AG, state police hold news conference about ILO investigation

AG, state police hold news conference about ILO investigation

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PROVIDENCE,. R.I. (WPRI) — R.I. Attorney General Peter Neronha responded Wednesday to Gov. Dan McKee’s characterization of his yearslong investigation into the ILO Group contract as a waste of taxpayer money that resulted in a finding of no wrongdoing.

ORIGINAL NOTE: https://www.wpri.com/target-12/ag-state-police-hold-news-conference-about-ilo-investigation/

“Well, I guess it depends how you define wrongdoing,” Neronha told reporters during a news conference. “Investigations are what this office, the state police and our fellow investigators do all the time. Sometimes those investigations lead to criminal charges and sometimes they don’t.”

“I don’t think it’s a waste of taxpayer money for us to do our jobs to investigate allegations like this,” he said.

Neronha and R.I. State Police Col. Darnell Weaver released the outcome of the probe on Tuesday, showing McKee “personally and directly intervened” just after he took office to steer a multimillion-dollar contract to a brand-new consulting firm with high-level political ties.

Despite finding the governor and his administration failed to comply with state regulations, Neronha ultimately decided against filing any criminal charges in connection with the case.

“Failure to abide by state procurement regulations is not in and of itself a criminal offense,” Neronha wrote in a 14-page analysis of the more than 1,000 pages of interviews, police reports, text messages and emails made publicly available.

The attorney general said he thought the public deserved to know the findings of the investigation, even if it didn’t result in criminal charges. He said he decided not to pursue the investigation through a secret grand jury proceeding because he wanted to ensure he got a chance to explain himself publicly.

“The public has the right to know what happened,” he said. “If there was a case here, we would have brought it.”

Law enforcement examined whether McKee and his team violated bribery or campaign finance laws, in part because an ILO executive separately helped coordinate to pay $15,000 per month to a prominent political consulting firm SKDK to assist McKee with communications.

Yet despite “close relationships between the players involved,” Neronha said he could not prove that McKee awarded the contract to ILO as a quid pro quo for the assistance from SKDK, which was never paid for most of its work on his campaign. The attorney general called the evidence “cloudy and contradictory.”

State police launched the probe one week after a Target 12 investigation first revealed in September 2021 the unusual process that led to the contract being awarded. They interviewed 26 people, issued court-authorized search warrants and reviewed hundreds of pages of emails and text messages.

The findings contradict McKee’s longtime defense of the contract. The governor has argued it was a competitive bid process and that he didn’t have a say in the matter.

Documents released Tuesday show the opposite, outlining how McKee helped orchestrate the details, price and final decision to award the contract in close connection with his long-time political confidant, Mike Magee, and the man’s then-employee, Julia Rafal-Baer, who founded ILO.

The firm incorporated the same week McKee became governor, and documents released Tuesday show Rafal-Baer sent an email to a colleague just weeks later about the contract-awarding process, writing, “It’s a fixed RFP, but luckily I know the person it’s fixed for [winky face emoji].” (RFP is short for “request for proposals,” the state’s process for awarding competitive contracts.)

The email was sent the same day the state publicly posted the RFP on its website for potential bidders to submit proposals to do the work, according to State Police Sgt. Michael Brock, who led the state’s investigation into the matter.

“This email shows that potential fraud or manipulation of the competitive bidding occurred at the outset of the process,” Brock wrote in his agency’s summary of its ILO investigation. “It calls into question the legitimacy of the process that followed.”

Rafal-Baer’s attorney Robert Corrente nonetheless argued the report was a vindication of his client and that there was “absolutely no wrongdoing” by ILO or its personnel. Amid mounting public scrutiny, ILO ended its contract six months before it was set to expire in 2022. The firm was ultimately paid $1.8 million.

McKee echoed ILO’s sentiment Tuesday, saying, “No wrongdoing took place and our priority has and will always be delivering for the people of Rhode Island.”

“It’s unfortunate that so much time and taxpayer dollars were wasted on an effort that was always going to come up empty, but now it’s important that we all move forward and continue focusing on the issues that are impacting Rhode Islanders every day,” he said in a statement.

McKee, Rafal-Baer and the governor’s former chief of staff, Tony Silva, and current chief of staff, Tony Afonso, all declined to be interviewed by investigators as part of the probe.

Neronha said Wednesday his office was eventually trying to coordinate an interview with McKee through his private counsel hired for the criminal matter. Neronha said he “believed” the governor’s attorney was former House Speaker Bill Murphy, who is now a prominent State House lobbyist. A spokesperson for McKee said she would check if that was the case.

McKee has no public events listed on his daily schedule for Wednesday, and he canceled a previously arranged interview with 12 News at 4 after the report was made public. Neronha’s decision to release the investigation’s findings isn’t likely to help his relationship with the governor, which the attorney general acknowledged is strained.

“I acknowledge that it’s not very good, but I can separate… any personal feeling from the work that we do,” he said. “There are a lot of people that work on this matter that aren’t me.”

The attorney general is also facing backlash from critics — including Joe Powers, chairman of the Rhode Island Republican Party — who argued the decision not to bring charges represents Neronha protecting a fellow Democrat in McKee.

“Once again, we see Democrats protecting Democrats,” Powers said in a statement. “It’s the same, tired story in Rhode Island politics — a ruling class looking out for each other while the rest of us are left to deal with their poor decisions and self-serving priorities.”

John Marion, executive director of the good-government group Common Cause Rhode Island, characterized the ILO report as “damning.”

“While the AG ultimately concluded that a prosecution of Governor McKee under the state’s bribery statute would not likely be successful, no Rhode Islander should feel good about what they read in this report,” Marion said in a statement. “State contracts should be awarded to vendors who provide the best service to the people of the state, not to the politically connected.”

Marion also said he disagreed with Neronha’s decision not to charge the governor or his associates under the state’s Code of Ethics, which deals with issues of public corruption.

“The attorney general is not the state’s prosecutor under that law, the staff of the Rhode Island Ethics Commission serves in that role,” Marion said. “The attorney general’s legal analysis is incomplete because it only focuses on part of the Code of Ethics. In the coming days Common Cause Rhode Island will look at whether Governor McKee may have violated other applicable sections of the Code of Ethics.”

Watch the full news conference below.

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.

Tim White and Ted Nesi contributed to this report.