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PROVIDENCE – A months-long Ethics Commission investigation into Gov. Dan McKee's messy interactions with a state contractor during a fundraising lunch at the Capital Grille came to an end Tuesday with a dismissal, while a probe of the infamous Philadelphia trip by two top-ranked members of his administration continues.
What did the Ethics Commission decide?
The commission voted 6-0 to dismiss a GOP complaint that McKee violated the state's $25 gift limit when he left a lobbyist to pay for his share of a $228 lunch with the top executives of Scout Ltd., the Philadelphia-based design firm his administration had hired to design a new use for the castle-like Cranston Street Armory.
McKee admitted to the commission that his steak dish had cost more than $25.
But McKee's lawyer argued – and the commission agreed – that there was no "probable cause" to believe that McKee committed a knowing and willful violation because he didn't know what happened, which on the surface marked a break with precedent set in a past case involving former Republican Gov. Donald Carcieri.
Ethics Commission Executive Director Jason Gramitt said the crux of the decision in this case was that McKee "inquired" if his campaign was paying for his meal as he left and was told that it was.
For anything to be a violation, it must be "knowing," he said.
John Marion, executive director of Common Cause RI, pointed to another distinction: Carcieri agreed to settle; McKee did not.
Pointing to the much larger issue that the commission did not deal with head on, Marion said McKee was having lunch with a state vendor and a lobbyist and expecting a campaign check at the end, which may be legal, but "isn't how people think government should work."
In this case, Scout's managing director, Lindsey Scannapieco; development director Everett Abitbol; and their lobbyist, Jeff Britt, were invited to the lunch while the $56 million Armory contract they were seeking – on top of their design contract – was still up in the air.
An Ethics Commission synopsis explained the event this way: "Britt, who had previously done fundraising on behalf of McKee’s 2022 campaign for Governor, was invited by McKee’s campaign finance chair, Jerry Sahagian, to attend a personal fundraising lunch with the Governor and Sahagian at the Capital Grille restaurant in Providence on January 19, 2023.
"Britt was permitted to bring some of his lobbying clients along, and it was understood by all that this was a fundraising event at which campaign contributions would be made. Knowing that the Governor had the final say as to whether to seek a budget amendment to fund Scout’s Armory redevelopment plan, Britt selected Scout’s Scannapieco and Abitbol to accompany him."
Philly trip fallout still to come
The commission gave itself more time to investigate the two high-ranked state officials whose March 10 trip to Philadelphia last March left Rhode Island with a black eye in both the local and national media. Both have since left state employ.
A commission-generated complaint against then-Administration Director James Thorsen, whose lawyer has argued that he, at no time, solicited or accepted any gift or reward "based on any understanding that a vote or official action or judgment would be influenced."
A second commission-generated complaint against David Patten, then director of the state's property management division, whose allegedly "bizarre, offensive and unprofessional actions" during the Philly trip led Scout executives to send the governor a blistering email, at a time when the fate and funding of the proposed Cranston Street Armory revival hung in the balance.
Page 1 of Investigative Report McKee
After Tuesday's ruling, McKee issued a statement thanking the Ethics Commission and describing the complaint filed by the state Republican Party as a "stunt" and "waste of taxpayer resources."
"The current leadership of the Rhode Island Republican Party is irresponsible and not reflective of the Republican leaders that I have worked with over the years," he said. "They showed their lack of leadership by using the Ethics Commission to pursue their own political agenda."
But GOP Chair Joseph Powers said he was "disappointed" the commission bought McKee's "clueless" defense.
"Because Scout and its team wanted to do business in Rhode Island, they felt the need to hire a lobbyist, give donations to McKee, learn that their lobbyist paid for McKee’s lunch, and then experience a gift-grabbing spree by McKee administration officials in Philadelphia. To do business in Rhode Island, you should not need to go through this," he said.
"Regardless of the Ethics Commission’s decision, what occurred to Scout was an embarrassment."
McKee's defense: He didn't know Britt paid for his lunch
The McKee complaint filed by GOP Chairman Powers, accused the governor of violating the state ethics code "by accepting a gift, a free lunch, in excess of $25" from a lobbyist for a state vendor, and then failing to reimburse the lobbyist, Britt, for his share of the $228 tab until The Journal disclosed the lunch five months later.
(At the lunch, Scout's Managing Director Scannapieco, and director of development each donated $500. Britt delivered a check for $1,000 to McKee's campaign account.)
Democrat McKee's defense lawyer Michael Kelly contended he could not be guilty of a "knowing and willful" ethics violation because he had no clue that Britt paid for the lunch.
According to Kelly's account of what happened in a written filing with the Ethics Commission:
"The Governor and Sahagian walked away from the table together as the Governor was exiting Capital Grille. The Governor stated to Sahagian, 'you got the lunch right?' indicating to Sahagian he expected Sahagian to pay for the lunch. Sahagian replied 'yes' confirming to the Governor that he would pay for the lunch bill."
Sahagian subsequently realized he did not have the campaign credit card with him. Britt paid the bill and two days later sent a copy of the receipt for the lunch to Sahagian via text message.
"Sahagian was not in his office that Saturday and was on vacation skiing at the time Mr. Britt sent the text message. Sahagian intended to submit the invoice for reimbursement once he returned to the office the following Monday but forgot," Kelly wrote.
Britt was reimbursed following The Journal's publication of a story about the free lunch in June.
Powers' response at the time: "Refunding a gift immediately after you have been exposed by the media does not comply with the Ethics Code."
GOP cites precedent
In his own filing, Powers cited, as precedent, the $1,000 fine paid by former Governor Carcieri as part of a settlement of allegations that his campaign had improperly solicited campaign donations from state workers.
This solicitation was handled by Carcieri’s campaign manager and a consultant. Although Carcieri personally had no knowledge that his campaign was sending a solicitation to state employees, Powers noted, the governor still had to pay a fine.
On Tuesday, the Ethics Commission made public its staff findings in McKee's case.
Among them: McKee acknowledged the guts of the complaint and that the cost of his share of the lunch was over the $25 gift limit in the Rhode Island Code of Ethics, and that the McKee campaign did not reimburse Britt for the lunch until after it was reported by the press approximately five months later.
But "McKee swears under oath that as he left the restaurant he specifically asked Sahagian if he was taking care of the lunch bill, and that Sahagian responded that he was."
"McKee also swears that he had been unaware that Britt had paid for the lunch until five months later when, on June 21, 2023, it was reported by [The Journal], and that he caused a reimbursement check to be sent to Britt the next day," the report states.
The Commission decided the governor could not have committed a knowing and willful violation.
The infamous Philly trip
According to the Scout email, Patten allegedly helped himself to freebies at almost every visit on the site tour, including vegan cheese, hand-blown glass and a pair of sneakers; left a trail of sexist and racist comments and when told the Michelin star restaurant where he wanted to eat was closed for lunch, told the Scout executives: "Well you can call in a favor if you want $55M in funding."
When Patten ultimately resigned, his lawyer, Michael Lynch, issued a statement that said in part:
"While a simple apology is never enough, Mr. Patten is apologetic to the citizens of Rhode Island, who he has had the pleasure of representing as a director in the Department of Administration, that any of these matters occurred."
"He also apologizes to the many individuals in Philadelphia he met with in March and were, unfortunately, recipients of comments that resulted from Mr. Patten suffering" what has been described as an "acute stress event."
The Thorsen and Patten complaints were both lodged by the Ethics Commission deputy chief investigator. The McKee complaint was lobbed by state GOP Chairman Joe Powers.
The McKee administration subsequently terminated Scout's contract to design a new use for the Cranston Street Armory.
This article originally appeared on The Providence Journal: Ethics Commission gives McKee a pass on lunch paid for by lobbyist