PROVIDENCE — Senate President Joseph Montalbano yesterday agreed to settle the ethics charges against him for $12,000, the third-highest penalty the state Ethics Commission has imposed.

The settlement, in which Montalbano made no admissions, heads off a court fight over his claims that the state and federal constitutions protect him and other legislators from prosecution based on their votes. A ruling in Montalbano’s favor could have undermined the commission’s ability to enforce the state Code of Ethics where legislators are concerned.

The commission’s lawyers, meanwhile, were ready to prosecute the case against him before the commission unless the courts intervened.

Montalbano was present when the commission approved the settlement behind closed doors yesterday, but wouldn’t answer questions. Afterward, he issued a statement saying that the outcome means “that I failed to complete my paperwork.” He said he regrets contributing “to a cynical view held in some quarters that something is just not right in Rhode Island government, and that for some elected officials, private interest takes precedence over the public good,” a view that he said isn’t true.

Montalbano said he will continue as Senate president and will run for reelection next year.

In the settlement, the commission dismissed two charges based on Montalbano’s votes in committee and on the Senate floor last year in favor of the Harrah’s-Narragansett casino proposed for West Warwick. Commission prosecutor Dianne Leyden said the commission agreed to drop those charges because of the difficulty of proving that Montalbano enjoyed a direct financial gain from his votes.

Of the six other charges, which Montalbano settled for the $12,000 fine, four dealt with his failure to disclose legal work for the Town of West Warwick on property related to the casino plan and two with his failure to file statements disclosing that his official actions in the Senate might involve a conflict of interest.

The president is the top official in the state Senate, making him, with the governor and the House speaker, one of the three most powerful elected state officials.

Max Wistow, Montalbano’s lawyer, said Montalbano has never denied failing to file the required information, and has said it was accidental. “He never denied that,” Wistow said. “He’s always said it was inadvertent.”

Yesterday’s settlement document says that Montalbano wasn’t admitting anything concerning the charges, only that the commission “could find” that he broke the law on the charges that weren’t dismissed.

On the other hand, officials said that the fine Montalbano agreed to pay, and which he described as “appropriate,” was the third highest in commission history. John A. Celona, the state senator caught in a State House influence-peddling scandal, was fined a record $130,000 in July 2006. Former Gov. Edward D. DiPrete was fined $30,000 in 1989 for steering state business to favored companies, although the state Supreme Court later reduced that by half. Both DiPrete and Celona went to prison.

Yesterday’s settlement was a relief for Robert Arruda, the Operation Clean Government board member who filed the complaint that became the basis of most of the charges against Montalbano. Arruda — and commission lawyers — had said Montalbano’s legal tactics threatened to undermine the Ethics Commission’s ability to prosecute legislators for voting unethically.

In early 2006, Montalbano voted to put on the ballot a change in the state Constitution to give exclusive casino rights to the Harrah’s-Narragansett proposal, which the town supported. The voters defeated the amendment. Montalbano was accused of engaging in a “substantial” conflict of interest by voting to put the casino proposal before the voters while he was profiting from legal work for the town.

Wistow, however, argued in a legal theory new to Rhode Island ethics law that any prosecution based on Montalbano’s votes would violate his constitutional immunity as a legislator. The claims were based on the state and federal Constitutions’ “speech in debate” clauses, which Wistow said give Montalbano complete protection from prosecution for his votes.

Wistow went to court to contest the constitutionality of the four charges against Montalbano that were based directly or indirectly on his votes. The case was in early stages in Superior Court, with lawyers expecting it would have ended up before the state Supreme Court. Wistow said yesterday that the settlement leaves those issues unresolved.

Leyden, however, dismissed the constitutional claims yesterday as “a red herring.” Commission lawyers have argued that when the voters created the Ethics Commission and Code of Ethics in a 1986 constitutional amendment, they overrode legislative immunity by saying the amendment applied to “all elected and appointed officials.”

Another ethics case, involving former Senate President William Irons, remains pending before the commission. It had been put on hold while the issues raised in the Montalbano case were addressed.

blandis@projo.com