Providence Bites

by by Malcolm Burnley & Emily Gogolak

illustration by by Annika Finne

Nowhere to Hide For Nude Survivor

Move over Wesley Snipes: there is a new king of celebrity tax evasion, and he hails from Rhode Island. On March 14, Richard Hatch, the Newport resident and inaugural winner of the reality show “Survivor,” began a second jail term for failing to file income tax on his $1 million winnings from the 2001 show. After spending three years in prison from 2007-2009, he was granted a supervised release under the condition that he re-file his uncompleted 2001 taxes. While on probation, Hatch attempted to dodge the IRS again, and was sentenced by the Providence District court to an additional nine months in jail for tax evasion.

Ironically, Hatch was the “Survivor” castaway most willing to bare it all. The Season 1 winner was the self-proclaimed “Big Fat Guy Winning A Million Dollars,” who flaunted his birthday suit up and down Borneo’s sandy beaches. He enjoyed scheming in the nude, joined by his unlikely ally Rudy, the senile former marine who finished third and once said: “Me and Richard got to be pretty good friends—not in a homosexual way, that’s for sure.”
Hatch and his lawyer, Mary McElroy, tried to appeal the newest sentence on several grounds, claiming that Hatch should be allowed to earn money to pay the IRS instead of going to jail and calling the violations “unduly severe,” partially on the account of Hatch’s sexual orientation. Judge William E. Smith was unconvinced, suggesting Hatch’s second tax evasion was deliberate fraud. He was quoted in the Providence Journal as saying: “This isn’t a complicated matter as much as you tried to complicate it. As far as I can tell, you’ve made no effort to put any money into the government’s coffers.”

Returning to the slammer is unfortunate for Hatch, who had just begun to climb back up Rhode Island’s reality-TV hierarchy. He is a contestant on the season of “Celebrity Apprentice” currently airing, and had just finished taping when he got sent back to lock-up. Hatch arguably wrote the playbook for reality stars to maintain minor degrees of cultural relevancy: win $1 million, get entangled in ongoing legal matters, and milk the publicity to appear on as many C-grade reality spin-offs as possible. Now, Hatch will watch from behind bars as Johnston-native and Jersey Shore cast member, Pauly D, continues to eclipse him as Rhode Island’s favorite reality star. –MB

School’s Out

Last week, Providence mayor Angel Taveras announced his newest plan to pull the city from the dregs of its financial distress: closing more schools. “This is a difficult day in the city of Providence,” Taveras said at a press conference last Monday. But it wasn’t just a tough day—the city has seen a tough year.

A recent independent audit revealed that Providence had a $57 million deficit for the fiscal year ending last June. To compensate, the city had to stretch itself thin, reaching deep into reserves and resorting to loans. And the situation is hardly looking up. Taveras, who took office in January, inherited a Gordian knot of financial problems; in early March, his financial team released “staggering” figures, including a projected $110 milion structural deficit for the next year. “I thought we were maybe a category-three hurricane,” Taveras told the Providence Journal. “This is a category five. This is a lot worse than I thought. I certainly expected a deficit; I didn’t expect one of this magnitude.”

Taveras wasted little time. After the review, the city announced a series of immediate budget cuts, including a hiring freeze for non-essential public employees, more payments from tax-exempt institutions, and even a ten-percent pay cut for the mayor himself. Another key—and controversial—remedy was large-scale teacher dismissal and the closing of several schools. But Taveras claims that “there’s no way to meet our fiscal responsibilities without [these] cuts.”

The School Board plans to hold six community forums in the next two weeks to review the proposed closures. If passed, the plan would be in action as early as June and would eliminate up to 70 teaching jobs, cut the deficit by $12 million, and close four elementary schools. All low-performing and in poor physical condition, the schools (Flynn Elementary, Windmill Street Elementary, Messer Elementary, and the Messer Annex Elementary) were picked for their condition, performance, and proximity to other public schools. Flynn, for example, is within one mile of six other elementary schools and needs $15 million in renovations, Schools Superintendent Thomas Brady told ABC 6 News.

Taveras is not without his share of opponents. Parents and unions are concerned about the costs of moving students and fear that the closures would significantly increase class size across the system. Brady, however, said that the cuts would allow the school department to save millions of dollars without significantly increasing class sizes; and the Mayor’s Office claims that no classroom would exceed the 26-student maximum. Although critics have vocalized concerns over the plan’s consequences, no one has proposed a viable alternative. In the meantime, families are looking ahead to the next academic year, hoping both Providence and its schools are headed toward brighter days. –EG

Bloody Sock Debacle

On March 18, the Providence Journal reported that federal regulators from the Securities and Exchange Commission (SEC) are trying to determine whether Rhode Island lied about the health of its pension fund in order to secure $2.5 billion in bond offerings. The SEC is investigating whether the State Treasury disguised Rhode Island’s pension crisis—the worst in the nation, with an estimated $5 billion in unfunded pension liabilities—by understating the actual levels of deficient funding. Of the most lucrative bonds being investigated by the SEC are those used to pay for the state’s $75 million investment in 38 Studios, Curt Schilling’s video game company.
Here’s what you need to know about Schilling and Rhode Island’s increasingly dubious investment in his company: in 1988, Schilling enters the major leagues and becomes an All-Star Pitcher with the Diamondbacks. In 2004, Schilling helped end an 86-year World Series drought for the Red Sox, pitching with an injured right-ankle tendon, which leaked blood onto his (red) socks during the World Series run. In 2009, Schilling retired from baseball to pursue 38 Studios, an online multiplayer video game company based in Massachusetts. In 2010, Rhode Island approved a $75 million loan to lure 38 Studios to Providence, promising that Schilling’s move to 1 Empire Plaza downtown would create 450 jobs by 2012.

The SEC investigation adds further scrutiny to an already questionable state investment in 38 Studios, which has yet to produce a video game. It was only March 12 when Schilling finally announced the company’s first video game release, “Kingdoms of Amalur: Reckoning,” slated to arrive in 2012. Even though Schilling has yet to be spotted in Rhode Island this year and 1 Empire Plaza remains largely deserted, he claims the company is set to arrive in Providence on May 1, the same day he will speak at the New England Institute of Technology’s graduation ceremony.

So just how much is a bloody sock worth? For some of Rhode Island’s Red Sox faithful, the state’s $75 million loan to steal Schilling away from Massachusetts might seem a bargain, practical chump change to re-unite with a member of the glorious 2004 championship. But what’s not wicked cool for blue-collar BoSox fans is an SEC pension fraud investigation, which is bound to illuminate the ever dwindling funds that pay for their retirement and health care. Curt Schilling helped rid us of the Curse of the Bambino, but his bloody ankle is not worth Rhode Islanders’ medical coverage. –MB