PROVIDENCE – Mayor Jorge Elorza has raised hundreds of thousands of dollars for a nonprofit organization with close ties to his political campaign and one that later reimbursed him and other high-ranking city employees for travel expenses to conferences all over the country, records show.
Now, the practice of soliciting donations for the Providence Tourism Fund – often from law firms and other companies that have contracts with the city – has come under fire from government watchdogs who say Elorza is sidestepping Rhode Island’s strict campaign finance laws so he can collect unlimited amounts of money from corporations.
Elorza didn’t create the fund. It was established in 2009 to raise money for a national conference that was held in Providence, but he has been far more aggressive about using it for travel than his predecessors.
Because there is no state law prohibiting politicians from raising money for nonprofits, the operation appears to be legal. But it has created a “back door way” for companies to “ingratiate themselves with public officials,” said John Marion, the executive director of Common Cause Rhode Island, a good-government advocacy group.
“Providence has a sad history of pay-to-play, and this practice does nothing to help the city shed that reputation,” Marion said.
Elorza insists the situation is above board, and that the travels financed by the tourism fund were part of his effort to promote the city.
Elorza, who was first elected in 2014 and won another four-year term last year, has raised more than $500,000 for the tourism fund, using a portion of the money to travel to places including China and New Orleans. That’s on top of the $1.5 million he has raised for his political campaign since taking office.
While state law prohibits individuals from contributing more than $1,000 to a single elected official in a calendar year and bans companies from donating directly to them at all, the Providence Tourism Fund’s status as a nonprofit means there are no restrictions on how much Elorza can raise or who can give.
And when the mayor asks for money, the donations flow.
A Globe review of the organization’s IRS Form 990s and a list of donations provided by the fund’s board of directors showthe mayor has helped raise more than $450,000 since he was elected in 2014.
Between December 2018 and March 2019, Elorza brought in $151,000 for the fund, including $15,000 each from Brown University, real estate developer Carpionato Properties, and Sims Metal Management, which oversees a scrap yard on Allens Avenue.
Among the other 29 recent corporate contributions, Elorza received $5,000 each from a bus service company, First Student, Inc., and a food-service corporation, Aramark. The two companies have multimillion-dollar contracts with the school department. Five local law firms that have city contracts also contributed at least $2,000, including DarrowEverett LLP, where Providence School Board member Nicholas Hemond works as a partner.
State Representative John Lombardi, a Federal Hill Democrat who briefly served as acting mayor in 2002, said companies seeking city contracts would be hard-pressed to turn Elorza down when he asks for money.
Since becoming a state lawmaker, Lombardi has emerged as a leading voice on Smith Hill for campaign finance reform, repeatedly submitting bills that would block lobbyists from making donations during the legislative session with little success. He said the mayor’s practice of raising money for the Providence Tourism Fund gives donors the chance to buy influence.
“It’s tough to say no because it’s the price of doing business,” Lombardi said. “Do you want to be shut out of the process?”
Several donors contacted by the Globe declined to comment.
Victor Morente, a press secretary for Elorza, said contributions to the mayor’s campaign or the Providence Tourism Fund are never a factor when it comes to deciding which companies will be hired by the city.
Elorza has long maintained the bulk of the fund-raising he does for the fund comes around his inauguration, in part to pay for related events. Leftover money is used for tourism-related activities, which he says includes promoting Rhode Island in other states.
The mayor’s annual financial disclosures filed with the Rhode Island Ethics Commission show the fund reimbursed him for at least $24,000 in airfare and hotel expenses during his first term, including trips to China, Austin, Texas, Miami, New Orleans, San Francisco, and St. Louis.
“Any PTF dollars that are used are associated with travel opportunities that the mayor decides to take in order to promote our city, our programs, and our economy here in Providence,” Morente said.
Elorza is not the first elected official to use a nonprofit fund to cover expenses.
Governor Gina Raimondo also raised funds for her inauguration party this year, but she donated the remaining $50,000 to the Rhode Island Food Bank. New Hampshire Governor Chris Sununu has also come under fire this year for his use of inauguration donations.
Ian Vandewalker, who serves as senior counsel at the Brennan Center for Justice’s Democracy Program at the New York University School of Law, said he sees similarities between the Providence Tourism Fund and the Campaign for One New York, a now-defunct nonprofit that New York City Mayor Bill de Blasio used for political advocacy. Both groups, he noted, received contributions from people and companies that have business with the city.
“It definitely creates at least an appearance of improper influence,” Vandewalker said. “It sounds like a shakedown if someone has control over a decision related to your business is asking for a donation.”
The Campaign for One New York closed after facing heavy scrutiny from watchdogs, and advocates later successfully lobbied for a law that places limits on the amount individuals and businesses with city contracts can give to politically connected nonprofits.
Jennifer Bramley, the president of the Providence Tourism Fund, said Elorza does not make donation calls on city time.
But he does make those calls at Campaign Finance Officers, LLC, the consulting firm that has overseen his political fund-raising operation for five years.
That’s not the only connection Elorza’s campaign has to the Providence Tourism Fund.
Meg Clurman, a partner at Campaign Finance Officers, sits on the fund’s board of directors. Another employee for the firm, Andrew Moore, serves as Elorza’s campaign finance director, but was also paid by the Providence Tourism Fund to assist with inauguration fund-raising.
At its outset, the fund had a completely different purpose.
It was established as a 501(c)3 tax-exempt organization in 2008 by supporters of then-Mayor David Cicilline to raise money for a US Conference of Mayors meeting hosted by the city.
The organization never dissolved after that. Mayor Angel Taveras used it for his inauguration party in 2011, but rarely tapped it for the rest of his single term.
When Elorza took office, he installed three of his supporters as the sole members of the fund’s board of directors. The board is not subject to the state’s open meeting laws and Bramley refused to provide a copy of its bylaws. She said there are no meeting minutes, even though the fund has repeatedly stated to the IRS on its Form 990 that it does document meetings.
Both Elorza and his staff have come to rely on the fund to pay for their travel. A list of expenditures shows it issued $32,000 in reimbursements since last year to Elorza and at least five of his top aides.
But at least one donor to the fund was not aware the mayor and his staff use the fund for travel purposes. Brown University spokesperson Brian Clark said the institution’s understanding was that its $15,000 contribution “would be used for inaugural week events or in support of other city priorities managed by the Providence Tourism Fund.”
Bradley Smith, a former chairman of the Federal Election Commission who now works as a professor at Capital University Law School in Ohio, said federal officeholders have tighter restrictions on when and how they spend money for events such as inaugurations, but not all states have the same rules.
One way to limit organizations such as the tourism fund would be to place a cap on the donations the organization can receive, similar to the caps allowed in political campaigns. But Smith acknowledged there might be unintended consequences for such a law.
“There are various ways to get at this issue, but it’s never going to be perfect,” Smith said.