Lawmakers call plan to cover RIC’s cancelled $76,000 consulting deal with COVID funds a ‘sham scam’

Alexis Rapoza

News Editor

Photo via Linkedin

PROVIDENCE, R.I., -- At a Rhode Island House Oversight Committee meeting last Thursday, lawmakers learned that the state planned to pay for the now-canceled $76,000 per week consulting contract between Rhode Island College (RIC) and New York based firm Alvarez & Marshal (A&M). The state planned to finance this contract through federal COVID-19 relief funds.


At the meeting, Head of the Council on Postsecondary Education Tim DelGuidice, defended the council’s decision to higher the New York-based firm. He said, “Everyone was in agreement that I meet with Alvarez & Marhsal, and if they are able to take on the added scope to support RIC, we could get them working quickly because they are already working in Rhode Island and already have existing state contracts.


The New York based firm was hired by the state in December to investigate the financial crisis currently impacting RIC. Alvarez & Marsal were to examine possible factors contributing to the school's financial issues and submit a recommendation that was to be reviewed by former Gov. Gina Raimondo. The contract was pulled after several state lawmakers expressed their disapproval.


DelGuidice said that an additional reason for the contract’s cancellation was Raimondo’s nomination and subsequent confirmation to join the Biden administration as commerce secretary. DelGuidice claimed that Gov. McKee’s priorities differed from those of the former governor. “He’s got other things on his mind, and for me, as a volunteer running in to say, ‘Hey, I’m spending all of this money to get this great report that I have great confidence in, but now I need confidence that you are going to act on it the way Governor Raimondo committed to act on it,’ that’s where I lost confidence,” DelGuidice stated.


DelGuidice said that initially he was told the state would come up with a plan to pay for the contract. “I made it very clear...that RIC had no money to pay for this.” He explained, “I was assured we were going to find other resources. At that point, I did not know it was part of the federal CARES Act money, specifically the Governor’s Emergency Education Relief Funds.”


Rep. Julie Casimiro expressed her disappointment in the plan to use federal funds to pay for the contract. She said, “So during a pandemic, when people are facing food insecurity, paying their bills and not knowing where the money is coming from and not paying their rent and landlords are not getting paid, you’re spending $76,000 per week?”


Providence Democrat, Anastasia Williams claimed DelGuidice’s explanation of the motives behind the contract were hard to believe stating, “It’s nothing more than a sham scam...with all those individuals being given a hook up from the floor up for the individuals that you are all associated with, and the heck with the taxpayers of Rhode Island. From my viewpoint, it is what it is.”


RIC President Frank Sanchez said although he did sign off on the contract, he did not initiate it. He claimed, “I know at Rhode Island College we certainly did not ask, we didn’t request, we didn’t seek engagement with Alvarez & Marsal.”


According to the Boston Globe, records show that the Raimondo administration was deeply familiar with Alvarez & Marsal. In the 2020-2021 fiscal year, various state agencies paid the firm $1.25 million. In fiscal year 2019-2020 the firm received $1.4 million from state agencies and an additional $936,000 in the 2017-2018 fiscal year. State agencies that enlisted Alvarez & Marsal include the Department of Administration, Department of Children, Youth and Families, Office of Health and Human Services and the Department of Health.

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