Former RI Rep. Palumbo indicted in campaign finance case

PROVIDENCE, R.I. (WPRI) — A former Rhode Island state representative has been indicted for allegedly using campaign money for personal expenses.

According to the attorney general’s office, a statewide grand jury handed up an indictment charging former Rep. Peter Palumbo with one count of embezzlement, one count of unlawful appropriation over $1,000, and one count of personal use of campaign funds.

Palumbo, 56, of Cranston, was arrested back in January following an investigation by the Rhode Island State Police. Investigators allege the Cranston Democrat could not account for about $59,000 withdrawn from his campaign account.

Palumbo is scheduled to be arraigned on June 14. After his arrest, Palumbo was released on $5,000 personal recognizance.

At the time of the arrest, state police said Palumbo withdrew about $16,000 from his campaign account at seven casino ATMs across the country.

“They could’ve caught this earlier,” Common Cause Rhode Island executive director John Marion said Wednesday, pointing out that a bill submitted by Gov. Gina Raimondo would require random audits of campaign finance accounts. Currently, the Board of Elections typically audits an account only when there is some sort of suspicion or a complaint.

The governor’s bill calls for random audits of 25% of campaign finance accounts each year, and would also bar from the ballot any candidates with overdue campaign finance reports or unpaid fines.

“We know people are tempted, people are fallible and they can be greedy, and they can skim off of these accounts when they’re not supposed to,” Marion said.

Palumbo is one of five current or former elected officials charged with or convicted of campaign-finance crimes in the past three years. The group includes Providence City Councilor and former City Council President Luis Aponte, former Providence City Council Majority Leader Kevin Jackson, former House Speaker Gordon Fox, and current State Rep. Joseph Almeida. All four are Providence Democrats.

Palumbo served in the House from 1994 until 2014, when he lost his seat to Republican Robert Lancia following a controversy involving a beach concession contract.

Palumbo, who held the contract from 2000 to 2008 before it became illegal for General Assembly members to be independent contractors with the state, won the 2013 contract. He agreed to pay the state $1.7 million, but then stepped aside. That allowed the deal to go to former R.I. Democratic Party Chairman David Caprio, who soon after hired Palumbo to run the concessions.

Caprio stepped down as Democratic Party leader a short time after the controversy surfaced, saying he “could not dedicate the necessary time and energy” to the party chair position.

In February, the R.I. Ethics Commission fined Palumbo $1,000 for his contract bid. A federal investigation into the beach concession flap has not led to charges.

Send tips to Target 12 Investigator Walt Buteau at wbuteau@wpri.com and follow him on Twitter @wbuteau