Ethics Commission Moving Forward with Investigations of Newport Officials

The former mayor of Newport and a longtime city solicitor and the current acting City Manager are both being scrutinized for possible ethics violations over the years.

The Rhode Island Ethics Commission over the past couple of months have authorized a review of both former Mayor and City Councilman Harry Winthrop’s dealings with the Newport Yacht Club as an elected official as well as solicitor and Acting City Manager Joseph Nicholson for allegedly not disclosing business ties with the Newport Housing Authority.

On June 16, the commission voted unanimously to authorize an investigation into Winthrop’s alleged ethics violation after a review of the complaint, No. 2015-4, filed by former City Councilman Michael Farley. (See the full complaint below).

The complaint alleges that Winthrop failed to recuse himself from city affairs in dealings with the Newport Yacht Club when a family member appeared before the City Council twice.

The complaint states that the club got city approval to remove a city-owned pier and replace with a system of floats in 2012. And in 2013, the club “avoided a rent increase of approximately $50,000 per year for the next ten years.”

The specific accusation revolves around the fact that the commodore of the yacht club, John H. “Jack” Ellis, is Winthrop’s brother-in-law and engaged in negotiations with city officials with Winthrop never disclosing the relation.

In the complaint, Farley cites specific e-mails and discussions that Winthrop had with then-City Manager Jane Howington and other officials during which he didn’t recuse himself, including discussions about the yacht club’s lease fees and approval for the removal of the city-owned pier.

In June, when the commission voted to authorize the investigation, members said that if the allegations were true, it would constitute a “willful and knowing” violation of the state ethics code, which includes in-laws as family members.

The Nicholson complaints, also filed by Farley, center on his role representing the Newport Housing Authority as a private attorney while serving the city as city solicitor.

The commission is also looking into Nicholson’s dealings with Clarke School LP, a private low-income housing developer that has been struggling to pay the city back a defaulted $1.3 million loan that now totals $1.8 million past due. Nicholson represented the developer at the same time the city was negotiating over the terms of possible loan repayment options.

In response to the Housing Authority complaint, Nicholson amended his ethics filings from 2008 through 2015 to indicate the business relationship exists.

“In doing further due diligence on my role as the City Solicitor and my obligations as a public official relating to the same and, in the course of reviewing and filling out this year’s financial statement, it has come to my attention that I have erred in filing [sic] out past financial statements, most particularly Question 6, Part II, in that I do perform legal work for the Housing Authority,” he wrote on April 17. “Through my private practice and my firm and I have acted as attorneys for the Housing Authority [] for the years 2008, 2009 and 2010. The legal work that I perform for the Authority is on diverse dates, too numerous to mention.”

The Clarke School matter is notable because Nicholson could appear to be sitting at both sides of the table. He reportedly did not disclose a business relationship with the company that owns the former Clarke School on Mary Street — now an elderly housing complex — at the same time the city was taking the company to court in 2013 over a the defaulted $1.3 million loan the city granted in the 1990s and is still trying to recoup.

During the legal battle between the city and Clarke School LP, court records show Nicholson’s law firm was representing the developer in several eviction proceedings they filed against tenants who reportedly were in violation of their lease agreements.

In an interview in April, Nicholson said he could not respond in detail to the complaint because it is an ongoing legal matter, but said it’s no secret there is no love lost between himself and Farley. He said he would not comment on pending matters before the Ethics Commission.

He suggested that Farley, who filed a wage complaint against the city, has a personal vendetta and is hoping to harm him professionally and politically. Winthrop has made it clear over the years — including during public City Council meetings — that he believes Farley is on a witch hunt.

“Government suffers from this stuff,” Nicholson said.

In terms of the defaulted loan, Nicholson said the city is still taking active steps to recover the outstanding loan balance.

Farley said that he is simply trying to shine light on what he said is a pervasive problem in Newport — people not disclosing important information about potential conflicts of interest and cronyism.

“Solicitor is a powerful position. For years, Mr. Nicholson has ‘rubber-stamped’ the expansion of low income housing, and rejected the application of PILOT fees on the Housing Authority. Now we know why,” he said.

Decisions on all the pending ethics matters are expected in the coming weeks. If the violations are deemed willful and knowing, fines could be levied.