In her first act since fellow Democrats endorsed her for Senate president, Senate Majority Leader M. Teresa Paiva Weed today announced that she has chosen Sen. Daniel DaPonte to be the new Senate Finance chairman and will be calling an "informational caucus'' early next month on the state's massive financial problems.

The caucus has been scheduled for Dec. 4. The announcement comes a day after the Carcieri administration released a quarterly spending report that serves notice the state is headed for a potential $357.4-million deficit this year, as a result of a revenue shortfall, tens of millions of dollars in unbudgetted spending and overly optimistic budget cuts.

Her choice of DaPonte, a deputy majority whip, to replace the defeated Sen. Stephen Alves, D-West Warwick, as Senate finance chairman is likely to be controversial. DaPonte's name is mentioned in every news story about Operation Dollar Bill, the wide-ranging probe of influence peddling at the State House.

The apparent focus is a $100,000 commission that Alves and DaPonte split in 2004 while they were both still financial advisers at UBS Financial Services, for their role in "introducing" Prudential Financial to the annuity fund of Local 99 of the International Brotherhood of Electrical Workers.

Prudential called the payment "a one-time finders fee," but the financial consultant who oversaw the process in which Prudential was chosen to manage the fund said that neither DaPonte, nor Alves had anything to do with Prudential's hiring, which was done through a competitive bidding process.

Asked about all this last week after DaPonte's name surfaced as a candidate for Senate finance chairman, Paiva Weed said her chosen replacement as majority leader, Sen. Daniel Connors, recommended DaPonte, who now heads his own brokerage firm, Axis Financial Group. Connors is a lawyer in defeated Senate President Joseph Montalbano's law firm.

Today she issued a statement in which she called DaPonte an insightful and valued member of this chamber since 1999...[who] brings a unique skill set and considerable financial credentials to this position. He has the respect of his colleagues in this chamber, and I have every confidence that the people of Rhode Island will come to appreciate his leadership as they get to know him better."

Without addressing his role in the Prudential-IBEW controversy, she said: "He is the right person for the job during these difficult times.''

In an interview today, DaPonte, 30, said he has "never been notified that I was a target of an investigation,'' and while it has been reported that federal investigations "looked into a transaction [that took place] while I was at UBS, my attorney and the attorneys for the firms that have been mentioned'' have assured him "there was no wrong-doing.''

He would not say if he had been questioned or elaborate on which firms assured him there was no wrong-doing. He referred further questions to his lawyer.

As for his new role at the State House, DaPonte said it would be premature to talk about brining the full General Assembly back for a special session to deal with the financial crunch. "The governor's office would obviously have to present us with something to come back for. To date, we haven't received anything.''

But "the numbers are sizeable. The numbers are problematic'' and "I think we need to look anything.''

Tax hikes? "I can't say absolutely not,'' he said. "I think it is premature to speculate before we have further conversations and are able to study the numbers in a much deeper way.''