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Mayor Elorza secured $5K donation from school bus company with big city contract

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PROVIDENCE, R.I. (WPRI) – The private transportation company at the center of an 11-day bus driver strike that left thousands of Providence children without rides to and from school in October donated $5,000 to Mayor Jorge Elorza’s inauguration and travel fund earlier this month, Target 12 has learned.

The donation from Ohio-based First Student, Inc. was arranged by the company’s lobbyist Robert Struck at the request of Elorza, according to a spokesperson for the mayor. The check was deposited into an account controlled by the Providence Tourism Fund, an obscure nonprofit that pays for inaugural events and has covered much of the mayor’s out-of-state travel since he took office.

“The mayor reached out to Bob Struck during fundraising time for the inauguration events who then contributed from First Student on 1/14/19,” Emily Crowell, the mayor’s communications director, wrote in an email. “They are one of many private partners who wants to support the city given their presence here.”

Elorza, a Democrat who just started his second term, reported raising $160,000 for the Providence Tourism Fund in recent weeks from a who’s who list of law firms, private companies and nonprofits, many of whom have direct business with the city. In First Student’s case, the company received a $25-million contract extension from the city in November, shortly after the strike ended.

Meg Clurman, who sits on tourism fund’s three-member board and is a partner at the firm that handles the mayor’s political fundraising, said the inauguration and related events – including a public party – cost $130,000. The tourism fund keeps the leftover money, which the mayor and his aides have used to travel to conferences and meetings throughout the world over the last four years.

One of those trips is this week. Elorza is in Washington, D.C. for the winter meeting of the U.S. Conference of Mayors, which started Wednesday and ends Friday. He declined an interview in Washington Thursday.

The tourism fund was created in 2008 as a way to accept donations to fund a U.S. Conference of Mayors meeting in Providence, and has been used by city officials to cover inaugural events – in 2011, 2015 and earlier this month – and certain travel by the mayor and his staff. Its stated purpose, according to business filings, is to “promote, encourage and create tourism in the city of Providence.”

In May Target 12 reported Elorza had taken 59 out-of-state trips since being sworn in as mayor in 2015. All told, the mayor was out of Rhode Island for 148 days in his first term – or nearly five months – visiting destinations including Miami (three times), London (twice), China, Guatemala, New Orleans and Nashville, Tennessee.

At the time, Elorza said he travels primarily to promote the city as “cheerleader in chief” — securing grants for various projects – and as part of the U.S. Conference of Mayors. Many of his trips have been paid for using money that was donated to the tourism fund.

But Elorza’s decision to actively raise money for the fund has come under scrutiny in recent months, in part because the donations would be prohibited if they were made to his political campaign. State law bars politicians from accepting donations from corporations and from receiving more than $1,000 from an individual in a calendar year.

There are no restrictions on donations to the tourism fund, which means it can receive unlimited contributions from businesses like First Student, which the city pays more than $12 million a year to transport nearly 10,000 elementary and middle school students each day.

John Marion, executive director of Common Cause Rhode Island, said the use of the tourism fund by the city’s mayors to pay for travel, inaugurations and other activities “has always been problematic.”

“Prohibitions on corporate donations and donation limits exist to discourage corruption and the appearance of corruption,” Marion said. “Mayor Elorza may not have violated the law by soliciting donations for the Tourism Fund from Providence’s bus contractor First Student but he has given the appearance that there is another way for those with city contracts to curry favor.”

The First Student donation came three months after it reached a new contract with Teamsters Local 251, the union that represents the city’s bus drivers. The drivers were on strike for 11 days, forcing students to find alternate transportation the school. Student absenteeism soared during strike; district officials said 165 students didn’t attend school at all during the standoff.

First Student’s handling of the dispute with the Teamsters came under fire from City Council members, but the city still signed off on a $25-million contract extension with the company in November. District officials have committed to overseeing a comprehensive review of student transportation before First Student’s contract expires at the end of 2020 school year.

Frank McMahon, a spokesperson for First Student, said the company “routinely” donates to entites like the tourism fund in other cities where it has contracts, but he did not name the communities. It’s unclear if any other mayor in Rhode Island has a tourism fund.

Aside from First Student, other recent donations to the tourism fund included $15,000 from the law firm DarrowEverett LLP, which has been paid more than $500,000 as legal counsel to the Providence Redevelopment Agency since Elorza took office. The firm also represents private companies seeking tax breaks from the city. Nicholas Hemond, a partner with the firm, is president of the Providence School Board.

The tourism fund also received $15,000 donations form Sims Metal Management, which controls a large scrap yard on Allens Avenue; Carpionato Group, one of the state’s most well-known developers; and Brown University.

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Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan

Tim White (twhite@wpri.com) is the Target 12 investigative reporter and host of Newsmakers for WPRI 12 and Fox Providence. Follow him on Twitter and on Facebook

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