House Speaker Gordon Fox Resigns

The irony was not lost on anybody who has spent any amount of time at the Rhode Island State House.

On a quiet Friday morning last month, the Rhode Island State Police, accompanied by agents from the FBI and IRS, swooped in, making a beeline for the third-floor office suite of House Speaker Gordon Fox. It is a place where the powerful and the hopeful alike have come to meet with Mr. Speaker — arguably the most influential person in state government. Many have waited outside to get in, or sometimes not get in at all. The speaker’s staff controls the access.

But on this day it was the authorities who took control. Simultaneous to the State House raid — unprecedented in Rhode Island history — Fox was being asked to leave his home on the East Side while another team of agents began removing boxes.

The state police, who guarded the door outside the speaker’s office throughout the day, ordered Fox’s longtime spokesman, Larry Berman, to take a walk, along with the speaker’s executive secretary. The message was clear: We’re in charge now.

The raid set off a rapid series of events that culminated in Fox’s decision to resign less than 24 hours later and the election of a new speaker, which will have significant ramifications for what happens between now and the end of the session. And while the raids came as a surprise to many at the State House and in the media, State Police Col. Stephen O’Donnell had the most telling quote when he said. “Fox knows what’s going on. He’s certainly aware of what happened and why it happened.”

That, in retrospect, may account for the change in vibe last fall surrounding the speaker. Those who regularly interacted with him tell The Hummel Report that Fox was different somehow — distracted. Word was he retained a Boston attorney. But the first three months of this year’s General Assembly went the way most do: a lot of bills filed, but not much passed. If Fox knew the feds were closing in, he did a good job of hiding it.

The big question is: What were investigators looking for and what’s the next step? Because a federal judge sealed the record, the public does not have access to the affidavit the FBI and U.S. Attorney’s office had to file with the court to convince the judge to sign off on the two search warrants executed the day of the raids.

But The Hummel Report disclosed more than a year ago that FBI agents paid an unexpected visit to a Cranston woman who owned a construction business and secured a loan from the troubled Providence Economic Development Corporation. Fox, an attorney, closed on her loan and dozens of others, but omitted disclosing that income on his yearly Ethics Commission form. We reported that the woman used a phantom Providence address for the loan, maybe not-so-coincidentally in the office building that also houses Fox’s law office. The agents asked her who told her to use that address and why.

Sources also tell us that investigators have been looking at how Fox spent money from his campaign account and whether he has used some of those funds to pay for personal expenses. Fox may not be Clarence Darrow, but he was good at holding fundraisers, and lawmakers and lobbyists alike flocked to them to pay homage to the speaker. It’s a tradition seemingly as old as Roger Williams.

Now the question becomes: Is Fox the target, or a vehicle to get to a bigger fish? If the investigation involves the PEDP loan program, The Hummel Report learned in 2011 that nearly two-thirds of all the loans were delinquent, which federal overseers described as an “astounding” rate. The mayor during that period was now-Congressman David Cicilline, who gave some of the PEDP closing business to his friend and political ally Gordon Fox. Cicilline was unusually quiet in the week following the raid; he usually makes public appearances on the Monday and/or Friday he’s back home from Washington, but he was nowhere to be found.

Will Fox be indicted? The fact he resigned so quickly and Col. O’Donnell’s statement about his knowing what was happening would seem to point in that direction. But don’t expect anything soon. Typically federal investigations are lengthy and methodical, which is why the Justice Department has such a high success rate of conviction when it does file charges against someone.

Meanwhile, the focus shifts back to the state house, where the leadership team was turned upside down following the election of Fox’s Majority Leader Nicholas Mattiello, to succeed his former boss.

Mattiello promptly replaced the chairmen of the two most influential committees: finance and judiciary. Lobbyists and others with interest in legislation are left wondering the fate of their bills, which is dictated from the speaker’s office. It is the first time there hasn’t been an orderly change of power in the house in decades and it puts a lot of people in uncharted water.

But as one representative said, “It doesn’t really matter; we’re going to do this again in December.” That’s when the Democrats will caucus after the November elections and decide — again — on a leadership team.

The Hummel Report is a 501 3C non-profit organization that relies, in part, on your donations. If you have a story idea or want make a donation go to www.hummelreport.org, where you can also see the video version of this story. You can mail Jim directly at jim@hummelreport.org.