The Rhode Island Ethics Commission voted Tuesday to investigate an allegation that House Speaker Gordon Fox violated financial disclosure rules by not reporting income from legal work he did for a Providence economic development agency.
Fox, D-Providence, is accused of violating the code of ethics by not disclosing the money he made handling dozens of loan closings for the Providence Economic Development Partnership between 2005 and 2009.
Fox is required to report income from governmental sources on yearly financial statements submitted to the Commission. Though he handled dozens of loan closings for the agency, Fox has claimed through his lawyer that he did not need to disclose the income because he was working as a subcontractor.
It's likely to be months before the Commission decides whether an ethical violation occurred. The unanimous vote by the Commission to begin an investigation simply means the commission wants to look into the facts of the situation, according to commission Chairman Ross Cheit.
"The decision today was appropriate given the circumstances," Cheit said. "This is the very initial stage."
An attorney for Fox, Albin Moser, said Fox was hired by the PEDP's private attorney - and not the agency itself - and therefore didn't need to report the income. From 2010 to 2012 the PEDP contracted with Fox directly and consequently Fox reported the income for those years, Moser said.
"His understanding of it is you don't need to disclose something like that if you're not being paid by them," Moser said.
Nonetheless, Fox will amend his report to include the income if the Commission believes he should have reported it, Moser said.
Fox spokesman Larry Berman declined to say how much Fox made working on behalf of the agency between 2005 and 2009.
"He isn't required to (say)," Berman said.
Fox could be fined up to $25,000 if the Commission finds that Fox is in violation of the financial disclosure rules. Most penalties are $1,000 or less.
The complaint was filed by Judith Reilly, a former Providence resident who moved to Salem, Mass., earlier this year. A self-professed "open-government activist," Reilly said she doesn't want to see the state's disclosure rules circumvented or undermined.
"If the commission sided with him (Fox) that would create a huge loophole," she said.