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Providence Loan Investigation: Top Stories in RI in 2012

Monday, December 31, 2012

 

What do a controversial night club, aformer campaign volunteer for David Cicilline and a man who was deported after serving time on drug charges have in common?

They all received—and failed to pay back— taxpayer-funded loans through the Providence Economic Development Partnership (PEDP).

GoLocalProv first reported on the PEDP’s extraordinary default rate in 2011, but the U.S. Department of Housing and Urban Development (HUD) took action this year, issuing a scathing report that questioned expenses and cited the city for lacking “adequate oversight” over the loan program between 2002 and last year.

Throughout 2012, GoLocalProv published more than a dozen stories on the dysfunctional agency, including being first to report that a former director misled HUD on the program’s actual default rate as well as the decision to write off 29 loans the city had little or no chance of ever collecting on.


The agency’s problems were also highlighted in Oklahoma Senator Tom Coburn’s annual Wastebook, which noted, “In Rhode Island’s capital city, taxpayer dollars have met anything but a providential fate.”

All new loans from PEDP are currently on hold and Mayor Angel Taveras has called for changes to the agency’s board, but the city has no plans of scrapping the program altogether. But with the Mayor’s eyes on the Governor’s office in 2014, you can expect him to pay much closer attention to decisions made by the PEDP in the coming year.

 

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