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Saturday, December 15 Local

Gov. candidate’s dicey business record

While chairman and managing partner of the London-based 3i Private Equity Group, Bob Stefanowski served on the board of a company that became embroiled in controversial drug trials that killed 22 people in India.

The families were paid about $4,500 for each of the dead — called “guinea pigs” by a British newspaper.

The 3i Group also lost $30 million after a rape and sex-trafficking scandal resulted in the sale of a chain of residential homes for troubled youth in England.

These details have emerged in a Hearst Connecticut Media investigation that reviewed corporate records, trade-magazine interviews and news reports linked to the corporate career of Stefanowski, the Republican candidate for governor running for his first elective office. He promises to run state government like a business.

While Stefanowski was not directly involved in the controversies, his position as a member of the board of Quintiles Healthcare, combined with an earlier report from Hearst, creates a clearer picture for voters, according to Fred Carstensen, director of the Connecticut Center for Economic Research at the University of Connecticut.

“It is a very troubling resume for someone seeking the governor’s office,” Carstensen said. “There is nothing here to argue that he brings any useful experience or skills to public service, e.g. building collaborative teams or helping transfer the culture of a company. I have characterized him as a ‘business bureaucrat’ because I don’t see where he actually created value or help build a better, stronger business.”

Earlier this year, Stefanowski told the Hearst editorial board that President Donald Trump has proved that a businessman can come in and get things done. “I think it’s about leadership and running this state like a business,” he said. “I think government experience is a little overrated.”

Kendall Marr, Stefanowski’s spokesman, said Monday night that Stefanowski did not take part in Quintile Healthcare’s day-to-day operations. “Suggesting that Bob is responsible for problems that surfaced at independent companies where 3i held minority investments in which Bob had absolutely role in making the investment is not just false, it is flat out irresponsible,” Marr said in a statement.

Drug trials

Between 2008 and 2011, Stefanowski was chairman and managing partner of 3i Private Equity. According to its 2009 annual report, 3i took a 7 percent share of North Carolina-based Quintiles Transnational Corp, a clinical-trial and pharmaceutical consultant.

Forbes magazine called the company “the leader in a secretive and powerful $20 billion industry, outsourcing clinical trials.”

Quintiles, a contract-research organization, was criticized in the medical industry for questionable quality and potential conflicts of interest because of close ties to their clients in Big Pharma. Forbes reported in 2010 that a federal Food and Drug Administration official wrote a critical review of a diabetes drug that Quintiles tested for GlaxoSmithKline. Quintiles responded that its monitoring of diabetic patients for heart-related ailments was “satisfactory.”

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Also in 2010, 22 people, mostly poor and illiterate — according to The Independent newspaper of Britain — died during drug trials in India. In 2011, Quintiles was one of about 10 companies, including Pfizer, Bristol-Myers Squibb and Bayer that paid families individual settlements, which were approved by the Drug Controller General of India.

In 2013, a North Carolina business journal reported that Quintiles shut down one operation in India “due to a challenging external business environment.”

Sex exploitation in Great Britain

In 2010, another controversy for 3i occurred near Manchester, in the north of England, in a children’s residential facility that became the focus of a sex-trafficking ring.

A home in Rochdale, one of about 30 facilities in the Green Corns Ltd. chain owned by the investment firm, was reportedly paid $375,000 a year by county officials to house and treat one troubled 15-year-old girl. The home had a staff of six to provide around-the-clock supervision, but The Independent reported that the girl escaped 19 times for as much as two weeks at a time, and had sex with numerous men who gave her alcohol and drugs.

The girl’s complaints eventually prompted a police investigation that led to the May 2012 conviction of nine men on sex trafficking and other offenses including rape. Stefanowski left the company in 2011. Marr, his campaign spokesman, said the Green Corns acquisition was made several year before Stefanowski joined 3i.

Before the scandal, British child-welfare officials had made numerous complaints that employees at the facility were under-qualified and under-trained on sexual-exploitation and care standards.

Days before the guilty verdicts, the 3i Group sold the home for about a dollar, for a loss of $30 million. The Independent reported that the 3i Group claimed the sale was not the result of the sex scandal.

Hearst recently reported that during the Great Recession when banks failed in 2008, Stefanowski told an industry trade magazine that the crisis created a “big opportunity” for his company, and a chance to outsource jobs.

His last position was CEO of a controversial payday loan company in Britain that is prohibited from operating in Connecticut.

While Stefanowski criticizes Democrat Ned Lamont for supporting trucks-only highway tolls to help pay for infrastructure work, and he opposes toll roads, 3i invested more than $100 million in an India-based company that builds and operates toll roads.

While he opposes state investments in businesses, when he was chief financial officer at UBS Investment Bank, the firm accepted $20 million in state assistance aimed at keeping the firm in Stamford.

kdixon@ctpost.com Twitter: @KenDixonCT

Ken Dixon|State Capitol reporter/columnist Hearst Connecticut Media

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