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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

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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. 

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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.
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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.
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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. 
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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."
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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.
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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.
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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.
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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
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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.
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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. 
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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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Enjoy this post? Share it with others.


yeah,yeah..so what else is new..but you fools continue to elect these greedy bums who don't give a crap about you! They line their pockets at our expense.. CICCLLINE FOX TAVERAS REED LANGEVIN WHITEHOUSE AND EVERYBODY IN BETWEEN are all in it for themselves. When will you people wake the 'F' UP!, how many times do you need to get beaten over the head!

Comment #1 by LENNY BRUCE on 2014 05 07

Bottom Line.. the incumbent local reps and senates receive more than 40 percent of their vote from the master ballot.. HOw? tHEY HAVE SENIOR CITIZENS WHO THEY COACH IN ALL THE HIGH RISES TO VOTE FOR THEM. EG DAVINCI CNTER... THEY WILL NEVER LET THE MASTER BALLOT BE REMOVED, IT IS THEIR LIVLIEHOOD. most people that are still voting whom have not given up are voting against these bastards. The master lever is the key to getting rid of them / REST assured the senate will kill the bill... ill give anyone 100-1 odds that Donny franky and weed face are gonna kill it.

Comment #2 by domenic antonelli on 2014 05 07

People are sick and tired of the insider cronyism that is killing our state. The system is full of lobbyists who are former elected officials or are connected to them that work against the taxpayers for their own special interests! It appears that the lobbyists are really running our state. We need fresh new blood in our State House.

Comment #3 by Reagan Republican on 2014 05 07

WE NEED ETHICS oversight in our GA, period!
Classic example of people self regulating what they do, right, wrong or indifferent.
Every Speaker RI has had their hands in a money grab at the expense of the taxpayers. Some get greedier than others and get caught usually with a small misstep like a contractor noticing something out of order, not an insider that would only look the other way to protect his/her colleagues or code of silence. It's all the same, these elected people are in it for the money again at the expense of the taxpayers. Don't forget they are mostly all lawyers and they know how to steal within the law or the grey area of law.
Too bad voters don't really understand anything about who they vote for, just the party line in RI, UNIONIZED DEMOCRATS no matter what.

Comment #4 by Gary Arnold on 2014 05 07

Soooooooooo, today is the vote for the toll and giving it back to the Dept of Transportation which is another corrupt entity in my book. The DOT has more problems than they will admit to and they can't afford to take on this project, too. More opportunity for deals, graft, bribes, etc. But this will get the new hypoctire speaker out of the hot seat since he wrote the 10 cent toll law in the eleventh hour and had it passed when the Portsmouth residents went to bed that night thinking their bridge was without a toll and woke up seeing there was a toll pace holder fee...This is flip flop Slick Nick's way to make amends. This is why he put three Portsmouth reps on committees and Rep. Canario also from Portsmouth named the Secretary of the House Committee and in charge of health education and welfare. If this not a sneaky Speaker maneuver to change his original stand on putting a toll there, than I don't know what is!And he will do the same thing in other issues, too. And the GA sheeple will follow along whatever he says for they, too, want to continue to get their money, grants, favors, etc. lol!

Comment #5 by joi fons on 2014 05 07

Kate Nagle -- thanks for reporting this story!

GoLocal -- thanks for running it!

Mike Chippendale -- thanks for investigating the government crooks!

Comment #6 by Art West on 2014 05 07

Lots of nice comments and sentiments.
But what are WE (voters) going to do about it?
Based upon past experience, very little. Why, because we like Joe Blow our State Rep. who gets $1,000 grant each year for the Left Overshoe Little League or the Hooterville Crime Watch, that's why.
Face it folks, we are our own worst enemy! Lots of talk, little action.

Suggestion: if they are currently in (Rep./Senator), vote them out (assuming the moribund Republican Party can find a candidate).
Will that happen probably not. Ground Hog Day in RI government continues.

Comment #7 by Walter Miller on 2014 05 07

Ehhhhhhhhhhh, in Rouges Island everybody knows a guy who knows a guy.

Comment #8 by G Godot on 2014 05 07

Walter Miller

"But what are WE (voters) going to do about it?"

I cannot speak for others but I am resolved to, and have been for past elections to NOT vote for any incumbent in office at election time. A bit extreme? Maybe. Foolish? At times, yes. But if for no other reason I can at least have the staisfcation that I didn't contribute to the glut of "self serving" pols who do nothing but lie, cheat and steal to keep their fat arses on Smith St.

It is not only a shame, it is discouraging and despicable for what these so called leaders do the the State and to us, the taxpaypers.

They have no soul, no character, no integrity and no God.

Do some of the good people in office get hurt because of this approach? You bet. But sometimes the baby has to go out with the bathwater before things get clean around here.

Comment #9 by Robert Anthony on 2014 05 07

@ Robert Anthony

I agree with your sentiments.
Some good people may in fact get hurt with this approach, however, after all the taxpayers have witnessed over the years, a total makeover is required. The silence from some of these "good people" on many key issues has been deafening. The "see no evil, speak no evil, hear no evil" philosophy must come to an end.

Comment #10 by Walter Miller on 2014 05 08

Fox knows he can't handle prison. When he's done talking a whole lot of people are going to jail.

Comment #11 by Redd Ratt on 2014 05 16

Commenting is not available in this channel entry.