Ex-Rep. Palumbo enters plea deal in campaign finance case

PROVIDENCE, R.I. (WPRI) — A former Rhode Island state representative charged in a campaign finance case changed his not guilty plea on Monday but will not receive any jail time. His attorney blamed the crime on a gambling issue.

Former Rep. Peter Palumbo, 56, of Cranston, pleaded no contest to one count of unlawful appropriation over $1,000, and the state agreed to drop counts of embezzlement and personal use of campaign funds.

Judge Joseph Montalbano reminded Palumbo that a no contest plea is in essence the same as pleading guilty.

“He has an issue which is gambling. He’s working through that.”

Palumbo will pay just over $31,000 in restitution to the state, starting with a $10,000 payment made Monday. Under the agreement, the rest will be paid in three years of monthly, $587.52 installments.

Palumbo’s restitution will go into the state’s general fund, unlike that of former House Speaker Gordon Fox, who is paying restitution directly to his campaign account following his guilty plea in a federal case.

Palumbo also agreed to close his campaign account and cooperate with the R.I. Board of Elections.

The longtime Cranston Democrat had no substantive response when asked if he had anything to say to constituents who voted for him and contributed to his campaign fund over the years.

“God bless,” Palumbo said. “Thank you. Have a nice day.”

Attorney General Peter Kilmartin said “the public demands and deserves their elected officials abide by the law, including our campaign finance laws.”

“When they break the law, like former Representative Palumbo admitted doing, they break the trust of their constituents and build contempt for our government as a whole,” Kilmartin said.

Palumbo’s attorney, Peter Petrarca, said his client is relieved the process is over, but characterized the crime differently than prosecutors.

“They donated to him,” Petrarca said. “He didn’t take any money that didn’t technically belong to him. It belonged to him, but he used it in the wrong manner.”

Palumbo, Petrarca, Montalbano and Kilmartin all served in the General Assembly during the same, recent era.

Palumbo was arrested in January 2017 following an investigation by the Rhode Island State Police. Investigators alleged he could not account for about $59,000 withdrawn from his campaign account. He initially pleaded not guilty to the charges following his indictment last May.

Court documents alleged Palumbo used his campaign account at casinos, a point Petrarca elaborated on after the brief plea hearing.

“It wasn’t a difficult deal to make,” Petrarca said. “He has an issue, which is gambling. He’s working through that. He knows what he did, and he’s willing to live up to it and do what he has to do to move on.”

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 had held the contract from 2000 to 2008, before it became illegal for General Assembly members to be independent contractors with the state. He won the 2013 contract, agreeing 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.

Petrarca said he was not sure whether or not a federal case involving Palumbo still loomed, saying he believes the statute of limitations on any potential charges runs out in October.

Rhode Island U.S. Attorney spokesman Jim Martin said “as a matter of policy, this office does not confirm nor deny the existence of investigations.”

In February of last year, the R.I. Ethics Commission fined Palumbo $1,000 for his contract bid.

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