LOUIS A. DEQUATTRO, JR.
THE RHODE ISLAND PERSONNEL APPEAL BOARD and PAUL MCGREEVY, Individually and in his Official Capacity as the Former Director of the RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION
Plaintiff: Martin K. DeMagistris, Esq.
Defendant: Jennifer Sanborn Sternick, Esq.; Steven B.
Louis A. DeQuattro, Jr. (Appellant or DeQuattro) appeals the
August 31, 2015 decision of the Rhode Island Personnel Appeal
Board (the Board or PAB) upholding the discipline imposed by
the Department of Business Regulation (DBR) on DeQuattro.
Jurisdiction is pursuant to G.L. 1956 § 42-35-15. For
the reasons set forth in this Decision, the Court affirms the
decision of the PAB.
an attorney and certified public accountant, began his career
in state service in 1992 as an insurance examiner for the
Department of Business Regulation (DBR), Insurance Division.
(Decision 3; Hr'g Tr. 92:1-22, May 18, 2015.) Over the
years, DeQuattro rose to the positions of Deputy Chief Legal
Counsel for the Department of Administration and Associate
Director and purchasing agent. (Decision 3.) At the time of
the challenged disciplinary action, he served as Deputy
Director of Legal Services at the DBR and "Executive
Counsel." (Decision 3-4.) In these capacities, DeQuattro
supervised the DBR's staff attorneys, managed legal work
for the DBR, and addressed issues relating to gaming and
banking (Decision 4; Hr'g Tr. 8-9, Apr. 16, 2015.) In
addition to these duties, DeQuattro was a hearing officer in
municipal liquor licensing disputes, the agency's public
information officer, and the ethics officer for the DBR.
(Decision 4; Hr'g Tr. 9:15-11:6, Apr. 16, 2015.) In
addition to his work in state service, DeQuattro held the
part-time position of North Providence Municipal Court Judge
since July 2011. (Hr'g Tr. 179:14-22, May 18, 2015.)
2010, while employed as Associate Director and purchasing
agent in the Department of Administration, DeQuattro received
a letter of reprimand from Rosemary Booth Gallogly, the
Director of the Department of Administration. (Decision 4.)
The letter of reprimand admonished DeQuattro for
"us[ing] poor judgment and violat[ing] purchasing
procedures" when he considered an untimely filed
contracting bid from H.V. Collins while acting in his
capacity as a purchasing agent on November 25, 2008.
(State's Ex. 11.) The letter was not included in
DeQuattro's personnel file, but was kept in Human
Resources records. (Hr'g Tr. 236:4-11, May 18, 2015;
Hr'g Tr. 41:1-42:10, May 20, 2015.)
times relevant to this appeal, the DBR and the Division of
Lotteries, Department of Revenue (Lottery) worked together to
regulate the gaming industry in Rhode Island. (Hr'g Tr.
51:11-52:10, Feb. 26, 2015.) Together, they jointly held
"full operational control" of the regulation of the
Twin River Casino (Twin River) in Lincoln, Rhode Island.
(Decision 2, citing § 42-61.2-2.1(c); Hr'g Tr.
7:4-13, Apr. 16, 2015.) In order to ensure the State's
investment in the casino remained within Rhode Island, Twin
River was subject to a compliance agreement with the Lottery
and the DBR. (Hr'g Tr. 54:17-55:14, Feb. 26, 2015.) The
agreement set forth specific procedures and required
disclosures regarding the transfer of assets or debts of Twin
Rhode Island State Police exercised oversight of Twin River
through its Gaming Enforcement Unit. The unit is charged with
"[c]onducting due diligence . . . and background
investigations with respect to entities and individuals
required to be licensed by the division and/or the department
of business regulation." Sec. 42-61.3-1; Decision 2-3,
citing State's Ex. 7 and Hr'g Tr., Apr. 7, 2015.
result of the regulatory interplay among the three government
entities, DeQuattro frequently collaborated with the Lottery
and the State Police to regulate Twin River. (Decision 2-3;
Hr'g Tr. 53:9-21, Feb. 26, 2015.) He was the DBR's
contact person for Lottery Director Gerald Aubin and Craig
Eaton, chief legal officer at Twin River. (Decision 4;
Hr'g Tr. 53:9-21, Feb. 26, 2015; Hr'g Tr. 14:10-22,
Apr. 7, 2015.)
2013 Liquor Board Hearing
appeal concerns two instances of misconduct. The first
instance of misconduct concerns a 2013 Liquor Board hearing.
On August 1, 2013, DeQuattro served as a hearing officer for
the DBR in the matter of RMP Investment Group v. City of
Providence, DBR No. 13LQ063, regarding the appeal of a
grant of a liquor license to RMP Investment Group, LLC (RMP).
(State's Ex. 5; Decision 7.) During the hearing,
DeQuattro admitted into the record a letter from Dino
Autiello, Vice President of the North Providence Town
Council, advocating for the approval of the liquor license.
(State's Ex. 5.) The letter was addressed to "Judge
DeQuattro" and endorsed "the character, business
acumen, and professionalism" of the applicants for the
license, based on the letter writer's experience as a
former employee of the applicants. (July 30, 2013 Letter from
Dino Autiello, State's Ex. 5.) DeQuattro stated on the
record that he had received the letter by mail and accepted
the letter into the record without disclosing to the parties
his position as a North Providence Municipal Judge. (RMP
Investment Group v. City of Providence Hr'g Tr.
6:11-23, Aug. 1, 2013, State's Ex. 5.) On October 4,
2013, DeQuattro issued a recommendation that the DBR uphold
the grant of a liquor license to RMP. (In the Matter of
Liquor License Application of RMP Investment Group,
LLC, Decision and Order, Oct. 4, 2013, State's
Ex. 5.) DBR adopted the recommendation as its decision, dated
October 7, 2013. Id.
decision was appealed to the Superior Court. In the appeal,
it was argued that DeQuattro had failed to disclose his
employment as a Municipal Court Judge for North Providence.
(State's Ex. 5.) On September 30, 2014, the DBR moved for
remand of the RMP matter in part to address the issue of
alleged bias resulting from DeQuattro's failure to
disclose his professional relationship with Autiello.
(State's Ex. 5; Findings of Fact, Decision ¶ 64.)
The DBR personnel and legal team brought this issue to the
attention of Paul McGreevy, the DBR Director, during the
March 2015 investigation into the second instance of
DeQuattro's misconduct. (Hr'g Tr. 17:18-18:5, Apr.
River and Fertitta
second instance of misconduct concerns an issue involving
Twin River. On February 13, 2014, while conducting a
background investigation pursuant to § 42-61.3-1,
Corporal Timothy Allen of the State Police met with Tilman
Fertitta, CEO of Fertitta Entertainment, in Houston, Texas to
discuss the investor's interest in increasing his
investment in Twin River. (Hr'g Tr. 117:1-8, Apr. 7,
2015.) During the interview, Fertitta mentioned a 2012
conversation he had with John Taylor, Board Chairman of Twin
River Management Group. Id. at 117:19-118:1.
Fertitta stated that he had set up the 2012 meeting with
Taylor because he was interested in acquiring Twin River
Management Group. Id. at 123:5-8. According to
Fertitta, Taylor told him that "Rhode Island was unlike
anywhere else," and that he would have an issue with the
regulators. Id. at 123:17-18. According to
Allen's testimony, Fertitta "repeatedly stated"
that he thought Taylor was "hiding behind the
regulators" and was "upset" about the way the
meeting went. Id. at 123:19-20, 125:8-9; Excerpt,
Fertitta Inc. Background Investigation, Appellant's Ex.
days later, on February 28, 2014, Lt. Flaherty told Aubin
about his meeting with Fertitta and the comment Fertitta had
made about his 2012 conversation with Taylor. (State's
Ex. 3.) Lt. Flaherty advised Aubin he wished to contact the
DBR to ask if they had knowledge of this potential purchase.
March 3, 2014, Lt. Flaherty contacted DeQuattro to schedule a
meeting. (Hr'g Tr. 128:18-129:2, May 18, 2015.) At the
meeting, Flaherty asked DeQuattro a number of questions
concerning companies interested in purchasing Twin River and
whether DeQuattro was aware of a company offering to purchase
Twin River in late 2012. Id. at 130:12-131:24.
Flaherty informed DeQuattro about Fertitta's offer and
the ensuing conversation between Fertitta and Taylor.
Id. DeQuattro gave Flaherty his thoughts on what
Taylor might have meant. Id. at 132-33. During the
conversation, Flaherty questioned DeQuattro concerning the
compliance agreement and whether it required Twin River to
disclose this offer. Id. at 136:1-16. DeQuattro
concluded it would not. Id. at 136:1-22. Later that
day, DeQuattro had separate conversations with McGreevy and
Maria D'Alessandro. Id. at 134:10-23.
Flaherty met with Aubin and Marilyn McConaghy, legal counsel
for the Lottery. At that meeting, he cemented his conclusion
that Twin River was not obligated to report the offer.
(State's Ex. 3; Hr'g Tr. 75:1-22, Feb. 26, 2015.)
Flaherty spoke with Aubin about the details of his
conversation with DeQuattro. (State's Ex. 3.) Aubin told
Flaherty that he planned to call a meeting with Taylor and
other members of Twin River leadership because he was
"very, very concerned" about Fertitta's comment
and wanted to "determine what was said at the . . .
meeting." (State's Ex. 3; Hr'g Tr. 76:2-3, Feb.
26, 2015.) Aubin was particularly "concerned" that
a "potential purchaser" of the casino had indicated
to the State Police that he was not going forward with a
purchase because he believed "the regulators were
preventing him from doing so." (Hr'g Tr. 76:2-16,
Feb. 26, 2015.) Aubin emailed Taylor to set up a meeting for
March 14, 2014, but did not advise Taylor of the reason for
the meeting. (State's Ex. 3; Hr'g Tr. 76:16-77:5;
78:19-23, Feb. 26, 2015.)
testified that he spoke to DeQuattro by telephone the next
day. (Hr'g Tr. 78:21-79:1, Feb. 26, 2015; Hr'g Tr.
138:19-24, May 18, 2015.) Aubin told DeQuattro he was
"very concerned about the alleged allegations made by
Mr. Taylor" to Fertitta. (Hr'g Tr. 81-1:11, Feb. 26,
2015.) Furthermore, he told DeQuattro that he was scheduling
a meeting with Taylor at the Lottery but that he had not
disclosed the topic of the meeting because he did not want
Taylor to "have a prepared" answer. Id.
DeQuattro disputes the conversation and maintains that Aubin
told him he "might want to chat with" Twin River
leadership about the deal. (Hr'g Tr. 144:12-16;
139:20-140:6, May 18, 2015.)
routine business call on March 13, 2014, Craig Eaton, General
Counsel for Twin River, told DeQuattro he and Taylor had a
meeting the next day with Aubin and had not been given a
reason for the meeting. (Hr'g Tr. 19:18-23, Apr. 7,
2015.) Eaton asked DeQuattro if he had any idea what the call
might be about. Id. at 19:22-23. Eaton recalled that
DeQuattro told him "between me and you, I think
they're going to-they want to ask you about Fertitta; you
might want to-you might . . . just . . . make yourself
familiar [with] the Fertitta meeting." Id. at
20:1-7. According to Eaton, when he asked what the Fertitta
meeting was, DeQuattro told him, "I'm not going to
say anymore." Id. at 20:21-24. DeQuattro
disputes this characterization of the conversation and
testified that when Eaton asked him what the meeting might be
about DeQuattro responded that Aubin "might have some
questions on . . . the proposed deal and the offer that was
made between Fertitta and Taylor." (Hr'g Tr.
154:18-22, May 18, 2015.) The next day, Aubin, Allen and
Marilyn McConaghy met with Taylor, Eaton, and Craig Sculos,
general manager of Twin River. DeQuattro spoke to Eaton after
the meeting. (DeQuattro and Eaton Hr'g Tr. 161:5-8, May
18, 2015.) Eaton later informed Taylor of his conversation
with DeQuattro, telling him, "I think they're going
to ask us about Fertitta tomorrow; I don't really . . .
know what that is." (Hr'g Tr. 21:5-8, Apr. 7, 2015.)
According to Eaton, Taylor then "refreshed his
memory" about the New York meeting with Fertitta.
Id. at 22:3-4.
next day, Aubin, Allen, and Marilyn McConaghy met with
Taylor, Eaton, and Craig Sculos, general manager of Twin
River. (Hr'g Tr. 161:5-8, May 18, 2015.) Aubin spoke to
Eaton after the meeting. Id. at 162:8-10.
March 18, 2014, Allen met with Eaton to ask him three
questions concerning the March 14, 2014 meeting. Id.
at 142:18-19. Allen sent an interdepartmental memorandum to
Flaherty documenting the March 14, 2014 meeting, including
his assessment that "[i]t was readily apparent"
that the Twin River representatives knew the topic of the
meeting prior to the meeting. (State's Ex. 4; Hr'g
Tr. 91:16-92:9, Feb. 26, 2015.) It also documented
Allen's March 18, 2014 conversation with Eaton, as
"This detective asked Mr. Eaton the following questions:
"Did any member of the State Police contact you
regarding the topic or scope of the questions for John Taylor
prior to the meeting on Friday, March 14th: response: No
"Did any member of the RI lottery contact you regarding
the topic or scope of the questions for John Taylor prior to
the meeting on Friday, March 14th: response: No
"Did any member of the Department of Business Regulation
(DBR) contact you regarding the topic or scope of the
questions for John Taylor prior to the meeting on Friday,
March 14th: response: Yes
"Who contacted you? Lou DeQuattro
"How did he contact you? Telephone conversation- Was not
sure if he called Mr. DeQuattro or if Mr. DeQuattro called
"When was this phone conversation? Either the Wednesday
or Thursday prior to the date of the scheduled meeting at RI
"What was said? Mr. DeQuattro said 'between you and
me' a 'heads up' regarding the meeting with John
Taylor and the RI lottery. Familiarize yourself prior to the
meeting with the offer from [Fertitta-] an issue may come
up." (State's Ex. 4.)
receiving the memorandum, Lt. Flaherty delivered a copy to
Aubin. (Hr'g Tr. 91:16- 92:9, Feb. 26, 2015.)
March 24, 2014, Aubin drafted a memorandum documenting his
March 18, 2014 conversation with Lt. Flaherty. (State's
Ex. 3; Hr'g Tr. 66:9-20, Feb. 26, 2015.) He sent this
memorandum, along with Allen's interoffice memorandum
(State's Ex. 4), to McGreevy. (Hr'g Tr. 12:20-22,
Apr. 16, 2015.) Upon receipt of the documents, McGreevy
immediately called Tony Bucci, Personnel Director, and
advised him of the personnel issue. Id. at 13:14-16.
following day, McGreevy held a meeting with the personnel and
legal team concerning DeQuattro. (Hr'g Tr. 13:23-14:7,
Apr. 16, 2015.) At the meeting, McGreevy asked the team to
conduct an investigation and report back their findings.
Id. The team concluded that DeQuattro should be
placed on paid administrative leave. Id. at
14:12-23. The following day, McGreevy's secretary called
DeQuattro to tell him that McGreevy wanted to meet with him.
(Hr'g Tr. 165:1-7, May 18, 2015.) A meeting was scheduled
for Friday, March 28, 2014. Id.
March 28, 2014, DeQuattro met with McGreevy and Kathleen
Lanphear. (Hr'g Tr. 164:20-23, May 18, 2015). At the
meeting, he was placed on paid administrative leave and was
relieved of all his duties. Id.; Hr'g Tr.
13:23-15:1, Apr. 16, 2015.
5, 2014, DBR issued two disciplinary charges against
DeQuattro (Appellant's Ex. H; See Hr'g Tr.
81:5-14, May 18, 2015.) The first charge read as follows:
"it has been reported that, during a telephone
conversation a day or two before the [March 14] meeting . . .
you told the General Counsel of the regulated gaming facility
that, during the upcoming meeting, the Director of the
Division of Lotteries might ask the [Twin River] Chairman
about his earlier discussion with the prospective purchaser
of the regulated facility . . .
"By alerting the representatives . . . to the topic of
discussion ahead of time, you undermined the purpose of the
meeting and the Director's strategy and failed to
demonstrate proper judgment and an ability to maintain
confidences entrusted to you." (Appellant's Ex. H.)
second charge alleged that DeQuattro failed to disclose a
potential conflict of interest during the RMP liquor board
hearing on August 1, 2013, and that the failure to disclose
his relationship with the author of the letter, which,
"whether a deliberate concealment or a lapse of
judgment, created an appearance of impropriety which strikes
at the integrity of the Department's administrative
appeals process." Id.
10, 2014, the DBR conducted its
pre-disciplinary/Loudermill hearing. See
State's Ex. 8. On advice of counsel,  DeQuattro did not
take an oath at the Loudermill hearing. (Hr'g
Tr. 231:4-11, May 18, 2015.)
17, 2014, the DBR Human Resources (HR) department issued its
recommendation for DeQuattro's discipline.
(Appellant's Ex. F.) In the draft letter, HR recommended
a ten-day suspension without pay. Id. Later that
month, Jennifer Sternick was assigned to McGreevy as legal
counsel for this case. (Hr'g Tr. 66:18-24, Apr. 16,
2015.) McGreevy spoke with Sternick in determining the
appropriate level of discipline for this case. (Hr'g Tr.
48:22-49:5, May 18, 2015.) McGreevy testified that in
addition to the recommendation of HR, he used pages five
through eight of the transcript from the RMP hearing
(State's Ex. 5), Aubin's memorandum (State's Ex.
3), Allen's memorandum (State's Ex. 4), and the
transcript from DeQuattro's June 10, 2014
Loudermill hearing (State's Ex. 8) to make his
decision to demote DeQuattro. (Hr'g Tr. 31:20-32:4, Apr.
final disciplinary letter was issued to DeQuattro on July 3,
2014. (PAB R. 13, July 3, 2014 Letter; See Hr'g
Tr. 87:1-13, May 18, 2015.) The letter asserted that
DeQuattro created an "appearance of impropriety"
with his ...