Ethics Commission finding triggers release of WFD report

Will a forensic audit of firefighter sick pay reveal a “conspiracy to defraud the city,” as Rob Cote contends, or will it show numerous firefighters collected payments within the terms of their contract?

On Tuesday, Mayor Frank Picozzi said the accounting firm Marcum provided the report at no cost to the city and that Solicitor Jeffery Ursillo is reviewing it – and making redactions – before he sees it personally and hands it over to the City Council.

Cote’s complaint triggered the state Ethics Commission investigation of former City Council President Steven Merolla. Merolla was instrumental in retaining the Providence law firm, YKSM, to perform the audit that was not released to the city because of outstanding invoices totaling $26,720.50.

In his complaint filed with the commission on Nov. 10, 2020, Cote alleges Thomas Lisi, a partner in the firm, served as Merolla’s campaign manager and that the firm performed accounting work for Merolla’s law firm.

In its report of July 27, 2021, the commission finds there is probable cause that Merolla violated the ethics code.

In conducting its investigation, the commission interviewed former and current members of the administration and members of the City Council, and reviewed email correspondences and documents. The 30-page report finds that while Merolla abstained on the vote awarding the initial $30,000 contract to YKSM – which has subsequently been acquired by the accounting firm of Marcum – he voted on contract extensions.

In addition, when former Mayor Joseph Solomon refused to pay Marcum, Merolla sought the intervention of municipal employees. Solomon, who did not win reelection in 2020, was City Council president and was in agreement with Merolla and Ward 5 Councilman Ed Ladouceur that a study of the Fire Department be performed in response to allegations that firefighters were “gaming” the system made by Cote and Ken Block, whose business was located in Warwick at the time and runs Watchdog RI.

The commission finds that “by using his (Merolla’s) position as City Council President to direct municipal employees or officials to pay outstanding YKSM invoices, the Respondent (Merolla) was using his public office as the Council President to financially impact his business associates.”

The report backs up this allegation on the basis that Merolla voted on extensions of the YKSM contract on April 22 and June 17, 2019; that he signed five separate invoices authorizing payments to YKSM; that he signed the engagement letter extending the YKSM contract through December 2019; that he submitted letters on different occasions to then Finance Director Brian Silvia and Purchasing Agent Patricia Peshka to increase funding to YKSM; and that he contacted William DePasquale, then chief of staff for Mayor Solomon, to pay the outstanding YKSM invoices.

The report recounts that Lisi emailed City Council Liaison Joanne Cournoyer and Merolla on June 3, 2019, explaining that several invoices had gone unpaid. On the same day, Merolla called DePasquale saying, “this is embarrassing. These guys do excellent work for us and we do not pay them.”

DePasquale suggested Merolla needed to increase to award to YKSM, to which Merolla retorted, “Bill, this is runaround bulls***t … Just pay it,” the report reads.

On a vote of 6-0, the commission found probable cause on two separate charges. Merolla now faces either adjudication or a settlement. Merolla’s attorney, Christopher S. Gontarz, said Tuesday he is “digesting the voluminous discovery delivered to us.” He did not say what would be their next course of action.

Cote is now focused on the report.

“The one thing I want out of this is the release of the report,” Cote said last week.

He maintains that the report will substantiate his study that members of the Fire Department, through manipulation of sick time, made off with $245,000 from 2015 to 2017. Furthermore, he claims Solomon, who was in support of the audit as a member of the council, changed his tune when he became mayor as he was seeking the endorsement of the firefighters in his bid for reelection. Cote reasons that’s why he refused to pay the outstanding YKSM invoices.

Last week Cote called on Mayor Picozzi to obtain and release the report.

“The fact of the matter is that officials have a fiduciary responsibility to follow through (on the findings of the report),” Cote said.

Both Picozzi and City Council President Steve McAllister said Friday they want the report, but didn’t feel the city should pay for it. YKSM has already been paid a total of $165,000.

“I think we have paid enough,” McAllister said Friday, adding that he believes it is in Marcum’s best interest to release the report.

Cote was aware Tuesday the report would be released to the city. He questioned if that would have happened had it not been for the action of the Ethics Commission. He maintains that the council should have demanded the report years ago.

“It’s a shame the public has to do the work of the council,” he said.

Both Cote and Block questioned Tuesday why the city should make any redactions to the report. Cote maintains the report is basically an accounting and that the numbers speak for themselves. Block said the council contracted for the report and that they should be getting it in its entirety, without redactions.

Block followed up his phone interview with an email. He had the following statement:

“The main driver of the unused sick time scandal – the discovery of the scheme, the quantification of the loss, the sweeping federal investigation that ensued and also the hiring of YKSM – were wholly the result of Rob Cote and I working doggedly to figure it all out. Why did no one in Warwick city government discover this issue? Why did the mayor’s office and the city council not work diligently to get the YKSM report published, and instead work to bury it? Was it because no one in Warwick government wanted to see a report confirming our findings? Warwick’s disinterest in getting to the bottom of this issue is governmental malpractice of the highest order, and one of the largest reasons why I moved my businesses out of the city. The ethics violations of which Merolla are accused are awful, but pale in comparison to the larger crime of an entire city’s worth of elected officials and public employees who collectively did nothing to protect the public’s financial interest until Rob and I created a tsunami of awful findings and the accompanying bad press.”