Allan Fung: GOP challenger Ken Block was fined for illegally funneling money to his Moderate Party

During the June 17 Providence Journal - WPRI-TV debate between the Republican candidates for governor, Cranston Mayor Allan Fung said his GOP rival, businessman Ken Block, was caught illegally funneling money to the Moderate Party that Block founded. That was before Block changed his affiliation to become a Republican.

The comment came after Block criticized Fung for accepting campaign money from the city's police union. (The department was ultimately caught up in a parking ticket scandal, a controversy Fung has been accused of mismanaging.)

Fung, in response, said he was not going to be lectured on ethics by someone who "has been fined by the state Board of Elections for funneling money into his Moderate Party."

Fung repeated the allegation two minutes later, telling Block, "The fact that you were fined and had to admit that you funneled money illegally to the Moderate Party speaks for itself."

To evaluate Fung’s claim, we first turned to The Journal’s December 2009 story. We also examined emails and the original consent decree signed by Block.

Block founded the Moderate Party in 2007 and was its chairman in 2009. He successfully sued the Board of Elections in federal court over its rules that hampered establishment of new political parties. He would subsequently be the Moderate Party's candidate for governor in the 2010 election.

On Monday, Sept. 21, 2009, he made a $10,000 party-building donation to the state Moderate Party. Most political donations are capped at $1,000 each year per person but that cap increases to $10,000 if the money is designed for "party building" to cover expenses related to staffing, rent and utilities, but not to winning a specific election.

That same day, Block sent an email to Richard E. Thornton, director of campaign finance at the Rhode Island Board of Elections, asking if, "Using the most extreme example, an individual donor can make a $10,000 'party building' donation to every State Committee and every Town Committee of every political party in the State every year."

The goal was to establish Moderate Party town committees in all 39 cities and towns.

Thornton initially wrote back to say that would be allowed.

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But 74 minutes later, Thornton sent a followup message saying, "I need to do some additional research . . . before I can confirm that your assessment is accurate."

"OK, Rick. Please let me know when you have more clarification on this issue," Block responded.

Thornton then said the board would need to issue a full advisory opinion on the matter. Block, already at odds with the board over the federal lawsuit, didn't want to wait. He subsequently informed Thornton that he had made a second $10,000 donation, this time to the Barrington Moderate Party Town Committee.

But two days later, the Barrington group transferred the money to the state Moderate Party.

Ultimately, the board concluded that Block had violated campaign finance law in two ways: first, by making the second donation and second, because the Barrington committee had shuttled the money to the state committee.

The two sides eventually settled for a $2,000 fine, to be paid personally by Block, who also  signed an admission of wrongdoing.

"I do believe that given the time and energy, we could have proven that we were right. But the election would have come and gone by then," Block said at the time. "It just made much more sense to put it behind us."

Today, Block argues that when he sought advice, "They never actually said, 'No. Don't do this. You can't do it.'"

"We were completely in the open about doing this," Block said. "Their overreaction to what we had done is a classic Rhode Island political payback story."

Fung, during the debate, didn't go into details. He simply said that Block was "fined and had to admit that [he] funneled money illegally to the Moderate Party."

We rate the claim as True.

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