June 18, 2018

Richard Thornton Director of Campaign Finance Rhode Island Board of Elections 50 Branch Avenue Providence, RI 02903

Dear Mr. Thornton:

Common Cause Rhode Island files the following complaint against Allan W. Fung, 1581 Phenix Ave., Cranston, RI 02921 (herein “Fung”) and Carpionato Properties,1414 Atwood Ave., #5 Johnston, RI 02919 (herein “Carpionato”).

Facts

In 2014 Allan W. Fung was a candidate for the Republican nomination for Governor of Rhode Island, and then the Republican nominee for Governor of Rhode Island. In 2016 Fung was a candidate for reelection as Mayor of Cranston, Rhode Island. In 2018 Fung is again a candidate for the Republican nomination for Governor of Rhode Island.

In 2014 the Fung committee made four payments, totaling $4500, to Carpionato Properties for “Rent and Utilities” (Exhibit A—2014 Rent and Utilities Payments). In 2016 the Fung committee reported one of those payments, for $1000, as “refunded” (Exhibit B—2016 refund of Rent and Utilities Payment).

In 2016 the Fung committee made three payments, totaling $1500, to Carpionato Properties for “Rent and Utilities” (Exhibit C—2016 Rent and Utilities Payments). The Fung committee was headquartered at the retail shopping center Chapel View from at least July 2016 to November 2016 (Exhibit D—July 2016 Facebook post). The headquarters appears to have been in Building 1000, Unit 138, 1,369 sq. ft. (Exhibit E—Village Side Available Retail Space). The Fung committee reported those three payments, totaling $1500, as “refunded” (Exhibit F— 2017 refund of Rent and Utilities Payment). With a three-month lease cost before the refund was approximately $0.37 sq. ft.

On October 24, 2017 Fung kicked off his campaign for the Republican nomination at Chapel View (Exhibit G—WPRI.com article by Ted Nesi on October 24, 2017). On April 30, 2018 the Fung committee amended its On-Going 2017 4th Quarterly report to show $3100 in “Rent and Utilities” to the Carpionato Group as accounts payable (Exhibit H—2017 amended Rent and Utilities Payment). An invitation to a “Women for Fung” event posted on Facebook lists the address of the Fung headquarters as Building 1000, Suite 144 (Exhibit I—2018 Facebook event). Carpionato markets the space as 1372 sq. ft. (Exhibit E—Village Side Available Retail Space). WPRI.com reported a “balloon payment” is due May 1, 2018 (Exhibit J—WPRI.com

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article by Tim White and Ted Nesi on June 13, 2018). A lease beginning October 1, 2017 to May 1, 2018 is approximately $516/mo. with a cost per square foot of approximately $.38.

Count I—Unreported in-kind contributions § 17-25-11, as defined in § 17-25-3(8)

The 2016 refund of $1000 in “rent and utilities” to the Fung committee by Carpionato Properties for the 2014 is an unreported in-kind contribution, in violation of § 17-25-11.

The 2016 rent and utilities payments, totaling $1500, by the Fung committee, which were refunded in 2016 are an unreported in-kind contribution, in violation of § 17-25-11.

Count II—Corporate contributions § 17-25-10.1(h)(1)

The 2016 refund of $1000 in “rent and utilities” to the Fung Committee by Carpionato Properties for the 2014 is an illegal corporate contribution, in violation of § 17-25-11.

The 2016 rent and utilities payments, totaling $1500, by the Fung Committee, which were refunded in 2016 are an illegal corporate contribution, in violation of § 17-25-11.

Count III—Contributions in excess of the limits § 7-25-10.1(a)(1)

The 2016 rent and utilities payments, totaling $1500, by the Fung Committee, which were refunded in 2016 are a contribution in excess of the $1000 limit, violating § 7-25-10.1(a)(1).

Rent and utilities totaling $1500 in 2016, and $3100 (to date) in 2017-2018 are below market rate for retail rentals, violating § 7-25-10.1(a)(1).

Common Cause Rhode Island requests that the Board of Elections find Allan W. Fung and Carpionato Properties in violation of the campaign finance requirements under § 17-25-11, § 17-25-13 and § 17-25-16 and such relief the board may deem appropriate.

Upon information and belief, the statements in this complaint are true.

Signed

John Marion Executive Director Common Cause Rhode Island

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Exhibit A—2014 Rent and Utilities Payments

Exhibit B—2014 refund of Rent and Utilities Payments

Exhibit C—2016 Rent and Utilities Payments

Exhibit D—July 2016 Facebook post

Exhibit E—Village Side Available Retail Space Village Side Available Retail Space

Route 2 (New London Avenue)

154

144 225 132 142 140 132 138 136 134 VILLAGE SIDE 116 128 112 108 NO. TENANT AVAIL. SQ FT

F 220 S STARBUCKS Building 1000 2,2201 100 1 104

IZZA F S 100 Johnny Rockets LAZE,527 P 250 B 2

C/ V R S E R L E K IN R WAT 2 2 SP Building 1000 240 104 Available 581 4 108 1800 Flowers 5 Building 2000 6 112 GameStop 116 Omaha Steak C 200 h 128 Carpionato Regional a p Management Office e l V 132 Available 975 8 ie 134 Cold Stone Creamery w 3000 136 Gents I-30 Chapel View-South B o 138 Available 1,369 u l e 140 Cosmo Nails v a 142 GNC r d 144 Available 1,372 154 Massage Envy

10 Building 4000 Building 2000 200 Available (still under lease) 6,276

300 350 220 Bling Eyewear

18 225 Ideal Image 22 240 Alex and Ani Offices 250 Alex and Ani Retail

3000 Chapel Grille

Building 4000

Sockanosset Cross Road 300 Staples 350 Available 5,091

I-30 Chapel View-South 1 Starbucks 2 Blaze Pizza 4 OrangeTheory Fitness Phase II Garden City 5 Games Workshop 6 Great Clips Center 8 Shaw’s Supermarket 10 Petco 18 TJ Maxx 22 REI Leased Available

Exhibit F—2017 refund of Rent and Utilities Payments

Exhibit G— WPRI.com article by Ted Nesi on October 24, 2017 Fung slams Raimondo, debuts new TV ad to kick off second gov campaign

wpri.com/news/eyewitness-news-investigates/fung-slams-raimondo-debuts-new-tv-ad-to-kick-off-second-gov- campaign/1082428509 Eyewitness News Investigates By: Ted Nesi

Posted: Oct 24, 2017 07:04 PM EDT

Updated: Oct 24, 2017 07:04 PM EDT

Patricia Morgan first to formally announce 2018 run for RI governor

CRANSTON, R.I. (WPRI) - Cranston Mayor Allan Fung launched his second campaign for Rhode Island governor on Tuesday, slamming incumbent Democrat Gina Raimondo for "dumb mistakes" and putting big money behind a new TV ad now hitting the airwaves.

"We see it in the news every single day: the complete incompetence, wasteful mismanagement, and shady behavior from our governor and many others sitting in that marble dome in Providence," Fung, a four-term Republican mayor, declared in his kickoff speech. He added: "Our governor has failed miserably, and it's time to lead our state in a better direction."

Fung suffered a narrow loss to Raimondo in the 2014 gubernatorial race, taking 36% of the vote to her 41%. (A third candidate, the late Robert Healey, received 21% as the Moderate Party nominee.) He was re-elected to a new four-year term as mayor last November, but was always expected to run for governor again.

"I told you I'd be back again, didn't I?" he laughed on arriving at the podium Tuesday.

“I told you I’d be back,” Allan Fung tells the sizable crowd as he launches his second run for governor pic.twitter.com/YxsIEAPu2F

— Steph Machado (@StephMachado) October 24, 2017

Fung, a 47-year-old son of Chinese immigrants, delivered his address to a few hundred supporters gathered in a vacant building at Chapel View, the former reform school that the Carpianato Group development company has turned into a major shopping center. He suggested it represents the type of economic development that would happen statewide if he's elected.

"We know we have what it takes to make that happen because we have done it right here in Cranston," he said.

1/3 Fung - who refused to answer questions from reporters after the event - also on Tuesday began running a new biographical TV ad reintroducing himself to voters. His campaign has bought about $82,000 of local broadcast time to air the commercial through Nov. 2.

Fung is the second Republican to jump into the gubernatorial race, joining the fray one day after House Minority Leader Patricia Morgan announced her own bid for the GOP nomination. In a statement welcoming Fung to the race, Morgan said, "I am a new face with fresh solutions to lead Rhode Island to a better and brighter future."

More candidates could follow. Two other Republicans, former state Rep. Joe Trillo and businessman Giovanni Feroce, both said this week they are also leaning toward running - raising the possibility of a crowded party primary. (No Democrats have launched primary campaigns against Raimondo at this point, but former Gov. Lincoln Chafee has been publicly flirting with the idea.)

New: Businessman Feroce leaning toward run for RI governor

Offering a message likely to appeal to many local Republicans, Fung used his speech to assail Raimondo on a long list of issues: the Cooler & Warmer tourism debacle, her hiring of former Rep. Don Lally despite a revolving-door rule, her support for business tax breaks, and the state's ever-growing $9-billion budget.

"Our fellow Rhode Islanders have become frustrated, disenchanted, and beaten down," Fung said. "They see a government that's held hostage by the rich and powerful, a select few who serve themselves instead of taking care of us."

Fung also made the critique personal, describing how his elderly father's application for public assistance to defray the cost of long-term care at a nursing home was held up for seven months because of the state's problem-plagued new computer system for benefits, UHIP.

"Our parents, children, friends and neighbors deserve better," he said.

View of crowd gathered for @MayorFung Gov kickoff here at Chapel View. Taking a different approach from @RepMorgan, who kicked off w a video pic.twitter.com/upN8mkBgHb

— Ted Nesi (@TedNesi) October 24, 2017

A spokesman for Raimondo declined to comment Tuesday night, but Democratic Governors Association spokesman Jared Leopold quickly argued Fung "is trying to bring [President] Trump's agenda to Rhode Island."

"Time and time again, Fung has refused to criticize the Trump administration as its policies threatened to harm Rhode Islanders," he said. "Rhode Island voters already rejected Fung once, and Fung's embrace of Trump means they'll do it again."

Added Rhode Island Democratic Party executive director Kevin Olasanoye: "While he, Patty Morgan and Joe Trillo will inevitably argue about which version of TrumpCare they like the best, Governor Raimondo remains focused on the hard work that's required to strengthen our 2/3 economy and get results."

Fung's speech made no mention of Trump and contained no detailed policy proposals. He promised to "focus on cutting taxes, cutting through the red tape for businesses, cutting the Raimondo administration's out-of-control and wasteful spending, and cutting out the culture of insider deals that benefit the elite."

Fung has hired a new campaign manager, Andrew Vargas Vila, whose LinkedIn profile shows he is a Republican political operative from Florida. Fung has also retained a national GOP consulting firm, Convergence Media, that gained attention earlier this year for its work on a costly special congressional election in Georgia.

Fung had about $180,000 in his campaign account as of June 30, significantly more than other Republican hopefuls but vastly less than Raimondo's massive war chest of $2.67 million, R.I. Board of Elections filings show. He acknowledged the governor's cash advantage in his speech Tuesday.

"Friends, this is going to be an uphill climb," Fung said. "We're running against an incumbent governor who's lined her pockets with millions of dollars from Wall Street, from people in Chicago, people in California, and from other places that is not Rhode Island. ... She knows she can't win running on her own record, so she's going to spend all that money making excuses for the status quo and attacking me."

Ted Nesi ([email protected]) covers politics and the economy for WPRI.com. He writes Nesi's Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook Continue Reading

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Exhibit H—2017 amended Rent and Utilities Payment State of Rhode Island and Providence Plantations Board of Elections Campaign Finance Division 50 Branch Avenue, Providence, Rhode Island 02904 Tel. (401)222-2345 Fax (401)222-4424 www.elections.state.ri.us

SUMMARY OF CAMPAIGN ACTIVITY

Name of Candidate, Political Party, Political Action Committee Key# ALLAN W FUNG 5080

Street Address City/Town, State and Zip Code 1581 PHENIX AVE CRANSTON, RI 02921

Mailing Address (if different) City/Town, State and Zip Code

Telephone Number Daytime Telephone Number Fax Number E-mail (401) 825-7166 (401) 580-5136 [email protected]

If Candidate Office Sought: Party Affiliation if any: Mayor/Administrator Republican

Reporting Period (Dates): Period Beginning: 10/01/2017 Period Ending: 12/31/2017 SUMMARY OF ACTIVITY FOR PERIOD 1. Beginning Cash Balance $ 229,650.20 4. Cash Disbursements, continued 2. Cash Receipts f. Other Disbursements a. Contributions From: 0 1. Aggregate 0 0 a. (Individuals) 0 0 b. (Political Parties) 0 5. Ending Cash Balance $ 240,422.83 c. (Political Action Committees) 0 2. Individuals 172,473.49 3. Political Parties 25.00 CAMPAIGN FUND STATUS 4. Political Action Committees 2,500.00 6. Report of In-Kind Contributions 0 5. Loan Proceeds 0 6. Payroll Check off 0 7. Interest Received 2.58 7. Cash $ 240,422.83 8. State Check Off 0 8. Other Assets 9. Refund/Rebate 0 0 10. Party Building 0 0 11. Matching Public Funds 0 0 12. Other 0 9. Total Assets $ 240,422.83 13. Returned Contributions (625.00) LIABILITIES AND FUND BALANCE 14. Returned Checks 0 10. Liabilities b. Other: a. Accounts Payable $ 3,100.00 0 b. Loans Payable 25,000.00 0 c. Other Liabilites 0 0 3. Total Cash 404,026.27 0 4. Cash Disbursements 0 a. Aggregate Expenses 0 b. Campaign Expenses 163,603.44 11. Total Liabilities 28,100.00 c. Repayment of Loans 0 12. Total Fund Balance $ 212,322.83 d. Account Payable Repayments 0 13. Total Liability / Fund Balance 240,422.83 e. Other 0

CF-2 Rev. 3/02 I HEREBY CERTIFY THAT THIS REPORT OF CAMPAIGN CONTRIBUTIONS AND EXPENDITURES AND THE SUPPORTING Name of Person Filing Report DOCUMENTS ARE TRUE AND CORRECT.

X Title of Person Filing Report Signature of Person Date

SUBSCRIBED AND SWORN TO BEFORE ME THIS Address of Person Filing This Report Day of 20

X Notary Public SCHEDULE OF CONTRIBUTIONS RECEIVED

Key # Full Name of Candidate or Committee Reporting Period From: To: Item Transaction Type Contribution Type Receipt Date Deposit Date Contribution Amount

In Kind/Other Receipts Description

Contributor Information Employer Data Prefix First Name MI Last Name or PAC/Party Committee Name Suffix Employer Name

Street Address Street Address

City State Zip City State Zip

CF-3 Rev. 3/02 SCHEDULE OF EXPENDITURES

Key # Full Name of Candidate or Committee Reporting Period 5,080 ALLAN W FUNG From: 10/01/2017 To: 12/31/2017

Check # Expenditure Date Payment Date Disbursement Type Expenditure Type Expenditure Amount 10/10/2017 Account Payable Rent & Utilities $3,100.00 Purpose of Expenditure Lease for HQ Payee Information Prefix First Name MI LastName or Vendor Name Suffix Carpionato Properties Street Address City State Zip 1414 Atwood Ave #5 Johnston RI 02919

CF-4 Rev.3/02

Exhibit I—2018 Facebook event

Exhibit J—WPRI.com article by Tim White and Ted Nesi on June 13, 2018 Fung campaign to cut new checks after paying no rent in 2016

wpri.com/target-12/fung-campaign-to-cut-new-checks-after-paying-no-rent-in-2016/1237308496

Target 12 By: Posted: Jun 13, 2018 05:51 PM EDT

Updated: Jun 14, 2018 12:09 PM EDT

Related Headlines Fung slams Raimondo, debuts new TV ad to kick off second gov campaign

CRANSTON, R.I. (WPRI) - Republican gubernatorial candidate Allan Fung wound up making no rent payments for his 2016 campaign headquarters at Chapel View, and more recently failed to disclose an outstanding bill from the shopping plaza’s powerful owner, according to a Target 12 review of R.I. Board of Elections filings.

The Cranston mayor’s political team has been based at Chapel View for the past three election cycles. Two years ago, in 2016, Fung’s office was open from at least mid-July through the November election. To pay for the space, the campaign issued three $500 rent checks to Carpionato Group, Chapel View’s owner, on Aug. 1, Sept. 1 and Oct. 1.

The following July, however, Fung’s campaign amended its Board of Elections reports to say that all three payments had been refunded by Carpionato. It was the second time that had happened: Fung’s campaign also reported Carpionato refunded $1,000 of its $4,500 in rent from his 2014 gubernatorial bid, which operated out of Carpionato space from the spring through the election. That $1,000 refund was reported to the board in October 2016, more than two years after the rent check was cut.

Reaction: Rivals blast Fung over rent-free HQ

In a statement early Wednesday afternoon, Fung spokesman Andrew Augustus said the Carpionato Group never cashed the checks, so Mark Collins - the campaign’s treasurer since 2014 - reported them as refunds to make its Board of Elections reports match its bank statements. (Augustus later said the campaign now thinks “the proper terminology should have been return not refund.”) He said the campaign did not reach out to Carpionato after discovering the checks were not cashed.

Augustus indicated the campaign is now making a new attempt to pay the uncashed 2014 and 2016 rent payments.

1/4 “Mayor Fung has directed his treasurer to again reissue the checks, and to follow up with the payee to ensure these new checks are cashed within the appropriate time period,” he said, referring to Carpionato.

Later in the afternoon, Carpionato Group President Kelly Coates offered a different explanation for some of the transactions. He said his accounting department had located the three $500 checks from 2016 with a note on them saying they were “held” because the Fung campaign had made repairs to its space following a roof leak.

“Campaign workers must have come up to clean up the space,” Coates said. “They had someone who donated the repairs inside the space. … If they had somebody do it and we figured it was a reasonable accommodation, they did it.”

However, Coates said he had no record or explanation for the $1,000 check from 2014 that the Fung campaign now says was also never cashed. “I haven’t gotten confirmation they gave them a refund,” Coates said.

“We’re a large company and we want to be clean,” he said, adding, “If they ask us to cash a check, we’re going to cash a check.” He also emphasized that free rent would qualify as an illegal campaign contribution and therefore is not something Carpionato would offer a candidate.

Richard Thornton, the Board of Elections’ director of campaign finance, told Target 12 that if the Fung campaign made repairs to offset its rent, the cost of the construction work would need to be disclosed as a campaign expense. He said he would need to see evidence that the value of the repairs covered the full $1,500, and would want the campaign to make clear in its reports that the work was in lieu of rent.

“I want transparency if that’s in fact what occurred,” Thornton said, but transparency is “clearly not what occurred - just holding a check is not the way to do it.”

“I want it documented,” he added.

Target 12 also found no record of rent payments to Carpionato for the Fung campaign’s current space at Chapel View, or for the space he used there to host his kickoff event last October. (The campaign’s most recent filing was dated March 31.) Asked about the matter, Augustus provided a letter from Coates dated March 1 that showed the campaign owed a “balloon payment” of $3,100 to Carpionato by May 1.

Thornton said campaigns that have outstanding debts need to disclose those in the accounts payable section of their Board of Elections reports. The Fung campaign amended its documentation after being informed of Thornton’s comments. (Coates said the Fung campaign has since made the $3,100 payment, and the check has been cashed.)

Augustus also said that when the Fung campaign signed its new lease with Carpionato last fall, “the issue of checks not being cashed did not come up.”

2/4 John Marion, executive director of good-government group Common Cause Rhode Island, said the state has strict rules on the reporting of campaign expenses so voters can have a full picture when they go to the voting booth. Voters are “robbed” of important information when campaigns aren’t transparent, he said.

Marion expressed concern about the Fung campaign’s reporting. “That’s premium real estate that they’re not paying market value for, according to filings,” he said. “I think clearly that campaign should be paying rent every month and they should be reporting that rent.”

“I wish I could get that deal for our office space at Common Cause,” he quipped.

Based in Johnston, Carpionato Group is one of the biggest real-estate developers in New England, with shopping plazas, hotels and other properties in multiple states. Its founder, Alfred Carpionato, is currently one of Cranston’s two largest property owners, with holdings valued at about $110 million, according to the city’s most recent municipal audit. Alfred Carpionato made $7,350 in campaign contributions to Fung between 2004 and 2017, Board of Elections records show.

Fung often praises Chapel View - as well as Garden City Center, a non-Carpionato development nearby - and cites the popular retail plazas as a sign of Cranston’s success under his leadership. “Those two large developments in Chapel View and Garden City, not a single tax dollar went into either of those developments, and it’s also the worldwide headquarters of Alex and Ani - you’ve got retailers there, restaurants,” Fung said during an April interview on WPRI 12’s Newsmakers.

Coates said the seemingly low rental rate paid by the Fung campaign - $500 a month - is the same deal offered to other candidates who seek office space from the company. He said the terms of Carpionato leases with campaigns require them to vacate their spaces as quickly as five to 20 days after a commercial tenant is found.

“There’s nothing here that wasn’t done for Senator Whitehouse or for Governor Almond or for Governor Carcieri,” Coates said. “It’s a standard thing.”

Marion said real-estate developers have more interaction with government than some other business owners. “Developers are always coming before cities and towns looking for variances and things, so developers all over the country are very active campaign donors,” he said.

Other campaigns’ Board of Elections filings show they make monthly rent payments.

Democratic Gov. Gina Raimondo pays $565 a month to Shuster Realty LLC for an office on North Main Street in Providence. She has paid the company roughly $54,000 since 2013. Republican gubernatorial candidate Patricia Morgan pays $450 a month to Lacroix Properties for an office on Bald Hill Road in Warwick. She paid the company $1,350 during the first three months of this year.

Tim White ([email protected]) is the Target 12 investigative reporter and host of Newsmakers for WPRI 12 and Fox Providence. Follow him on Twitter and on Facebook 3/4 Ted Nesi ([email protected]) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

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