STEVE MEROLLA

Former City Council President Steve Merolla is required to pay a $3,500 civil penalty after the Rhode Island Ethics Commission accepted a settlement agreement with the former City Council President on Tuesday. 

On Nov. 10, 2020 Warwick watchdog Rob Cote filed an ethics complaint against Merolla. He alleged that Merolla voted in favor of awarding contract extensions to YKSM – which has subsequently been acquired by the accounting firm of Marcum, which was tasked with conducting a forensic audit of firefighter sick pay.

In the complaint Cote alleged that 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. Merolla’s attorney Christopher S. Gontarz said Wednesday that Lisi never served as campaign manager.

The 30-page report finds that Merolla abstained on the vote awarding the initial $30,000 contract to YKSM.

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.

Gontarz, in a phone interview Wednesday said that it was “raised from the very beginning that the definition of business associate with the ethics commission is much broader than one would think of as a business associate being in business with someone to procure or to make money or to gain something.”

Cote in a statement Tuesday said, “this was a slap on the wrist and certainly sends the wrong message in terms of preventing poor decisions on the part of elected officials. This is an example of the deception of the taxpayers and gross abuse by a department that everyone holds in such high esteem.   When will the taxpayer be made whole and have accountability? Still no official word on the part of this new Administration which boasted transparency.”

Gontarz said that when the original contract came up Merolla abstained from the vote because it was brought up that it could be a conflict of interest. 

After doing research Merolla thought that Lisi wasn’t considered a business associate and it was his understanding that he would be able to vote on the extensions without their being an issue. 

“It was his understanding, unfortunately it wasn’t the correct understanding,” Gontarz said. 

“If he had known the Ethics Commission had a different view obviously he would’ve recuse himself,” Gontarz said. 

Gontarz who has practiced law for over 40 years said that the vast majority of administrative hearings ends with both sides sitting down to discuss how to settle the cases, which is what happened in this situation. 

Gontarz said that Merolla “had the potential to pay a substantial civil penalty.”

“It was in his best interest to conclude this case. He felt that way.”