video: GoLocalTV: Former RI House Speaker Fox Sentenced to 3 Years in Federal Prison

Friday, June 12, 2015

GoLocalProv News Team

 

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Former Rhode Island House Speaker Gordon Fox was sentenced on Thursday to 3 years in federal prison for stealing $108,000 donated by campaign supporters to pay for personal expenses; accepting a $52,000 bribe to advocate and move for issuance of a liquor license for East Side Restaurant Shark while serving as Vice-Chairman of the City of Providence Board of Licenses in 2008; and failing to account for these illegal sources of income on his tax returns. U.S. District Court Judge Mary M. Lisi ordered Fox to serve two years supervised release upon completion of his prison term, and to pay $109,000 in restitution. 

See statement from the US. Attorney's Office BELOW:

An 18-month federal grand jury investigation led by prosecutors from the United States Attorney’s Office and the Rhode Island Attorney General’s Office, and investigators from the FBI, IRS and Rhode Island State Police, included the execution of court authorized search warrants at the former speaker’s home and State House office in March of 2014; the issuance of more than 200 subpoenas; the examination of more than 36,000 bank, government, personal, and campaign records belonging to former Speaker Fox; and forensic examinations of numerous computers and other electronic devices.

United States Attorney Peter F. Neronha commented, "It is a great irony that the man in Rhode Island once most responsible for securing the passage of laws somewhere along the way decided he no longer needed to follow them.  And the laws former Speaker Fox chose not to follow were not just any laws, but rather laws designed to ensure the integrity of the legal and political process.  In short, he violated his oath to the people of Rhode Island.  He promised to do their business, not his own.  His failure to keep that promise has brought him down today, and deservedly so. 

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“I want to thank the FBI and IRS Special Agents, Rhode Island State Police Detectives, and the federal and state prosecutors, whose outstanding work has secured justice and ensured that Rhode Island can chart a new path forward.  Hopefully, Rhode Island can take advantage of it."

Attorney General Peter F. Kilmartin said, “From day one, I pledged the resources of my office, and when the allegations surrounding the acceptance of a bribe by Gordon Fox arose, and it was recognized that the federal statute of limitations for that offense had expired, this office made a commitment to the United States Attorney to proceed with the prosecution of that charge in state court if necessary.  The State, working jointly with the United States Attorney, was ready to prosecute the bribery charge had this case not been resolved in Federal Court, and this case now stands as a testament to the commitment of both offices to aggressively prosecute corrupt public officials.

Attorney General Kilmartin further stated, “Gordon Fox is not the first public official that our two offices have jointly prosecuted. While we can all hope it’s the last time we prosecute a public official, unfortunately history has taught us that it will happen again.  But, let this serve as a warning to all public officials in this state, whether they are the Speaker of the House or a local board member - if you break the law, violate the trust the voters put in you, and abuse your office, you will be held accountable. You can be assured, as can the public, that we stand together, as federal and state prosecutors, with a single purpose, and will continue to work with our prosecutorial and law enforcement partners to ensure justice prevails.”

At the time of his guilty plea, Fox admitted to the Court that from February 2008 until March of 2014, just prior to the execution of federal search warrants at his State House office and home, he repeatedly used money received from campaign donors to pay for personal expenses.  After transferring the money from his campaign accounts to his personal accounts, former Speaker Fox used the money - $108,000 in all - to pay the mortgage on his home, the loan payments on his car, and the balance on his personal American Express card, which he used to make purchases at various retail outlets.  Fox admitted that in order to conceal his fraudulent conduct, he falsified his mandatory Rhode Island Board of Elections filings.  

Additionally, Fox admitted to the Court that in 2008, while serving as an appointed member and Vice-Chairman of the City of Providence Board of Licenses, he accepted a $52,000 bribe from the owners of Shark Sushi Bar and Grill to help secure a liquor license for the establishment. At the time, there was considerable neighborhood opposition to the application. At a hearing in August 2008, Vice-Chairman Fox, pursuant to his agreement with the Shark Bar partners, spoke in detail regarding why the license should be awarded, and moved the Board to approve the Shark Bar’s application. The Board voted to approve the Shark Bar’s application.  

Additionally, Fox admitted to the Court that for the tax years 2008 through 2012, he filed false tax returns, in that he knowingly omitted personal income he received as a result of his receipt of the bribe in 2008 and his fraudulent transfers from his campaign accounts to his personal accounts.

Vincent B. Lisi, Special Agent in Charge of the FBI’s Boston Division said, “Gordon Fox accepted a bribe, used campaign donations for his own personal use and lied on his tax return. The FBI will continue to go after corrupt individuals like him who abuse their elected office and betray the public’s trust."

“Public servants are entrusted by all of us to act in the best interests of the citizens they serve,” said Special Agent William Offord, IRS Criminal Investigation. “Gordon Fox betrayed the public’s trust and his sentencing today sends a clear message - corruption at all levels of government will not be tolerated.  IRS-CI will continue to lend our financial expertise to these important prosecutions.”

Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police added, "I commend all the Troopers, Detectives, FBI and IRS agents as well as the prosecutors from the US Attorney's office and Attorney General's office for their dedication and commitment to justice".
The case was jointly prosecuted by Assistant U.S. Attorneys Dulce Donovan and Adi Goldstein, and Rhode Island Assistant Attorney General J. Patrick Youngs.
 

 

Related Slideshow: The History of Gordon Fox: From Camp St. to Speaker to…

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1992

Reform Candidate

In 1992, Gordon Fox ran for (then) House District 5 seat replacing Dr. Nick Tsiongas.

Fox, an ally of then-Councilman Josh Fenton and former College Hill State Representative Ray Rickman, won the seat easily. 

Gordon Fox (D) 2,253

Michael Mitchell (R) 525

Jay Enderle (I) 407

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1994

Under Harwood 

Gordon Fox gained power right out of the block. He was appointed to Finance immediately and rose quickly to be Chairman of the House Finance Committee - arguably one of the three or four most powerful positions in Rhode Island state government.
 
As Finance Committee Chair he emerged as a supporter of progressive causes.
 
In addition, Fox scored a job in then-Mayor Buddy Cianci's Law Department.
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2002

Murphy - Fox Team 2002

John Harwood was forced out as Speaker and the combo of the popular Bill Murphy from West Warwick and Gordon Fox teamed up to take control of the House. Murphy and Fox were young, both grew up in working class neighborhoods and lawyers.
 
The two of them were popular and press savvy - together they guided the team for nearly a decade.
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2003

Fox and GTech and the Ethics Commission 2003

In 2003, Majority Leader Fox faced harsh criticism and an investigation for his law firm's role and his involvement in the effort to reach an agreement with GTECH to stay in RI. Ultimately, Fox pleaded guilty and was issued one of the largest penalties in the history of the Ethics Commission.
 
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.
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2004

Openly Gay - 2004

In 2004, Gordon Fox announced that he was openly gay. The announcement was a breakthrough for the gay community at the time.  He became the first openly gay speaker of any House of Representatives.
 
He married his long-time partner Marcus LaFond in November of 2013.
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2010

Speaker of the House

The rise of Gordon Fox was now complete. In February of 2010, Fox was elected Speaker of the House. He was the first Minority to rise to such a position of power in Rhode Island's history.
 
It was a remarkable trip from being bullied as a kid for being mixed-race in a predominately black neighborhood to the most powerful political position in the State of Rhode Island.
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2007 - 2010

Fox and 38 Studios

The genesis of 38 Studios started when Gordon Fox's close friend and fundraiser Michael Corso hosted a private meeting between Fox and 38 Studios executives. This meeting was the spark for the General Assembly passing special legislation after the legislative deadline. The result, $75 million to 38 Studios.
 
The Fox and Corso relationship included Corso being the landlord to Fox's now husband Marcus LaFond's hair salon.
 
As GoLocal reported in July of 2012:
 
House Speaker Gordon Fox on Tuesday wrote a check to the business owned by 38 Studios insider Michael Corso to cover previously undocumented expenses from a March 2007 fundraiser, according to a letter obtained by GoLocalProv.
 
The $648 payment came nearly two months after initial inquires into the event, which was hosted by Corso, Steven Nappa and Robert Britto of Nappa Building Corp. and former State Representative Ray Rickman. Fox spokesman Larry Berman said the payment will appear on Fox’s third quarter campaign finance reports.
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2013

Fox and Gay Marriage

Gordon Fox was an advocate for the passage of civil unions and then marriage equality legislation. Both bills languished for years. Then, Senator Donna Nesselbush arrived in the legislature and changed the political dynamics.
 
Nesselbush created a new political dynamic in the Senate and drove the effort to push the legislation through the Senate. Combined, Fox and Nesselbush ushered through gay marriage legislation through both Chambers.
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2010-2013

Providence Economic Development Partnership 

Speaker Fox did work for a number of applicants for the federally investigated Providence Economic Development Partnership (PEDP). GoLocalProv, which has written more than 50 articles on PEDP, reported in January that the RI Ethics Commission had fined Fox for a second time tied to his PEDP work:
 
The Rhode Island Ethics Commission has fined Speaker of the House Gordon Fox $1500 for violating the state's code of ethics.  
 
Fox was fined $500 for each of the three years between 2007 and 2009 he did not report income for legal work with the Providence Economic Development Partnership, the quasi-public agency under the Department of Planning and Development for the City of Providence.
 
In 2004, Fox was fined $10,000 by the Ethics Commission while House Majority leader for voting on a no-bid deal for GTECH in which his law firm was involved.  
 
Statement in Response:
 
Fox's lawyer, Albin Moser, Esq., issued the following statement following the ruling on Tuesday:
 
“Speaker Fox had stated from the beginning that if the Ethics Commission would like his Financial Disclosure report to be amended, then he would do so. That being the case, Speaker Fox has amended his reports for 2007, 2008 and 2009.
 
In keeping with past practice of the Commission, there is usually a fine involved. He will pay the fine of $500 per year for each of those three years.
 
He did not list work for PEDP in those years because he believed he was a subcontractor to Joshua Teverow’s law firm on his loan closings that were performed at Mr. Teverow’s office.
 
Beginning in 2010 and continuing in 2011 and 2012, Speaker Fox began doing the closings directly for PEDP, which he reported during those three years and the Ethics Commission has acknowledged. He has not performed any work for PEDP since 2012.” 
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2014

Raid and Resignation

On Friday, the State House office of Gordon Fox was raided by RI State Police in conjuction with FBI and IRS agents. This was the first time a State House office was ever raided by law enforcement officials.

By end of day Saturday, Fox had resigned, here is his statement:

The Rhode Island House of Representatives is an institution that I deeply respect and serving my constituents has been a major part of my life for the past 22 years. I will not let yesterday’s events distract my colleagues from addressing the challenges facing Rhode Island.”
 
“Because of the respect I have for all members of the House of Representatives, I am resigning as Speaker. The process of governing must continue and the transition of leadership must be conducted in an orderly manner.”
 
“I want to thank my colleagues and loyal staff for all that we were able to accomplish together. I will continue to serve out the remainder of my term and represent my neighbors and constituents in District 4. That said, I do not intend to seek another term in the House.”
 
“My personal focus going forward will be on my family and dealing with the investigation. Because of the nature of this matter, I will not be commenting further.”
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2015

Fox Pleads to three charges of bribery, wire fraud, and filing a false tax return on March 3, 2015.  

The charges stem from former Speaker Fox’s theft of $108,000 donated by campaign supporters to pay for personal expenses; his acceptance of a $52,000 bribe to advocate and move for issuance of a liquor license for an East Side restaurant while serving as Vice-Chairman of the City of Providence Board of Licenses in 2008; and his failure to account for these illegal sources of income on his tax returns.

 

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