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Over $500k Missing in ProCAP Scandal

Wednesday, November 16, 2011

 

More than $500,000 in government funds that were designated for various vendors that work with the city’s top anti-poverty organization were never paid while the organization continued to dole out interest-free loans to select employees, according to a report filed last week by an independent assessor.

Now the Providence Community Action Program (ProCAP), a 47-year-old organization established under President Johnson’s “War on Poverty” program, stands to lose millions in government funding that is supposed to assist the city’s poorest residents to help pay for home heating costs and several other initiatives that support low-income families.

In a letter delivered Tuesday, Mayor Angel Taveras joined City Council President and ProCAP board chairman Michael Solomon in urging the organization’s executive director Frank Corbishley to resign immediately to prevent state and federal dollars from being cut off from the organization.

Staggering Mismanagement

Both Taveras and Solomon acknowledged Tuesday that the state has expressed an unwillingness to work with ProCAP unless substantial changes are made to the organization’s management structure, which Taveras said is now “endangering jobs, services and our poorest neighborhoods.”

“We’ve discovered information and it’s clear in my view and the Council President’s view that there been mismanagement,” Taveras told reporters. “We need change, we need new leadership.”

Corbishley, who made just shy of $100,000 in 2010, has denied any wrongdoing in the situation. But an assessment conducted by accountant Ken Richardson unveiled a “series of inconsistencies” with health benefits, educational subsidies, cell phone usage and vehicle usage, on top of the interest-free loans given to some employees.

Richardson noted that $14,741 from Rhode Island Housing, $159,781 from the Temporary Assistance for Needy amilies fund and deposits of $111,867 and $388,703 from the Office of Energy Resources (OER) were transferred to other accounts rather than being paid to vendors who work with the programs.

Since at least 2010, the OER has expressed concern with the finances at ProCAP, but Taveras and Solomon said the issue came to a head recently when more vendors started to speak up about being owed money.

“If you look at the information that was presented, there’s clearly mismanagement here and there continues to be mismanagement.” Solomon said. “They’re still not following policies and procedures and clearly it’s being mismanaged.”

Report Details Misspending

In his report, Richardson describes checks processed by Rhode Island Housing (RIH) that were never mailed and subsequently voided, but never returned to RIH or the General Treasurer’s office. In addition, checks cut to National Grid for up to $159,781 were never mailed and again voided. Richardson also pointed to $388,703 from the state that simply went to a general checking account and were used for payroll rather than its intended use.

Richardson’s three-page summary also describes an employee being given a 100 percent advance to take education courses despite not having proper approval. In other instances, employees were reimbursed for their personal cell phones, including one employee who was reimbursed twice for the same invoice.

In addition, both Corbishley and other high-level staff received interest-free loans despite the organization being behind on vendor payments, according to Richardson.

Mayor Fires Board Members

During a board meeting last week, Solomon called for Corbishley to resign and expected the board to make a motion to terminate the longtime executive director. But the board, which was mostly unknown to city officials until this week, chose to continue the meeting until Dec. 29. Solomon was outraged, noting that he believed, “the evidence was there” to remove Corbishley.

On Tuesday, Taveras, who can appoint up to five people to board, fired three members and appointed Jeffrey Dana, Christine Spaziano, Delia Rodriguez, and Ani Haroian to the board. Paul MacDonald is remaining on the board. Taveras said he did not simply replace members who supported Corbishley.

“I thought it was important to have a fresh set of eyes,” Taveras said.

Councilman Nick Narducci was among the board members let go Tuesday. In addition, Joseph Caffey Jr. and Raymond DeTorre Jr. have been fired from the board. Narducci, who said he only learned about being let go from the board by a GoLocalProv reporter, said he doesn’t understand why he was terminated.

“Nobody cares more about this organization than me,” Narducci said. “The board felt it needed more information with Frank. That’s all.”

Despite being chairman of the board as the mismanagement unfolded, Solomon said he has no intention of stepping away.

“I think when the flags were raised we took swift action,” Solomon said. “It has been a long and tedious agenda, so I mean in other words we weren’t moving fast enough. So we felt it was time to make a move so we could get ProCAP on its right foot again.”

Criminal Aspect

While Taveras would not acknowledge whether a criminal investigation would take place into Corbishley or the organization, several City Hall sources told GoLocalProv that both the U.S. Attorney and Attorney General’s office have been briefed on the situation.

In addition, several letters released Tuesday detailing ProCAP’s misspending were copied to Providence Public Safety Commission Steven Pare, but Taveras refused to explain why Pare was involved.

Taveras called the entire situation “extremely disturbing and disappointing.”

“What we have to do now is make sure we bring everything to the light of day and make the changes necessary so people receive the services they deserve and also so that we don’t jeopardize any funding in the future for this agency and ultimately for the citizens of Providence,” Taveras said.

Asked if an investigation would take place, the Mayor offered few details.

“Right now what we have is substantial mismanagement and we will follow that wherever it leads us,” he said.

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