Cloud's attorney called this a last-minute effort to smear his client before the city's Democrats meet on Monday.
The U.S. Securities and Exchange Commission has subpoenaed campaign finance records from Hartford city Treasurer Adam Cloud, just days before the city's Democrats meet to endorse a candidate for the upcoming election.
The subpoena, dated July 20, 2015, was sent to the city. Cloud issued a statement, below.
In a letter accompanying the document, the commission told the city that the investigation is confidential and non-public.
"We are trying to determine whether there have been any violations of the federal securities law," it reads. "The investigation and the subpoena do not mean that we have concluded that the Clerk's Office, its representatives or employees, or anyone else has broken the law. Also, the investigation does not mean that we have a negative opinion of any person, entity or security."
John Droney, Cloud's attorney, told WNPR that he thinks this is a last-minute effort by Cloud's political adversaries to smear his client before the city's Democrats meet on Monday.
Droney said Cloud was surprised by the request, has no idea what the commission is investigating, and has done nothing wrong.
"We know of no investigation. Never been questioned, never had an issue raised. We don't have any idea what's going on," Droney said. "But we do know the nominating convention is coming up Monday night and that opponents and adversaries of Adam have been conducting a smear campaign and trying to make sure he doesn't get the nomination and I think this is just another chapter in it.
"I think some people -- I don't know who they are -- have supplied the Securities and Exchange Commission with false and misleading information to create a press issue prior to the nominating convention," Droney said. "And I think it's the cheapest, vilest political trick I've heard of in a number of years."
Droney said the SEC has jurisdiction over some of Cloud's duties as treasurer.
"The treasurer's office deals with bonds and pension funds and the SEC has jurisdiction over that activity," he said.
Marc Nelson is the city tax collector. He's also running against Cloud for the Democratic nomination. He said he has had no contact with the feds. But he has watched Cloud at work and hasn't been impressed.
"I served for three years on the pension commission of the city of Hartford, I was elected by city employees to be the watchdog representative on that body," Nelson said. "I wasn't pleased with some of the things I saw and I decided to step forward and seek the nomination for this important position."
Cloud was at the center of swirling accusations that led to a federal criminal investigation into the business dealings of a now failed insurance broker named Earl O'Garro. The city, under Cloud's watch, paid O'Garro's company, Hybrid Insurance, hundreds of thousands of dollars. O'Garro was to then take that money and pay insurance premiums on the city's behalf. He never did.
O'Garro was eventually investigated and indicted by the feds, who say he made off with roughly $1.5 million of other people's money. His trial is set for the fall. Droney , Cloud's attorney, said he believes there is no connection between the Hybrid case and the SEC investigation.
"It has nothing to do with this," Droney said. "In that situation, Adam was a victim -- like many insurance companies and businesses -- of a gentleman that I consider to be a sociopath."
Below is Cloud's statement.
Recently, I became aware that the Town Clerk's office received a request from the Securities and Exchange Commission for copies of filings related to my 2011 and 2015 election campaigns. This request was made directly to the clerk's office and not to me. The request indicates that: “the existence of this investigation should not be construed as an indication that any violation of any federal securities laws has occurred”. Additionally; “…this investigation does not mean we have concluded anyone has broken the law. Also, the investigation does not mean that we have a negative opinion of any person”.
I welcome the release of my filings, as I know they will show there are no irregularities whatsoever concerning my campaign activities for Treasurer of the City of Hartford. I find it curious that this request was made given the fact that these documents are public records readily available to anyone who wishes to review them at any time. More disturbing is why now? – for public documents openly available to all, in some cases since 2011, less than a week before the Democratic Town Committee Convention.
While I have no idea what this is all about, given the timing of this request, I can’t help but think that it is being used to damage my reputation. However, I have confidence that the Town Committee members and voters of the City of Hartford know me, my record, and my accomplishments - and will judge me on those merits.
To view campaign filings and more, see a digest of WNPR's investigation into this developing story.
