Lombardi: I won't fire Vallee, but don't blame me

Lombardi: I won't fire Vallee, but don't blame me

Controller fined $8,000 for ethics violation

NORTH PROVIDENCE - Mayor Charles Lombardi will keep Maria Vallee as the town's controller, despite a decision by the Rhode Island Ethics Commission against her last week. But the mayor, who said he was advised to keep her by the town's attorneys, is blaming state and federal officials for the decision.

If federal officials had treated Vallee and her unlawful loans as a criminal matter, instead of a civil one, "it would have made my job a lot easier," said Lombardi, instead of setting him up for "a fight we probably wouldn't win."

State officials can also be blamed for setting a precedent on ethics decisions with the appointment of former Sen. President Joseph Montalbano to a Superior Court judgeship after he was fined for an ethics violation, said Lombardi.

"The easiest thing for me to do to make myself look good would be to fire her and not care about the cost to the taxpayers," said the mayor, who called Vallee a "great employee."

The Rhode Island Ethics Commission last week fined Vallee $8,000 for improperly receiving $48,000 in illegal federal loans. Vallee agreed to the fine and acknowledged that she violated state laws, according to Jason Gramitt, staff attorney for the commission.

The $8,000 fine against Vallee represents what "most people would consider a serious penalty," said Gramitt. The amount was decided on based on the "totality of the circumstances," including the willfulness of Vallee's conduct and the size of the civil penalty paid in Vallee's federal case.

Just as federal officials were trying to "effectuate justice on a grand scale," said Gramitt, so was the Ethics Commission.

The $8,000 figure was consistent with past cases of a similar nature, said Gramitt.

Lombardi is also blaming those at the state who are in charge of administering the Community Development Block Grant loan program Vallee took advantage of for not catching issues with dozens of previous "questionable" loans, creating an environment where loans were given out without questions.

The money was there, and Vallee "took advantage," said Lombardi. Was it right? No, but Vallee is a union employee with extra protections, he said. She will "absolutely" be under heavy scrutiny going forward, he said, as the ethics fine will be a permanent part of her employee file.

Vallee, North Providence's former finance director, had already been fined $78,000 in damages for illegally obtaining the loans for herself and her husband back in 2008.     

The federal ruling came two weeks ago after Vallee reimbursed nearly $48,000 of Department of Housing and Urban Development Community Development Block Grant money she received in the form of loans from the town of North Providence which she was not qualified to receive, according to a civil complaint and a consent judgment filed with the U.S. District Court in Providence.     

Brian Quirk, the town resident who filed the complaint against Vallee, said this week he was happy to win his second of three complaints against town officials.

"Two out of three, not bad," he said.

In a letter to the editor this week, Quirk blasted Lombardi for deciding to keep Vallee, saying it goes against decisions he's made on other employees. See Quirk's letter on page 10.

Frank Manfredi, the former town councilor who was all over the Vallee case during his time in office, called for some form of punishment for the employee.

"I do not want to see anyone in trouble but those that knowingly utilize funds specifically earmarked for minorities and qualified residents, well that warrants some type of penalty," he said in a statement.

The CDBG loan program is a Housing and Urban Development program administered by various municipalities across Rhode Island to provide low-interest loans to low-income and moderate-income families and the elderly to make necessary repairs to existing housing.

According to the earlier complaint, announced by U.S. Attorney Peter Neronha and Cary Rubenstein, special agent in charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General, between April and July 2008, Vallee applied for and received a total of $47,895 in HUD CDBG loans, even though she was aware that her and her husband's combined salaries of $125,000 exceeded maximum salary guidelines. The maximum aggregate family income for a family applying for a home repair loan from the CDBG program was $58,550.

Vallee removed herself from the appointed interim finance director position and returned to the union controller position in June of 2011, hours before the Rhode Island Ethics Commission found probable cause for numerous alleged ethical and statutory violations.