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38 Studios Contractor Ordered to Install Equipment in Fox’s Crony’s Bar

Wednesday, May 07, 2014

 

A former subcontractor for 38 Studios is alleging that his firm was ordered to work on former Speaker of the House Gordon Fox's business colleague Michael Corso's bar as part of their contract - and has produced what he says is documentation to prove it.

Project manager Michael Rossi with SyNet, Inc. has revealed a budget for work which he says shows at $25,000 line item for work to be done at Corso's Tazza Cafe in 2011 -- under a job order for the failed 38 Studios.

Warwick-based SyNet bills itself as "the premier design-build low voltage contractor of structured cabling, access control, surveillance and audio visual systems in the Northeast."

See SyNet 38 Studios Budget HERE

Representative Mike Chippendale, Senior Deputy Minority Leader and Secretary of House Oversight who is leading the investigation into 38 Studios along with Rep. Karen MacBeth, told GoLocal, "[Rossi] has hit a number of things on the head, things he wouldn't have been able to have known otherwise. He was able to validate some things, and the State Police has said they have determined the [budget] document has credibility."

"We're moving in the right direction," said Chipendale, who along with Macbeth have both been the target of mail threats in the past month. "We've kicked the hornets' nest."

38 Studios Work

Rossi said when he was working at SyNet, he was aware the 38 Studios work could be a possibility. "When my boss called me to say we got the project, that I was going to oversee the [network infrastructure] work, I thought, "Wow...38 Studios. This is big."

"As soon as I started working, they told me to order cable right away," continued Rossi. "I didn't have a permit. Arguments went back and forth. I walk out, I say I don't have a budget, I'm not doing it. I get berated by my boss to get back on the job. Next day, I get the budget, I'm back on the site -- and there are walls up already, with no permits pulled."

A portion of the SyNet 38 Studios budget document with a line item for work on Corso's Tazza bar and restaurant.

"So I get sent the quote, and inside the quote's the budget. My job is to take the quote, and revise the budget. My job is to tweak it so we can make money," said Rossi. "First thing I notice is there's a 27% gross margin. Then I see the $25K for Tazza. I've got $140,000 of cable delivered that's supposed to go on the second floor (of 38 Studios), and instead I'm getting back time cards that are showing Tazza."

"I'm changing everything on job -- these were all no bids. Nappa construction picked Rossi Electric. I realize the job can't be done the way it's designed," said Rossi. "The money was getting kicked back in the form of goods and services to Corso and Fox. I said I'm not doing this. I knew I was getting set up for jail with this. I went out on sick leave, I was done."

Joyce Strause with SyNet told GoLocal, "SyNet has fully and wholly cooperated with the Rhode Island Attorney General Patrick Young regarding the investigation surrounding 38 Studios and has no further comment at this time."

Looking Ahead

Rossi said that he went to the State Police with the information at the time it happened.  "Nothing was done with it," said Rossi. "They're setting up to defend themselves with information they had 2-3 years ago."

Rhode Island State Police Colonel Steven O'Donnell told GoLocal on Wednesday that there has been an "ongoing investigation by the state police into Michael Corso."  When asked for further details, O'Donnell said, "With the investigation, I can't comment further on the matter at this time."

Chippendale said he was unsure if Rossi be testifying before the House Oversight Committee. "We're not a criminal investigatory body -- if it aids us with the procedural, then we will use it."

"The State Police did say [today] that this information did come to them years ago," said Chippendale. "It's a shame to think that something like this had to spur the process, but at the end of the day, I'm happy they're looking into it."

 

Related Slideshow: Fox Scandal: Facts and Rumors

Prev Next

RUMOR:

RUMOR:

FBI and IRS Agents Are Focused on Campaign Financing Reports

The State of Rhode Island has regulatory and enforcement authority over the use of campaign finance funds.

While the IRS could be looking at improper use of campaign funds - it is not the core focus of the federal investigation.

As state campaign documents state:

Any person who undertakes any action whether preliminary or final which is necessary under the law to qualify for nomination for or election to public office which would include receiving a contribution or making any expenditure or giving his/her consent for any other person to receive a contribution or make an expenditure to bring about his/her nomination or election to any public office even if such office is unknown at the time is subject to the RI campaign finance laws. 

Prev Next

FACT:

FACT:

The relationship between attorney/lobbyist Michael Corso and Fox is longstanding and complex. 
 
From fundraisers, to business agreements to the first meeting on 38 Studios - Fox and Corso have been linked. 
 
Whether this case is tied to 38 Studios is pure conjecture.
 
 
As GoLocal reported in 2012, in March 2007, Michael Corso, Steven Nappa and Robert Britto of Nappa Building Corp. and former State Representative Ray Rickman were listed as the hosts of a private fundraiser held in the Peerless Lofts for the then-Majority Leader Fox. The event, which helped Fox rake in approximately $10,000, was catered by Tazza, the downtown café owned by Corso.
 
Earlier this year Corso's Tazza Cafe closed.
Prev Next

RUMOR

RUMOR:

 
The Fox case is at the beginning of the investigation and federal authorities have just begun a broader investigation that may link to other elected officials, appointed officials and business leaders.
 
This is speculation. Internal Revenue Service agents raided the State House office of Gordon Fox and secured documents from the Rhode Island's Board of Election's Campaign Finance Division - this we know.  It is unclear where this investigation will lead.
Prev Next

RUMOR

RUMOR:

 
Fox will be charged by the Federal government.
 
Fox's legal work relating to the Providence Economic Development Partnership may be core to the federal investigation, according to one local journalist. Jim Hummel, an investigative reporter, charged in a recent appearance on RI PBS's "A Lively Experiment" that Gordon Fox would be charged by federal authorities. 
Prev Next

FACT

FACT:

 
Gordon Fox is selling his house
 
Former Speaker of the House Gordon Fox's East Side home is on the market -- for $615,000.
 
Fox purchased the house in 2005 for $500,000.
 
The listing with Executive Realty has that the five-bedroom, three-and-a-half bath, 2,600 foot property is a "stately 5 Bedroom Colonial. Recently updated, 2 Fireplaces, Formal Living and Dining, Hardwoods, Gourmet Kitchen, Bright and Sunny, Family Room, New Mechanicals."
Prev Next

FACT

 

FACT:
 
Former Speaker Bill Murphy is now Fox's attorney.
 
Murphy, who preceded Fox as Speaker, is also close to newly elected Speaker Nick Mattiello. Presently, Murphy serves as a registered lobbyist and his clients include Twin River casino's parent company and a pay day lending firm.
Prev Next

FACT

FACT:

 

 
Fox's husband, Marcus LaFond, rented from 38 Studios-connected lawyer Michael Corso - the same Corso tied to the 2007 fundraiser and set up the initial meeting between Fox and 38 Studios officials. 
 
LaFond's salon located in the Jewelry District closed earlier this year.
Prev Next

RUMOR

 

RUMOR:
 
According to radio talk show host John DePetro, the raid of Fox's home and State House office were tied to federal authorities' search for marked currency given to Fox by a federal informant that is close to Fox.
 
The marked currency theory is unsubstantiated -- no named sources have been quoted.
Prev Next

FACT

FACT

 
The federal raid on Fox's Speaker's office in the Rhode Island State House was unprecedented. As GoLocalProv first reported, "It was a dark day in Rhode Island's history as the State House was raided by federal and state law enforcement officials for the very first time…a contingent of dozens of State Police officers, as well as Federal Bureau of Investigation and Internal Revenue Service officers swept into the iconic Rhode Island Capitol to raid files of the Speaker of the House - Gordon Fox."
 
"I've been around 27 years. We've arrested people at the State House, but I can't remember something like this before," said Rhode Island State Police Colonel Steve O’Donnell.
 
State Librarian Tom Evans, who has been working at the State House for 26 years, affirmed, “State policemen have only been in the State House to interview for investigations
Prev Next

FALSE

FALSE

 

 
The Providence Journal falsely reported that federal law enforcement raided Fox's office at 32 Custom House.
 
First, Fox's law office has not been located in the building in more than 5 years.
 
Second, the office that the Projo cited has been vacant for years and has been being rehabbed (with Historic Tax Credits).
 
Fox's actual law office is located on the 2nd floor at 127 Dorrance Street. An office he shares with the lawyer who represented him before the Ethics Comission. Angel Taveras also was located in the office before being elected Mayor of Providence in 2010.
Prev Next

FACT

 

FACT
 
Fox has been fined twice by the State's Ethics Commission. The first time was in January of 2010, when the Commission rendered a $10,000 fine against Fox.
 
Pursuant to the above Findings of Fact, Conclusions of Law and Mitigating Factors, the Prosecution and the Respondent agree, pursuant to R.I. Gen. Laws § 36-14-13(d), to the imposition by the Commission and to payment by the Respondent of a civil penalty of Ten Thousand ($10,000) Dollars. The above terms represent the full and complete Informal Resolution and Settlement for Complaint Nos. 2003-6 and 2003-7. 
 
The case started in 2003 and was related to Fox's role in agreement between the State of Rhode Island and GTECH. Fox's law firm represented GTECH. 
Prev Next

FACT

 

FACT:
 
Fox was fined a second time for failing to report income tied to his doing legal work as a subcontractor to PEDP attorney Joshua Teverow. 
 
The Ethics Commission issued a $1500 fine in January of 2014 for this violation.
 
 
 

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