Wired: 2011 Part 6, a Book by Paul Caranci

Monday, July 31, 2017

Paul F. Caranci, Author

Each week, GoLocalProv will publish a chapter of the book Wired: The Shocking True Story of Political Corruption and the FBI Informant Who Risked Everything to Expose It, by Paul Caranci. The book details how Caranci gambled his thirty-year political career, his reputation, and his family’s safety in his quest to restore good, honest government to a community that needed it most by going undercover with the FBI for 17 months to exposed corruption. 

Buy the book by CLICKING HERE

The Aftermath

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With those words following the verdict in the Baccari case, Neronha declared that the investigation into North Providence corruption had now ended. For Richard Baccari and his family life would finally begin to regain a sense of normalcy. The latest disruptive chapter in my life, however, was just starting.

The end of the trial pretty much coincided with the end of my career with the State of Rhode Island. Secretary of State Ralph Mollis, the man for whom I had worked for the past eight years, was term-limited and forced to leave his post, driving me into the job market for the first time in thirty-six years. I still enjoyed public service and looked for another opportunity to fulfill that desire to serve. Unfortunately, it appeared that many people in positions of responsibility within Rhode Island government were unwilling to hire me, presumably because of my involvement with the federal investigation into political corruption in North Providence which had once again found its way to the front pages of the Providence Journal thanks to the recent events of the Baccari trial.

One prospective employer in the field of higher education alluded to my political relationships asking if my prior activities might adversely impact my ability to work with local elected officials from North Providence. (That person was later dismissed from her position as a result of issues unrelated to this.) Another asked whether I might continue to look for opportunities to un-root corruption if hired by his agency. Employment applications submitted to a number of newly elected state and local officials in Rhode Island, even those who ran for office on an anti-corruption platform pledging to institute the highest levels of ethical standards within their new administrations, failed to generate even a response despite my having offered some fairly impressive career credentials.

While I believe I handled the interview questions appropriately, the underlying tone made it clear to me that though many may outwardly express respect for those who have the courage to expose corruption, few want to chance having a whistleblower in their employ.

I understood my fate in Rhode Island to be just as Margie and I had anticipated it might be several years ago when we first discussed the implications of going to the FBI. We thought then that there would be a high probability of losing my job and a possibility of being forced to leave the state. Though I was able to maintain my employment with Ralph Mollis over the four years since the arrest of the North Providence officials, we now realized it was time to deal with the imposition of fate’s new reality in our lives.

Congressman Todd Rokita of Indiana’s 4th Congressional District was someone I had confided in throughout my invigorating journey through the criminal justice system. He was aware of my actions and my motives and always said that he would never stand idly by and watch a person he believed to be an “American hero” suffer for doing the right thing.

Upon learning of my latest employment issues he immediately offered me a position on his Indiana office staff. His offer was magnanimous and incredibly unselfish. The conservative Republican Congressman had nothing to gain politically by appointing a Rhode Island Democrat to his staff – a staff that was comprised of only four district employees. He could be criticized by fellow Republicans for hiring a Democrat, by media for hiring an outsider to a high-level position, and by constituents for not providing that opportunity to the significant pool of local talent generated each year from such prestigious colleges and universities as Indiana State, Purdue University, Ball State University, Notre Dame and so many other local institutions of higher learning. And though I could offer the benefit of experience to an otherwise young team of staffers, I was unfamiliar with the state, its political jurisdictions, its people, its local politics, its industry and its customs. He was taking an extraordinary political risk all for the sake of doing what he considered to be “the right thing.” He is a true American hero and I respect him immensely for his outstanding principals and the courage to live up to them.

As Constituent Services Manager & Strategic Communications Advisor, I was responsible for drafting speeches, writing press releases and meeting with constituent groups around Indiana’s expansive 4th Congressional District, an area of which I had no prior familiarity. Regardless, I looked forward to the new opportunity to serve even while I dreaded the long-distance arrangements that confronted me.

Margie and the balance of my family needed to remain in Rhode Island as job and other commitments prevented them from relocating. And so, at the age of almost 60, I would be separated from my wife for the first time since we were kids playing touch football and catching frogs together in the local ponds well before our teen years.

Margie and I ventured towards Indianapolis, Indiana just after Christmas 2014 to the small Township of Avon in search of an apartment that Margie had found and leased on the Internet, sight unseen. Avon, a town in Hendricks County located about 20 miles west of the capitol city was also conveniently situated just 6 miles east of my new office in Danville.

Hendricks County is comprised of 20 cities and towns dispersed over some 409 square miles. Founded in 1824 the county boasts a rich history, and is home to beautiful meandering rivers, several sprawling parks, magnificent libraries, a spattering of Catholic churches, and 153,879 people, some of whom I had the pleasure of meeting and all of whom I found warm and welcoming. It also has a significant number of trains that run in every direction at all hours each with the potential of disrupting traffic for 10-15 minutes at a time. And it has farms – miles and miles of farms!

Margie accompanied me on the thousand-mile journey west alternating driving in my 2004 Honda Pilot. And she remained with me for eleven days during which time she helped me shop for furniture, provided a crash course in cooking and converting the apartment into a home – as much of a home as it could be one thousand miles away from my family. We visited my new office, took in some of the local sites, tasted the local cuisine, met with the Congressman, located the Catholic Church I would attend, and generally enjoyed sharing some of our last moments together before the miles would divide us.

Thursday January 8th dawned a frigid minus seven degrees Fahrenheit. It was unseasonably cold for central Indiana I’m told, but the dread of exposure to that icy chill was overshadowed by the reality that Margie would be leaving that day to return home to Rhode Island.

I imagined that saying goodbye would be difficult, not because we had never been apart before, but rather because of the sense of permanence that defined this separation. I never dreamed, however, that the aching void that enveloped me that morning at the airport would linger for months. I’ve cried a few times in my memory, but perhaps never with more vigor than I did that morning as she walked past security and disappeared down the long hall leading to the terminal. It was a new sense of loss that I’d never experienced before and I could feel my energy and enthusiasm slowly begin to fade.

Despite all the wonderful people that I met, worked with and worshiped with during my months in Indiana, I never recovered from the sense of desolate loss that cloaked me that day. It affected my ability to be happy, my job performance, and at times my capacity to function, depleting my very capacity to think creatively and to focus. Many times I thought how difficult it must have been for Burchfield, Douglas, Zambarano, Ciresi and Imondi. I had my freedom. I didn’t live in fear each day and despite my difficulties, I had a job that I genuinely enjoyed and wonderful people to share my time with. I was free to call home as often as I liked, to Skype with family, to go to church, to shop, to relax outdoors or in, to read what and when I wanted, to watch television, to satisfy my culinary urges and to do many other things that freedom affords; things that we often take for granted day in and day out.

In addition to the separation from their families, the five who served time in prison for violating the public trust were denied all those benefits and had other hardships to deal with. Since the day of their arrests, I included them in my daily prayers. Now I had a better understanding of their pain and continue to this day to pray for their comfort and strength and for that of their families. I know that none of our lives will ever be the same again.

An Award of a Lifetime

In mid-February 2015, I had the pleasure of traveling to our nation’s capital to attend the award luncheon at the winter conference of the National Association of Secretaries of State (NASS), an organization that I worked very closely with during my eight years as Rhode Island’s Deputy Secretary. About a year prior Secretary of State Connie Lawson of Indiana submitted my nomination for the Margaret Chase Smith American Democracy Award. Mine was one of three nominations submitted, the others being for people who had most substantial and exceptional accomplishments. The Margaret Chase Smith American Democracy Award is the highest honor bestowed by that national organization and, once notified of my nomination, believed I hadn’t a chance of winning it. I was most surprised and incredibly humbled to learn that prior July that I had.

The award ceremony was to take place at the Association’s conference on February 12th and while I was excited to be receiving the award I was equally thrilled that Margie would be meeting me at the Reagan International Airport in Washington, DC and attending the ceremony with me. It would be a reunion of sorts, not only with Margie, but with good friends from NASS.

Established in 1992, the Margaret Chase Smith American Democracy Award is named after the former U.S. Senator from Maine, who jeopardized her career by speaking out against the red-baiting tactics of Senator Joseph P. McCarthy in the 1950s. Award recipients are “recognized for individual acts of political courage, uncommon character and selfless action in the realm of public service.” The recipient is selected by a vote of the full membership. As a recipient of the award I would join the company of some extraordinary people such as President Jimmy Carter, Civil Rights activists Rosa Parks and Ruby Duncan, U.S. Secretary of State Condoleeza Rice, U.S. Supreme Court Justice Sandra Day O’Connor, Chief Judge John J. Sirica who presided over the Watergate scandal, Mayor Rudy Giuliani, Eunice Kennedy Shriver, and many others. It was an amazing honor to be included with such company and it wasn’t lost on some that a Hoosier rather than Rhode Islander thought my actions worthy of such a nomination.

Margie and I were escorted to the table directly in front of the podium and took our seats with NASS dignitaries. We were both delighted to see Special Agent Jim Pitcavage seated at our table but I was particularly surprised to see Jeffrey Sallet, the FBI supervisor that Jim encouraged me to meet with several years earlier after a heated discussion with Jim resulted in my threatened withdrawal from the case.

Jeffrey S. Sallet began his work with the FBI in 1997 and was assigned to their New York Division to investigate organized crime, public corruption, labor racketeering, and counterterrorism matters. During the next several years his work led to the indictment and conviction of New York Organized Crime figure Joseph Massino, the Bonanno La Cosa Nostra family boss. His work led to the conviction of more than 100 organized crime figures as well as the successful resolution of more than 30 related cold case murders. For his efforts he was recognized with the presentation of the Executive Office for the United States Attorney’s Award. He was also selected to serve as the supervisory special agent in the transnational organized crime-eastern hemisphere section at FBI Headquarters where he managed La Cosa Nostra investigations in the northeast United States. In 2007 he was again promoted to supervisory special agent in the Boston Division, Providence, Rhode Island Resident Agency, where he was responsible for narcotics, organized crime, gangs and violent crime investigations. His star within the Agency continued to rise with his selection as supervisory senior resident agent of the Providence Resident Agency also serving as the program coordinator for all organized crime investigations for the Boston Division. During this time, Mr. Sallet led a collaborative law enforcement effort which resulted in the indictment and conviction of long-time New England La Cosa Nostra boss, Luigi “Baby Shanks” Manocchio.

On the day of the NASS Award presentation, Mr. Sallet was serving as the section chief of the public corruption and civil rights section in the criminal investigation division, where he had oversight and responsibility over the public corruption, international corruption, international human rights, and civil rights investigative programs for the entire country. It was in this capacity that he asked NASS officials for permission to speak for a few minutes at the award presentation ceremony.

With close to three hundred people in attendance, I should have been a bit nervous to say the least, but having the opportunity to spend a couple of days in Washington with Margie, followed by a couple more with my family at home in Rhode Island provided a greater sense of calm than any soporific drink could have.

The program began with opening remarks by incoming NASS President Tom Schedler of Louisiana who told the assembled, over the clanking of lunch dishes as attendees finished their meal, that in making their annual selections of a recipient of the Margaret Chase Smith Award, the Secretaries: “hoped for big things, an unlikely hero who helps them feel good about their system of government and how it works. This year’s award honoree,” he said, “will not disappoint in this regard. But the story also has a twist. We did not have to look far to find our recipient. He is a familiar face to NASS and someone who many of us know…He also, unbeknownst to many of us, made a risky decision to speak up for what is right regardless of the cost to himself or to his family. When you hear his story today there should be no doubt why he was overwhelmingly the top candidate for our recognition.”

Schedler then called Indiana Secretary of State Connie Lawson to the podium to explain why she nominated me. Before relating my story however, Lawson noted that, though serving as R.I. Deputy Secretary of State, “it was his role as a local elected official where he distinguished himself.”

Lawson recounted my story as gleaned from newspaper accounts concluding that “although guilty of nothing more than being a conscientious elected official, Paul paid a significant price for speaking out and doing the right thing. He is the epitome of what it means to have political courage.” Prior to calling me to the podium for the award presentation, Secretary Lawson called on Jeff Sallet to say a few words.

Jeff’s presence at the ceremony was now beginning to make sense to me, but his words astounded me.

“…It is an absolute honor and privilege to be here today, he began, to share with Paul and his wife Marge really an incredible award for an incredible person. As articulated, I am in a unique position right now. I am the FBI’s National Chief of Corruption and Civil Rights meaning all the corruption investigations throughout the entire county fall under my oversight. But I can tell you back when Paul was undercover and doing his job and being courageous for the citizens of the State of Rhode Island, I was also the supervisor in Rhode Island overseeing the investigations…What I can tell you is that Paul’s cooperation is not only exceptional, but almost to a point of being unprecedented.”

He explained, “the majority of the time that people assist the FBI in corruption cases, they do so because they need to give something up because they were charged with corruption themselves and have no choice. Paul is a unique individual who came forward because he wasn’t going to stand for corruption. I can also tell you, being in the State of Rhode Island for five years and also seeing the entire national picture [that] unfortunately the citizens of the State of Rhode Island have grown accustomed to corruption and accepted corruption as a regular course of doing business. So Paul’s cooperation in that sense was also exceptional. For seventeen years I worked organized crime as well. I worked organized crime in New York City. And I can tell you having had numerous made-members of organized crime cooperating with me, it is more difficult to get people in the political secter in Rhode Island to cooperate than it is to get made members of organized crime, who have taken the oath of Omerta… Rhode Island really unfortunately has a permeated culture of acceptance of corruption.”

Alluding to the meeting that we had in which he encouraged me to continue with my cooperation despite my fatigue and stress, Jeff concluded, “Paul is a different person than I was used to dealing with because he was doing it voluntarily and really for the right reasons and I think this award epitomizes that. So Paul, on behalf of the FBI, I want to thank you for everything you did for the State of Rhode Island and for the citizens of the State of Rhode Island. I’d also like to thank Jim Pitcavage who is here. Jim is the Special Agent who worked side-by-side with Paul and I can tell you it was not an easy job for either of them to do what they did in the State of Rhode Island. The accomplishments are significant, but the impact it had on corruption in the State of Rhode Island is extremely significant. So Paul thank you, Marge thank you, and thanks to your family for the sacrifices you made and it’s a pleasure to be here.”

I was floored by his comments but had no time to digest the significance of his words as within seconds Secretary Lawson called me to the stage and presented me with the award. With Jeff’s words still swirling in my head, it was now my turn at the podium.

I joked a bit about how my name just didn’t seem to fit with the others who had received the award and then proceeded to recount some of the anecdotal stories that led me to call the FBI. I described my 17 month experience working undercover and spoke of the impact that our decision to expose  corruption in North Providence had on my family. My acceptance speech concluded with these words:

As others before me have learned, no good deed goes unpunished. Doing the right thing, it turns out, does come with a high price, and my family and I have had to pay that price. Almost immediately following the arrests in 2010 our vehicles were vandalized. We’ve had our car tires slashed and nails are frequently strewn in front of my house where we park our cars. These are ongoing occurrences, the latest of which took place as recently as a few months ago in September 2014.

  Our home was vandalized twice over the course of that first summer. Within 2 months of the arrest my office was moved out of the historic State House and into an old mill building about a mile away that housed other divisions of the Secretary of State. Within six months my position was the subject of an office reorganization that resulted in my salary being decreased by $35,000. Lifelong friends stopped talking to me and one of my closest friends at work was ordered to change her cell phone number and not give the new one to me. I was heckled by neighbors, shunned by some co-workers, and forced to spend thousands of dollars on video surveillance and home monitoring equipment, and alarms at home. My credibility was publicly challenged and I was even made the target at trial where the defense tried to paint me as the bad guy. We had to endure bankruptcy and even lost a home to foreclosure.

During a television interview with an investigative reporter that aired just two weeks ago, I was asked two very poignant questions. First, “knowing what you now know, would you do it again?”, and second, “what was the hardest part?”

The answer to the first question didn’t require much thought. I told him that given the same circumstances of fiduciary responsibility, and despite the personal hardship, I would do it again in a heartbeat.

The answer to the second question, though not making the final edit for television, was just as easy. Margie and I have been friends since we first met when I was 6 and she was 5. We began dating while still in Junior High School and were married immediately following my graduation from college. Over those 54 years, we have never been apart more than a few days at a time, mostly while attending work-related conferences. The activities involved with exposing local political corruption made it virtually impossible for me to obtain employment in the Rhode Island area. Thankfully, your former colleague turned Congressman, Todd Rokita, offered me a position in his Indiana district office. While grateful beyond words for his benevolence, the position requires a separation from Margie that has been very difficult for me, for her and for the entire family.

So, at a time in our lives when we probably should thinking about buying matching rocking chairs, and stocking up on Preparation H and denture adhesive, we were 1,000 miles from home buying furniture for my new “bachelor” apartment.

In fact, Margie and I saw each other for the first time in several weeks this morning at the airport making this event a reunion with not only my NASS family, but with my wife as well. So, to answer the reporter’s second question, for me and for Margie the separation has been the hardest part.

I happened to be the Councilman while all these events took place, but I would not have had the courage to do any of this alone. I have always maintained that Margie is smarter than me. She   certainly is more courageous, and God knows, she’s better looking.

She makes me proud every day that I’m married to her and this distinction is as much hers as mine.

And so, speaking for the two of us, we thank you again so much for this incredible honor. We are both truly grateful.

The Real Cost of Corruption in North Providence

In September, 2011 Charlie Lombardi, upon learning the news that his chief of police had just been arrested, said he just couldn’t catch a break. Well if Lombardi thought that the police chief’s corruption scandal constituted a bad break the news from Moody’s that came on the morning of September 30 of that same year couldn’t have signaled an improving outlook for the month of October. On that morning the result of the mayor’s reckless spending habits and his inability to clean up the corruption that was all around him finally came to light.

Karen Hobert Flynn, a Vice President for Common Cause in New York, noted, “Recent scandals show that some politicians are more than happy to trade away their offices for private gain.” And, it has been demonstrated throughout time that corruption has both a direct and an indirect cost to the taxpayers of our society. Some studies have suggested that the corruption ads about 25% to the tax rate. The corruption in North Providence is a shining example of that cost. Not only did the actions of the corrupt officials in this town stifle legitimate business growth and prevent new business from locating in town it also justified an attitude of distrust toward politicians and government employees and served to legitimize the actions of other officials whose motivations were not in the best interest of those they were elected or appointed to serve.

Since taking office in April of 2007 and throughout 2010, Lombardi initiated several tax increases and overspent virtually every budget. His reckless tax and spend approach and his unorthodox policy of budgeting by rewarding friends and punishing detractors, led to both high cumulative deficits and a need to pass a $10.5 million deficit reduction bond that would cost each taxpaying individual in North Providence dearly. Although at various times Lombardi blamed the Mollis Administration, the school committee, the state legislature and the school department for the town’s financial problems, the documented record tells quite a different story.

The last audit that the town Council received from the Mollis Administration was for the fiscal year ending June 30, 2006. It indicated that the FY07 budget was balanced and that there was no cumulative deficit at that time. Mollis continued in office until December 31, 2006 and was replaced by Interim Mayor John Sisto after Mollis resigned to assume the position of Secretary of State to which he had just been elected. Sisto served until the special election in April when Charles Lombardi defeated him. Lombardi actually took office in his own right in April 2007, the exact time that the mayor was to submit a FY08 budget to the Council. Lombardi rejected the level-funded budget that Sisto had already prepared. He chose instead, without preparing a new budget, to request that the Council include a substantial tax increase of $0.75 on the tax rate in the submitted budget. Because the Council had no idea where the mayor wanted to spend that money, it refused and eventually Lombardi had to settle for a negotiated increase of $0.25 on the tax rate. Throughout the process I had argued that a tax increase was not necessary and eventually cast the lone vote against the budget containing the 25-cent increase.

As has been stated, Lombardi rules, not by reason, but by vindictiveness and fight. Refusing to take responsibility for the tax increase, Lombardi claimed it was made necessary because of an unrealistic political budget presented by Sisto. At this point there was still virtually no deficit in the current year except the one created by Lombardi as a result of two intentional actions taken in that last quarter of the fiscal year. The first act was the cancellation of the legal and valid purchase and sales agreement for the sale of the land on which sat the town Department of Public Works (DPW). Since the FY07 budget prepared by Mollis included the $1.2 million in sale proceeds as revenue in that fiscal year, the cancellation of the contract reduced the revenue by $1.2 million without decreasing the spending side of the ledger. The second action was to postpone until the start of the FY08 budget, the current year tax sale that Mayor Mollis had held annually as a means of prompting payment of delinquent taxes. A current year tax sale traditionally generates the payment of about $1 million in delinquent taxes and that revenue was also projected in the FY07 budget.

The failure to reduce spending by an amount equal to the deferred income coupled with overspending in the 4th quarter of the fiscal year created a deficit of about $2.7 million in FY07. Therefore, the deficit that Lombardi blamed on Mollis was actually created by his own actions. Further, since Lombardi presided over the town’s finances during the final quarter of the fiscal year, he had an obligation to limit spending in his departments to ensure that the budget would not be overspent. He took no action to issue such an order and the result of the loss of two anticipated revenue streams, along with a lack of regard for overspending, was a large deficit.

In FY 2008, the Lombardi budget proposal didn’t increase the tax rate, but it still raised the tax levy by approximately $2 million due to a property revaluation that increased property values without the customary reduction in the tax rate that normally accompanies such an increase in property values. While my protestations resulted in a public meeting with the revaluation team and the elected officials, my call to reduce the tax rate by an amount that would equal the $2 million difference went without a second. The result was that the town raised about $2 million in taxes more than was anticipated in the revenue side of the budget. Rather than generate a budget surplus with these funds Lombardi spent the money as part of the general fund without Council approval and without oversight.

The FY09 budget contained no tax increase. That didn’t stop the mayor from spending money as if it had. He continued his out-of-control spending trend and toward the end of the fiscal year, the town was projecting a $4 million deficit. In response, rather than adjust his spending, Lombardi submitted state legislation requesting authority to implement a supplemental tax increase in May of 2009. I alone opposed the supplemental tax proposal because of the extraordinary hardship it would have imposed on our citizens. The House of Representatives approved the bill with little debate and without objection from the North Providence delegation, but my efforts in the General Assembly caused the Senate to reject the tax. As an alternative, the infuriated mayor instead submitted a FY10 budget with a whopping and unprecedented 17% tax increase. A Council whose integrity was compromised by several corrupt politicians supported the increase and rejected my alternative proposal to reduce spending. In fact, at the public budget hearing held in May of 2009, I failed to receive a second on over 30 individual motions each suggesting a different budget cut. The Council also failed to support my motions to enact user-based, revenue-increasing initiatives. As a result, the taxpayers were saddled with a 17% tax increase, generating a lot more money for the Lombardi spending machine. The approved budget contained such outlandish spending as a $75,000 line item for the position of Finance Director, which had been left unfilled since Lombardi took office 3 years earlier. In fact, his original budget proposal had irresponsibly sought a $9,000 raise for the vacant position.

In Fiscal Year 2011, the mayor increased the tax on automobiles even resorting to trickery to tax more money than the law allowed by failing to apply the state mandated depreciation formula to certain vehicles.

The Fiscal 2012 budget contained another tax increase of $0.75 per thousand. Lombardi, whose original budget request included a much larger tax increase, said the higher taxes were necessary to make the first payment on the deficit reduction bond. This too was untrue.

The column that follows was part of an advertisement that I placed in the North Breeze just days before the FY10 budget hearings were held in May 2009. The expensive two-page ad included a page of alternate spending cuts and revenue enhancements that I was proposing for the FY10 budget as well as the section below that explained the real cause of the cumulative deficit facing the residents of the town:

The Cause of the North Providence Deficit:

Why is the Mayor trying to deceive the public by blaming others for the deficit?

 

History proved that the information provided in my North Providence Breeze ad was correct on the budget deficit. In fact, my projection of $9.75 million was a little conservative. The certified audit received by the Town Council revealed an actual deficit of $10.5 million requiring the Auditor General’s intervention and the Council’s approval of a deficit reduction bond.

The budget of FY10, the final one that I voted on as a councilman, contained the deficit reduction bond. By this time, because the deficit had ballooned to $10.5 million the R.I. Auditor General demanded that the town balance its budget and pay down its deficit. Despite the Auditor General making it clear that the budget could be balanced with spending cuts, tax increases or any combination thereof, the mayor chose to comply by floating a bond and increasing taxes. If spending cuts were even a thought, those thoughts did not find their way into the mayor’s final budget submission.

Conditions of the Auditor General’s approval of the deficit reduction bond included a requirement that the town pay all future invoices in a timely fashion and not run any further budget deficits. The Council and the administration were at a stalemate with regard to the terms of the bond however. With the Council now devoid of the influence of the corrupt councilmen that had rubberstamped most of Lombardi’s proposals, Frank Manfredi, with some assistance from Manny Giusti, was able to work out a compromise with the bonding agents, the Auditor General, the Council members and the Administration. The proposal allowed for the bond to be floated in July rather than in June thereby ensuring that the initial bond payment would not be payable in FY11. It also required that the bonding agent, and not the Administration, be responsible for those payments. Despite Lombardi’s prior objection, such a plan allowed the Council to pass a budget without a tax increase, instead hoping to reduce spending in future fiscal years enabling the bond payments to be made without requiring tax increases in the out years.

Despite the admonitions of the Auditor General and the Council, the school department was forced to confront the Administration several times during the fiscal year because of the mayor’s failure to pay the Department’s bills. So delinquent was the Administration in fulfilling its obligation that the School Committee was, for several months, unable to obtain a copy of the audit they requested from the Town’s auditors because of the mayor’s failure to pay that invoice. Also, the mayor continued to spend money that was not authorized in the budget, and without benefit of competitive bids, in violation of the state law, the town charter and the bond agreement. One example of such no-bid spending is the mayor’s hiring of a firm to conduct a forensic audit of the school department’s finances.

The extra revenue generated from the massive tax increases that the Lombardi Administration imposed on the unsuspecting residents of North Providence seemed to empower the mayor to spend more. Lombardi ignored the requirements of the bond, denied the timely payment of several school department bills and overspent the FY11 budget causing yet another projected budget deficit.

On September 30, 2011 the bonding authorities took action. Moody’s lowered the town’s already bad bond rating to Baa2, essentially just a notch above junk bond status. Moody’s report pointed to three main reasons for the downgrade of the town’s credit rating; the continuing deficits in the school department, the underfunding of the police pension ARC fund and Moody’s belief that the town will continue to operate the same way into the future. The report also makes clear that the budget surplus the mayor proclaimed at the end of FY10 was simply smoke and mirrors. While Lombardi issued press statements hailing a surplus of $768,000, it failed to adequately fund the police pension ARC paying only $750,000 of the required $1.5 million payment. Some on the Council argued that if the town’s bills go unpaid, money remaining at the end of the year couldn’t constitute a surplus. Somehow Lombardi the self-proclaimed businessman politician just doesn’t understand that concept!

“I don’t know what else to do,” Lombardi told reporters incredulous that Moody’s would do such a thing to him. “This hits me right here,” he said pointing to his gut. “It hurts!” Always the victim, the Administration had to find someone else to blame. In this case he found two scapegoats; the school department and Moody’s itself. “These are the guys who downgraded the credit of the United States Government,” Chief of Staff Fossa reminded Lombardi while addressing Joe LaPlante of the North Breeze as if to imply that Moody’s doesn’t know what they are doing.

Lombardi desperately tried to convince the public that he did everything in his power to comply with the requirements of the rating agency saying that under his leadership the town has surpluses where there were once deficits. “The Auditor General and bond counsel told us to go forward with the deficit bond so yeah, we have deficit financing,” clearly not understanding what Moody’s was referring to.

“They told us to raise taxes and we did, a year ago taxes went up 17%, this year taxes went up 75 cents and that is to pay for the deficit bond. They criticized us for using TANs (Tax Anticipation Notes – towns barrow against their yet-to-be collected property taxes during a fiscal year to maintain cash flow and then pay the money back when the tax payments come in.) You show me a town in Rhode Island that doesn’t use TANs. You have to, you have no choice,” he told LaPlante. Then, ever the martyr, he added, “They want us to raise taxes to take care of this and I won’t do it.”

Typical of Lombardi statements of the past, it was full of misinformation. The surpluses he spoke of were paper surpluses created because of his own failure to pay the town’s bills. One of the conditions imposed on the approval of the deficit reduction bond was a requirement that the town not produce another budget deficit. Lombardi failed to achieve that. Above all, a report released by the Auditor General in response to Rhode Island’s public pension woes indicated that the town’s funding of its police pension under the Lombardi Administration had been woefully inadequate. In FY06, the last year of the Mollis Administration, the police pension was funded at an amazing 92%. (Anything over 80% is virtually considered by the state to be full funding.) Under Lombardi’s stewardship the pension funding declined as follows:

 

FY06 – 92% - Mollis – July 1, 2005 to June 30, 2006

FY07 – 77% - Lombardi – July 1, 2006 to June 30, 2007 (-15% from the previous yr)

FY08 – 55% - Lombardi – July 1, 2007 to June 30, 2008 (-22% from the previous yr )

FY09 – 54% - Lombardi – July 1, 2008 to June 30, 2009 (-1% from the previous yr )

FY10 – 49% - Lombardi – July 1, 2009 to June 30, 2010 (-5% from the previous yr )

 

In order to cover up the over-expenditure of his own budgets, budgets that imposed massive tax increases on the unsuspecting people of North Providence, Lombardi had taken a fully funded pension and reduced that funding by 43% in just four years creating a massive hole in the town’s pension system. This record of funding is pathetic to say the least and full vindication of the Council’s assertion that the FY10 budget surplus that Lombardi touted was a fraud.

In 2015 Lombardi crowed about what he termed the sound fiscal position of the town. He sought permission of the federal government to use $22 million of the $60 million Google windfall that North Providence received during Lombardi’s term in office. (NOTE: The commitment of a town police officer in the federal government’s investigation of Google that resulted in a large settlement with the federal government was actually made by Ralph Mollis many years earlier. Because North Providence was one of only two (East Providence being the other) R.I. municipal governments that lent support to the investigation it, along with the City of East Providence, received $60,000,000 that the town can use to fund capital improvements to the police department.)

The permission was granted and the pension is now considered to be fully funded. Few of those Google funds remain and most of the balance is slated for use by Lombardi to construct a new public safety complex which will ironically be located on the site of the proposed Stop & Shop construction that was at the root of the town’s corruption woes.

With the payment of the deficit reduction bond, the full funding of the police pension and the accumulation of a surplus born on the backs of town residents through massive tax increases, the town is once again in good fiscal condition. In August 2016, Moody’s acknowledged its pleasure with the town by assigning it a bond rating of A2, up from the dismal Baa1 that was assigned in July 2010 when the $10.5 million deficit reduction bond was first initiated.

The election of 2016, the first in which Lombardi would face a real challenge to his incumbency, occurred just as this book was going to publication. Lombardi was challenged by Councilwoman Kristen Catanzaro in what was one of the most vile campaigns in memory. The campaign sparked charges and countercharges by each candidate. Catanzaro accused Lombardi of being a tax-and-spend mayor who was willing to violate any law that got in the way of his agenda and cited many examples in support of her claim. Lombardi in turn accused Catanzaro of being ethically challenged and aiding and abetting her husband, former Fire Chief Steven Catanzaro, who Lombardi accused of wrongfully taking thousands of dollars of taxpayer money when he left his position with the town.

I was low key during the primary election between Lombardi and Catanzaro. I refused to openly support either candidate and noted the reason to Providence Journal columnist Ed Fitzpatrick when he called to ask my position in the race. In 2010, Councilman Frank Manfredi and I worked very hard to draft an Ethics Ordinance for the Town. After tens, if not hundreds of hours of independent research we collaborated on a final product after each of us learned of the other’s efforts. The final product combined the best features of similar ordinances from Indianapolis, Indiana and Providence, R.I. It was approved by the Council Ordinance Committee, unanimously passed by the seven-member North Providence Town Council that included Catanzaro, and was signed into law by Mayor Lombardi in December 2010.

The Ordinance created a seven-member volunteer ethics panel, comprised of three members appointed by the Council and three members appointed by the mayor. The seventh member would serve as chair of the committee and would be appointed by the other six appointed members. The body would be unpaid and given the authority to investigate allegations of violations of the law committed by any town employee including those serving in elected and appointed positions.

Unlike the Rhode Island Ethics Commission, the local ethics commission would be able to act on violations of the constitution, the state law and local ordinances regardless of any personal financial gain to the person being charged. While the panel had no authority to levy fines or prison terms, it was empowered with the right to remove a person from his or her position in town government in accordance with the established provisions of the Town charter. Such a commission might have been able, for example, to remove Maria Vallee from her position after the mayor refused to do so.

Despite my efforts and those of Frank Manfredi and town resident and activist Brian Quirk over those six years in which the Ordinance had become law, neither Mayor Lombardi nor the Town Council appointed the members of the ethics commission as required by the law. Over those years the three of us roundly criticized Catanzaro and her fellow Council members for failing to abide by the law.

We were offered several excuses for the non-compliance. Initially Catanzaro claimed that the positions needed to be filled with lawyers. Later Catanzaro said that no impartial people could be found in North Providence to be entrusted with the power that the Ordinance imparted to them. Later still, she said that appointing the members would impose a significant cost that the town simply couldn’t afford. None of these things is true and I, Manfredi and Quirk pointed out the fallacy of her statements using the very language of the Ordinance. Regardless, Catanzaro and the other Council members refused to abide by the requirements of the law.

I told Fitzpatrick during that interview that North Providence was undoubtedly one of the most ethically challenged communities in the state and that the selective enforcement of laws is the very thing that lends itself to corruption. I could not in good conscience, I noted to him, support any candidate who willfully violates the law by not advocating for the appointment the members of the North Providence Ethics Commission. My comments were printed in his column that following Sunday.

During a subsequent debate between Lombardi and Catanzaro, moderator Tim White picked up on my comments to Fitzpatrick and asked each candidate why he/she hadn’t appointed the ethics commission members. Catanzaro was steadfast in defense of her refusal to appoint the commission while Lombardi noted that indeed the time had come to make those appointments.

Lombardi went on to win the September primary in a 3-1 landslide. Though proclaiming the election over, he still faced opposition in the November election from Independent candidate Brian Quirk. Lombardi didn’t mount a campaign electing instead to place a couple of ads in the North Providence Breeze.

Quirk, who chose to finance 100% of his campaign using his own money, was restrained by a lack of name recognition, a lack of time to adequately meet the residents, and lack of the financial resources necessary to compensate for those shortcomings. He spent most of his approximately $8,000 budget on full page ads in the North Providence Breeze and on a 24-page brochure in which he explained his positions, his intent and his reasons for running. In an energetic and otherwise brilliant campaign Quirk took the high road. He refused to attack his opponent personally and focused instead on his quest to bring professional management to the town by working to eliminate the position of mayor and replace it with a professional town manager hired by the Council.

Noting that 21 of the State’s 39 municipalities had such a system of government and that each of those 21 sported lower taxes, better services and a higher quality of life than did North Providence, he vowed to be a one-term mayor. He offered immediate tax relief both through the reinstatement of the automobile tax exemption, and a reduction in the property tax resulting from the early payoff of the $10.5 million deficit reduction bond. And, he promised to listen and be attentive to the needs of the taxpayers of North Providence.

Nothing about his campaign was conventional and most of the people he met during the seven week effort agreed with his plan and liked his proposal. In the end however, the November 8, 2016 election gave Lombardi won another resounding victory. Though running a decent, clean and professional campaign that might be an ideal model for every other campaign in the nation, in the end, Quirk just couldn’t get his message out to enough people.

Paul F. Caranci is a historian and serves on the board of directors for the RI Heritage Hall of Fame. He is a cofounder of, and consultant to The Municipal Heritage Group and the author of five published books including two produced by The History Press. North Providence: A History & The People Who Shaped It (2012) and The Hanging & Redemption of John Gordon: The True Story of Rhode Island’s Last Execution (2013) that was selected by The Providence Journal as one of the top five non-fiction books of 2013. Paul served for eight years as Rhode Island’s Deputy Secretary of State and for almost seventeen years as a councilman in his hometown of North Providence. He is married to his high school sweetheart, Margie. They have two adult children, Heather and Matthew, and four grandsons, Matthew Jr., Jacob, Vincent and Casey.

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Related Slideshow: Rhode Island’s History of Political Corruption

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