Target 12

RI developer under scrutiny following military housing probe

PROVIDENCE, R.I. (WPRI) - U.S. Sen. Jack Reed said Thursday a local developer with a government contract to maintain housing on military bases should repay taxpayers and soldiers' families if the company fell short on its promises.

The comments come in the wake of an investigation by Reuters. The news agency interviewed dozens of current or recent tenants of military housing maintained by East Greenwich-based Corvias Group who said they lived in poorly maintained homes - some plagued by mold, sometimes triggering serious health problems. Corvias is owned by Rhode Island businessman John G. Picerne.

Corvias began getting government contracts to manage military housing roughly 18 years ago, and now maintains some 26,000 homes on 13 military bases, according to Reuters.

Reed, who is the top Democrat on the Senate Armed Services Committee, agreed that "there are problems, and as long as there any problems, we cannot be satisfied." 

"We have to provide military families with the high-quality housing," Reed said in an interview with WPRI 12. "We're not going to rest until we have what we believe is the best possible housing for our military families."

The financial agreements Corvias has with the government are complicated, but the majority of the money the company receives is through rent from military families and government housing stipends to soldiers.

"If [Corvias is] in violation of their contract in terms of providing services, reimbursement or some type of reparations should be made, obviously," said Reed. 

In an email, Corvias spokesperson Christina Chase took issue with the Reuters report, writing that the article "did not present the full story - the photographs in the story do not reflect current conditions in those homes, our rapid response protocol or that we offer alternative housing, as appropriate, when repairs are made."

"Corvias is committed to providing safe, comfortable housing and outstanding service to our military service members and their families," Chase wrote. "We’re proud of our consistent superior ratings - as measured independently - by service members and their families." 

She added that tenants have "five different ways to contact" the company with a problem.

"If there’s an area where we can improve or an unmet resident need, we want to make it better," she wrote. "All homes in our military housing portfolio will undergo significant renovations and/or replacement during the life of each partnership."

Corvias is one of the largest private landlords on military bases, but not the only one. The Pentagon shifted away from publicly maintained housing more than two decades ago, and more than 200,000 homes are privately managed now.

Reed said the Armed Services Committee directed the Governmental Accountability Office to review all privatized military housing contracts in 2016. The office then made eight recommendations to better monitor the conditions and hold contractors more accountable.

"We're now going to take those results and start moving systematically with the Department of Defense to ensure we have the highest level of housing available for our troops," Reed said. "We're going to do all we can as quickly as we can to rectify the situation because given the sacrifices that these men and women and these families make, they deserve good housing, they deserve prompt response if there are problems."

Reed said he hoped there will be more hearings before the Armed Services Committee - chaired by Oklahoma Republican Jim Inhofe - in the near future.

Picerne has profited greatly from the government contracts. After reviewing confidential financial agreements, Reuters reported that "Picerne’s business stood to collect more than $254 million in fees for construction, development and management," and fees were projected to top $1 billion over the course of their 50-year deal.

Asked about the contract during a 2012 interview on Executive Suite, Picerne described the business as "recession-proof," and touted its promise. "For the next 50 years the government knows, and DoD knows, the housing will be kept up at a high level, versus letting it go to a sad state," he said.

Reuters also reported Picerne has given more than $500,000 in political contributions to candidates or committees and spent millions on lobbying efforts over the years.

A Target 12 review of federal campaign finance data found Picerne has made 40 donations totaling more than $82,000 to the Rhode Island delegation since 2001.

Asked if he provided Picerne help in obtaining the government contracts, Reed said, "I can't recall doing so." 

"These contractual relationships, they’re competitive," Reed said. "It was several different companies vying for access to the contract and ultimately the decision was made by the Department of Defense not by the Congress."

Reed acknowledged he did take a trip with Picerne to Fort Bragg prior to Corvias obtaining the military housing contract at the base there.

"I wanted John to see what it was like to be a soldier," Reed said. "I wanted to make sure he understood that this was not just a typical commercial contract, that this was an obligation to take care of the men and women who defend us."

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

Nick Domings contributed to this report


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