INVESTIGATION: ‘What Is PPAC Hiding Behind the Curtain?’

Tuesday, April 01, 2014

Stephen Beale, GoLocalProv News Contributor

GoLocalProv’s investigation into the finances and business relationships of the Providence Performing Arts Center has raised questions about what seems to many to be the excessive compensation of its top staff, sparking demands for greater transparency from the politically well-connected nonprofit.

On Monday, GoLocalProv revealed that PPAC’s president, James “Lynn” Singleton, earned nearly $800,000 in 2012, with more than half coming from an affiliated for-profit business for which he also serves as president. Singleton earned more than $500,000 from the outside business despite PPAC’s claims in IRS filings that he works 60 hours a week exclusively for the nonprofit.

“The compensation seems excessive,” said Providence city Councilman Luis Aponte, who added that without knowing more about the arts and theater industry it would be hard to assess whether it the salary is reasonable or not.

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Aponte said the news reminded him of the controversy over the compensation package for former Lifespan CEO George Vecchione, whose pay peaked at almost $8 million even as the health care nonprofit was battling budget shortfalls.

“When you hear of those types of salaries for not-for-profit organizations, you have to question what it is,” Aponte said. Two questions came to mind, Aponte added. “If it’s a nonprofit, are they making more than they would be making in the private sector? How does it compare with their counterparts?”

GoLocalProv has reported that other theater executives earn less than Singleton. For example, locally, the top executive at Trinity Repertory Theater was earning $181,883 as of 2012, the latest available year for which IRS records are available. In Boston, the top position at the Wang Theatre in Boston paid $482,912 while the highest-paid employee at the Shubert Theatre in New York City earned $334,743 for the same year.

High-paid arts executives, but what about the artists?

For one local artist, the issue was not so much the compensation for PPAC’s top executives, but whether the windfall was making its way down to individual artists. “In other words is there a trickle down here so everybody is enjoying the benefit?” said Harley Bartlett, a muralist and fine arts painter based in Cranston who also serves on the board of directors for the Providence Art Club, which is a nonprofit.

Bartlett said more concerned about the salaries for the individual artists who make productions at PPAC possible—the scene painters, the actors and actresses, the stage crew. “Those are the ones who to me count. I want to know if they are being compensated as well,” Bartlett said.

Bartlett said he often hears others in Rhode Island pointing to its many arts nonprofits as evidence of its vibrant arts scene. But he worries about the ability of the average artist to make a living here.

When people think of arts in Providence, PPAC usually takes top billing, but Bartlett said GoLocalProv’s investigation—particularly revelations about its business relationships and executive compensation—make him question its role in the arts community. “You have somebody with their hands in the cookie jar. You say, ‘Wait a minute, is this really about the arts or is this about somebody enriching themselves?” Bartlett said.

A key question for Bartlett is whether PPAC receives any government funds. If it does, he said the issue would be one that affects not only local artists, but also local taxpayers.

PPAC refused to disclose information on any government funding. But GoLocalProv has learned that it has received millions in public funding over the years.

In 2004, PPAC won a $1 million federal grant for facilities improvements, according to federal grants records. In the mid-1990s PPAC received a Community Development Block Grant between $7 million and $8 million, according to state Rep. John Lombardi, a Providence Democrat and also a former city councilman. More recently, in 2013, PPAC was identified as a potential recipient of a share of $675,300 in federal funds distributed to the Rhode Island Council on the Arts.

Lombardi said he could not comment on how much PPAC and its affiliated businesses pay Singleton without knowing more about the situation. Overall, he said he considers himself a supporter of Singleton, praising him for the job he has done at PPAC. “I think he’s doing so well over there,” Lombardi said, adding that he could not see how anyone could be upset with Singleton.

‘Appalled and disappointed’

But others question why PPAC is not being transparent, after GoLocalProv reported that PPAC officials refused to answers numerous questions about its finances and operations—including whether Singleton and board members have ownership interests in the affiliated businesses.

State Rep. Charlene Lima, a retired Providence school teacher and Cranston Democrat, said she did not have a problem with the reported PPAC salary of more than $200,000 for Singleton. “Compared to other states, that part is OK,” Lima said. But she would like to know more about the $555,000 in income from the affiliated business. “I would like to have some transparency on that,” Lima said.

Providence’s GOP committee chair, Tara Pinksy, was outraged by the report. “I’m just appalled and also disappointed,” Pinsky said. “It just seems to me the same old business in Rhode Island.”

Pinsky said she had questions of her own that she’d like answered by PPAC. For example, she wants to know when the three for-profit businesses affiliated with PPAC were formed and who authorized it. She also wonders how the nonprofit PPAC shares revenues with the businesses, asking if revenue being diverted from PPAC into the for-profit businesses.

“There’s no accountability. That’s the problem with this state—no transparency and no accountability,” Pinsky asked.

Pinsky added that as a Republican, she doesn’t begrudge anyone for making money after hard work, but she does find the salary paid to Singleton “unusual” for the arts. Among her questions for PPAC—just where exactly is the outside income coming from?

“What is going on behind the curtain?” Pinsky said.

Board members defend compensation, businesses

Two board members at PPAC defended the compensation for its top executive, as well as its close relationship with three businesses that share the same office space—along with many of the same officers and managers—on Weybosset Street.

Bob Flanders, a former associate justice of the state Supreme Court, said he was aware of the salaries for Singleton and other top employees, and that, as a member of the finance committee of the board, he had reviewed their compensation in finalizing the annual Form 990 that PPAC, like other tax-exempt nonprofits, must submit to the IRS every year.

“I am aware that they are well paid,” Flanders said, adding that he was equally cognizant of how successful they have been at running both PPAC and its for-profit businesses.

When asked if it was appropriate for Singleton and Finance Director Norbert Mongeon to run both PPAC and hold positions in the for-profit businesses, Flanders said the board had reviewed the question and had been advised by an accounting firm, the New Jersey-based Abruzzo Associations, that the arrangement was OK. “We received counsel that there was nothing inappropriate about that,” Flanders said.

GoLocalProv also asked Flanders if he was aware that PPAC claims in its IRS filings that Singleton and Mongeon work 60 hours a week exclusively for it, before taking into account any time presumably spent earning as much as $500,000 from the other businesses,

“I’m not aware of the details of how that’s allocated, both what they do for PFM and what they do for PPAC,” Flanders responded. (PFM is Professional Facilities Management, one of the three affiliated businesses.)

When the same question was posed to former Providence Mayor Joe Paolino, also a board member, he too was unaware of the allocation of hours. But he also defended the compensation paid to Singleton. “You take a guy like Lynn Singleton out, PPAC then would be a second-rate place,” Paolino said. “Us keeping him in Providence, if we got to pay him a little more, it’s worth it.”

Paolino added that he would rather pay someone a $1 million who generates revenue than someone else $100,000 who doesn’t bring in any more. “The economic impact PPAC has on Providence is incredible,” Paolino said. “Besides the national recognition it has brought on us.”

Paolino also said that PPAC’s relationship with three for-profit businesses was the “norm in the industry.”

GoLocalProv also contacted the offices of several of the elected officials who sit on PPAC’s board as non-voting members for comment. They include: U.S. Senator Jack Reed, Congressman Jim Langevin, Governor Lincoln Chafee, and Providence Mayor Angel Taveras. Only one responded—a spokeswoman for Chafee, who referred questions to Chafee’s designee on the board, Steven Costantino, the Secretary of Health and Human Services. (Costantino could not be reached for comment in time for publication.)

Stephen Beale can be reached at [email protected]. Follow him on Twitter @bealenews

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