I-Team: Bid may have violated ethics regulations

Peter Palumbo

New questions are being raised about whether a state lawmaker who bid on a state contract violated ethics regulations.

When state Rep. Peter Palumbo of Cranston is not at the State House, he's at the beach, running snack stands at Scarborough, Wheeler and Misquamicut state beaches.

Before he got the gig, Palumbo won a state contract to run the stands, and then suddenly backed out.

The winning bid went to his close personal friend, former state Democratic Party Chairman David Caprio, who then hired Palumbo to work for him.

"It's just the way it was, maybe it doesn't look good but there's only so many people in this business, so that's it," Palumbo told the I-Team earlier.

But there's another problem.

Rhode Island ethics regulation 36-14-5007, Prohibition on State Employment, reads:

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 defined in R.I. Gen Laws 36-14-2(4) and shall also 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.

"That's the plain language of the law, is that you're not supposed to seek or receive a contract," said John Marion of Common Cause.

Records uncovered by the I-Team show Palumbo bid more than $1,776,655 for a five-year contract, seeking business with the state while still serving as a legislator.

"You want to prevent situations where they create jobs or employment for themselves through the state budget," Marion said.

So why did a sitting state legislator bid on a state contract in the first place? And why didn't anyone raise a red flag?

The I-Team looked for Palumbo at Scarborough and at Wheeler state beaches, where he manages the concession stands, but couldn't track him down Thursday afternoon.

Caprio resigned as chairman of the Democratic Party 24 hours after NBC 10 broke the story. Palumbo's current job as a manager is allowed under ethics rules, because he's considered a sub-contractor.