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PROVIDENCE, R.I. (AP) — A charity set up by former Mayor Buddy Cianci to provide college scholarships to Providence school children has amassed hundreds of thousands of dollars but gives out just a few thousand per year in grants, and most of its spending is on expenses other than scholarships, according to an Associated Press examination.
Since 2008, the charity has spent no more than 2.7 percent of its assets annually on scholarships, and as little as 1.7 percent.
In addition, the charity's board is composed of relatives or people who have business relationships with Cianci, even though it has told the Internal Revenue Service that none of the board members have such relationships.
Cianci told the AP they are building the fund so that it continues to make money in the future. Charles Mansolillo, the fund's president and Cianci's former city solicitor, said all its expenses are reasonable.
"I disagree with the idea that it's too much money," Mansolillo told the AP.
The Vincent A. Cianci Scholarship Fund was established in 1994, during Cianci's second stint in office and before he was sent to prison in 2002 for presiding over widespread corruption in City Hall. Cianci is now running for mayor again.
Every year, the fund gives out college scholarships to graduating high school seniors. A review of the charity's IRS filings shows it has given out between five and 14 scholarships in various years since 2005. The amount of the scholarship these days is always $1,000, Mansolillo said.
Cianci told the AP he believed the fund had helped at least 300 kids and guesses it has given out more than $300,000 in scholarships over the years. A complete accounting was not available, but an AP review of IRS filings shows it gave out $52,000 in scholarships from 2008 to 2013.
"We've done a lot of good things for a lot of good people," Mansolillo said.
Board member Jeff Kenyon, a retired high school guidance counselor who is married to Cianci's press secretary, leads the selection committee, typically made up of several city guidance counselors. Each year, they sift through about 80 to 100 applications from Providence high school seniors, he said. Recipients are selected based on academic record, financial need, an essay and resume. The board approves the final list.
"It's important to have the whole city represented," Kenyon said.
The AP reported this week that sales of Cianci's Mayor's Own Marinara Sauce, which are supposed to benefit the fund, have not resulted in any money being donated to the charity for several years. The sauce is made by a private company, for which Cianci is president and Mansolillo is vice president, secretary and treasurer.
Because of that, the fund relies on money it raised years ago and the resulting investment income.
The charity's IRS filings show that it had $434,126 in assets as of June 30, 2013, and received around $25,000 in investment income that year. It gave out $11,000 in grants and spent $32,061 total in expenses. The year before, it had $3,862 in revenue and gave out $12,000 in grants, and before that it received $10,972 in revenue and gave out $10,000 in grants.
Mansolillo said they are conservative in spending because there have been years that the fund's investments have lost money.
However, Daniel Borochoff, president of the watchdog group CharityWatch, said charities generally should not be sitting on assets of more than three times their annual budget.
"Why are they sitting on this money?" he said. "Why isn't that being given out in scholarships?"
Sandra Miniutti of the group Charity Navigator, which evaluates such organizations, said that if the charity's mission is making grants, most of its spending should be on grants.
Since at least 2008, the charity spends more on other expenses than grants, according to its IRS filings. Its other expenses include investment management fees, telephone bills and salary for its secretary treasurer, Rita Marcotte, who was paid $6,425 in the fiscal year that ended in 2013.
"A donor that wanted to fund scholarships would not give to this group if they wanted to fund scholarships," Borochoff said.
Several times, the group told the IRS in filings that none of its board members has a family or business relationship with any other. However, Cianci, his sister Carol Turchetta and his nephew Brad Turchetta are all board members, as is Mansolillo, with whom he has a business relationship. It also does not list Kenyon's wife, Beryl, as a board member, although she and Mansolillo both told the AP she was on the board.
Mansolillo said he was not aware of the reporting issues, and said it was an oversight, not intentional deceit.
Miniutti said the IRS wants to know if there are potential conflicts of interest. Borochoff said it's important for different people to be responsible for operations, such as accounting for money and issuing checks.
"That way it's hard for one person to manipulate the system," he said.
Mansolillo said there's a simple explanation for who is on the board.
"There were times," he said, "that nobody wanted to join that group."
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