But report shows it was still a sleezy deal
By Alexander Castro and Nancy Lavin, Rhode Island Current
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| An email sent by Julia Rafal-Baer to an out-of-state colleague references a request for proposal with a winking emoji. The Office of the RI Attorney General saw the email as suggesting the ‘the procurement process was manipulated from the outset,’ according to a report released Tuesday, Oct. 29, 2024. (Screenshot/Rhode Island Attorney General) |
The awarding of a multimillion-dollar state education contract in 2021 flouted state procurement laws, but there’s not enough evidence to press criminal charges against Gov. Dan McKee and his advisers.
“The Governor and his administration did not follow state procurement rules and regulations — the evidence of that is plain and cannot be seriously disputed,” Attorney General Peter Neronha concluded in a 14-page memo. “But enforcing state procurement rules is not within this Office’s responsibilities. Our job is to determine whether crimes were committed.”
Neronha and Col. Darnell S. Weaver, superintendent of the Rhode Island State Police, are scheduled to take questions from reporters at Neronha’s office in Providence on Wednesday morning.
Prosecutors and Rhode Island State Police pored over thousands of records obtained through a combination of court-authorized search warrants, other legal avenues and in response to public records requests, and conducted interviews of more than 25 witnesses, including state officials, officers and employees. The AG’s website on Tuesday afternoon posted a trove of memos, emails, text messages, conflict of interest forms and campaign finance filings with the state Board of Elections.
The investigation found the $5.2 million deal with the ILO Group was in the works as McKee’s team prepared for his transition from lieutenant governor to governor in early 2021 to fill the unexpired term of former Gov. Gina Raimondo after she was tapped as U.S. Commerce Secretary.
But, “the evidence is cloudy and contradictory in places,” Neronha wrote. “Cloudy and contradictory evidence rarely if ever justifies a prosecution, and seldom leads to a successful one. We choose not to bring one here.”
The state ultimately paid $1.8 million to ILO for what was supposed to be a $5.2 million contract beginning in July 2021. The contract was cut short halfway through the one-year agreement amid ongoing public and legal scrutiny.
ILO Group — its letters stand for “In the Life Of” — incorporated in Rhode Island just two days after McKee was sworn in on March 2, 2021. The company was cofounded by Julia Rafal-Baer while she was working as chief operating officer at the national education nonprofit Chiefs for Change, alongside then-CEO Mike Magee. Magee also served on McKee’s transition team.
ILO’s website describes the company as a “women-founded, leadership-focused education policy and strategy firm” that offers executive coaching, capacity building and other strategizing to enhance student outcomes. Rafal-Baer has been its CEO since July 2021, according to her LinkedIn page.
ILO was one of the top two bidders — with a significantly more expensive proposal — seeking the federally-funded contract to help schools meet COVID-19 safety protocols in the wake of the pandemic, alongside summer and afterschool programs to address learning loss. The controversial award, first reported by WPRI-12 TV in October 2021, prompted state prosecutors and law enforcement to open an investigation that same month.
“Today’s report confirms what we’ve been saying for years,” Gov. McKee said in a statement Tuesday evening. “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.”
Robert Clark Corrente, an attorney representing ILO Group, issued a statement Tuesday afternoon on behalf of his clients.
“The Attorney General’s report confirmed what we have maintained from the outset: there was absolutely no wrongdoing by ILO Group or any of its personnel,” Corrente wrote. “We are pleased that this matter has concluded, and ILO Group looks forward to continuing its work supporting public education nationwide.”
Magee, who now works as president for Minerva University in San Francisco, said in an email Tuesday night that he was “pleased” the investigation had concluded.
“As an unpaid member of Governor McKee’s transition team, I tried to help Rhode Island support teachers and students through one of the worst periods of the COVID pandemic,” Magee said.
Rafal-Baer could not be reached for comment.
Bribery argument leads to a dead end
Neronha told WPRI in March that the ILO investigation was finished, promising the report “fairly soon.”
Seven months later, he delivered, concluding that the maze-shaped evidence did not definitively lead to bribery: “The evidentiary trail here was complicated, and understanding its threads and weaving them into apparent truth took considerable time,” Neronha wrote in his memo.
The attorney general’s investigation centered around state bribery law, which requires prosecutors to show a quid pro quo occurred and benefited a state official in a personal or political, rather than official, capacity.
There are two narrative threads in the report. The first is the contract awarded to ILO for consultation surrounding school reopening, and the second is communication services for McKee via SKDK, a New York-based communications consulting firm. Two smaller subplots involve a pair of related allegations: That McKee violated campaign finance and ethics laws in addition to bribery.
SKDK’s services cost McKee nothing, and the investigation alleges they were paid for via Chiefs for Change, thanks to Rafal-Baer securing roughly $90,000 for a six-months contract to provide “transition support” from another nonprofit. The contract covered the period from Jan. 5, 2021,to June 7, 2021,to support only education-related issues.
Magee, who the AG’s report describes as being “as involved behind the scenes during much of the procurement process,” was willing to be interviewed about the communication services provided via SKDK, but did not agree to be interviewed about ILO.
The report names Magee and Rafal-Baer as the impetus for the ILO contract, not McKee.
In a Feb. 28, 2021, email to then-Lt. Gov. McKee and his staff, Magee pushed for an “emergency contract” or “very fast RFP (request for proposal)” that could be “swiftly executed so Julia and her team can get to work.”
On March 5, 2021, Magee joined McKee, then-Director of Administration James Thorsen and Purchasing Agent Nancy McIntyre for a Zoom call to discuss the proposed RFP. McKee said children needed to get back to school because of pandemic learning loss, and floated the idea of a speedier, single-source contract, avoiding the traditional competitive solicitation route.
“No, you should do a procurement,” McIntyre advised.
But was the solicitation truly competitive? Perhaps not.
A March 21, 2021, email from Magee to other top McKee advisors shows how Magee manipulated the phrasing of the state solicitation to fit with ILO’s qualifications.
“I personally think ‘qualified’ should be defined as a firm whose partners have worked … in at least 15 large school districts and at least 6 states…We want one vendor with the capacity to oversee, manage and deliver on all of this work,” Magee wrote.
Rafal-Baer was even less subtle in an email to an out-of-state consulting colleague sent two days later.
“It’s a fixed RFP but luckily I know the person it’s fixed for,” Rafal-Baer wrote, capping her note with a winky face emoji.
To Rhode Island State Police Sgt. Michael Brock, Rafal-Baer’s email threw the entire bidding process into question.
“This email shows that potential fraud or manipulation of the competitive bidding occurred at the outset of the process,” Brock wrote in his own, 25-page memo. “It calls into question the legitimacy of the process that followed.”
The state issued its formal bid request on March 23, 2021. Five bidders submitted proposals, with two companies, ILO and WestEd, rising to the top. The proposal from WestEd, a San Francisco-based firm with decades of experience, came in $4 million less than ILO.
Despite WestEd scoring higher on the state’s evaluation and drawing support from the bid review team, McKee stepped in to block a potential contract. A series of text messages in May 2021 between McKee and Thorsen show the governor questioning the proposed award to WestEd and, as Thorsen admitted to State Police, ultimately influencing the award process.
WestEd ultimately got a small piece of the final contract — less than $1 million — but the bulk went to ILO. Gretchen Wright, a spokesperson for WestEd, declined to comment on the investigation Tuesday.
The definition of bribery
Bribery consists of two parts: an “official act” and a “personal benefit.” Neronha’s office found the former charge was “satisfied” by McKee’s manipulation of the RFP process. But the “evidence is decidedly mixed,” Neronha wrote, as to how McKee personally profited, or imagined he and his team would profit, from ensuring ILO was victorious in the bid process.
The strongest evidence of a quid pro quo was timing: The communications firm SKDK worked for McKee for the first six months of 2021 as “transition support,” from when McKee was still lieutenant governor until just before the ILO contract was awarded July 1.
Those overlapping timelines warranted “close investigative and prosecutorial scrutiny,” Neronha said, but, “Without such direct evidence, a prosecution for the bribery offense would have to rely on a patchwork of circumstantial evidence and inferences surrounding the award of the contract to ILO and the receipt of SKDK’s services.”
There was also no clear way to delineate how the SKDK money was used to fund McKee’s 2022 candidacy for governor, as opposed to his transition to governor. Magee told State Police that he believed there would be a “Chinese wall” within the funds that would prevent their use in McKee’s 2022 campaign, and that he also told Rafal-Baer and Trainor that the funds could not be used for McKee’s campaign.
“Yet, we cannot definitively answer that question, because, as described above, the investigative record is replete with conflicting witness accounts, emails and other documents that cut both ways,” Neronha stated.
Conclusive evidence of the SKDK work benefiting McKee’s 2022 candidacy would have violated state campaign finance laws, the report added, as SKDK’s consulting would have surpassed the $1,000 limit for in-kind contributions.
Possible disregard of ethics laws was also discussed in the report. McKee met some of the criteria, since his team shared confidential information with Rafal-Baer that would financially benefit herself and ILO. But there was “no proof” that Magee or Rafal-Baer met the standard of “business associate,” the final ingredient in an ethics violation. While Rafal-Baer did help secure funds for the SKDK contract, the relationship “was too tenuous” for Neronha’s office to qualify her as McKee’s “business associate.”
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