Former Cicilline Campaign Volunteer Never Repaid $103,000 PEDP Loan

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Thursday, August 30, 2012

Dan McGowan, GoLocalProv News Editor

The 66-year-old man who received a six-figure taxpayer-funded loan less than 20 months after volunteering on Congressman David Cicilline’s 2002 Mayoral campaign never repaid a dime on the loan, GoLocalProv has learned.

In 2004, the Providence Economic Development Partnership (PEDP), a quasi-public agency whose board of directors was chaired by Cicilline, approved a $103,660 loan for Erasmo Ramirez for El Portal Family Restaurant, which would lose its operation certificate less than a year later.

When the time came to begin repaying the loan in January 2005 (by then, another $3,000 in interest had accrued), the PEDP board approved a four-month payment moratorium for Ramirez. In May of that year, he was granted another four-month grace period by the agency.

The postponement of payments didn’t end there.

In September 2004, the PEDP again gave Ramirez a four-month break on repaying the loan and in March 2006, the agency’s loan committee and board of directors approved yet another moratorium, this time for six months.

So why was the loan deemed paid off by the PEDP?

A technicality. A property that was pledged as collateral was sold and the title company was unaware of the PEDP loan. After the property was transferred and the loan was considered in default, the agency received a $96,000 payment through the title company’s insurance.

The PEDP then paid back approximately $2,000 of the loan and then the board agreed to write off $13,651.63 in additional funds that were owed.

Ramirez is on District 10 State Rep. Committee

Last week, Ramirez was seen in an undercover video pledging to deliver hundreds of mail ballot votes to a campaign worker for Anthony Gemma in exchange for a $500 weekly paycheck. The video, first reported in Saturday’s Providence Journal, shows Ramirez pulling a stack of absentee ballots out of his car and explaining to the Gemma aide which votes were for Gemma and which ones were for the Congressman. He claimed he could use his influence to bring in up to 1,000 votes for Gemma.

The video was recorded by TRP Associates, a private investigative firm run by former State Troopers which has been paid $40,000 by Gemma to look into Cicilline’s connection to voter fraud over the past decade. The investigation has resulted in numerous claims being leveled toward Cicilline, but the Congressman has denied any involvement.

Ramirez, who is a member of the District 10 State Rep. committee and has worked on several political campaigns over the past decade, also claims he was paid $450 per week when he worked for Cicilline. But Cicilline campaign manager Eric Hyers said Ramirez was only an unpaid volunteer during the 2002 Mayoral campaign.

Poor Track Record for PEDP

When GoLocalProv first reported that Ramirez received a PEDP loan, Hyers denied that his relationship with Cicilline had anything to do with the loan. Hyers said the agreement was “thoroughly vetted by a loan committee of financial experts and community bankers like they approve every loan” and credited Cicilline with revamping the PEDP so that loans weren’t simply jammed through by the Mayor’s office.

Still, the PEDP’s track record throughout Cicilline’s tenure as Mayor has been in question over the last year.

In July, the Department of Housing & Urban Development (HUD), which funds the PEDP, issued a report citing the city for a lack of oversight over the agency over a ten-year period. HUD found that the agency failed to supervise funding recipients, displayed questionable use of federal funds and did not have a system in place for loan write-offs despite having an approximately 60 percent default rate.

“We found no written policies and procedures governing underwriting, loan collection, loan modifications and or write off policies,” the report states.

In June the PEDP board voted to write off 29 loans (the majority of which were approved under Cicilline), leave the city stuck with a $2,171,125.66 tab when interest and penalties were figured in. It was the first time since 2008 that the agency had written off a loan.

Hyers did not return a phone call seeking comment for this story.

Running Out of Adjectives

Cicilline held a 12-point lead over Gemma in a WPRI released earlier this week. If he wins the Sept. 11 Democratic primary, he’ll take on Republican candidate Brendan Doherty, who has repeatedly criticized the Congressman’s handling of the PEDP in recent weeks.

Doherty campaign manager Ian Prior said he wasn’t surprised to learn Ramirez never paid his loan to the city.

“We’re running out of adjectives to describe the Congressman’s disastrous tenure as Mayor of Providence,” Prior said.

Editor's Note: The story's headline was edited for clarity.

 

Dan McGowan can be reached at dmcgowan@golocalprov.com. Follow him on Twitter: @danmcgowan.

Related Articles

• Providence Stiffed for Millions in Loan Money
• Controversial South Side Bar Stiffed City for $330k on PEDP Loan
• City Writes Off Millions in Economic Development Loans
• Feds Say City Lacked ‘Adequate Oversight’ over Taxpayer-Funded Loan Program
• Former Cicilline Campaign Volunteer Received $103,000 PEDP Loan
• Top Democratic Social Club Received Low-Interest Loan from PEDP
• Cicilline & Gemma have Ties to Controversial Providence Loan Fund
• City Officials Withheld Information About Controversial Loan Fund
• City Used Business Loan Fund to Help Pay for Skating Rink
• Providence Loan Fund Created Few Jobs Under Cicilline

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