The Rhode Island Board of Elections (BOE) has fined Johnston Town Council President Robert Russo $2,000 following a campaign finance audit.
According to Richard E. Thornton, the state’s Director of Campaign Finance, Russo paid the fine in full on Nov. 8.
“I’ve been in office 28 years now and never had an issue,” Russo said. “I’ve always self-funded my campaigns.”
Russo represents Johnston’s District 4.
The BOE initiated an audit of Russo’s campaign accounts in August 2021 “due to Russo’s failure to reconcile a variance between his campaign bank account balance and his 2020 Q4 campaign finance report ending balance” and his alleged failure to file campaign finance reports.
Russo has acknowledged he made mistakes, and said they were due to a misunderstanding of pertinent campaign finance laws.
“It was clearly unintentional; I didn’t realize, even though it’s your own money, you have to report it as campaign activity,” Russo said, adding that he didn’t realize he had to report six dollars per month in bank fees as “campaign activity.”
“I didn’t have any campaign activity, and it was my money,” he explained on Tuesday. “I misunderstood the directions that were given to me, so I had to pay the fine for a rule violation. I didn’t think I had to physically write checks to myself and close the account down.”
The board reviewed campaign finance reports and documentation from the period between Jan. 1, 2017, and June 30, 2021.
The BOE requested documents, and in October 2021, they received depository account bank statements for the nearly three-year period. Russo said he gladly turned the documents over to BOE auditors.
According to the campaign finance audit, a $22,344.60 loan repayment was reported on the 2017 Q1 campaign finance report, which brought the reported account balance to zero, and then the account was dissolved. Russo loaned the money to his own campaign.
“The repayment did not occur as was reported and the account should not have been dissolved,” according to the audit.
Zero expenditures were reported on the four campaign finance reports filed during Russo’s 2018 campaign, however a $5,500 loan repayment, $625 in political donations and $77 in bank fees were spent from the campaign bank account during 2018.
“Concurrent with the filing of the 2018 Q4 campaign finance report, the account was again dissolved and should not have been,” according to the audit.
Russo spent $16,726.50 on loan repayments, and $179 in bank fees from the account from 2019 Q1 through 2020 Q2, “but due to the dissolution filed in 2018, no campaign finance reports were scheduled to be filed for the period,” according to the audit.
“The campaign dissolved twice (2017 Q1 and 2018 Q4) when it was not eligible due to funds remaining in the campaign bank account,” according to the audit. “By improperly dissolving the account, Russo avoided filing up to 10 campaign finance reports and submitting two bank account statements.”
The audit determined that the loan repayment of $22,344.60 was inaccurately reported on a campaign finance report, as the funds were not expended from the campaign bank account, in violation of state election laws.
The loan repayments, political donations and bank fees were disclosed on campaign bank account statements, but not disclosed on campaign finance reports, also in violation of state election laws.
And “the campaign dissolved twice when it was not eligible due to funds remaining in the bank account,” and “copies of Russo’s 2018 and 2019 campaign bank account statements were not submitted,” both in violation of state election laws, according to the audit summary.
The audit contains an “auditee response” from Russo.
“Russo acknowledged he failed to file two campaign finance reports due to his attempt to reconcile a variance which existed between his campaign bank account balance and his campaign finance report ending balance as of Dec. 31, 2020,” according to the audit. “Russo also acknowledged making a mistake in reporting. Prior to dissolving his campaign account with the Board in 2017, Russo recalled speaking to a staff member who instructed him to do a repayment of loan to dissolve. Russo explained that since the money in the campaign bank account was largely his loan proceeds, he believed he could leave it there and did not realize it must be fully transferred out of the bank account as a condition of dissolving his campaign account with the Board. Russo believed that the subsequent political donations made from the campaign bank account were personal transactions and not campaign activity.”
Russo signed a consent order.
“Russo hereby acknowledges that he unintentionally violated several provisions of Title 17, Chapter 25 as noted above; filed the two past due campaign finance reports and properly reconciled all reports and statements to date,” according to section 4 of the consent order with BOE.
Russo waived his rights to any further hearings or legal challenges.
Russo had 120 days to pay the $2,000 civil fine.
“As soon as I found out what the fine was, I paid it a couple of days after,” Russo said on Tuesday.
The BOE routinely audits campaign finance accounts of candidates running for town, city and statewide office.
Russo, a personal injury lawyer, has served on the Town Council for nearly three decades. He expects to run for office again next year, but would not commit to another run for Town Council.
“It depends on which office I run for,” Russo said. “Stay tuned.”
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