video: GoLocal Investigation PEDP Tapped by the 2012 Waste Book

Email to a friend Permalink

Monday, October 22, 2012

GoLocalProv News Team

An ongoing investigation into the spending and accountability of the Providence Economic Development Partnership (PEDP) lead by GoLocalProv.com has been recognized by U.S. Senator Tom Coburn (R-OK) in his annual Waste Book 2012.

GoLocal's investigation unveiled the improper spending by the City of Providence's economic initiative. GoLocal's investigation has included the review of thousands of documents and review of numerous meeting tape recordings. To date, GoLocal New Editor, Dan McGowan, has written dozens of articles unveiling the misspending.

The Waste Book also features government beyond Providence including federal spending of more than $1 million to test food to eat on Mars, robot squirrels for $325,000, and Moroccan Pottery Classes for $27 million. 

FROM THE WASTE BOOK 2012

In Rhode Island’s capital city, taxpayer dollars have met anything but a providential fate.
The city of Providence has been using part of its federal Community Development Block Grant (CDBG) to issue millions of dollars in risky loans. Now 25 percent of the program’s loans, collectively worth $3.4 million, and are delinquent the city is actively trying to collect $1,365,660 from 11 businesses.

The Providence Economic Development Partnership (PEDP) makes a point to fund businesses whose loan applications have been rejected repeatedly in the marketplace. It serves as a lender of last resort, which is certainly a questionable use of federal dollars that could be directly benefiting the poor. "[E]veryone who gets a loan from us has either been rejected by two banks or has been offered a loan that is not sufficient to do the project…our loans are very risky,” the organization’s executive director said of its
operations.

Seemingly unfazed by his employer’s reckless use of federal taxpayer money, PEDP’s lawyer claimed when it comes to economic development, “It’s no guts, no glory.”

One of Providence’s city council members noted private financial institutions in the area might otherwise be more willing to make loans for local businesses, but currently they are “hampered by excessive regulatory policies.”

The city has targeted a number of businesses for loan repayment, including “Fatty McGee’s Restaurant,” “KO Shoe Company,” and “Invictus Arc,” all of which have since gone out of business.

Not only has the program made several faulty loans, PEDP is under federal investigation for spending up to $1.5 million in federal funds on catering, limos, and marketing – expenses
that are disallowed under federal rules – in the last few years.

For example, a marketing company developed an orange “P” for the city’s branding using federal funds.

At the time, former Mayor David Cicilline, who now represents Rhode Island’s 1st congressional district, oversaw the program. On the hook for the money, Providence may have to repay taxpayers if the expenses are ruled ineligible. CDBG funds are generally to be used for programs to benefit low- to moderate-income people, such as low-income housing and anti-poverty measures.  

 

 

 

Related Articles

• 7 PEDP Loan Recipients Never Repaid a Dime to City
• Deported Man Stiffed City on $70,000 PEDP Loan
• Former Director: PEDP Used ‘Smoke & Mirrors’ When Reporting to HUD
• Former Cicilline Campaign Volunteer Never Repaid $103,000 PEDP Loan
• Former Cicilline Campaign Volunteer Received $103,000 PEDP Loan
• NEW: PEDP Confirms - Former Cicilline Volunteer Did Not Repay Loan
• Top Democratic Social Club Received Low-Interest Loan from PEDP
• Troubled PEDP Hires New Lawyers
• 18 Taxpayer-Funded Loans are Still at Least 500 Days Past Due
• City Writes Off Millions in Economic Development Loans

Enjoy this post? Share it with others.

Email to a friend Permalink

---

Commenting is not available in this channel entry.