Criminal Probe: ProvPlan Refuses to Answer Questions

Thursday, September 15, 2016


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Rocked by charges of embezzlement, the controversy at ProvPlan is not only expanding, but members of the organization are refusing to provide any information. 

GoLocal has learned from multiple sources that the embezzlement of funds may be in the hundreds of thousands of dollars. To date, now former Director of Finance Charles Denno was forced out in late July and this week, now former executive director Patrick McGuigan resigned under a cloud of uncertainty.

The organization in the past few years has received tens of millions of dollars in federal funds and grants from some of America’s top private foundations including the Annie E. Casey Foundation and the Bezos Family Foundation to name a few.

According to Sue Lin Chong, Senior Communications Manager at Casey Foundation, she was not aware of the investigation into Denno and ProvPlan by the Rhode Island State Police. Chong referred GoLocal to program staffing, who did not return calls on Wednesday.

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Jim Martin of the Providence office of the United States Attorney told GoLocal, "We can neither confirm nor deny investigations, whether one is or isn't underway.”

How much money is at stake and could be compromised?

According to tax documents, ProvPlan received more than $20 million in funding and grants from government and private foundations between calendar years 2011 and 2013. The 2015 (for the 2014 calendar year) 990 tax filings are not publicly available, although best practices would be that those documents would be available by now. 

The RI Department of Labor and Training has provided millions of dollars in grants to ProvPlan, according to Mike Healey, the agency's spokesperson.  “United States Department of Labor awarded Building Futures (a ProvPlan) program a $5 million American Apprenticeship Initiative grant in September 2015. DLT was a co-applicant on the grant but the USDOL required that the lead applicant be an industry-facing intermediary (ProvPlan), not the state workforce agency. So although we’re a party to the grant, any funding goes directly from USDOL to ProvPlan,” said Healey.

And the $5 million is just one of the many job training programs being implemented by ProvPlan. Healey said hundreds of other dollars have been appropriated to ProvPlan in 2015 and 2016. Healey said DLT is vigilent in protecting taxpayer funding.

"This order is important because DLT only pays for services after they’ve been provided and only after we’ve verified them. Our grant advisors and accountants scrutinize invoices and make sure we’re getting what’s in our contracts," said Healey.

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Ongoing State Police Filings

Who Started ProvPlan - The Legacy spoke with the original executive director of the organization, Mike Rich, who today is a Professor at Emory College in Atlanta. “ProvPlan was a national model,” said Rich.

ProvPlan was started in the early 1990’s as a cooperative effort between Brown University and the City of Providence to collect data for better municipal decision making. The non-profit was launched by civic leaders and politicians including Brown President Vartan Gregorian, Providence Mayor Buddy Cianci and lawyer Fred Lippitt.

Rich said at the inception of the organization it had three principal goals; convene stakeholders, harness the power of data for more informed decision-making and be a conduit to strong public private partnerships. In those early years Providence was designated an Enterprise Community by US Housing and Urban Development under Bill Clinton’s administration and was able to attract significant funding to spark Providence’s Greenway programs through funding from the Trust for Public Land and the Wallace Foundation.

Rich said the model was unique and was transformative. 

No Response

Now, board members and the new Executive Director refuse to respond to questions regarding how deep the potential corruption extends and how or if millions in federal and foundation funds were misused. 

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Dick Spies, Chair of the Board, according to most recent tax filings

Repeated efforts to get comment from Dick Spies, former top administrator at Brown University and Chair of the Board of the ProvPlan, have gone unanswered. It is unclear if Board members are aware of or involved with the embezzlement.

Repeated calls and emails to the acting executive Jim Berson have also gone unanswered.

According to the most recent federal tax documents for 2013, ProvPlan had revenue of $7.8 million. ProvPlan did not file their 2014 990 form.


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