Playing Monopoly at the Beach, Part 2

Did Lisa DiBello help her business associate pass “Go”?

By Will Collette

In Part 1, I compared the revenue the town of Charlestown receives for concession rights at the two town beaches. Concessionaires at Blue Shutters Beach bid fiercely for the contract and, as a result, the town has received almost $60,000 in fees.

However, at Charlestown Town Beach, the same concessionaire, The Dog Pound, has held a monopoly since 2001, usually getting the contract with no competition, but has only paid $17,002 to the town. This is a pretty good illustration of why state law requires government contracts to be competitively bid.

In this installment, we’re going to look at how that competition actually works in Charlestown’s beach concessions.

As Parks and Recreation Director until she was fired in 2010, Council member Lisa DiBello supervised the beach concessionaires, including the Dog Pound, which has held the Charlestown Town Beach concession since 2001.

DiBello usually wrote the recommendations to the Town Administrator and Town Council for who should be awarded the beach concession contracts, except on one occasion, where she decided to exercise “an abundance of caution” and recuse herself  because the owner of the Dog Pound, Deborah Dellolio, is “a close personal friend.”

According to Providence Journal articles (April 15 and April 10, 2008), DiBello advocated for the award of the 2008 concession contract at Blue Shutters Beach to the Dog Pound for $1000, even though the previous year’s bid was $8100. This was after the Blue Shutters pavilion was closed due to its terrible condition.

According to the ProJo, Dellolio initially bid $500, a bid that even then Council President Jim Mageau (now Councilor DiBello’s most fervent supporter) rejected, saying “I don’t think we should consider it.” Despite DiBello’s advocacy for her friend, the contract was eventually awarded to West’s Bakery for $3000. However, Dellolio continued to hold on to her monopoly at Charlestown Town Beach.

In 2009, the last time her close friend filed a bid before DiBello’s firing, it was DiBello who made the recommendation to the Council that Dellolio once again get the contract for Charlestown Town Beach, for the ninth consecutive year.

Town Council meeting minutes for the March 9, 2009, meeting carry this entry:

16d. Award of bid for vending at the Charlestown Town Beach with a recommendation from the Parks and Recreation Director:  Deborah Dellolio, dba “The Dog Pound” as per the proposal.

For this past summer, The Dog Pound won the contracts for both town beaches, miraculously submitting a bid topping competitor Johnny Angel's by one dollar on each beach..

As I wrote in Part One, the process of awarding the contracts for the beach concessions at Charlestown Town Beach and Blue Shutters Beach has been dramatically different.

Click to enlarge

The Dog Pound, owned by Deborah Dellolio of 35 Morley Street, has held a monopoly on the Charlestown Town Beach concessions since 2001. Dellolio has paid the town $17,002 for the concession rights over the past ten years.

At Blue Shutters Beach, the concessions regularly changed hands due to competitive bidding. The Blue Shutters concessionaires paid the town $59,300 over the past ten years, more than triple the amount paid by Dellolio.

DiBello may have violated ethics rules through her involvement in awarding the contracts and supervising the work under those contracts by Dellolio.

From the Town Tax Assessor database: 35 Morley,
home to Lisa DiBello, Deborah Dellolio, The Dog Pound
and A Ray of Hope

Under the definition used by the RI Ethics Commission, Deborah Dellolio and Lisa DiBello have been “household members” at DiBello’s 35 Morley Street single-family home since 1993. Dellolio and DiBello both registered to vote on December 2, 1993, listing the 35 Morley Street address, as it has remained ever since.

Dellolio and DiBello have also operated the nonprofit corporation, A Ray of Hope, from their 35 Morley Street home since 1999. DiBello is the President and Dellolio is the Secretary of the corporation. Town Tax Collector Jo Anne Santos is the Treasurer and Lynn Craig, ex-wife of former Council President John Craig, rounds out the current board. Because of their business relationship in A Ray of Hope, Dellolio and DiBello are clearly business associates under the RI Ethics Commission definition.

The Rhode Island General Laws and the RI Ethics Commission rules set strict limits on the conduct of a public official – as DiBello had been when she was Parks and Recreation Director and now, as a Town Council member – and “household members” and “business associates” who do business with the town. 

As a town department head and now as a Town Council member, Ms. DiBello has been required by state law to file annual ethics disclosure reports with the RI Ethics Commission. The ethics disclosure form focuses on disclosing relationships involving family members, but not businesses associates or household members.

The Dog Pound's meat wagon

Since DiBello and Dellolio are not, in the eyes of the law, family members, DiBello did not have to report on the Dog Pound, even though it is run from her Morley Street home. DiBello was required to report her relationship to her non-profit organization, A Ray of Hope, and did so.

However, DiBello does have to report gifts. On her ethics reports, DiBello answered Question #10 each year as "N/A" (not applicable). This question asks whether any "interested person or business entity" gave the public official (DiBello) gifts of cash or property worth more than $100 during the course of the year. Is it plausible that Dellolio, a town contractor for the past 11 years, could live in the same house as DiBello and not give cash or gifts worth $100 a year?

One of the main reasons why the state has ethics rules is to make sure that businesses that seek to do business  with state or local government do so on a level playing field, without the taint of favoritism. Sure, embarrassing situations like the scandals in North Providence happen, but the rules are there to, first, try to prevent corruption and, second, provide a means to punish it when it occurs.

So has Charlestown's beach concession contracting process been played on a level playing field?

In 2005, New England Frozen Lemonade put in the first competing bid against Dellolio. Both bids came in on January 4, 2005 and tied at $2000.

Both NE Lemonade and the Dog Pound offered an extra payment if their sales exceeded $10,000. NE Lemonade offered $600; the Dog Pound offered $500. The Dog Pound also added two additional sales target bonuses, although all this was pretty academic – beach concessionaires almost never exceed projected sales. Even though NE Lemonade won the first tie-breaker by $100, the concession contract continued to go to Dellolio.

NE Lemonade owner Robert Lombardi told me he couldn’t say how his company lost that bid, but from that time on, he felt his company was blacklisted from all events in Charlestown – including the various festivals.

I have also asked then Town Administrator Richard Sartor, now chair of Charlestown’s Budget Commission, to explain why he signed off on awarding the 2005 contract to The Dog Pound. I have asked him twice. He has not responded to my request for comment.

Other concessionaires have not returned repeated phone calls. That includes Johnny Angel's, who bid against Dellolio’s Dog Pound for the concession rights to both town beaches. Johnny Angels bid $3002 each for the two beaches on March 10, 2011. Dellolio submitted her bid on March 14, bidding a remarkable $3003 for each beach. 

Other than what Mr. Lombardi told me, there's no explanation for the mysterious lack of bidders willing to take on Dellolio. It’s pretty clear from her pattern of bidding that she bids low. But there is the question of how she managed to beat the competing bidder in 2005 and 2011.

What we do know from town and other government records is the Dog Pound paid Charlestown a whole lot less money for its monopoly at Charlestown Town Beach than the concessionaires at Blue Shutters Beach. And the Dog Pound’s owner is a business associate and shares a household with the person who recommended and administered her concession contracts.

Statute of Limitations: if a criminal investigatory body such as the RI State Police or Attorney General’s office found evidence of bid-rigging, contract fraud or conspiracy, the period of time covered by the statute of limitations could be anywhere from three years (most likely) to ten years, depending on how the charges were framed. 

Here are the relevant sections of Rhode Island law governing the ethical responsibilities former Parks and Recreation Director and present Town Council member Lisa DiBello has with respect to town contractor Deborah Dellolio’s business, the Dog Pound.

R.I. Ethics Commission Code of Ethics: from RI Gen. Laws § 36-14-2 Definitions.

(1) "Household member" means a person having legal residence or living in a public official's or public employee's place of residence.

(2) "Business" means a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, trust or any other entity recognized in law through which business for profit or not for profit is conducted;

(3) "Business associate" means a person joined together with another person to achieve a common financial objective.

R.I. Gen. Laws § 36-14-3 Code of Ethics.

Sections 36-14-4 through 36-14-7 of this chapter shall constitute the Rhode Island Code of Ethics in government.

R.I. Gen. Laws § 36-14-4 Persons subject to the Code of Ethics.

The following persons shall be subject to the provisions of the Rhode Island Code of Ethics in government:

(1) State and municipal elected officials;

(2) State and municipal appointed officials; and

(3) Employees of state and local government, of boards, Commissions, and agencies.

R.I. Gen. Laws § 36-14-5 Prohibited Activities.

(a) No person subject to this Code of Ethics shall have any interest, financial or otherwise, direct or indirect, or engage in any business, employment, transaction or professional activity, or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his or her duties or employment in the public interest and of his or her responsibilities as prescribed in the laws of this state, as defined in section 36-14-7.

(c) No person subject to this Code of Ethics shall willfully and knowingly disclose, for pecuniary gain, to any other person, confidential information acquired by him or her in the course of and by reason of his or her official duties or employment or use any such information for the purpose of pecuniary gain.

(d) No person subject to this Code of Ethics shall use in any way his or her public office or confidential information received through his or her holding any public office to obtain financial gain, other than that provided by law, for him or herself or any person within his or her family, any business associate, or any business by which the person is employed or which the person represents.

(e) No person subject to this Code of Ethics shall:

(1) Represent him or herself before any state or municipal agency of which he or she is a member or by which he or she is employed. In cases of hardship the Ethics Commission may permit such representation upon application by the official and provided that he or she shall first:

(i) Advise the state or municipal agency in writing of the existence and the nature of his or her interest in the matter at issue, and

(ii) Recuse him or herself from voting on or otherwise participating in the agency's consideration and disposition of the matter at issue, and

(2) Represent any other person before any state or municipal agency of which he or she is a member or by which he or she is employed.

(h) No person subject to this Code of Ethics and or any person within his or her family or business associate of the person or any business entity in which the person or any person within his or her family or business associate of the person has a ten percent (10%) or greater equity interest or five thousand dollars ($5,000) or greater cash value interest, shall enter into any contract with any state or municipal agency unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded; provided, however, that contracts for professional services which have been customarily awarded without competitive bidding shall not be subject to competitive bidding if awarded through a process of public notice and disclosure of financial details.

Regulation 36-14-5002 Additional circumstances warranting recusal.

A person subject to this Code of Ethics must also recuse himself from participation and notify, in writing, his [or her] board/agency of an interest when any of the following circumstances arises:

Regulation 36-14-5004 Prohibited Activities - Nepotism .

(a) Definitions. For the purposes of applying the provisions of this regulation, the following definitions apply:

(1) "Household member" means a person having legal residence or living in a public official's or public employee's place of residence.

(b) Prohibitions. In addition to any other provisions of the Code of Ethics the following prohibitions relating to nepotism shall apply:

(1) Nepotism Generally. No person subject to the Code of Ethics shall participate in any matter as part of his or her public duties if he or she has reason to believe or expect that any person within his or her family, or any household member, is a party to or a participant in such matter, or will derive a direct monetary gain or suffer a direct monetary loss, or obtain an employment advantage, as the case may be.

(2) Advocacy/Supervision Regarding Family/Household Members.

(A) No person subject to the Code of Ethics shall participate in the supervision, evaluation, appointment, classification, promotion, transfer or discipline of any person within his or her family or a household member, in the state or municipal agency in which the official or employee is serving or over which he or she exercises fiscal or jurisdictional control, except in accordance with particular instructions and advice received from the Ethics Commission in a written advisory opinion.

(3) Participation in Budgets.

(A) General Prohibition. No person subject to the Code of Ethics shall participate in discussion or decision-making relative to a budgetary line item that would address or affect the employment, compensation or benefits of any person within his or her family or a household member.

(B) Specific Line Items. Notwithstanding the prohibition set forth in subsection 3(A), a person subject to the Code of Ethics may, only in accordance with particular instructions and advice received from the Ethics Commission in a written advisory opinion, participate in discussion or decision-making relative to a budgetary line item that addresses or affects the employment, compensation or benefits of any person within his or her family or a household member as a member of a significant and definable class of persons, and not individually or to any greater extent than any other similarly situated member of the class.