4.25.99
There's no accounting for R.I.'s scandals
By PETER PHIPPS
Journal Staff Writer
The way the Providence Police handled cars taken from criminals was so Rhode Island.

No records. No accounting. No accountability. And no big deal — until the newspaper got word that city workers were driving cars seized from drug suspects.

Then The Journal did what few public officials in this state ever seem to do. The reporters asked the obvious questions:

Who bought the cars?

How much money did the city get?

What happened to the money?

Well, guess what? Rhode Island's largest law-enforcement agency said it couldn't tell us.

The police said that for eight years, during which time the department seized and sold 250 cars, the officers in charge of the program kept no records.

Captain John J. Ryan said the department was wrong and now keeps records of the seizures and the sales.

"Does this embarrass us?" Ryan said. "Of course it does."

An embarrassment? Captain, give us a break. This practice borders on criminal neglect. With no records and no accounting, money and cars could — and probably did — just disappear.

Without good record keeping, anything goes. The rogues get the run of the house.

In 1905, muckraker Lincoln Steffens called Rhode Island "A State for Sale." And don't expect to see the receipts. Not then. Not now. If any receipts exist, they are secret or a lie. That's the bottom line of every Rhode Island scandal since RIHMFC.

Ironically, at the Rhode Island Housing and Mortgage Finance Corp., former Executive Director Ralph Pari went to jail because his record keeping was too good (a lesson the Providence Police seem to have learned).

When ordered to turn over mortgage records to The Journal, Pari trapped himself by deleting the aberrant loans to insiders.

Journal reporters noticed that there were gaps. When the newspaper finally got the unedited file, the reporters were able to zero in on Pari's abuse simply by comparing the new and the old files.

Later, the reporters heard that Pari had billed RIMHFC for pleasure trips to Florida and the Caribbean. This time, Pari ordered an employee to go to his lawyer's office with "a lot of pens and pencils" to re-create a set of ledgers.

Pari's secretary talked, and Pari paid the price.

At RISDIC, the departed deposit insurer, they cooked the books routinely and regularly. Phony accounting was the only way the big credit unions survived.

Back in the early '80s, officials at the state banking division and the Rhode Island Share and Deposit Indemnity Corp. allowed Marquette Credit Union to inflate the value of its downtown Woonsocket office tower from $5 million to $7.5 million to cover investment losses.

Marquette was insolvent. All the insiders knew it, but no one in authority had the guts to do anything about it.

So they did what generations of Rhode Island officials have done. They went with the lie and hoped they could keep it from the public. That's the Rhode Island way.

At the Rhode Island Supreme Court, the chief justice and his court administrator had a secret fund that in five years doled out $177,000. The state didn't audit the account because the state didn't know it existed.

The public found out about the fund only when The Journal couldn't find records in the state accounting system for all the flowers, parking tickets and restaurant bills the pair bought.

Then there's traffic court, perhaps the worst accounting scandal of them all. The court's accounting system was so flawed that $39 million in fines was lost, stolen or simply uncollected.

The traffic court was all but asking to be looted and abused.

Again, it was only after The Journal laid out the gross malfeasance did the state act to clean up what officials long knew was an accounting nightmare.

Are you picking up the theme? The Journal Ñ not any independent state agency Ñ uncovered these scandals.

That's a credit to the newspaper, but in the long run the taxpayers would be better served by public officials with the character and courage to stop abuse before it gets out of hand.

Now that's probably not going to happen Ñ not in Rhode Island, with its storied tradition of public misdeeds.

So what can be done? Two things. The voters can amend the Constitution to create an independent state auditor, elected and empowered to root out corruption.

And the General Assembly can require that all public departments and agencies be reviewed by certified public accountants with the audits made public and posted on the Internet.

And one more thing: Rhode Island can make the failure to keep financial records a felony — not just an embarrassment.

Peter Phipps is deputy managing editor of The Providence Journal. You can reach him by phone, at 277-7443; or by E-mail, at pphipps@projo.com




Past writing tips | About The Providence Journal's Writing Program | E-mail us | Order How I Wrote the Story | Writing-related Web links
Back to main

Copyright © 1999 The Providence Journal Company
Produced by www.projo.com