In a November 2006 ruling, arbitrator Marc Greenbaum upheld the state’s decision to fire Solomon, saying to do otherwise “would likely be viewed by the grievant as signaling [to] her an ability to continue to behave in a fashion foreign to a civilized workplace.” The 23-page report cites “disruptive behavior” and “derogatory comments and vulgar outbursts” including “racially charged language.”

Upon taking office in January 2007, Caprio rehired Solomon, despite an earlier arbitrator’s judgment (RI Council 94 v. State of Rhode Island) upholding her firing. Marion Solomon continues to work as a $49,884-a-year applications coordinator in the Crime Victim Compensation Division of the treasurer’s office, enabling her to accrue service toward a pension.

She first went to work for the state in December 1980, was fired on April 27, 2005 and rehired on July 1, 2007.

She has not responded to Chafee’s remarks, but Salvatore Lombardi, a fraud investigator for the state treasury and former president of the union representing Solomon, said she was rehired under a last-chance agreement, common in state government, in which employees are put on notice that any further infraction, no matter how small, will lead to their firing without opportunity for further challenge.

But Chafee insisted her rehiring is at odds with Caprio saying just recently that he would “like to see all hiring fully transparent and competitive, as it has been in the treasurer’s office.”

“Frank Caprio’s words ring hollow,” Chafee said. “This is not transparency and competitiveness. This is cronyism.”

Chafee also faulted Caprio’s “failure to take action” to head off a potential municipal-pension crisis.

He cited findings in a March 2010 report by the General Assembly’s auditor general that indicated serious underfunding of some municipal plans, including the Cranston police and fire pension plan which “is only 15.1 percent funded with an unfunded liability of almost $250 million,” and the Providence city retirement system which is 33.5 percent funded with more than $800 million in unfunded liabilities.

With respect to municipal pensions, Caprio spokesman Nick Hemond said Chafee “doesn’t have his facts in order. The municipal pension plans that the treasurer’s office oversees are funded at an average rate of 88 percent; the rest are under the control of the cities and towns.”

Chafee said the state has a responsibility to make sure no city or town pension fund fails, forcing it to at least consider emergency action.

On Wednesday, Chafee went public with a pension proposal that would reduce the guaranteed benefits within the state and municipal pension plans; give the state retirement board oversight over disability pension applications to the cities and towns; and open the opportunity for the public employees to supplement their retirement income, as many private-sector workers do, by voluntarily contributing to a 401(k)-style program.

Under Chafee’s plan, the state — and presumably the cities and towns — would match each dollar of workers’ contributions up to 3 percent of their pay.

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