December 15, 2011

It All Makes Sense if you Understand They're Planning to Sell Their Rights to the Gold Mines Under Kennedy Plaza

Carroll Andrew Morse

Ted Nesi of WPRI (CBS 12) notes two developments in the the collapse of ProCAP, an organization that is supposed to address poverty issues that, while outside of the government-proper, receives "96% of its...revenue from taxpayers"...

Superior Court Judge Michael Silverstein granted ProCAP's request and named Thomas Hemmendinger as the agency's temporary court-appointed receiver during a brief hearing Wednesday. A permanent receiver will be named in early January.

The board voted 10-0 “to seek the protection of the courts through receivership" after a presentation by interim executive director Frank Shea that showed the taxpayer-funded nonprofit's financial woes are "much direr, quite frankly, than anybody thought," spokesman Bill Fischer said....

The city [of Providence] will loan ProCAP $250,000 on an emergency basis to keep its doors open and repaying the money will have priority in court, [Mayor Angel Taveras] said. The judge approved a $10,000 bond and described the step taken Wednesday as an "operational receivership" because the organization will remain open.

Let me get this straight. A city that has no money, because it spends more than it takes in, is loaning money to an organization that receives all of its money from public sources -- raising the question of how the "loan" will be paid back -- at the same time that a source of revenue is going to need to be found to pay for the services of a "receiver", who I assume is not working for free.

I'm not suggesting a connection here, just pointing out that the Rhode Island solution to ProCAP's problems seems to be to pile new debts on an already bankrupt organization that has no taxpayer-independent source of revenue with which to pay them back. Does Rhode Island's governing class really think that this is legitimate, rational finance?

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Posted by: Monique at December 15, 2011 9:25 AM

And how does ProCAP find the cash to pay Bill Fischer to be their spokesperson? Seems like a luxury when, oh, I don't know, you owe $2.2 mil to various creditors.

Posted by: Don Botts at December 15, 2011 9:42 AM

You guys clamor for privitization of services that could be provided by the city, then cry foul at the funding of those nongovernmental nonprofits? Um, OK.

Granted this organization needs better management, but this line of reasoning is quite odd. If providing a bridge loan is cheaper than taking over the functions that would be lost if PROCAP goes under, it's money well spent. If not, it isn't. Why is that so confusing?

I'm also not sure why you'd think it a concern for the city if PROCAP pays back loans with money from federal or other grants. The city funds all kinds of programs with state or federal money without any confusion. It's sort of like wondering how a business unit could bill internal clients for IT work. How could that be?! Must be gold mines in the data center!

Posted by: Russ at December 15, 2011 10:00 AM

Once upon a time, the co-workers of one habitually VERY late, or "I have to leave early" did not want the co-workers pay docked for the time (8 or 9 hours per week) absent from work. When I asked them to collect and pay the worker, they did NOT agree! Hmmm, guess when the phatom "somebody" is directed at the fools who want to give away money, the "giving" swiftly changes!

Posted by: RedShoes at December 15, 2011 10:37 AM
You guys clamor for privitization of services that could be provided by the city, then cry foul at the funding of those nongovernmental nonprofits? Um, OK.

More intellectual dishonesty from Russ of exactly the type we've all come to expect from him. Nobody here wants privatization just for the sake of privatization. What libertarians and conservatives in fact want is privatization of appropriate services through an open and competitive bidding process to lower costs and increase quality. We also want rigorous and transparent oversight of the process with periodic review and auditing handled by competent and impartial persons. The real issues here are the lack of oversight and accountability regarding use of taxpayer funds, and the appropriate response to gross mismanagement and fraud involving said funds. No shocker that Russ misses all this and mischaracterizes it as a "privatization" issue.

Posted by: Dan at December 15, 2011 1:33 PM


The meaning of privitizaion seems to have evaded you. Private organizations don't have mayoral-appointed board members, or recevie automatic geographic-based rights to administer government funds without having to go through a contracting or bidding process. And whatever you want to call ProCAP, a "quasi-public organization" or something similar, you still can't create money for paying back a loan by passing transfer payments from a government departments to quasi-accountable quasi-govenrnment departments.

Posted by: Andrew at December 16, 2011 10:07 AM

Unfortunately, this kind of corruption and fraud isn't limited to Providence. To the knuckledragger who wants to cry foul, claiming that those concerned are hypocrites because they support privatization.. These CAP and other type agencies aren't examples of privatization, these are staffed by the same criminal entitlement mindset types that have infested public agencies. These types aren't looking to serve the public, but fatten themselves on the public dole, for their own profit. I'd highly recommend an investigation of the rest of the CAP and related agencies, starting with Westbay Community Action in Warwick, and then moving on to the public housing authority in Warwick. Serious digging will expose a variety of sins.

Posted by: Jenna at December 16, 2011 7:34 PM
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