies involved in this case. The governor has been clear that he has zero tolerance for malfeasance and corruption in government. The governor took action in 2021 to remove Mr. Diamantis from his governmental positions when allegations of ethical improprieties surfaced and directed an independent review of the school construction program. Since then, several reforms have been made to the program to ensure accountability and restore public trust. The State of Connecticut and its citizens are the victims where there is public corruption, and the governor will continue to support the full scope of resources and investigative tools available to federal authorities in rooting out corruption.”

Politically, the indictment is good news for the Lamont. No one from his administration is named. However, the investigation forced out McCaw.

WHAT’S NEXT?

If convicted, Diamantis faces up to 180 years in prison and millions of dollars in fines.

Federal Judge Thomas Farrish released Diamantis on $500,000 bond, using his Farmington home as collateral. Diamantis is also barred from having any contact with nearly two dozen victims or witnesses.

Farrish set an in initial trial date on July 23 in Bridgeport.