Projo 7 to 7 News Blog

Ceprano, a former career IRS agent and Rhode Island Ethics Commission investigator, told the KPMG auditors that Finance Director Bruce Miller asked him to remove a property owned by Poisitano Realty from a city tax sale last summer. Ceprano said that he wasn't comfortable doing so, because the taxpayer had a poor payment history and owed more than $27,000 in back taxes and interest.

City planning director Tom Deller e-mailed Ceprano that the mayor supported removing the property at 2 Lake St. from the tax sale, because the city was negotiating a major development on the property.

The property was removed from the tax sale, but the taxes remain unpaid. The delinquency is now $42,000. The president of Poisitano, Edward Marandola Jr., donated $1,150 to Mayor Cicilline from 2003 to 2007, the report said.

Ceprano also told investigators that earlier in 2008, mayoral aides Miller, Murphy and Leo Perotta came to his office, shut the door and asked him to remove three properties controlled by developer David Corsetti, a friend of the mayor's, from a tax sale, saying that he should be given consideration because he was a developer and was trying to sell the property.

When Ceprano resisted, he said, Miller called him a "hard ass.'' Corsetti owed about $95,000 at the time; the taxes have since been paid. The report noted that Corsetti donated $5,000 to the mayor's campaigns from 2004 to 2008.

The report also outlines a dispute in 2007 involving whether Craig Baker should have to pay interest on a 2005 tax bill that he said he hadn't received. According to Ceprano, Baker complained that he shouldn't have to pay the interest on his property at 93 Benefit St. because he had never received the tax bill. But Ceprano refused, noting that enough time had passed for Baker to realize he should have paid the $14,000 he then owed for 2005 in back taxes and interest.

Baker told Ceprano that he was going to appeal to the mayor. Later that day, Ceprano told investigators, deputy chief of staff Rita Murphy told him that the mayor wanted the interest penalty, which Ceprano had already reduced y more than half, to $517, removed entirely.

The report quotes a written note by Ceprano on the account: "Rita M. informed me that the Mayor wanted me to change the penalty to zero. I explained that this was not appropriate under the circumstances, and wanted to speak with the Mayor. Not possible. So I explained that any interest abatement would be done under his authority not mine.''

Investigators also quoted an e-mail that same day from Murphy to the mayor, explaining that City Councilman Cliff Wood, a Cicilline ally and former mayoral aide, had requested assistance for Baker. The mayor wrote back, "I also do not understand why he would have to pay interest for a bill he did not receive.''

The report says that the mayor told the KPMG investigators that since the city had acknowledged Baker had not been sent a tax bill, it was only fair that he not have to pay the interest. While Ceprano had the "ultimate decision,'' explained Cicilline, the mayor has a right to "advocate'' when he believes someone is being treated unfairly.

Finally, Ceprano said that Finance Director Miller also asked him last year to waive a $12,000 interest penalty on a $237,000 tax bill owed by Charles Orms Associates, which owns an office building at 10 Orms St. The company is managed by Cicilline friend and supporter Arthur Robbins. The interest was subsequently waived, over Ceprano's objection, he said. The interest had been assessed because a quarterly tax payment was late, apparently because the check had inadvertently been mailed to the utility company.

Miller told KPMG that Ceprano approached him regarding Robbins, that Miller never discussed it with the mayor and that Miller only directed that the interest be waived to ensure that the collector's office handled those types of circumstances "consistently.''

Cicilline told KPMG that he received a call from Robbins about the taxes, and asked an aide to assist Robbins. The mayor told the auditors that the city ``should not be penalizing or taking advantage of taxpayers . . . where honest mistakes have occurred.''

"He stated that he would afford this type of advocacy to any taxpayer who contacted him regarding a tax matter,'' the report said. "Finally, he advised that he did not see any conflict of interest relative to his advocacy concerning Mr. Robbins, or relative to Mr. Baker.''

KPMG investigators, who spent three months on the matter, interviewed the mayor and his aides, but were unable to sit down with John Cicilline or Garcia.

John Cicilline reported to federal prison last October to begin serving an 18-month prison term for shaking down a drug-dealing couple in Massachusetts for $150,000. He offered his version of events in a three-page letter from his lawyer, which contradicted the recollections of city officials, saying that he told city officials at the outset that he didn't have enough money in his account to cover the check and that they assured him they would merely hold it as collateral until Garcia paid his overdue taxes.

Garcia, a Hispanic business leader who owes the taxes on an auto-parts and hardware business he operates at 577 Cranston St., in the city's West End, declined through his lawyer to talk to the KPMG investigators.

The report chronicles how John Cicilline approached Ceprano, the tax collector, in the spring of 2006 to work out a deal on Garcia's delinquent taxes. Garcia was seeking to refinance the property, and needed the city to lift a lien it had placed on the property so that the loan would be approved. In return, Cicilline promised that Garcia would pay $75,000 to settle his tax delinquency.

When Ceprano insisted that the taxes be paid before the lien was lifted, the two sides instead agreed to let Cicilline provide a $75,000 check of his own as collateral, to be held by the city until Garcia's refinancing was approved. Ceprano said that it was Cicilline's idea; Cicilline said that it was Ceprano's.

A lawyer working for the city to collect the taxes, Scott Hammer, told investigators initially that he though it was "crazy'' for John Cicilline to agree to offer to put up his own money for a client. But then Hammer said that he may have actually suggested the unusual arrangement because it would make him more "comfortable'' releasing the lien before the taxes were paid.

Though Hammer acknowledged that John Cicilline's check was not a "guaranteed payment, he indicated that he was comfortable with the situation because the check was from an attorney, and the fact that the attorney was well known and was the mayor's brother,'' the report says. Hammer noted that a lawyer risks losing his law license by passing a bad check. And Hammer felt that as the mayor's brother, John Cicilline "would have additional motivation to act in good faith.''

In the ensuing months, as the taxes remained unpaid and John Cicilline proved hard to pin down, Ceprano said that he enlisted the mayor's aides, including deputy chief of staff Rita Murphy and then-chief of staff Christopher Bizzacco, to collect the money. Ceprano and Hammer pressed to deposit Cicilline's check, but Murphy and Bizzacco said that John Cicilline should be given more time.

In the fall of 2006, the check became `"stale dated'' because 90 days had passed. Hammer and Ceprano began pressing Cicilline to provide a new check. And this time, they drafted a written agreement in which Cicilline agreed that the city's lien would be reinstated on Garcia's property and the city would cash John Cicilline's check if the taxes weren't paid in 60 days.

But then the city's efforts abruptly ended. Ceprano filed away the new check and the agreement signed by John Cicilline, never sending it to Hammer to sign. Consequently, Hammer said that he was unaware Cicilline had finally signed the agreement. Hammer said that he never reinstated the lien and gave up trying to collect the money, resigning himself to the fact that he would never be paid for his prior efforts.

Although collection lawyers are only paid a percentage of the money they collect, after the tax is paid, Ceprano told investigators that another mayoral aide, John Simmons, suggested that Ceprano pay Hammer out of city funds. Ceprano said that he refused. Simmons denied making that suggestion.

Ceprano told investigators that he stopped trying to pursue collection because he felt "he wasn't in control of the situation, and that John Simmons and Rita Murphy had assumed control.''

As previously revealed in a state police affidavit last month, Bizzacco, now a graduate student at Harvard University, said that he told Mayor Cicilline about the situation, but that the mayor never directed him to take any specific action or do anything inappropriate. The mayor vehemently disputes that. Murphy and Simmons told investigators that they don't recall telling the mayor, though Simmons did say that given Murphy's and Bizzacco's involvement, "he thought the mayor would have known.''