Playing Monopoly at the Beach, Part 3

The continuing series on the business dealings of Council member Lisa DiBello

By Will Collette

In part one of this series, I examined how differently Charlestown has awarded its contracts for beach concessions at the two town beaches. At Blue Shutters Beach, there has been healthy competitive bidding resulting in almost $60,000 revenues to the town. By contrast, only one vendor, The Dog Pound, has held a monopoly at Charlestown Town Beach and, in contrast to Blue Shutters Beach, had only paid the town $17,002.

In part two of this series, we established that the direct overseer of beach concessions, Parks and Recreation Director Lisa DiBello, shared a household and a business with the owner of the Dog Pound, Deborah Dellolio. DiBello not only supervised the beach concessions, but also made the recommendations – and even the direct arguments before the Council – that her friend and associate be awarded the beach contracts.

In this segment, we’ll look at some questionable business practices at the beach.

The original dispute that prompted this series of investigatory reports was the fight over Council member Lisa DiBello’s activities at the town beaches. This issue first arose at the June Council meeting in a fight involving DiBello versus Council President Tom Gentz and DiBello’s longtime adversary, Council member Gregg Avedisian.

Though a lot of hard shots were thrown at the June meeting, the battle really intensified when her successor as Parks and Recreation director, Jay Primiano, filed a formal complaint and then additional supporting documents against DiBello for the July Town Council meeting. Primiano complained that DiBello was frequently at the town beaches and used the parking spaces reserved for the beach concessionaire.

For the summer of 2011, there was only one beach concessionaire, Deborah Dellolio’s Dog Pound hot dog wagon. As reported, Dellolio won the right to service both beaches by either an amazing stroke of luck, clairvoyance or something, beating Johnny Angel's bid of $3002 for each beach by submitting her own bid of $3003 for each beach three days after Johnny Angel's bid was submitted.

The bidding process and the resulting monopoly for the Dog Pound – and the ethics of Ms. DiBello’s involvement – warranted separate coverage in Part 2.

Now comes the question of what did Charlestown get for its money? During the course of my investigation, I discovered that the RI Health Department database has no record of inspections of the Dog Pound hot dog wagons. I've also heard complaints about her hours. 

Health inspections?
We don need no steenkin health inspections
(to get the Charlestown beach contract)!

Following the document trail led to questions about The Dog Pound’s compliance with the laws on workers’ compensation and the payment of wages and taxes.

In his June and July reports to the Town Administrator, Primiano’s main complaint was an allegation that DiBello interfered with his staff, in violation of a policy adopted by the Town Council in November 2010 that Town Council members would engage with town staff only through the Town Administrator.

But in the course of presenting the complaint, both he and Town Administrator William DiLibero alleged that DiBello appeared to be working with or working for Deborah Dellolio. As discussed in Part 2 of this series, that could be an ethics violation or worse because DiBello and Dellolio share a household and are also business associates in a non-profit corporation they run from their home.

Both DiLibero and Primiano also notably charged DiBello with the seemingly trivial charge of using parking spaces reserved for the beach concessionaire, Dellolio’s business The Dog Pound.

If you watch the Clerkbase video for the Town Council June meeting, DiBello initially denied she was even there, but then backed away from that denial to admit she was there, but didn’t interfere with the staff. She then amended that story to say that she was (a) trying to help and (b) responding to constituent requests.

Primiano added detail to his complaint against DiBello, filing additional documents for the July Town Council meeting. DiBello did not attend that meeting, but asked that no discussion or action be taken on the matter in her absence.

Town Council President Tom Gentz deferred to her request. Even though DiBello was present at the August Council meeting, the matter did not come up. In an August 9 e-mail to me, Town Administrator Bill DiLibero said he wasn’t sure if or when the matter would be brought up again. And it hasn’t, at least to date, although a new set of charges and counter-charges came up at the September Town Council meeting (the “Frick and Frack” incident).

Those parking spaces at the town beach are very important to Dellolio. After winning the miracle bid over Johnny Angel’s this year (see Part 1 for details), Dellolio wrote to the town on March 24, 2011.

In that letter, she asked that the “proposed specs be revised to provide for 2 parking spots for workers. On busy weekend days, I often have 2 people working the carts as well as having a daily need for the ability to have a ‘runner’ to restock items if busy and will require 2 spots as I have been provided over the course of the last several years.”

So Dellolio states that she has had at least two employees at the beach (not counting the “runner”) in prior years and has had two spots for several years.

Problem: Dellolio had not carried workers’ compensation coverage prior to this year, 2011, according to the checklists accompanying her bids with the town. Such coverage is mandatory in the State of Rhode Island for all employers who have one or more employees.

Dellolio does not have any employee listed as an independent contractor with the RI Department of Labor and Training, as would be required if she sought an exception to the mandatory workers’ compensation coverage.

I found no record in the Westlaw database showing a FEIN – Federal Employer Identification Number – registered to Dellolio or the Dog Pound. A FEIN is required when you pay people that work for you, whether directly employed or as legitimate independent contractors.

The Dog Pound is not listed in the RI Secretary of State’s database as a corporation or LLC. Westlaw’s several business databases also show no record of the Dog Pound.

That’s not unusual for very small businesses that operate as sole proprietorships or partnerships. You don’t have to be incorporated to do business – but you do need a FEIN.

That is, unless Dellolio’s employees are paid in cash, off the books – and that violates federal and state tax laws.

It isn’t the Town of Charlestown’s duty to enforce state and federal employment and tax laws, but it looks like the town may not be the only one that should check to see if they’ve been short-changed.