Cranston Mayor Michael T. Napolitano, at right, talks with Cumberland Mayor Daniel McKee, center, and North Providence Mayor Charles Lombardi at the State House early this year. Napolitano says out-of-court settlements of lawsuits are the prudent avenue. “Controversy costs money,” he said in a recent interview.

The Providence Journal / Connie Grosch

CRANSTON –– Lawyers with close ties to Mayor Michael T. Napolitano have collected hundreds of thousands of dollars in salaries and legal fees from the city.

Old college friends, campaign officials and members of the mayor’s transition team are among those who have benefited from municipal largess.

Critics say the lawyers have failed the city by helping to implement a legal strategy focused on out-of-court settlements that have left taxpayers on the hook for millions.

But Napolitano, a Democrat, argues that the agreements have averted even costlier courtroom judgments.

And he says his push for settlements has led to a steep drop in legal fees.

Napolitano’s predecessor, Republican Stephen P. Laffey, spent between $535,000 and $725,000 on lawyers per year.

Napolitano, by contrast, spent $400,000 for the fiscal year that ended June 30.

“The proof is in the pudding,” he said, referring to the lawyers he tapped for city work. “They did the job well and they did it cheap.”

Napolitano, who announced in May that he would not seek a second term, is hardly the first executive to steer legal work toward friends.

Rhode Island’s mayors have long tapped supporters for staff jobs such as city solicitor.

In Cranston, Laffey signed a letter of engagement with a man he had called a second father –– Norman G. Orodenker, a partner at the powerful firm of Tillinghast Licht Perkins Smith & Cohen –– on his first day in office.

But just a handful of lawyers who worked for the city during the Laffey years had preelection ties to the former mayor.

And a review of city records and campaign finance reports points to a particularly strong nexus of personal relationships, campaign contributions and legal spending in the Napolitano administration.

A former tax lawyer and municipal judge, Napolitano narrowly won the mayoralty in the fall of 2006, edging out Republican Allan W. Fung by 79 votes after a tense recount fight.

He quickly moved to dismantle the team of lawyers that Laffey had assembled during his four years in power –– with one notable exception.

Before taking office, Napolitano announced that he would promote assistant city solicitor Vito L. Sciolto, whom he had known since their days at Providence College, to solicitor.

“He is a man of honesty,” Napolitano said, at the time. “I think he’s going to be a wonderful addition to our team.”

Sciolto, one of the few high-ranking city officials to survive the transition to the Napolitano administration, donated $1,500 to the mayor’s campaign fund in the months following his appointment.

And city records show Sciolto earned close to $94,000 during the first 1½ years of the Napolitano era, about $72,000 in his capacity as solicitor and the balance for work as “outside counsel.”

Three of the city’s assistant solicitors, Charles Garganese Jr., Richard D. Raspallo and John C. Manni, also have ties to the mayor.

Garganese, who grew up with Napolitano in Providence’s North End, donated $3,000 to his friend’s campaign fund and earned $45,000 in the first 18 months of his administration.

Raspallo, who earned $64,500 during that period, worked as deputy treasurer on his campaign, served on his transition team and donated $1,875 to the mayor’s war chest.

Manni, who has given $2,500 to the mayor, served as co-chairman of Napolitano’s campaign finance committee before collecting $63,000 from the city between January 2007 and June of this year.

Manni, who maintains a private practice, works out of a squat brick building on Plainfield Pike in Johnston with five other independent lawyers, including Napolitano’s campaign counsel Michael DiChiro Jr.

And the advent of the Napolitano administration has meant a steady stream of work for his officemates.

James Creighton, a campaign contributor who works out of the Plainfield Pike offices, cleared almost $1,000 in October 2007 working on a dispute over a half-built concrete plant.

And Manni’s brother Frank J. Manni, who contributed $2,000 to Napolitano, earned nearly $10,000 working on the city’s unsuccessful bid to strike from the voting rolls two men found not guilty of murder by reason of insanity, among other matters.

Several other lawyers who donated money to Napolitano’s campaign have also worked for the city.

Among them: Anthony DiBiase Jr., Steven Levesque, Michael J. Mulcahy, Anthony W. Cofone, Terrance N. Turner, Jeffrey Michaelson of Michaelson & Michaelson and various employees of Schechtman Halperin Savage.

The total bill for their services during the first 18 months of the Napolitano administration: almost $70,500, the bulk of it going to DiBiase, who worked with Napolitano on tax matters during the mayor’s career as a lawyer, and Michaelson & Michaelson.

But Napolitano administration officials say it is unfair to suggest a mayor cannot bring supporters on board.

“Does it mean that automatically, if you work for the campaign, you can’t be hired?” Napolitano demanded.

The mayor has the right to pick lawyers he knows and trusts, he said, as long as they are up to the job.

The focus, he said, should be on the record.

NAPOLITANO’S APPROACH to legal affairs is, in many ways, a repudiation of his predecessor’s tactics.

Laffey, an aggressive businessman elected in the midst of a fiscal crisis, pledged to take on the city’s powerful unions.

And that he did.

The first blow: hiring Vincent F. Ragosta Jr. as his labor lawyer.

Laffey, in an oft-repeated tale, says firefighters union officials came to see him shortly after he took office and asked him to hire any labor lawyer but Ragosta, who had worked on and off for the city since 1992.

That sealed it, Laffey says: Ragosta was his man.

The former mayor quickly made headlines when he pushed to fire the city’s unionized crossing guards, who worked an hour per day for $45 plus health-care benefits for their families, dental insurance, life insurance and paid holidays.

But there were other fights, too –– particularly with the firefighters.

After two were arrested for drug offenses, the administration started questioning union members about their arrest records when they sought promotions.

When an off-duty firefighter who pitched in to fight the Station nightclub fire filed for injured-on-duty status –– claiming post-traumatic stress –– the mayor objected.

The firefighter was acting as a private citizen when he fought the blaze that killed 100 people, the city argued.

The administration even sent the union a $450 bill for “rent” after it used a pair of fire trucks in a demonstration for elected officials and the media.

Laffey and Ragosta won most of their fights, privatizing crossing guard services and prevailing on almost all of the 25 grievances filed by city labor unions.

And the mayor’s approach won plaudits on talk radio, helping to fuel Laffey’s ultimately unsuccessful run for the U.S. Senate.

But there were costs. City Hall’s relationship with the firefighters sharply deteriorated. And the mayor’s hard-charging style on labor and other matters contributed to hefty legal bills.

The Laffey administration spent about $725,000 on lawyers in fiscal 2003-04, a figure that dipped to $535,000 in 2005-06.

Neighboring Warwick, a city of similar size, spent about $300,000 on legal bills for the fiscal year that ended June 30.

With the Laffey record as backdrop, Napolitano last year took office pledging to improve labor relations and cut costs.

Hourly pay for lawyers would drop from $190 or $150 to $100, with occasional exceptions for specialists. And the mayor said he would settle cases whenever he could.

“We made a fundamental policy decision,” Napolitano said, in a recent interview.

Ragosta said he expected to hold onto some Cranston work when Napolitano took office.

He knew the cases, after all. And while mayors often dole out staff positions to political supporters, he said, they are generally nonpartisan when it comes to labor lawyers because the field is so specialized.

Ragosta, an independent, has worked for Democratic and Republican administrations in Cranston and across the state.

Clients include Providence Mayor David N. Cicilline, a Democrat, and Lincoln Town Administrator T. Joseph Almond, a Republican.

But in a meeting with Napolitano, Ragosta said, the mayor said he wanted to rein in costs.

Ragosta, who charged $150 per hour, had billed the city for $103,000 per year, on average, during the Laffey years.

Napolitano said he wanted a lower hourly rate. And he said he was going to do some of the negotiating himself.

“He said, ‘I’m a lawyer, I’m smart, I’m going to solve things right in this office,’” Ragosta recalled.

Ragosta said he had no quarrel, in principle, with Napolitano’s drive to cut costs. But the city was at a critical juncture, he argued.

Cranston “had really been victimized for a number of years by the domination of organized labor,” he said, and the city was just beginning to cut into that power. The mayor needed an experienced hand.

One-and-a-half months into his administration, Napolitano made the announcement: he was dumping Ragosta and hiring Frederic A. Marzilli as the city’s labor counsel.

AN AFFABLE CHARACTER, Marzilli has known Napolitano since they were classmates at PC in the late 1970s.

“He was always asking questions,” Marzilli said, in a recent interview, laughing about the future mayor’s boisterous classroom presence.

The friends split off after college –– Napolitano attending Suffolk University Law School, in Boston, and Marzilli enrolling at Catholic University’s law school, in Washington, D.C.

But they both wound up back in Rhode Island, frequenting area golf courses together.

And when Napolitano wound up in the recount fight with Fung, Marzilli was there as legal counsel.

The mayor raised some eyebrows when he tapped Marzilli as the city’s labor lawyer, at a rate of $100 per hour and, later, $125 per hour.

Marzilli, who would earn $67,000 during the first 18 months of the Napolitano administration, had extensive experience.

But he had represented organized labor for decades and had done only limited work for management. He even had a “union bug,” denoting a union printing job, on his stationery.

Marzilli, in a recent interview, brushed aside the criticism. He has done quality work for the city, he said.

And besides, he added, who better to navigate negotiations with organized labor than a union lawyer?

Republicans were quick to pounce on Marzilli’s work, particularly the new firefighters contract he helped to craft.

They said the pact was full of giveaways, including provisions that hamstrung management’s authority to organize the department, required employee contributions of just $87 per month toward family health care coverage and granted 15 paid holidays.

Among those holidays: Sept. 11, which even New York City firefighters cannot claim.

Administration officials note that they were able to reduce the overall number of paid holidays in the contract from 17 to 15, even if they offered higher holiday pay in exchange.

And they emphasize that the health care contributions were the first the firefighters had ever been required to pay.

“We certainly didn’t give anything away,” Marzilli said. “And on the other hand, we built some good will.”

City Hall’s relationship with the firefighters union has undoubtedly improved under Napolitano.

And the mayor says he is drawing on that relationship now, in the midst of a fiscal crunch, to ask for concessions.

But critics say the thaw has come at a cost.

At the end of the Laffey administration, the city was in a legal tangle with fire Capt. Edward Grady, a 24-year veteran of the department who was diagnosed with cancer in September 2004 and underwent surgery to remove a kidney.

Grady missed 62 days of work for the surgery and recuperation, with 59 charged to his accumulated sick leave and three to his vacation account.

But the union argued that a state law deems all firefighters’ cancers “occupational” –– or job-related –– and maintained that Grady should not be charged for the time off.

The Laffey administration, drawing on testimony from Grady’s own doctor, argued that there is no established link between firefighting and kidney cancer.

And the city maintained that the state law, which defines “occupational cancer” for a firefighter as a “cancer arising out of his or her employment” due to exposure to smoke and other toxins, does not automatically provide for paid leave.

Superior Court Judge Patricia A. Hurst, in a preliminary hearing, appeared to agree.

“I read the statute, and it seemed to me that the legislature did not pass a law saying if any firefighter gets cancer it is presumed to be work related,” she said, according to a court transcript. “That is not what the statute says.”

But when the Napolitano administration took office, the city quietly settled with Grady, replenishing his sick leave and vacation accounts.

And the contract the administration negotiated with the firefighters union included a clause deeming all cancers work-related.

Marzilli said the city was only affirming a state statute that, he maintains, presumes a link between firefighting and cancer.

“The law, as unfair as it seems, is pretty clear,” Marzilli said.

But Ragosta called the Napolitano administration’s actions “outrageous,” arguing that it exposes taxpayers to years of costly disability claims from firefighters who develop cancers that may or may not be tied to their work.

NAPOLITANO AND MARZILLI have also come under fire for a settlement with police sergeant Lillian Rivera.

Rivera had been out of work with pay for three years when the administration settled with her for $84,000 in June 2007.

A Providence Journal investigation disclosed that Rivera’s complaint against the city revolved around a sexual harassment claim against a superior officer, former Capt. Robert Brown.

Napolitano cast the settlement as part of a broader effort to protect city employees against harassment.

And he said the city could have faced a far steeper award had the matter gone to trial.

But sealed legal records obtained by the Journal show that a doctor diagnosed Rivera with an anxiety disorderly three years before she accused Brown of harassment.

And Laffey administration officials, who denied Rivera’s claim when they were in office, noted that an independent investigation had cleared Brown of any wrongdoing.

Republican critics pounced when the state Retirement Board denied Rivera’s bid for a work-related disability pension for anxiety tied to the alleged sexual harassment. The state, they argued, had found her claims baseless.

The city, in the meantime, continues to pay Rivera’s salary while she appeals the retirement board’s decision to Superior Court.

Marzilli argues that the retirement board’s decision was flawed and says he is confident Rivera will prevail on appeal.

The Napolitano administration has had better luck justifying two other agreements –– a $2.5-million settlement with a woman who blamed the police for a crippling car accident and a $1.9-million deal to buy out a half-built concrete plant that had neighbors worried about traffic, noise and pollution.

Cullion Concrete Corp. was issued a building permit for the plant during the Laffey administration. And the company sued when city officials later moved to block completion of the project in the city’s Eden Park neighborhood.

Napolitano, who rode into office pledging to get rid of Cullion’s plant, wound up in mediation with the company before retired state Supreme Court Chief Justice Joseph R. Weisberger.

The judge, according to both sides, determined that Cullion’s case had merit.

And the mayor argued that the final price of $1.9 million was reasonable. An independent appraisal had put the value of Cullion’s 17.7-acre building site at $3.1 million.

Napolitano, in what had become a frequent refrain, also said he had saved the city on legal bills –– devoting some 200 hours of his own time to the legal work in the case.

The City Council signed off on the deal, handing the mayor a major political victory.

But critics including City Council President Aram G. Garabedian, a fellow Democrat, argue that the city never should have settled.

The building permit was flawed, Garabedian said, and the mayor could have revoked it, beat back any legal challenges and held onto taxpayer money.

“In the end, I think we could have prevailed,” he said. “We never got justice.”

But Garabedian, who has often tussled with the mayor, said he agreed with Napolitano’s decision to settle for $2.5 million with Natasha Valley, a 29-year-old single mother who was paralyzed from the waist down after a suspect fleeing police plowed head-on into her car in February 2004.

Valley, in court papers, called the high-speed chase a “wanton” and “negligent” act that led to her paralysis.

And the mayor said the city could have faced a far steeper judgment had the case gone before a jury.

“You’ve got a 29-year-old woman, with three small children, in a wheelchair paralyzed,” he said.

Nonetheless, Republican critics including Fung, who is making another run for mayor, say Valley did not have a strong case against the city.

It was the fleeing driver, not the police, who was liable for the accident, critics say.

The mayor’s penchant for settling, rather than litigating, came into question again this summer during a nasty city-schools fight over local education aid.

The schools claimed the city failed to provide them adequate support for the fiscal year that ended June 30 and sued for $4.9 million more.

But several City Council members said reckless spending was to blame for the problem.

City and school lawyers hammered out a complex settlement, obtained by The Providence Journal, that was to give the district a cash infusion and force long-term changes in the schools’ fiscal management.

Napolitano pressed the City Council to back the deal, but the Democratic-dominated panel rejected it twice. And the city went on to score a resounding victory in court.

Napolitano, while pleased with the courtroom triumph, still stands by his initial support for the agreement.

The deal made sense at the time, he argued. And he said it would have saved the city tens of thousands of dollars in legal fees.

THAT SORT OF argument is at the heart of the mayor’s rationale for his legal strategy.

Most civil cases in the Rhode Island courts are settled, he said. Hiring expensive lawyers to do battle in court may grab headlines, but it is not in the taxpayers’ interest, he argued.

“Controversy costs money,” he said, in a recent interview.

Judging the mayor’s settlements is no easy task.

The mayor said the Cullion and Valley cases would have cost the city millions had they gone to trial.

But it is impossible to know, of course, how a judge or jury might have ruled.

The decision to settle a case, or to work with a union rather than confront it, is ultimately a judgment call.

Critics say the mayor’s judgment, and that of his lawyers, has been disastrous.

But Napolitano said his decisions were prudent, judicious. And he said the lawyers who helped him are to be applauded –– whatever their ties to the mayor.

dscharfe@projo.com