It took three years for state investigators to untangle the intricate web surrounding a multimillion-dollar state education contract Gov. Dan McKee’s administration awarded in 2021.

But there could still be some threads left to pick apart — just not by the Rhode Island Attorney General Peter Neronha’s office. The trove of documents — hundreds of pages of emails, text messages, contracts and investigative memos —  weren’t enough for the state to press criminal charges, investigators concluded in a report issued Tuesday afternoon.

But that doesn’t preclude a separate probe into whether McKee violated state ethics laws. Hours after the trove of documents was unveiled, Common Cause Rhode Island announced it was considering filing its own complaint with the Rhode Island Ethics Commission.

“The attorney general’s analysis of the code of ethics is flawed,” John Marion, executive director for Common Cause Rhode Island, said in an interview on Wednesday. “He only looks at part of the code of ethics.”

The AG doesn’t doesn’t have the best relationship with McKee: “I acknowledge that it is not very good,” he told reporters at a press conference Wednesday morning.

Yet Neronha insisted being frenemies with the governor didn’t fog his judgment during his office’s three-year probe into a $5.2-million state education contract awarded in July 2021. The deal first raised eyebrows due to the political ties between McKee’s administration and the bid winner, ILO Group.

Asked by a reporter what surprised him about the investigation, Neronha’s answer trailed. But he ultimately arrived at the inelegance of it all — from use of a winking emoji in an email about a “fixed” bid to the governor’s revealing texts that showed his outsized role in swaying the contract from the original awardee to ILO.

“I think I was a little surprised, I guess, with some of the ham-handedness here,” Neronha said.

But clumsiness did not translate to criminality. At the press conference, Neronha parroted what his office’s report said: While there was plentiful evidence, woven together from many threads and “a lot of players,” the end results could not support the weight of proof needed to prosecute.

“The evidence has to be very, very, very strong,” Neronha said.

What the investigation does reveal: McKee “steered” the money for a state contract to reopen schools to ILO, despite the state’s bid review team initially favoring a less costly proposal from a competing bidder, WestEd. ILO was incorporated in Rhode Island just two days after McKee took office in March 2021, and Julia Rafal-Baer, ILO’s co-founder and CEO, is a major character in the report’s narrative, alongside her then-colleague (and former McKee staffer) Mike Magee.

Neronha appeared alongside Rhode Island State Police Colonel Darnell S. Weaver, who was a man of few words compared to the AG. 

“I do not have anything to add to what the attorney general already stated,” Weaver said as he stood against the wall of the conference room.

Ethical concerns linger

Neronha’s investigative memo points to a section of state ethics code that bars public officials from using their office, and confidential information obtained through office, for financial gain for themselves, or their business associates. McKee clearly used his office and access to information about the bidding process to favor ILO, but it’s not clear that ILO leader Rafal-Baer, nor McKee’s advisor Magee, were direct business associates of the governor, Neronha wrote.

Marion believes there could be a case that McKee broke the state ethics provision barring public officials from accepting gifts over $25, based on the $90,000 worth of consulting work McKee accepted from public affairs firm SKDK, paid for by Magee’s separate education firm, Chiefs for Change.

“The AG’s office is not in charge of prosecuting under the code of ethics and it shows in that report,” Marion said.

That power lies with Jason Gramitt, executive director for the Rhode Island Ethics Commission. Gramitt did not respond to inquiries for comment on Wednesday.

However, it’s not unprecedented — though unusual — for the state ethics prosecutorial team to launch its own investigation, even without prompting by an outside complaint from a group like Common Cause.

The Ethics Commission did just that in June 2023, launching probes into a pair of former state officials in the aftermath of the now-infamous business trip to Philadelphia months earlier. The investigation ended in a $5,000 settlement with former state properties director David Patten for four ethical violations — including violating the gifts clause. Former administration director James Thorsen is still fighting the proposed $52,000 penalty from his probe, which found three ethical violations.

Neronha was unsure when asked Wednesday if his office consulted with the ethics commission as part of its criminal investigation.

The state’s top prosecutor did, however, interview officials with the Rhode Island Board of Elections regarding potential violations of state campaign finance laws. Neronha’s office was ultimately unable to disentangle the monetary value of SKDK’s services for McKee as an administrator — versus on his 2022 reelection campaign — making it impossible to penalize the governor for campaign finance violations.

Christopher Hunter, a spokesperson for the Rhode Island Board of Elections, declined to comment on the findings or future actions by the elections board on Wednesday.

Proving ‘someone got X for Y’

Speaking to reporters, Neronha stressed the limited focus of his review.

“If there was a case here, we would have brought it,” Neronha said, and was evasive on whether there was a basis for misdemeanor charges, because his office targets felonies.

“We are focused on very serious misconduct when it comes to government officials,” Neronha said.

Part of the burden state prosecutors faced, Neronha argued, is that “theories of public corruption on which you can prosecute have become increasingly narrow.” A bribery charge, for instance, is anchored on a clear quid pro quo, a something for something else. Demonstrating the relationship between two somethings, however, is easier said than done.

“You have to prove in real time that someone got x for y, and it’s really hard to prove that,” Neronha said — unless you wiretap, have an undercover source with a wire, or the parties explicitly describe their bribery in writing. Reactive responses to potential bribery can be arduous to prove without one of those three things, Neronha said.  

But the lack of criminal charges does not mean there isn’t value.

“If you read the report as a Rhode Islander, you don’t think that procurement was done properly,” Marion said. “If the law is insufficient to prevent that, then the law needs to change.”

Neronha, too, pointed out there is no “bid-rigging statute” in Rhode Island. That’s unlike the federal government, which prohibits the practice via antitrust laws. It is “one of the most common” crimes the U.S. Department of Justice’s antitrust division prosecutes, according to one federal primer. Bid rigging and similar violations under the Sherman Act can result in felony charges with possible punishments of up to 10 years imprisonment and a $1 million fine for individuals and a fine of up to $100 million for corporations.

‘The report speaks for itself’

Neronha praised his office and its work in the name of public transparency. He was far more reserved when asked directly about how the public should view McKee’s actions, and those of his top advisors, as revealed in the investigation.

“The report speaks for itself,” he said.

According to the report, McKee and other key players, including Rafal-Baer, declined to be interviewed as part of the state investigation. Neronha considered, but decided against convening a grand jury and subpoenaing the governor to force him to testify. Without formal charges, he wouldn’t have been able to share results of testimony to a grand jury anyway, Neronha said.

Neronha’s office has for multiple years, including in 2024, proposed legislation to let a grand jury issue reports of findings from investigations once-closed, even if the probe yields no charges. The Rhode Island General Assembly has let the bill die in committee each year.

“Because the General Assembly has not acted on it, I have to balance the relative merits of going to a grand jury versus public transparency,” Neronha said. “I don’t think that’s a place I should have to sit.”

Neronha also suggested there was room for state lawmakers to do “real oversight” in cases like this – not only in making or strengthening state laws, but also issuing subpoenas.

State lawmakers held oversight hearings on the ILO contract in the fall of 2021, resulting in stricter state procurement rules signed into law in June 2022.

Sen. Lou DiPalma, a Middletown Democrat who chaired the Senate oversight hearings on ILO in 2021, said in an interview Wednesday that lawmakers didn’t issue subpoenas because they didn’t need to — everyone asked to participate did so.

But, DiPalma acknowledged that some people named in the investigation weren’t known at the time of the oversight hearings.  Lawmakers also didn’t know to ask Thorsen about text and in-person exchanges with McKee over the proposed contract with ILO, which were revealed in the investigative report.“We didn’t know to ask about that,” DiPalma said. “And he didn’t tell us.”

DiPalma no longer heads the Senate oversight panel, but said he was open to more oversight hearings in light of the report.

“I don’t know,” DiPalma said. “I think those should be looked at again to figure out whether it’s warranted enough. I extremely value the work of the AG, explicitly and implicitly.”

House Speaker K. Joseph Shekarchi and Senate President Dominick Ruggerio in a joint statement Wednesday praised the work of state investigators, but were tight-lipped on future legislative actions.

“Their work will continue to inform the General Assembly’s efforts on oversight and accountability in the procurement process,” they stated.

Some questions answered, but not all

Neronha’s office has closed the proverbial book on its investigation, but unanswered questions remain about parallel efforts by higher up law enforcement agencies. Both the FBI and Rhode Island U.S. District Attorney were conducting investigations in 2022, WPRI reported then, but the present status of those two searches is unclear.

Kristen M. Setera, a spokesperson for the FBI Boston Division, said the office was going to decline comment.

Jim Martin, a spokesperson for the Rhode Island U.S. Attorney’s office, wrote in an email Wednesday, “As a matter of general principle and longstanding practice, the Department of Justice does not comment upon matters that it does not litigate or charge.”

Neronha left one stone unturned, too: The reason for the state investigation’s pause from 2022 to 2023, as noted on the first page of his office’s report. Neronha dodged the question multiple times from reporters and said he couldn’t answer.