Allegations of Financial Misconduct by Rep. Williams at John Hope

Tuesday, September 02, 2014


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The recently ousted Executive Director of the John Hope Settlement House has alleged that Board President Representative Anastasia Williams had used the house for political purposes, without compensating the organization.

GoLocal reported Monday that Williams appointed former discredited head of ProCAP, Frank Corbishley, to serve as the interim Executive Director in the wake of former Director Taino Palermo's sudden departure last week, when Palermo challenged Williams' leadership. 

In a letter to the John Hope Settlement House board upon his resignation last week, Palermo leveled a series of allegations against Williams, including that on July 26, Williams "hosted an event...for her campaign (this event was not for John Hope) in which John Hope paid staff to create the flyer, distribute the flyer to the community and work the night of the event. John Hope has now documented payroll for a political event of which I would be responsible for as the Executive Director. There is no rental agreement or payment for the event."

Palermo goes on to outline additional instances that he said Williams used the building for political purposes without compensation, including hosting a fundraiser for Gina Raimondo on July 31 that he said Williams said she would pay the rental fee for, but never did.  Williams did not return request for comment.

Charges Came Prior to Leadership Change

Prior to his resignation, Palermo, who started as Executive Director at the John Hope Settlement House at the end of May, had worked in non-profit management at Syracuse University.   Less than two months into his tenure at the John Hope Settlement House, Palermo addressed his initial concerns to two members of the board in an email dated July 22. 

"I'm reaching out to you both as veteran board members of organizations and fountains of knowledge (especially in regards to legal matters and/or non-profits) about a few things that are concerning to me," wrote Palermo.  "I am telling you both this in confidence...yet in writing, so it's documented somewhere that I voiced these concerns should something arise in the near future."'

Palermo goes on in the email to broach his issues with perceived conflicts of interest in both the political arena, and management style, of Williams. "I want to be clear that my issue is not with her personally, or even with her as a board member and our board president," wrote Palermo. 

Palermo spoke with GoLocal Monday about his non-profit experience prior to coming to John Hope, and his experience at the West Side non-profit that has served the community since the 1930s.

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Representative Anastasia Williams

"My whole career's been non-profits.  I'm well aware of the blurred lines between politics and non-profits in cities," said Palermo, who had worked with Syracuse's Near West Side Initiative.  "I guess it's more in your face here.  When I was being interviewed, I was also interviewing them.  I saw online there was a 990 for 2010 for a $5 million operating budget, but that was the most recent one at the time."

"So I believe I asked all the right questions about fiduciary responsibility, but couldn't get direct answers," continued Palermo.  "But they seemed eager for direction. I saw it as a clay I could mold, put a stamp on it.  I believed in the mission."

Palermo, however, said that despite the political issues, he did not see a larger pattern of financial malfeasance at the house. 

"In my short time, [Williams] never had anything to do with the finances, although she did cut staff hours and pay," Palermo told GoLocal.  "She'd say we had a lack of resources, but I one of the first things I did was to restructure things to save $20,000 in salaries."

Palermo's replacement Corbishley was previously the Executive Director of ProCAP, before he was suspended and subsequently stepped down.  In November of 2011, GoLocal reported of ProCAP, “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.”

Finances in Question

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Taino Palermo

A 990 from 2010, for the 2009 tax year, shows that the John Hope Settlement House started the year with $7.2 million in assets, and ended the year in $6.3 million in assets.  A 2012 990 -- for the 2011 tax year -- had the House starting the year with $5.1 million in assets, and ending with $3.9 million. 

Palermo said that while the house had his challenges, he had worked to keep it in good standing. 

"I knew there was a legislative grant of $250,000 of state funding coming.  That's what [Williams] told us.  It was supposed to come, but I hadn't seen it," said Palermo. 

"When I first came on, I got multiple calls a day [from vendors], saying "You owe us this," said Palermo.  "I'm probably a certified debt collector at this point.  But [John Hope] is in a good place.  There's a $100,000 line of credit of with city, of which $50,000 has been used.  I know, as it was in our audit."

"So while they're relatively sound right now, the bigger issue is they have no formal funding streams.  The Rhode Island Foundation, Champlain Foundation, United Way...all of those former funders no longer give to John Hope," said Palermo.  "So finances aside, there was a clear power struggle at play [with Williams] that I'm still not fully aware of at this point."

John Hope Settlement House board member Sarah LaRosa said that she fully supported Palermo. 

"I loved that Tai was from out of state," said board member Sarah LaRosa, who had voted for Palermo to stay.  "He had visions -- and a plan -- to bring the John Hope Settlement House back to greatness."



Related Slideshow: Rhode Island’s History of Political Corruption

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Buddy Cianci

Vincent A. "Buddy" Cianci resigned as Providence Mayor in 1984 after pleading nolo contendere to charges of assaulting a Bristol man with a lit cigarette, ashtray, and fireplace log. Cianci believed the man to be involved in an affair with his wife. 

Cianci did not serve time in prison, but received a 5-year suspended sentence. He was replaced by Joseph R. Paolino, Jr. in a special election. 

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Joseph Bevilacqua

Joseph Bevilacqua was RI Speaker of the House from 1969 to 1975, and was appointed as Chief Justice of the State Supreme Court in 1976.  It was alleged that Bevilacqua had connections to organized crime throughout his political career.  

According to a 1989 article that appeared in The New York Times at the time of his death:

The series of events that finally brought Mr. Bevilacqua down began at the end of 1984... stating that reporters and state police officers had observed Mr. Bevilacqua repeatedly visiting the homes of underworld figures.

The state police alleged that Mr. Bevilacqua had also visited a Smithfield motel, owned by men linked to gambling and drugs...

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Thomas Fay

Thomas Fay, the successor to Bevilacqua as Chief Justice of the Supreme Court, resigned in 1993, and was later found guilty on three misdemeanor counts of directing arbitration work to a partner in his real estate firm, Lincoln Center Properties.  

Fay was also alleged to use court employees, offices, and other resources for the purposes of the real estate firm.  Fay, along with court administrator and former Speaker of the House, Matthew "Mattie" Smith were alleged to have used court secretaries to conduct business for Lincoln, for which Fay and Smith were business partners. 

Fay was fined $3,000 and placed on one year probation. He could have been sentenced for up to three years in prison. 

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Brian J. Sarault

Former Pawtucket Mayor Brian J. Sarault was sentenced in 1992 to more than 5 years in prison, after pleading guilty to a charge of racketeering.  

Sarault was arrested by state police and FBI agents at Pawtucket City Hall in 1991, who alleged that the mayor had attempted to extort $3,000 from former RI State Rep. Robert Weygand as a kickback from awarding city contracts.

Weygand, after alerting federal authorities to the extortion attempt, wore a concealed recording device to a meeting where he delivered $1,750 to Sarault.

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Edward DiPrete

Edward DiPrete became the first Rhode Island Governor to be serve time in prison after pleading guilty in 1998 to multiple charges of corruption.

He admitted to accepting bribes and extorting money from contractors, and accepted a plea bargain which included a one-year prison sentence.

DiPrete served as Governor from 1985-1991, losing his 1990 re-election campaign to Bruce Sundlun.

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Plunder Dome

Cianci was forced to resign from the Mayor’s office a second time in 2002 after being convicted on one several charges levied against him in the scandal popularly known as “Operation Plunder Dome.” 

The one guilty charge—racketeering conspiracy--led to a five-year sentence in federal prison. Cianci was acquitted on all other charges, which included bribery, extortion, and mail fraud.

While it was alleged that City Hall had been soliciting bribes since Cianci’s 1991 return to office, much of the case revolved around a video showing a Cianci aide, Frank Corrente, accepting a $1,000 bribe from businessman Antonio Freitas. Freitas had also recorded more than 100 conversations with city officials.

Operation Plunder Dome began in 1998, and became public when the FBI executed a search warrant of City Hall in April 1999. 

Cianci Aide Frank Corrente, Tax Board Chairman Joseph Pannone, Tax Board Vice Chairman David C. Ead, Deputy tax assessor Rosemary Glancy were among the nine individuals convicted in the scandal. 

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N. Providence Councilmen

Three North Providence City Councilmen were convicted in 2011 on charges relating to a scheme to extort bribes in exchange for favorable council votes. In all, the councilmen sought more than $100,000 in bribes.

Councilmen Raimond A. Zambarano, Joseph Burchfield, and Raymond L. Douglas III were sentenced to prison terms of 71 months, 64 months, and 78 months, respectively. 

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Charles Moreau

Central Falls Mayor Charles Moreau resigned in 2012 before pleading guilty to federal corruption charges. 

Moreau admitted that he had give contractor Michael Bouthillette a no-bid contract to board up vacant homes in exchange for having a boiler installed in his home. 

He was freed from prison in February 2014, less than one year into a 24 month prison term, after his original sentence was vacated in exchange for a guilty plea on a bribery charge.  He was credited with tim served, placed on three years probation, and given 300 hours of community service.

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Joe Almeida

State Representative Joseph S. Almeida was arrested and charged on February 10, 2015 for allegedly misappropriating $6,122.03 in campaign contributions for his personal use. Following his arrest, he resigned his position as House Democratic Whip, but remains a member of the Rhode Island General Assembly.

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Gordon Fox

The Rhode Island State Police and FBI raided and sealed off the State House office of Speaker of the House Gordon Fox on March 21--marking the first time an office in the building has ever been raided. 

Fox pled guilty to 3 criminal counts on March 3, 2015 - accepting a bribe, wire fraud, and filing a false tax return. The plea deal reached with the US Attorney's office calls for 3 years in federal prison, but Fox will be officially sentenced on June 11.


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