Raimondo administration suspends $150K grant tied to Gallison’s nonprofit

Man Up, a group affiliated with ex-lawmaker's AEP, also got second grant worth $91K

Former Rep. Ray Gallison is the assistant director of nonprofit Alternative Education Programming - which is located in this Washington Street office building.

PROVIDENCE, R.I. (WPRI) – Former Rep. Ray Gallison’s controversial nonprofit is set to receive part of the proceeds from a $150,000 grant awarded through the Raimondo administration’s signature job-training program, Target 12 has discovered.

However, just two hours after Target 12 asked state officials about the Gallision connection on Thursday, an administration spokesman announced the grant payments are being suspended “in an abundance of caution” and funds transferred so far will be audited. He later said the timing was a coincidence.

Gallison’s group, Alternative Educational Programming Inc. (AEP), is a taxpayer-funded nonprofit; the Bristol Democrat has worked there for years and apparently became its executive director after the 2014 death of its founder. The grant went to an affiliated organization, Man Up Inc., a second, newer nonprofit that documents show has close ties to AEP.

Real Jobs RI Gov. Gina RaimondoThe R.I. Department of Labor and Training awarded Man Up the $150,000 grant from the new Real Jobs Rhode Island program last fall “to prepare low-income, formerly-incarcerated participants for jobs to fill high-growth jobs in the manufacturing and marine trades industries.”

Man Up listed eight partners, including Electric Boat, but AEP was not among them. In an April 20 legislative questionnaire obtained by Target 12, however, AEP disclosed: “AEP was named as a sub grantee to Man Up, Inc., who is the lead agency for the Real Jobs Rhode Island Grant. Under this grant, AEP’s role will be to remedial [sic] support services to participants with low literacy/numeracy scores so that they can their [sic] skills – particularly in mathematics.”

AEP did not disclose how much of Man Up’s $150,000 Real Jobs grant money it expected to receive. AEP has come under heavy scrutiny in the wake of Gallison’s stunning resignation Tuesday, as alleged board members say they were not even involved in the group.

No one answered the phone at Price’s office midday Thursday, but on Friday she issued a terse news release saying: “At this time, Man Up, Inc. is unable to make a statement to the press until the State’s audit is completed. Thank you for your cooperation. Please share this information.”

Michael Healey, a spokesman for the Department of Labor and Training, said its director, Scott Jensen, met with Man Up CEO Rhonda Price on Thursday morning to inform her the agency had decided to suspend payments and look into its relationship with AEP. “This is to protect both public money and Man Up,” Healey said.

DLT has paid Man Up about $9,000 from the grant so far, and the agency has received no invoices from Man Up requesting payments on behalf of AEP, Healey said.

“Although we have absolutely no reason to suspect any wrongdoing, in an abundance of caution, we have suspended payments to Man Up Inc. and will be conducting an audit,” Healey told Target 12 in an email.

The audit will include not only the $9,000 paid out from the Real Jobs grant so far but an additional $68,175 from a separate grant of roughly $91,000 awarded to Man Up last June by the Governor’s Workforce Board, bringing the grand total of last year’s DLT awards to Man Up to about $241,000.

“I don’t know if any of this money – the $68,175 – went to AEP,” Healey said in an email. “DLT won’t know that until we finish the audit.”

Ashley Gingerella O’Shea, a spokeswoman for Gov. Gina Raimondo, said Gallison never lobbied the governor’s staff to help Man Up obtain the Real Jobs grant. “The governor’s office supports DLT’s efforts to ensure integrity of the Real Jobs RI program by suspending payments and conducting an audit,” O’Shea told Target 12.

Target 12 has confirmed Gallison is the subject of a joint federal and state investigation that partly involves allegations of prostitution. It’s unclear whether AEP is any way tied to the probe. Gallison declined to comment when confronted at his home on Tuesday, and his lawyer has said he cannot discuss the case in any detail.

The timeline surrounding AEP and Man Up remains somewhat murky. In the legislative questionnaire last month, for example, AEP wrote that it has “helped organize” Man Up Inc. since the start of the 2015-16 fiscal year, which began last July.

Yet the questionnaire also said Man Up was “established and incorporated” in August 2014, while Man Up’s own website dates its creation back to 2011. And in a report on AEP’s activities during the 2014-15 fiscal year, AEP wrote that it “has now embarked upon a new program entitled Man Up,” which it said had assisted 32 men that year.

Further complicating matters, in a July 2015 letter to state officials Man Up CEO Price disclosed that during the previous year AEP had “served as our fiscal agent because we did not have our non-profit status,” which seemingly would have put Gallison in control of Man Up’s money; he also controlled AEP’s accounting books, according to its tax returns. (Price said Man Up had since received its nonprofit status.)

In last month’s questionnaire, AEP said it “continues a strong working relationship” with Man Up and that “together” they “have been responsible for numerous positive outcomes.” AEP’s website – which has been taken down since Wednesday  – also included a section on Man Up that described AEP’s late founder, Leo F. DiMaio Jr., as Man Up CEO Rhonda Price’s “mentor and friend.”

“Pending the acquisition of our non-profit status, Man Up is authorized, organized and operated within the corporate structure of the Alternative Educational Programming, Inc. to provide limited fiscal and administrative management assistance,” AEP’s website said. “The Alternative Educational Programming, Inc. also serves as fiscal agent to the Man Up Project.”

For AEP, the Real Jobs RI grant is only the latest example of its use of taxpayer money.

The group has received at least $1.7 million in legislative-directed community-service grants since 2005, according to a review by Target 12. House Speaker Nicholas Mattiello said earlier this week he now thinks it was not acceptable for Gallison, as a lawmaker, to be receiving a salary from a group that was so financially dependent on grants awarded by the General Assembly.

Gallison was named chairman of the House Finance Committee, which controls the annual budget-writing process, when Mattiello succeeded Gordon Fox in March 2014. The first budget approved under Gallison’s leadership continued the existing annual $70,875 community-service grant to AEP, but his second budget, for this year, added an additional community-service grant: $30,000 for Man Up.

It’s unclear how much of the $30,000 went to pay Man Up CEO Rhonda Price’s salary. One document provided to legislative aides last month suggests all $30,000 went to compensate Price, while another suggests only $20,888 was used for that purpose.

No detailed documentation has emerged so far breaking down how much of AEP’s $70,875 community-service grant went to Gallison’s compensation. Gallison sent an invoice to R.I. Postsecondary Commissioner James Purcell on July 28, about a month after the budget was signed, asking him to transfer the money from his agency to AEP.

In its recent filing with the legislature, Man Up said it received a total of $195,900 from the state during the 2015-16 fiscal year, including the $91,000 from the Governor’s Workforce Board. Man Up also said it received $28,580 from AEP in 2014-15.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes The Saturday Morning Post. Follow him on Twitter, Facebook and Instagram

Tim White (twhite@wpri.com) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @TimWhiteRI

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