Conn. attorney general sues ex-Wesleyan investment chief, 3 companies; alleges funds misused

Conn. AG sues ex-Wesleyan investment chief, others

HARTFORD, Conn. — Connecticut Attorney General Richard Blumenthal said Monday he is suing Wesleyan University’s former investment director and three companies, accusing them of misusing the university’s endowment for personal trips and other expenses.

Thomas Kannam, who was Wesleyan’s chief investment officer until he was fired last year, failed to disclose his ties to investment companies Belstar Group LLC and Vietnam Capital Partners LLC and to Advanced Device Technology Inc., which designs infrared products, Blumenthal said.

Kannam became involved with Belstar in 2006, eventually becoming director of investment, Blumenthal said. Two years later, Kannam began serving on the board of Vietnam Capital Partners, which operates the Vietnam Equity Growth Fund, a hedge fund investing in Vietnamese markets, Blumenthal said. Wesleyan was not aware of Kannam’s work with Vietnam Capital Partners, the attorney general said.

Blumenthal also accused Kannam of using Wesleyan employees and resources to provide research and other professional services to the companies and billing Wesleyan for business trips that “strictly benefited” the companies and involved little to no university-related business.

The suit also claims Kannam provided lobbying and other services for Advanced Device Technology and billed the university for at least two trips to Washington on behalf of ADT that involved little to no university-related business.

Stephen Fitzgerald, Kannam’s lawyer, said his client’s contract with Wesleyan allowed him to do outside work. He criticized Blumenthal’s lawsuit as a waste of taxpayer money.

Martin Stein, a lawyer for Belstar, said the lawsuit has “absolutely no merit whatsoever” and the company expects to be vindicated.

David Pesci, a spokesman for Wesleyan University, said the school has sued Kannam and others, but would not comment on Blumenthal’s lawsuit.

The other two companies did not immediately return e-mails seeking comment.

Fitzgerald said the university’s lawsuit against Kannam has been moved from Superior Court to arbitration, which is stipulated in Kannam’s employment contract. The lawsuit against the companies has been put on hold until the arbitration has been resolved, he said.

By suing, Blumenthal is trying to return the matter to court, Fitzgerald said.

“I think this lawsuit is the worst kind of me-too lawsuit on behalf of an institution as large and powerful as Wesleyan, which is able to press this case, which itself is a waste of the university’s resources,” he said.

The dispute is a private matter between Wesleyan and a former employee, but Blumenthal, the Democratic candidate for U.S. Senate, said his lawsuit will help the state pursue penalties under the Solicitation of Charitable Funds Act.

“Wesleyan staff and assets were allegedly treated as personal fiefdom, abused and misused for private gain,” Blumenthal said in a statement.

is lawsuit seeks to recover money Kannam allegedly diverted from Wesleyan’s charitable assets.