Redaction error tied to campaign account thefts

By DANIEL KITTREDGE
Posted 7/31/19

By DANIEL KITTREDGE The theft of funds from the campaign accounts of Cranston Mayor Allan Fung and Secretary of State Nellie Gorbea may have resulted from a failure to redact routing and account numbers from a 2018 election report, the state's Board of

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Redaction error tied to campaign account thefts

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The theft of funds from the campaign accounts of Cranston Mayor Allan Fung and Secretary of State Nellie Gorbea may have resulted from a failure to redact routing and account numbers from a 2018 election report, the state’s Board of Elections acknowledged this week.

“We take full responsibility for not redacting the account information within the report which may have been the source of the fraudulent activity,” reads a statement from board Chairwoman Diane Mederos. “We also sincerely apologize for any inconvenience this caused.”

On July 8, Fung’s campaign notified the Board of Elections of a fraudulent transaction involving its account. The transaction involved a $15,000 check deposited with a credit union in New York, Fung confirmed Tuesday.

The Board of Elections’ statement indicates that it “immediately reviewed the Campaign Finance Division’s security procedures over the bank statements received from candidates and committees and the internal recording of the information,” and that based on that review, it was “confident the bank statements in the custody of the Campaign Finance Division were secure and that no account information was obtained thereof.”

On July 19, however, the board learned through a media report that a similar fraudulent transaction had occurred with Gorbea’s campaign account – reportedly for the same $15,000 amount, this time in Texas. The board then reached out to Gorbea’s campaign regarding the incident.

According to the board’s statement, it was soon realized that the Fung and Gorbea campaigns both took part in the Matching Public Funds program during the 2018 election cycle. An investigation was subsequently launched to determine whether the fraudulent activity was connected to that program.

“It was during this investigation it was discovered we posted the 2018 Matching Public Funds Report on the Board of Elections’ website without redacting the routing and account numbers from the campaign checks written by the program's participants to refund the General Treasury 50% of their surplus funds,” the board’s statement reads. “The posting of the 2018 Matching Public Funds Report to the BOE website was done to be informative and transparent.”

Based on that discovery, the board moved to redact the banking information. It also made contact with representatives of Lt. Gov. Daniel McKee and Attorney General Peter Neronha – whose campaigns also participated in the matching funds program in 2018 – and “determined no fraudulent transactions occurred in either account.”

According to the statement, the Board of Elections met with Detective Lt. Chris Schram of the Rhode Island State Police Financial Crimes Unit regarding the Fung and Gorbea transactions on July 23.

“While it is not definite the 2018 Matching Public Funds Report is the source of the fraudulent activity, the detective concluded that it is likely,” the statement reads.

On Tuesday, Fung said his campaign agrees that the failure to redact the bank information was an unintentional oversight.

“We believe it was an honest mistake on the part of the Board of Elections,” he said.

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