NEW: Fung Calls on Chafee to Rescind Caprio Beach Contract
Wednesday, July 30, 2014
Cranston Mayor and Republican candidate for Governor, Allan Fung, has asked Governor Lincoln Chafee to cancel the contract for state beach concessions that his administration awarded to a company owned by David Caprio.
On Tuesday, Caprio resigned as Chairman of the Rhode Island Democratic Party. The company also employed Democratic State Representative Peter Palumbo as a manager.
“This entire transaction looks like an insider deal and I am calling on Governor Chafee to rescind the award of this contract and issue a request for proposals through an open and transparent process,” said Fung. “There are rules and regulations in place to prevent insider deals in procuring state contracts, but government officials must be diligent in enforcing these rules. The Department of Administration is responsible to ensure compliance with the procurement process and ultimately it is up to Governor Chafee to resolve this matter.”
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Fung cited Section 3.4.1.3 of the Code of Procurement Ethics, which prohibits any conflict of interest with respect to procurement, or the appearance thereof.
“The facts and circumstances surrounding this procurement raise an obvious appearance of a conflict of interest in violation of this provision, which is enough to demand to demand that Governor Chafee take immediate action,” said Fung. “The citizens and taxpayers of Rhode Island deserve to know that the rules apply to everyone, including Governor Chafee’s Democrat allies. Governor Chafee also must ensure that a full investigation of possible additional violations is completed and appropriate action, including prohibiting future bids from the parties involved, if warranted.”
The General Conditions of Purchase under the Rhode Island Procurement Regulations require every bidder to warrant that the bidder “is not an employee, agent, or servant of the State [of Rhode Island]” and prohibit collusion or any other action in restraint of full competitive bidding. Bidders may be required to execute an affidavit attesting that they have not engaged in such behavior. Section 5.9.5 of state procurement regulations also provide for sanctions against any bidder who withdraws a bid.
“In this case, one bidder is a State Representative, who may have been colluding with another bidder who is a former State Representative and the head of the Governor’s own political party. Rhode Islanders deserve a full investigation into the appearance of ethical violations and possible collusion among bidders,” said Fung. “We need to know if affidavits were required from the bidders regarding collusion and if sanctions are warranted against Representative Palumbo for withdrawal of his bid.”
“The Rhode Island Ethics Commission must initiate its own independent investigation into this transaction, in addition to any criminal investigation,” continued Fung. “Whether or not there is any criminal wrongdoing, there is an obvious appearance of a conflict of interest and this harms the reputation of Rhode Island as a place to do business. As Governor, I will prohibit elected officials from bidding on state contracts through the Division of Purchases and ensure compliance with the purchasing regulations. I have vowed to make Rhode Island ‘Open for Business’ and when it comes to state contracts we will be open to all qualified bidders, and stop special deals for political insiders,” Fung concluded.
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