NEW: Fox to Serve Three Years in Federal Prison
Tuesday, March 03, 2015
GoLocalProv News Team
Former Speaker of the House Gordon Fox has plead guilty to three counts of felonies -- bribery, wire fraud, and filing a false tax return -- and will spend three years in federal prison.
At a new conference on Tuesday morning, U.S. Attorney Peter Neronha outlined "substantial abuses" of Fox's personal campaign account after concluding an extensive grand jury investigation, in which they filed in federal court a three count information on the charges above.
Bribe of $52,000, Misuse of Campaign Donations for Personal Use of $108,000
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Neronha said that Fox accepted a $52,000 bribe from Shark Sushi on Thayer Street in 2008 for a liquor license, while serving on the board of licenses, and did not disclose the money on his tax returns.
Neronha also outlined how Fox funneled money through hit Friends of Gordon Fox campaign account for personal use.
"He used $108,000 from February 2008 to just before the search warrant was executed," said Neronha. "He transferred money, misled campaign donors, and over a six year period, paid the mortgage of his home, car loan payments, and his American Express [bills]. Neronha listed spending at Tiffany's, TJ Maxx, and Urban Outfitters, as places Fox spend campaign money for personal use.
"There's no dispute that such [campaign donation] funds can only be used for that purpose. It prohibits such funds to pay for personal expense," said Neronha, who said it was a "particularly pernicious type of fraud."
"When officials rely on donors to maintain a personal lifestyle, they'll have a sense of personal obligation to their donors," said Neronha. "His campaign filings were a fantasy."
"We need to lose our political corruption amnesia," said Neronha, who added they would be in court later in the day.
Related Slideshow: Fox Scandal: Winners and Losers
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Winner
Peter F, Neronha, U.S. Attorney
The bold action by the Federal Bureau of Investigation coupled with Internal Revenue Service investigators raiding the Speaker of the House's office was a major statement by federal authorities.
The investigation tied to now-former Speaker Fox sets expectations of a far broader probe.
Neronha has also indicted developer Richard Baccari and was key to the https://www.golocalprov.com/news/9949/">Google Settlement that brought $230 million to Rhode Island.
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Winner
Senate President M. Teresa Paiva Weed
Generally, the Senate President plays second fiddle to the Speaker of the House, but with a new Speaker to be voted on as early as Tuesday, Paiva Weed's influence will shoot up in the transition.
She will be more influential in the budget process.
Look for Paiva Weed to make a move on controlling the Joint Committee on Legislative Services - the proverbial legislative grab bag for jobs and grants.
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Winner
Majority Leader Nick Mattiello
As GoLocal Tweeted on Friday, the Cranston Representative and Majority Leader has the edge to take control of the House.
Mattiello (as of Sunday Night) has approximately 40 votes and the momentum necessary to replace Fox.
Mattiello has strong support from former Speaker and lobbyist Bill Murphy. A Mattiello Speakership may cause a big shake up in Committee Chairs and senior staffing.
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Winner
Former Speaker Bill Murphy
Murphy and Fox worked together for more than a decade and their relationship had both ups and downs. Nick Mattiello, if elected Speaker, is a close ally to former Speaker Bill Murphy.
Murphy had served as Speaker from 2003 to 2010. The former legislator has a successful criminal defense practice and is a lobbyist for notable clients (2013) for UTGR (Twin River), Advance America Cash Advance, and the Brotherhood of Correction Officers.
Murphy will emerge as an ever greater influencer with Mattiello as Speaker.
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Loser
Gina Raimondo
The resignation by Gordon Fox is a political hit to the General Treasurer who went big for Fox in his surprisingly tough re-election against story teller Mark Binder.
Binder hit Fox both for his role in 38 Studios and his legal work for PEDP applicants.
Raimondo decided to publicly support Fox and walk his district with the embattled Speaker.
It should be noted that Providence Mayor Angel Taveras also supported Fox, but Raimondo claims to be the reformer in this race.
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Loser
Fox's Committee Chairs (if Mattiello wins)
Fox loyalists who have pledged their support to Michael Marcello will be in trouble as will their agendas if Mattiello is in fact elected Speaker on Tuesday.
Committee Chairs like Helio Mello, Edith Ajello, and Arthur "Doc" Corvese might all be replaced as they backed Marcello.
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Loser
Providence's Budget
For the past decade, Providence could always count of Gordon Fox to help bail the Providence Budget out of trouble.
From Finance Committee Chair, then-Majority Leader and ultimately-Speaker, Providence Mayors knew that Fox -- the Mount Hope section of Providence Representative -- would increase aid to Providence in one way or another.
Providence always found an extra few millions from Fox. That access is likely to end in 2014 further impacting the City of Providence's budget issues.
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Loser
Legalization of Marijuana
The pieces were falling together for the effort to pass legislation to legalize marijuana in Rhode Island. Speaker Fox was a social progressive. Judiciary Committee Chair Edith Ajello, who may lose her post in the power shift, was the legislation's sponsor and in command of the key committee.
In addition, Governor Lincoln Chafee has voiced support for the idea.
But, a shift to a more conservative Mattiello would throw a barrier in the way to a 2014 passage.
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