Central Falls, RI

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Central Falls, Rhode Island, July 16, 2012 – In 2010 the Mayor of Central Falls, Charles D. Moreau, was accused of rampant fraud and corruption including no-bid contracts and kickbacks from a high school friend, who was granted almost $2,000,000 in overpriced property boarding fees, which the Rhode Island U.S. Attorney is investigating.  He was fired last year by the city’s state-appointed receiver, retired Judge Mark Pfeiffer. "The state police show up at my house at seven in the morning and strip me of my vehicle my cell phone the keys to my office. They changed the lock to my office," said Moreau during an interview with WBGH. He is appealing his removal with the State Supreme Court. <br />
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Central Falls, a city of about 19,000 just north of Providence, is both the smallest and most densely populated city in Rhode Island. It also has the distinction of being one of a handful in the US to file for bankruptcy. The city’s economy began to decline in the 1970s with the departure of manufacturers, particularly in the textile sector where 11 plants closed between 1997 through 2007. By the 1990’s the state was eventually forced to take over the city’s schools system, including 100 percent of its funding. The Great Recession in 2008 added further pain when the state was forced to drastically cut aid to cities and towns. <br />
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Central Falls problem was that spending continued unabated even though its revenues were down sharply. For years its government failed to contribute to its police and firefighters’ pension fund, eventually leaving the fund broke. With an $80 million unfunded pension – which is 5 times that of the city’s $17 million budget - and obligation to cover health benefits,  it had no option but to file for Chapter 9 protection.