Politics

Morgan Stanley executive suggested cash could be funneled through private firm to pay Connecticut state senator wife's girlfriend

Key Points
  • Connecticut state Sen. Alex Bergstein's divorce case with her husband, Morgan Stanley managing director Seth Bergstein, has exposed her new romantic relationship with her former campaign manager, Nichola Samponaro.
  • Seth Bergstein allegedly suggested that some of his money that he promised his wife be funneled through a private company to pay for the legislative salary of Samponaro if Senate Democrats did not pay her salary, according to court documents. He never actually paid the money.
  • Alex Bergstein in November became the first Democrat since 1930 to be elected to the state Senate out of Greenwich.
Sen. Alex Bergstein
Source: ALEX for State Senate | YouTube

A Connecticut state senator's divorce case with her investment banker husband has exposed her romantic relationship with her ex-campaign manager, a woman whose unusual work arrangement for the senator's office raised eyebrows in Hartford earlier this year.

The pending divorce between freshman Sen. Alex Bergstein, D-Greenwich, and her husband — Morgan Stanley head of global services Seth Bergstein — also has exposed Seth's suggestion last year of having his money funneled through a private company to pay for the legislative salary of the other woman, who is now dating his estranged wife.

Seth Bergstein in November, on the heels of his wife's election, offered to commit $222,000 "from Morgan Stanley earnings for the next 2 years" to pay Alex Bergstein's personal and professional budget, according to an email cited in court filings.

Some of that money, Seth wrote, might be used to pay the salaries of both his wife's current romantic partner and of another legislative aide, the filing said.

That money was never paid by Seth, which is a bone of contention in the Bergsteins' divorce case in State Superior Court in Stamford, Connecticut.

Alex Bergstein sued her husband for divorce in December, a month after he outlined the proposed payment to her.

'Looks Bad'

But if the money had been paid to Alex Bergstein, and if some of it had been funneled through a private company or shell company to pay for the salaries of aides to his wife, it would have been both puzzling and potentially legally problematic move, a leading Connecticut attorney said.

"I don't know that it is illegal, but I think it would raise concerns with the state election [enforcement] folks," said Stanley Twardy, a Stamford lawyer who previously served as the state's top federal prosecutor.

"A lot of questions and concerns ... it certainly looks bad," said Twardy. He said the arrangement could create tax compliance problems for a company that paid the aides.

"You're actually going to have a business paying for our public servants?" he asked. "What's the difference between that and giving them a kickback to pay for legislation?"

Alex Bergstein went public with her relationship with the woman, Nichola Samponaro, on Saturday, publishing a picture of them together in front of the statehouse in Hartford on Instagram and Facebook.

The senator took that step after becoming aware of the fact that the Hartford Courant was preparing to publish a article about recent court filings in her divorce.

Those filings by Alex Bergstein's own lawyer detailed her relationship with Samponaro and discussed Seth Bergstein's unusual suggestion of how to pay Samponaro's salary in the event that the state government would not.

Seth Bergstein's lawyers last month issued a subpoena for Samponaro, asking her for all correspondence between her and Alex Bergstein. Samponaro is fighting that subpoena, seeking to quash its request for communications with Alex Bergstein that occurred after the senator sued her husband for divorce. Samponaro's lawyer in a court filing said the request for texts and emails that came after the divorce action "is designed to harass [Samponaro] and invade her privacy."

'There's no scandal here'

Alex Bergstein claimed that she and Samponaro became romantically involved only after she sued her husband for divorce, and after Samponaro was working for some period of time as her "personal assistant."

"Long after my marriage had ended emotionally and physically, I made the decision to end it legally. Once I was free and empowered, I was able to see other paths to happiness," Alex Bergstein wrote on Facebook on Saturday. "Nichola and I worked together on my campaign and after the Election she stayed on as a personal assistant. Like many others, we fell in love through our work and then ended our professional relationship."

She added: "Anyone who suggests there's something inappropriate about our relationship is close-minded and wrong. There's no scandal here."

"Senator Bergstein has no comment on her personal life," a spokesman for Alex Bergstein wrote in an email to CNBC on Monday after being asked about Seth Bergstein's suggestion of how to pay Samponaro.

The Bergsteins' divorce is not yet finalized.

The couple, who have three children, had been married for nearly 24 years when Alex, a former Skadden, Arps, lawyer, won election as a state senator representing Greenwich last November.

She was the first Democrat in nearly 90 years to be elected to the senate from that tony town.

An 'excellent' aide ... and concerns about 'compliance'

Samponaro, a local real estate saleswoman, volunteered as Alex's campaign manager, and, according to court documents, performed so well in that role that Seth Bergstein urged his wife after the election to employ her to support her as a senator.

In the November email to his wife quoted by Alex Bergstein's lawyer in a court filing, Seth wrote, "We should seriously consider hiring Nichola full time."

"That is an expense that could massively improve your effectiveness. We could pay her $52K with 4 weeks of vacation. She is excellent and the right level and energy level to work for you."

Seth Bergstein also wrote that "it would be best to have Nichola and Eliza [Fink, a current legislative aide for Alex] hired by the senate dems."

But "if not then we need to hire them and pay them through Technopulp or Bergstein LLC or a new entity," Seth Bergstein wrote Alex Bergstein, according to the filing.

Technopulp was at one time a forestry consulting and engineering company in New Jersey, although recent online searches suggest it is a real estate management business. The firm did not return a request for comment.

The company at one point was owned by Alex Bergstein's mother, Mary Mochary.

Seth Bergstein's lawyer declined to say what Bergstein LLC does or owns.

In his email to his wife, Seth Bergstein wrote, "You need to make sure that all checks and bills for your political staff are under your control and in your name only."

He emphasized in the email to his wife that the $222,000 he expected to give Alex Bergstein is for "for salary, travel, car, housing events, insurance and your contributions."

"Obviously, clothes, food, drs, vacations etc. is not in that — but we need to be really careful on that given compliance rules," Seth Bergstein wrote.

"I am trying to get positioned for a much bigger job — this is new territory for the Firm and I really want to make sure I don't limit my ability to compete for a bigger role," the email from Seth Bergstein said.

Seth Bergstein's matrimonial lawyer, Janet Battey, told CNBC that the court filing by Alex Bergstein's attorney, cites "out of context" quotes from the email.

Battey said Seth Bergstein's email was outlining how he could financially help his wife fulfill her new duties as a senator in Hartford while also enabling her to continue to live with the family in Greenwich.

"He suggested that Nichola drive her back and forth instead of [Alex] residing in Hartford," Battey said.

When asked about Seth Bergstein's idea in that email of having his money be passed through a private entity, Battey said, "He was making suggestions" about how both Samponaro and the other aide, Fink, could be paid.

"He left it up to Mrs. Bergstein to explore the possibilities there were, and what would and would not be appropriate," said Battey, calling her client's suggestions "off-the-cuff."

Asked about Seth's concerns in the emails about the uses of his money by Alex, Battey said, "Mr. Bergstein is, to his knowledge, the first more-senior person at Morgan Stanley that has a spouse who is an elected official."

Battey said Seth Bergstein's desire to avoid creating a conflict with Morgan Stanley's compliance rules led him to outline restrictions for the use of his money by his wife to support her as senator.

Ethics questions

Samponaro's work for Alex Bergstein first drew attention in February when the Hartford Courant revealed that the senator was paying Samponaro out of her own pocket.

That arrangement was unusual, if not unique, in the Connecticut Capitol, and led to controversy over whether Samponaro would be subject to the same disclosure rules as legislative staffers who were paid by the state government.

Alex Bergstein has said Samponaro left her senate office in February after "the press printed her name in a negative context and with factual errors."

Alex Bergstein's lawyer wrote in a court filing that when Alex and Samponaro "began a personal relationship they ended their professional relationship."

The senator earlier this year requested that the state's Office of Ethics review the pay arrangement with Samponaro, which that office found was not in conflict with state ethics rules.

She told the Courant last weekend that Samponaro "was privately employed to drive me to Hartford and manage in-district events and volunteers. She did not do legislative work."

However, before then Bergstein had not publicly disputed that Samponaro worked in the legislature for her, as the Courant and other outlets reported previously.

A copy of the "informal staff opinion" by the ethic office's legal division, issued to Alex Bergstein, says that "you seek guidance concerning the application of the Code of Ethics for Public Officials ... to having a staff member who you would pay out of your own funds and who would provide support to you in your official capacity as a member of the General Assembly."

Fink remains on Bergstein's staff, and is paid in the same way as other legislative aides at the Capitol.