The Hummel Report

Investigative Reports That Get Results

A Rhode Island 501c3 Non-Profit

Granting Favors

Legislative and community grants issued by the Rhode Island General Assembly came under intense public scrutiny this session, prompting the House and Senate to make some changes. But are they enough? This week, Jim Hummel finds there is another layer of money being distributed by the Assembly’s leadership, largely under the public radar.

 

SCRIPT:

The 2016 session of the General Assembly will be remembered, in part, as the year many Rhode Islanders got a tutorial on legislative and community grants - a program that distributes millions of taxpayer dollars annually to non-profit organizations at the whim of legislative leadership, in some cases with little oversight.

We’ve all witnessed the legislative grants, often a photo op for the local newspaper, complete with lawmaker, recipients and an oversized ceremonial check.

And the so-called community grants, which have gone to organizations like Crossroads, or St. Mary’s Home for Children or Rhode Island Meals on Wheels.

But The Hummel Report found another category of money being appropriated by the General Assembly: departmental grants: taxpayer money allocated to and distributed by various state agencies like the Department of Environmental Management, The Department of Administration or the University of Rhode Island.

Morgan: `` They give money to the departments and the departments give them out.  ‘’

Representative Patricia Morgan has been a longtime critic of the grant program and says that despite the House Speaker’s assertion they are community grants, the departmental grants are really their own entity - because state agencies are being used as a conduit for the money.

Morgan: ``That gives the people up here in this building, in the State House, a degree of separation. What’s the criteria for them to give out this money? What value does it add to the taxpayers and how do you judge that value? What metrics, what performance metrics are you putting on the money? That’s missing in that money.’’

MacBeth: ``I want to have somebody vote for me because I’m doing the right thing here and I’m voting the right way, not because I can pass out money.’’

Karen MacBeth has opposed legislative grants since she was first elected to the Rhode Island House in 2008, submitting a bill during her first term to have them eliminated. She even sent then-Speaker Bill Murphy certified letters trying to personally get on his radar screen with her opposition to the grants.

Hummel: ``You know everybody’s talked about okay the legislative grants and the community grants. There’s really a third subsection, isn’t there?’’

MacBeth: ``I believe there is. I don’t know if people call it grants, but I believe it falls under that same heading.’’

Hummel: ``But they’re labeled department grants. That’s what it says on the legislative website.’’

MacBeth: ``Right. I don’t think it is a community grant. I see it as using one entity - we put money in one place, who then gives it to another organization or another group. If we’re going to give money, then it should be in the budget where it’s going.’’

MacBeth, who until recently was the chairwoman of the House Oversight Committee, said she had talked to Speaker Nicholas Matiello about turning the oversight committee’s focus to the grant program - in part because then-House Finance Chairman Raymond Gallison was associated with an organization receiving grant money. Gallison abruptly resigned this spring, the target of a federal investigation.

MacBeth: ``And we did have a conversation about Rep. Gallison before everything happened. Certainly I’d seen his website, and thought…’’

Hummel: ``So that was on your radar screen even before all of the publicity?’’

MacBeth: ``Yes it was.’’

Matiello told MacBeth grants came under the purview of House Finance. Shortly after that MacBeth switched from being a Democrat to Republican and the speaker removed her as the chairwoman of oversight. MacBeth since decided not to seek a fifth term.

Hummel: ``Were you more concerned about the oversight and accountability of the money or the concept of funding charities that maybe should be raising their own money?’’

MacBeth: ``I think both. My own philosophical belief is that we should not be doing that, that’s not our role goal here. But putting that aside, if it was going to happen, I wasn’t going to be a part of it. But I certainly wanted to see the oversight of it.’’

The Hummel Report examined the money distributed through URI the past five years. This year the university was enlisted to distribute nearly three quarters of a million dollars to eight organizations, including more than $28,000 for the Hope High School Scholarship Fund and $5,100 for something called Italian Cultural Heritage; more than $31,000 went to Learning Enhancements for Adult Programs.

The principal of Hope High told us he’d never heard of the Hope High School Scholarship Fund. We obtained documentation from both URI and the Speaker’s office that shed more light on the program - turns out it’s aimed at middle-school students who show academic promise but might be at risk to drop out. The report we obtained says it serves anywhere from 10-30 students a year in grades 9-12. It’s unclear why prospective Hope High students were recipients or how the program began.

We found the Italian Cultural Heritage funds actually go to support Italian Americana, described as a semi-annual historical and cultural journal devoted to the Italian experience in America. The benefit to taxpayers is unclear but it says URI benefits from the Journal’s wide distribution and ``any acclaim it receives.’’

Hummel: ``Somebody at some point had to say we think that Italian Cultural Heritage program or Hope High School Scholarship Fund or Educational Enhancement…’’

Morgan: ``Do those names sound like money that URI would say: `We have to have this program?’ That URI itself thinks they have to have the Hope High School Scholarship program, or they have to have the Italian Heritage.That doesn’t sound like a program that URI would bubble up internally. Doesn’t it sound like somebody else has suggested it?’’

Hummel: ``And used URI as a pass through?’’

Morgan: ``Yeah. To give that degree of separation.’’

MacBeth: ``When I first heard that there was money going to URI and then URI was supposed to then give money to organization or groups, I think that puts URI in a difficult situation. That’s not their job. Their job is to educate our students and this didn’t seem to be part of it.’’

The largest URI grant goes to the Polaris Manufacturing Extension Program. The $350,000 grant was justified in a two-page handwritten form that says the mission of the program is to ``grow small Rhode Island manufacturers’’ through bus tours, `consortia’ and seminars.

Mortan: ``We don’t see those line items in our budget. So you can be thinking and voting on a budget that says we’re giving $10 million to URI and then underneath it they’re giving money to other places. That’s the concern I had going through and having gone through my 8th budget and reading them over and over and looking at each line item and finding out - you can look at that all day long and you’ll never see that second step in the money.’’

Hummel: ``Although URI tells me it is accounted for in their budget, but you have to take a deep dive into URI’s budget and who’s going to do that?’’

MacBeth: ``Yes, yes.’’

House Speaker Nicholas Mattiello announced last month that he was revising the community grant program, reducing it from a total of $11.3 million this year to $6 million next year. The total number of grants has been reduced from 230 to 25, with four pools of money created and distributed by state departments.

Under that new budget, the Hope High Scholarship funding is eliminated, along with the Italian Cultural Heritage, but Polaris remains, although it’s been reduced from $350,000 to $250,000.

The legislative grant program will remain unchanged at $2.2 million, split equally  between the House and the Senate.

Morgan: `My fear is that now they’re saying: All fixed. It’s all fixed. Not so fast, it’s not all fixed and I’m afraid the people will fall for it again and say okay, now it’s a line item in the budget. That means nothing. They can add and subtract line items in that budget and nobody will go and do the research and that’s the problem.’’

In fact, Morgan says she tried  to introduce an amendment last week on the House floor that would require community grants to have a legislative sponsor’s name and to disclose if any elected official was on the board or an employee of the organization -  and have it listed on a website. Her proposal was defeated.

Morgan: ``Doesn’t mean it’s bad necessarily, unless it is bad, right? But it’s a transparency issue. We should know if an elected official is connected to that money in any way.’’

MacBeth agrees additional changes in the grant program are necessary.

Morgan: ``I don’t see a change in the process so we may stop a legislative grant or we may stop a community service grant. We say they’re not community service grants, but what have we done to change the whole process? We haven’t. It can still be hidden, it can still go to groups. You have the Department of Labor and Training and they have a budget and then they dole their money out to groups or, I guess they’d be called quasis. The money from there goes to somebody else. That’s the layers that need to be peeled back to get the answers of why this state has such a big budget. It makes no sense that a state this size would have the budget we do. And I think as you start to peel those back you’re going to start to see - or get answers - that people are really going to be surprised at.’’

At the State House, Jim Hummel for The Hummel Report.