Troubled PEDP Hires New Lawyers
Tuesday, September 04, 2012
The troubled city loan fund that has faced a 60 percent default rate and ran up more than $1.5 million in questionable expenses over the last several years has hired new legal counsel, GoLocalProv has confirmed.
The change in legal counsel came ahead of a Department of Housing & Urban Development (HUD) report released earlier this summer that cited the city for “inadequate oversight” over the quasi-public agency which was designed to offer loans to businesses that could not secure funding elsewhere. New loans are currently on hold until the PEDP's board responds to HUD.
But critics have charged that the PEDP served as a slush fund for Congressman and former Mayor David Cicilline during his eight-year tenure as chairman of the board.
Last week, GoLocalProv first reported that Erasmo Ramirez, a campaign volunteer for Cicilline during his 2002 Mayoral run, received a $103,000 loan for a restaurant from the PEDP 20 months after Cicilline took office. Despite the board granting him four payment moratoriums over an 18-month period, Ramirez never repaid a dollar to the city. The loan was eventually paid off through a technicality after the property was sold.
Last October, Teverow told GoLocalProv that 25 percent of the loans issued were at least 90 days past due, but disputed the idea that that the city would be on the hook for more than $2 million. At the time, Teverow defended the fund. He suggested that many businesses would not have been created without help from the city.
“It’s no guts, no glory,” he said. “The nature of economic development is that you’re supposed to take a chance.”
- Providence Stiffed for Millions in Loan Money
- Controversial South Side Bar Stiffed City for $330k on PEDP Loan
- Former Cicilline Campaign Volunteer Never Repaid $103,000 PEDP Loan
- 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
- NEW: Providence Councilman Calls for More Oversight of City Loan Fund
- Providence Agency Spent Over $20,000 in Taxpayer Funds on Lunches
- Feds Say City Lacked ‘Adequate Oversight’ over Taxpayer-Funded Loan Program
- City Writes Off Millions in Economic Development Loans
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