Former House Speaker Gordon Fox was charged and agreed to plead guilty to bribery, wire fraud and filing a false tax return following an investigation that included a dramatic federal raid on the Statehouse, according to court documents unsealed Tuesday.
The details from the documents bring an end to nearly a year of speculation about what the FBI, Internal Revenue Service and state police were investigating when they raided Fox’s home and Statehouse office March 21, 2014.
Fox, once considered among the most powerful politicians in state politics, was scheduled to be arraigned and plead guilty at noon in U.S. District Court in Providence.
In the documents, Fox acknowledges he received a $52,500 bribe in cash and checks in 2008 to help grant a liquor license to a bar near Brown University when he served as vice chairman of the board of licenses for Providence. He’s also accused of making about 28 interbank transfers totaling $108,000, taking the money from his campaign account and using it for personal expenses.
Prosecutors and Fox agreed to request a three-year prison sentence.
U.S. Attorney Peter Neronha grew angry as he described what he called “political corruption amnesia” in Rhode Island.
“You can have someone who’s violated the public trust, and they’re back running for office again eight years later,” Neronha said in an apparent reference to former Providence Mayor Buddy Cianci, who ran unsuccessfully for mayor last year after twice being convicted of felonies.
“It’s in incredible privilege to serve the people,” Neronha continued. “It’s a privilege, not a right.”
Prosecutors say the personal expenses Fox paid with campaign money included mortgage payments, car loan payments, his American Express bill and purchases at Tiffany’s, Urban Outfitters, TJ Maxx, Target, Walmart and Warwick Animal Hospital. They say the diverted funds represent about 15 percent of the campaign donations he received, and he overstated the account balance in campaign finance reports to hide his actions from the board of elections.
He’s accused of filing false tax returns by knowingly failing to include the personal income he received from the bribe and the fraudulent transfers.
Neronha left the door open for going after the business that paid the bribe, Shark Sushi Bar & Grill, saying it was “under review.” He would not comment on whether the people who paid the bribe, not named in the indictment, cooperated in the investigation.
The bar’s owner, Raymond Hugh, told The Associated Press on Tuesday that he didn’t know his bar was involved in the case and was accused of paying a bribe.
“That’s news to me. I have no idea what’s going on. We’ll get to the bottom of it. I’m sure my lawyer is working on it,” he said in a brief phone conversation.
Providence Mayor Jorge Elorza said that his administration is investigating whether the bar’s license can be legally revoked and that he’s “particularly disappointed” that an important city board was used as an avenue for corruption.
Fox was forced to resign his speakership after the raids, when federal agents were seen carting out boxes of evidence from his home and office at the Statehouse.
The Democrat announced he was stepping down as speaker the following day, but he finished out his term in the House, representing a neighborhood on Providence’s upscale East Side. That term ended in January.
Fox’s successor, current Speaker Nicholas Mattiello, said Tuesday that there’s no place for public corruption in the General Assembly and that he’s extremely disappointed to learn about the charges against Fox.
“While this closes a very sad chapter, the House will continue to move forward and focus on the needs of the state,” he said in a statement.
Democratic Gov. Gina Raimondo said elected officials must uphold the highest ethical standards.
“These events are deeply troubling and we owe it to the citizens of Rhode Island to do better,” she said in a statement.
Since the raids, investigators have mostly refused to detail what they were looking at. However, other information has trickled out about the investigation and about how Fox managed his campaign finances and business affairs.
Fox is an attorney with a solo law practice and had held a seat in the part-time General Assembly since 1992. He became the state’s first openly gay House speaker in 2010.
In his law practice, Fox had represented businesses before the city’s board of licenses and performed loan closings. He paid a $1,500 civil fine to the state ethics commission before the raids happened last year for failing to disclose more than $40,000 in loan closing work he did for a Providence economic development agency.
Fox also had a Statehouse employee doing his campaign books and acted as his own campaign treasurer, practices criticized by watchdog groups.
In June, Fox disclosed to the ethics commission that he had received a personal $10,000 loan from a registered legislative lobbyist in 2009 and had not paid it back over a period of years. He had not disclosed it in any of those years.
