Federal Investigations Plague Providence
Thursday, April 05, 2012
Nearly a decade after former Providence Mayor Vincent “Buddy” Cianci was sentenced to five years in federal prison, the capital city is still under scrutiny by the feds, this time with three separate programs facing questions about how tax dollars were spent and in one case, whether the head of an agency sexually harassed a female employee.
The agencies include the Providence Economic Development Partnership (PEDP), a taxpayer-funded loan program with extremely high delinquency rates currently being reviewed by the Department of Housing and Urban Development (HUD); the Providence Community Action Program (ProCAP), an anti-poverty agency that has been under federal investigation since last May; and most recently, the Providence Housing Authority, which has HUD officials investigating a 37-page complaint filed by a female employee.
Each investigation, while not necessarily criminal, has given the cash-strapped city a black eye at a time when Mayor Angel Taveras is attempting to right the ship and pull the city back from the brink of bankruptcy. Critics say the current administration is not at fault for the agencies’ woes, instead claiming a lack of oversight during Congressman David Cicilline’s eight-year tenure as Mayor is to blame.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“It’s clear that in the past several years there was a serious lack of oversight between the former administration and these nonprofit agencies that operate with a lot of government funds,” said Harriet Lloyd, executive director of the Rhode Island Statewide Coalition (RISC). “Both Providence residents who need the kind of programs and assistance these agencies offer and taxpayers who foot the bill for the millions in government dollars that subsidize them should be outraged by what has happened.”
Programs Facing Scrutiny
The programs are all well-intentioned. A loan program for small business owners who struggle to gain approval from banks; an agency that provides the city’s neediest residents with heating assistance, weatherization and other vital resources; and the agency that provides housing for nearly 6,000 city residents.
But all have fallen on hard times over the last year, with rampant mismanagement to blame, critics say.
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In September, GoLocalProv first reported that a quarter of all PEDP loans were delinquent while also highlighting a series of questionable decisions made by the program’s loan committee. In some cases, loan payments were put on hold for businesses and since 2008, loans that went to fund the Bank of America Skating Center and the Trinity Repertory Company were written off and converted to grants. HUD, which provides the program with funding, pledged to launch a full review and now has to sign off on all loans given to businesses. The program’s former executive director, Thomas Deller, resigned to take a job in Hartford last week.
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Late last year, ProCAP was cited by Mayor Taveras for “staggering mismanagement” after an outside audit revealed vendors were not being paid and no-interest loans were being given to employees. A federal subpoena was issued in May and officials from the U.S. Attorney’s office seized computers from the organization. After ProCAP was forced to file for receivership, executive director Frank Corbishley was fired.
- In late February, an employee with the Providence Housing Authority filed a 37-page complaint that included accusations of sexual harassment and financial mismanagement against the agency’s longtime executive director, Stephen O’Rourke. O’Rourke, who has been placed on paid administrative leave while both a HUD investigation and internal investigation takes place, says he is innocent.
“It’s a disgrace that at a time when Providence residents are more dependent than ever on community programs and housing assistance and when taxpayers are struggling to meet tax bills that Providence agencies are facing three federal investigations,” Lloyd said.
Accountability Needed
City resident and government watchdog Judith Reilly agreed with Lloyd. She called it “extremely concerning” that three agencies are under federal review. She said a lack of oversight for many years as well as a reliance on appointed boards have caused problems for the city. She said she also finds it concerning that some of the programs, formerly PEDP and currently ProCAP, are not required to hold open meetings for the public.
“We have a proliferation of ‘quasi-governmental’ or even ‘non-governmental’ unelected boards doing what is or used to be the business of government,” Reilly said. “Our elected officials rely upon the competence of politically appointed boards and directors, but don't adequately supervise or question their performance. And unpaid volunteer board members have nothing to lose.”
Common Cause executive director John Marion said everything comes down to accountability.
“As a citizen of the city and as the head of Common Cause I'm really concerned that are seeing so many investigations,” Marion said. “I hope is that something comes of these investigations. People want to see those who wasted taxpayer money held accountable, unlike what we have seen at the state level with the long investigation of RI Resource Recovery.”
Former Mayor: Let the Chips Fall Where they May
Former Mayor and City Council President John Lombardi said he called for more oversight over many agencies during his long career in city politics. He blames the Cicilline administration for its “lack of hands on oversight and the lack of questioning how things are and how to make them better. It was my opinion from day one that there was a complete lack of that during the previous administration.”
Lombardi said the most egregious part is that, in some cases, federal dollars expected to assist the city’s neediest residents appear to have been misused. He said the Taveras administration should “clean house” with some boards.
Lombardi said the reviews may provide answers he has been seeking for a long time.
“Scrutinizing this, vetting it and auditing is the proper thing,” he said. “Let's get it all done and let the chips fall where they may.”
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