R.I. official denies bill halted out of spite

EAST PROVIDENCE - A state senator reportedly under FBI scrutiny denied yesterday that he blocked legislation in order to punish a city because it refused to invest its pension fund with him.

Senator Stephen Alves, a Democrat who works as a stockbroker, called the allegations "absolutely baseless" and said he will not resign as chairman of the Senate Finance Committee despite calls to step aside from Governor Don Carcieri.

"Absolutely not," Alves said during an interview on WPRO-AM. "Never in a million years did I ever think anybody would be connecting those particular dots."

Alves, of West Warwick, has not been charged and said he has not been questioned by the FBI. The accusations come during a massive investigation into State House corruption, called "Operation Dollar Bill," that federal prosecutors have said involves seven politicians and seven corporations.

Johnston Mayor Joseph Polisena told the Providence Journal that FBI agents questioned him about Alves's purported decision to kill tax incentive legislation designed to bring a trucking company to the city.

The mayor said FBI agents indicated they were investigating whether Alves blocked the plan because the city didn't invest its pension fund through him at UBS, a large financial services firm that was Alves's employer at the time.