Former RI House Speaker to Plead Guilty to Bribery, Wire Fraud, Tax Evasion Charges

A year ago, Gordon D. Fox was the most powerful political figure in Rhode Island in his role as Speaker of the House.

Today, Fox appeared in U.S. District Court in Providence and pleaded guilty to charges of bribery, wire fraud and filing false tax returns, according to court documents, following an 18-month criminal investigation highlighted by a State House raid of his office last March.

In exchange for a three-year sentence in federal prison, Fox, a longtime Providence house rep who was elected house speaker in 2010, admitted in a signed statement that he accepted $52,000 in bribes in 2008 to push through a liquor license in Providence for Shark Bar and Grille when he served on the Providence Board of Licensing. And, beginning in 2008, he used a campaign account as a personal slush fund to pay for the mortgage on his home on the East Side, his car and purchases at Tiffany’s, T.J. Max, Target, Urban Outfitters and Walmart that he put on his American Express card.

U.S. Attorney Peter Neronha in a Tuesday morning press conference, said that Fox’s campaign filings over the years with the state Board of Elections were a “fantasy,” and he “repeatedly misled voters” as he solicited donations purportedly for his runs for state office. All told, he stole $108,000 over a six year period by transferring money from his campaign account into his personal accounts and not reporting the transfers as campaign expenses with the Board of Elections, or as income on his tax forms.

The transfers were happening right up to when state police and federal agents raided his home and office nearly one year ago.

“His position as chairman [of the Providence liquor licensing board] was for sale. He reported none of the personal income from stealing campaign accounts and accepting [bribes].,” Neronha said. “His corrupt conduct has resulted in his removal from high office, and deservedly so.”

Neronha, in a forceful condemnation of political corruption in general, said that Fox’s actions constituted a particularly “pernicious type of fraud,” and “one that should concern all of Rhode Island.”

“When you rely on campaign donors to maintain a personal lifestyle, there’s a very real danger to feel a strong sense of obligation to those donors,” Neronha said. “That is precisely what Speaker Fox did.”

Foreshadowing the possibility of more charges for other elected officials, Neronha said that prosecutors will not stop hunting down corruption. But the Rhode Island public, perhaps numb to corruption, needs to stop shrugging it off as business as usual in the Ocean State, whose economic turnaround is plagued by the bad perception of the state being a hive of smarmy pols looking out for themselves.

Rhode Islanders ”need to lose our political corruption amnesia in general,” Neronha said, and Fox and other fallen politicians should never be given the chance to serve again. “In general, I believe in rehabilitation, but I do not believe that those who are sworn to uphold this enormous opportunity should ever be given the opportunity to play again.

“I believe that those who pay to play should never be given the opportunity to play again. I believe companies that receive enormous contracts and negligently perform as required should never be afforded the opportunity to receive contracts again,” Neronha said. “If we’re serious about public corruption, we can do it, and it requires real change in the way we do business. The good people of Rhode Island, who’ve lived here all their lives or who arrived just last week are not getting what they deserve and once and for all that has to change”

In his last campaign finance filing, Fox’s campaign account, Friends of Gordon Fox, is reported to show a balance of $212,000, but in actuality, it has a balance of just $52,000, Neronha said. And discovering the bribe in stacks of documents took months of hard work by a large team of agents and officers who followed what Neronha said was a complex money trail.

Court documents show Fox met with two of the partners for Shark Bar and Grill in 2008 in advance of a liquor license hearing before the Providence license board and agreed to accept a bribe of $45,000 in exchange for his support as the board’s vice chairman.

Fox followed through after a hearing on Aug. 13 of 2008 during which the partners testified in favor of the proposal but it was “not without controversy,” Neronha said, and there was notable neighborhood opposition to the application. At a subsequent hearing, Fox went into great detail why he felt the license should be approved and moved the board to approve the license and it passed.

A third silent partner delivered another $17,000 following the favorable vote.

Members who serve on the board receive an annual stipend of about $20,000.

Neronha was joined by Col. Stephen G. O’Donnell, superintendent of the Rhode Island State Police, Attorney General Peter Kilmartin and members of the Federal Bureau of Investigation at Tuesday’s press conference.

Fox was due to appear in U.S. District Court at noon.

If Fox had not agreed to the plea deal, he could have faced more than 30 years in prison had the case gone to trial and resulted in a conviction.

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