WARWICK, R.I. (WPRI) — It was a $225,000 contract to dig into data and documents tied to financial concerns with the Warwick Fire Department raised by the City Council and taxpayers.
Three companies bid on the 2017 job that eventually went to the accounting firm Yarlas, Kaplan, Santilli, Moran (YKSM) — a Providence company with an executive who had business and political ties to Councilman Steve Merolla.
Merolla’s attorney, Christopher Gontarz, insists “the complaint is unfounded,” and after the initial report on the possible conflict of interest, Merolla himself called claims that he benefited after voting to hire the company “patently absurd.”
But on Tuesday morning, the R.I. Ethics Commission voted unanimously to investigate the complaint further, stating the claims, “if true, are sufficient to constitute a violation of the Code of Ethics.”
Ethics Commission Executive Director Jason Gramitt said commission investigators will now start looking into the complaint to determine if “there is probable cause to believe” Merolla violated the code.
Frequent city government and Merolla critic Rob Cote filed the complaint earlier this year, telling the commission he met with councilmembers and YKSM personnel about the fire department several times starting in late 2017.
Cote alleges Merolla never disclosed that YKSM executive Tom Lisi was his campaign finance treasurer and personal business accountant.
Merolla, who did not seek another council term and lost in the primary for a state senate seat, told Target 12 that Lisi’s company was the lowest “qualified bidder.”
Records show the city received bids from YKSM, Parmalee, Poirier & Associates, and Marcum, LLP. Marcum and YKSM have since merged and the company website states Lisi is currently the firm’s office managing partner.
When news of the potential conflict broke last June, Merolla said Lisi had volunteered to be his campaign account treasurer.
Cote also claimed in the complaint that a final report of YKSM’s findings was never publicized.
“How does an elected official authorize a $225,000 payment of taxpayer money and have no work product to show for it?” Cote asked. “The taxpayers deserve an answer as to the results of investigations that they pay for.”
Merolla has not responded to an email asking about YKSM’s findings and the release of a report.
In his complaint, Cote noted he “was interviewed numerous times” by federal investigators about the fire department’s “accounting issues.”
Cote said he spoke with agents from the FBI, Homeland Security, and the Justice Department’s Labor, Racketeering and Fraud Division.
Merolla previously acknowledged he spoke with federal investigators and in February 2019, Mayor Joseph Solomon also confirmed “federal inquiries have been made in City Hall.”
In a text, Cote said his statement in the ethics complaint was the first time he documented his contact with federal investigators.
No one has been charged with a crime in connection with the federal probe in Warwick, and a spokesperson for the FBI would neither confirm nor deny the existence of an investigation.