NORWALK, Conn. – Gubernatorial hopeful John McKinney is challenging Gov. Dannel Malloy on the state's financial assistance to HomeServe USA as it moves from Norwalk to Stamford.
HomeServe USA, the U.S.-based branch of a company founded in the United Kingdom, has had its headquarters in Connecticut since 2008 after six years in Florida.
On Wednesday, Malloy announced the company was expected to receive state grants and loans to help pay for its relocation from Stamford to Norwalk and its planned expansion over the next five years. Malloy expects the funding to be approved at a State Bond Commission meeting Friday.
McKinney, a Republican state senator who represents Easton, Fairfield, Newtown, Weston and Westport, questioned the choice of HomeServe USA as a recipient of state funding Thursday, citing its overseas base and allegations about the company’s business practices. HomeServe has been under investigation in the U.K. and states such as Massachusetts, Kentucky and Ohio due to its sales and advertising practices.
“Does the Malloy administration vet the companies it is providing millions of our taxpayer dollars to?” McKinney said in a press release Thursday. “Did anyone do any research or did they just write out the check?”
The Better Business Bureau has received complaints that HomeServe’s direct mailers include local P.O. Box numbers, state silhouettes and language that customers said led them to believe it was affiliated with local utilities. The BBB also received complaints that the mailers had “reply by” dates that may have led customers to believe a reply was required, not optional.
“At best we are giving millions of dollars to a foreign company that will take work away from our small local contractors, at worst we are facilitating consumer fraud,” McKinney said.
Malloy's spokesman Andrew Doba blasted McKinney.
"It’s after 5 p.m., so it must be time for more phony outrage from Senator McKinney," Doba said. "It appears his only job creation strategy is to criticize everything the governor does and offer absolutely nothing of substance. Senator McKinney should explain to one of the new employees at HomeServe why he thinks they should not have a job.
"To be clear, here are the facts: our unemployment rate is the lowest it’s been in more than four years and we added more private sector jobs in the first two years under Governor Malloy than at any other point since the late 1990s."
In its defense to the BBB, HomeServe USA said its mailers make it clear that the company is an independent, private corporation based in Connecticut. It also told the BBB of plans to use new logos without state silhouettes.
The company currently has an “A-minus” ranking with the Better Business Bureau, according to the group’s website. HomeServe’s score received deductions because of its advertising techniques, BBB said, but its score was increased recently due to responses to customer complaints and “complaint volume filed with BBB for business of this size.”
McKinney has announced his intention to run for the Republican nomination in the 2014 gubernatorial election. Malloy, a Democrat, has not yet announced whether he intends to run for re-election.