WEST WARWICK — A federal corruption probe of the Rhode Island State House has branched out into the town of West Warwick, home to powerful Senate Finance Chairman Stephen D. Alves.

Officials confirmed yesterday that West Warwick’s finance director and the town pension board’s secretary appeared on Thursday before a federal grand jury in Providence.

Federal investigators also have subpoenaed records regarding various financial dealings in town, including contracts with Alves’ employer, UBS Paine Webber, to help manage West Warwick pension funds.

The Journal has previously reported that Alves, an investment adviser, is among seven politicians under investigation as part of a wide-ranging State House influence-peddling probe dubbed Operation Dollar Bill.

The probe, which began with former state Sen. John A. Celona, who recently reported to federal prison after pleading guilty and agreeing to cooperate, has also focused on Senate President Joseph A. Montalbano. The Journal reported last fall that the FBI has questioned West Warwick officials about title work that Montalbano did for the town, and Alves’ role in Montalbano’s hiring.

Yesterday’s disclosures came as a result of a stormy meeting of the town’s pension board, during which two vocal critics of Alves and the town attacked the pension application of the longtime director of the West Warwick Senior Center, Thomas Iannitti.

Iannitti, who is also the acting chairman of the state Board of Elections, has decided to retire this spring and has applied for a pension from the town — even though critics say he isn’t a town employee and shouldn’t be eligible.

Iannitti, 66, who has run the senior center since 1986, angrily disputed that last night in a telephone interview. He said that he has paid in nearly $40,000 — the amount that the pension board’s lawyer told him to — and pointed to a Town Council resolution two decades ago allowing him and the senior center’s assistant director to join the town pension plan.

“I’ve done nothing illegal,” said Iannitti, adding that he has received no inquiries from the FBI or anyone else in law enforcement.

Alan Palazzo, a West Warwick resident and longtime critic of town leaders, addressed the pension board late yesterday afternoon, shortly after it had voted unanimously to accept Iannitti’s pension application.

“I don’t see this board taking appropriate action,” said Palazzo. “We have major problems in this town, and I wanted to afford members of this board the opportunity to do the right thing — you have not done that.”

Consequently, Palazzo vowed to “go forward” by naming all five board members in any further communications he has with the Rhode Island attorney general and other “state and federal agencies.”

Palazzo was followed by his neighbor and another town critic, Tom Jones, who criticized the board’s action regarding the Iannitti pension in light of the ongoing FBI investigation.

“This board is very familiar with the FBI investigation of this board and the town,” said Jones, adding that the town’s finance director has been questioned.

Jones also said that he understood that the FBI has questioned officials of the pension board. Members denied that, but acknowledged that the board’s secretary, Chris Payette, has been questioned.

With Jones pressing for more details, Town Manager Wolfgang Bauer interjected that federal investigators had asked town officials to keep the FBI’s inquiries “confidential.” That prompted board officials to decline to discuss the matter further.

Afterward, town Finance Director Malcolm Moore declined comment when asked about being questioned by federal investigators. However, town officials confirmed that he and Payette appeared before the grand jury last week.

Board Chairman Geoff Rousselle protested that the board hadn’t made any decisions yet regarding Iannitti’s pension. Yesterday’s vote was merely to accept the pension application and now it will be studied.

But afterward, Rousselle said, “We feel that [Iannitti] is well within the limit of the plan.”

The question of whether Iannitti is a town employee is a confusing one. Palazzo, who has waged a year-long battle to obtain town records regarding Iannitti’s pension, said that he was initially informed by Joseph Pezza, the board’s lawyer, that Iannitti was an employee — only to be contradicted later by the town’s lawyer, state Rep. Timothy Williamson.

The town has blocked access to the records Palazzo requested.

Palazzo went to the Rhode Island attorney general, which enforces the open-records law, and recently won an opinion that the records should be released. But since then, the town has requested more time.

Among Palazzo’s questions regarding Iannitti’s pension is whether he has been improperly excused from paying about $13,000 in interest on his $38,000 pension contribution.

Pezza said the pension board is researching the question and, during the meeting, told Palazzo and Jones that, contrary to their criticism, the board has been diligent.

“The board has to do the right thing,” said Pezza.

Echoed Chris Coffua, the board’s vice chairman, who joined 16 months ago, “We’ve been working really hard. Things are actually getting better.”

Iannitti complained last night that he is being “smeared” by town critics out to get other political leaders.

“One guy had the audacity to suggest that because I served on a school building committee with Alves, that I was getting something in return,” said Iannitti. “The reason I was on that committee was because I was the elected chairman of the school board. . . . They’re trying to connect dots that don’t exist.”

Iannitti said that the town, which helps finance the senior center, suggested admitting him and his assistant into the pension system back in 1987, the year after he became director, as a way of providing additional support when he sought an increase in funding.

But in spite of the Town Council resolution allowing him to join the pension system, he says, he was repeatedly put off from actually joining until 2001 — probably because of town politics, though he says he never received an explanation.

Finally, in 2001, he said, he received notice from the pension board that “this is what you have to do, and I did it.” He said that he paid $31,000 into the system that year, and another $7,000 in 2004 for two years of military service, as allowed under the plan, and also started making regular weekly contributions deducted from his paycheck.

“I tried to give to the community, decent, honest service,” said Iannitti. “And now I’m being treated like a petty criminal.”

mstanton@projo.com