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IN CASE YOU MISSED IT: Palumbo would have run afoul of Ethics Commission

August 1, 2014

PROVIDENCE – Even if he had not withdrawn his high bid, Cranston state Rep. Peter Palumbo would not have been able to be awarded the contract to run concession stands at state beaches.
A RI Ethics Commission regulation prohibits General Assembly members from taking any other employment with the state – explicitly including being an independent contractor – until one year after he or she leaves the legislature.
That shines a new spotlight on the situation in which Palumbo was the high bidder for a contract to run concession stands at three state beaches, only to withdraw his $1.7 million bid, which then went to then-Democratic Party Chairman David Caprio for $1.5 million. Caprio then turned around and hired Palumbo to manage the concessions.
Ethics Commission regulation 36-14-5007 states: “No member of the General Assembly shall seek or accept state employment, not held at the time of the member’s election, while serving in the General Assembly and for a period of one (1) year after leaving legislative office. For purposes of this regulation, “employment” shall … include service as an independent contractor or consultant to the state or any state agency, whether as an individual or a principal of an entity performing such service.”
Jason Gramitt, staff attorney and education coordinator for the RI Ethics Commission confirmed the regulation but said because the commission has received no complaints about the beach contract brouhaha, he couldn’t comment on that case.
Palumbo is currently managing the concession stands at Scarborough, Roger Wheeler and Misquamicut state beaches, but he is doing so as an employee of Caprio’s company. Caprio, who stepped down as Democratic State Chairman shortly after news of the contracts broke, is a former state
representative but has been out of the General Assembly since early 2011.
Common Cause RI Executive Director John Mario said Thursday that, from his reading of the regulation, which carries the force of law, Palumbo could have run afoul of it simply by bidding on the contract. Marion pointed to a 2011 advisory opinion issued by the ethics commission to Rep. Jared Nunes, who had been elected the previous November. Nunes was told that a company of which he is part owner, R.T. Nunes & Sons, could continue plowing snow for the state under an existing contract, but that he was barred by the regulation from seeking new contract.
“The General Assembly control the budget of every state agency,” Marion told The Times. “It’s reasonable for the person who controls the purse strings not to be able to then seek employment from the state. They could use their role as a member of the legislature to create employment for themselves.”
Marion said he is “not convinced we need to necessarily change state law or the code of ethics, as some candidates have suggested, I think the law just has to be enforced.”
At an impromptu news conference after an unrelated event Thursday morning, Gov. Lincoln Chafee said the probe into the contracts was not prompted by a TV news report earlier this week. He said the RI State Police “were already shoulder-deep” into the investigation, which he said started weeks ago.
Responding to GOP gubernatorial candidate Allan Fung’s call for the contract to be scrapped and re-bid, Chafee said state officials “are going to let the investigation play out and we’ll move forward with whatever needs to be done.
“Of course it troubles me,” Chafee said when asked about the beach concession dust-up. “Let them continue with the investigation and we’ll go forward with whatever needs to be done,” the governor told reporters. “If we need some change we’ll do that.”
On the question of whether state representatives should be bidding on state contracts, Chafee said, “that’s what we’re looking at, the ethics and that’s why the state police are involved.”
Asked about a release from his office Wednesday that said, “no state agency or the Governor's Office will take action during any inquiries,” Chafee said, “I don’t know if that’s accurate. I’ve known about the investigation, I have not gotten involved in it. I’ve let the State Police do their work, which they do, always admirably. If we need to hand it over to the attorney general’s office for prosecution that will happen.”
Questions about the legal and ethical implications of Caprio’s winning bid, “are appropriate and should be asked and answered,” Chafee said.
“People have a jaundiced view of public service and people’s reasons for seeking public office and this reinforces that,” Marion said. “There’s just the appearance that people seek political office for private gain and we all know the vast majority of people don’t do that.”

Follow Jim Baron on Twitter: @Jim_Baron.

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