Insiders Had Hands All Over Schilling’s 38 Studios Deal
Thursday, May 31, 2012
The owner of the construction company that was awarded a contract to work on the interior of 38 Studios’ downtown headquarters has close ties to House leadership and other prominent local politicians, GoLocalProv has learned.
Steven Nappa, who owns Nappa Construction Management, has contributed over $16,000 over the last decade to top politicians including House Speaker Gordon Fox, Congressman and former Providence Mayor David Cicilline, Providence Mayor Angel Taveras, former House Speaker William Murphy and former House Finance chairman Steven Costantino. In June 2011, Nappa also contributed $1,000 to the Fund for Democratic Priorities, a political action committee maintained by House leadership.
Nappa is also connected with Michael Corso, a Providence lawyer who has made a fortune helping to sell state tax credits and was involved in the earliest meetings between Schilling and Rhode Island officials. The two hosted a private fundraiser at the Peerless Lofts for then-Majority Leader Fox in 2007. Nappa also helped build the movie screen located in the open space next to Tazza, the downtown café owned by Corso.
Corso himself has contributed $11,625 to Fox, Cicilline, Taveras, Murphy and other local politicians in recent years.
On Wednesday, neither Nappa nor the Economic Development Corporation (EDC) responded to inquiries about the amount the construction company made from the 38 Studios deal, but a Providence Journal story from last March cited a carpenter’s union official who said between 15 and 30 employees were working on the project.
Par for the Course
While House and Senate leadership have remained quiet regarding the Schilling’s company in recent weeks, concern over which connected individuals or companies benefited from the 38 Studios deal has only increased.
In addition to Corso and Nappa’s connections to 38 Studios, several top local law firms made hundreds of thousands of dollars off the deal, including Adler Pollock & Sheehan ($124,790), Taft & McSally ($36,990), First Southwest Company ($120,620), Moses & Afonso ($190,000) and Pannone Lopes Devereaux & West ($12,250).
For Common Cause executive director John Marion, it comes as no surprise that insiders may have profited from the deal.
“It appears that the politically connected have benefitted from the 38 Studios debacle,” Marion said. “This is par for the course in Rhode Island politics, however. Powerful construction businesses, law firms, and others have long been beneficiaries of government's largesse and have at the same time been financially supportive of powerful politicians in the state.”
Deal Only Possible Because of General Assembly
Schilling’s loan guarantee was only possible thanks to last-minute legislation that allowed the EDC to expand its Job Creation Guaranty Program from $50 million to $125 million, the exact amount that ended up being awarded to 38 Studios. At the time, lawmakers expressed concern over the lack of information they had regarding the fund, but the bill overwhelmingly passed anyway.
The bill was first included as part of a supplemental budget that passed in the House but never made it out of the Senate. At the time, six Representatives (Rod Driver, Larry Ehrhardt, Robert Jacquard, Charlene Lima, Brian Newberry and Bob Watson) voted against the article in the budget.
“If you don't want it to be a favor factory, kill the article," Watson, who was serving as House Minority Leader, said at the time. “This is like an attractive nuisance for all sorts of skullduggery."
When the issue came up again in May of that year, Watson was the only Rep. to vote against the bill.
Forensic Audit Underway
This week, Schilling, whose company was unable to make payroll in the days before it opted to lay off every employee, blamed Governor Chafee for scaring off potential investors with comments he made about company. Schilling was said to be seeking tax credits to help keep the company afloat, but Chafee was unwilling to offer any more incentives to save the company.
Chafee announced Wednesday that the state has hired Deloitte to conduct a forensic audit of the company.
And while Chafee has said he still hopes to company can find a way to pull through, he has also acknowledged that he isn’t optimistic.
“This is a business that punishes those who don’t know what they’re doing,” Chafee has repeatedly said.
Dan McGowan can be reached at dmcgowan@golocalprov.com.
Related Articles
- 38 Studios Debacle - A Timeline
- 38 Studios Fallout—What Next?
- Dan Lawlor: The Political 1% Need to be Held Accountable for 38 Studios
- EDC Never Discussed 38 Studios After September 2010
- Few Lawmakers Voted Against Deal that Paved Way for 38 Studios
- Future Remains Uncertain for Schilling’s 38 Studios
- Guest MINDSETTER™ Dr. Edward Mazze: 10 Questions for 38 Studios
- Lawmakers Feel Duped by Schilling’s 38 Studios Deal
- NEW: Curt Schilling’s 38 Studios has Insufficient Funds in Bank Account
- NEW: EDC takes No Action on 38 Studios
- NEW: Preview to 38 Studios $50 Million Game Released
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- Schilling Claimed 38 Studios Would Create Over 1,500 Jobs
- Schilling has Invested ‘Majority of Money I’ve Earned in My Life’ in 38 Studios
- Schilling’s 38 Studios Deal Hatched Earlier than Disclosed
- Schilling’s 38 Studios Lays Off Entire Staff—Taxpayers May Be Stiffed
- Special 920 WHJJ Radio Report: 38 Studios
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- Who Created the 38 Studios Deal?
- Who Fought Against the 38 Studios Deal?
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Comments:
pearl fanch
7:27am on Thursday, May 31, 2012
Of course the insiders were rewarded. You might as well start working on the story behind all the corruption taking place now, with the gaming tables at Twin River.
Pssst, the tables are already stored in a locked room at Twin River.
Just like always, the voters won't have a say.
They've always "voted" against a casino in each election, which never made any sense. This time they'll "vote" FOR it. What a coincidence.
Caroline Evans
7:35am on Thursday, May 31, 2012
Look at the typical insider scamming.
And this is just the obvious stuff.. the easy audit trail stuff.
This is the culture of corruption. The cliques who dominate RI politics are cliques of people who simply are not able to act honorably and honestly. It just plain is not in them.
Even look at the insider deals here.... they are pathetically tiny takes considering the magnitude of the losses they dumped on this state.
These clowns cannot even figure out how to be corrupt and make much out of the opportunity. Is it any wonder they cannot sort out what a good investment might be in legitimate terms?
hal morgan
8:18am on Thursday, May 31, 2012
Who owns former BCBS bldg ?
Rob K
8:38am on Thursday, May 31, 2012
1. Rhode Island
2. Zero experience starting or running a video game company
3. Rhode Island
Sounds about right to me.
Caroline Evans
8:48am on Thursday, May 31, 2012
Suppose this boondoggle had created 750 jobs.... which is well over double the promise.
Let us see the math: $75million / 750jobs = $100,000 per job.
Ask yourself if this is even close to sane.
Caroline Evans
8:53am on Thursday, May 31, 2012
And ask yourself this... only half that many jobs were promised and easily half of those were in Maryland.
So the effective cost per job is $200,000 per job anyplace.
And the cost per RI job is $400,000.
And now ask yourself:
What kind of person ever thought this was a good deal?
Someone who is baffled by a calculator?
Or someone who does not care so long as they get their piece of the action?
bob ingerson
8:58am on Thursday, May 31, 2012
say what you want about bob watson , but he was right on this one,and has Benn right on others.the dems gave this to schilling and no one else.
RI WILL BE SAVED
9:19am on Thursday, May 31, 2012
Notice the pattern of Democrats to insider deals... Cicilline's name pops up again, last month your pages reported he received $$ from Capco Steel and helped them get a piece of the connected pie. Democrats are in control and have absolute power! This is what you get. It is time to vote them out and restore balance to our legislature and RI will be saved!
Howard Miller
9:40am on Thursday, May 31, 2012
has one ( only one ) contract ever been awarded to a company or a person whom has not contributed to politicians in the history of the state
Rob K
9:42am on Thursday, May 31, 2012
This is not a Democratic/Republican issue so don't kid yourself. Big Don Carcieri was a big supporter of this and you can check the political affiliations of the EDC and everyone who had their hand in the till. I'll bet it is close to 50/50
Charles Drago
9:53am on Thursday, May 31, 2012
Let's see ...
Anthony Gemma not only publicly opposed the 38 Studios deal; he offered an alternative plan for creating jobs with the $75 million.
David Cicilline is now linked to the scam.
Gemma and Cicilline: Honor and dishonor, respectively.
Gemma and Cicilline: Job creation and job destruction, respectively.
David Cicilline, in his foul, job-destroying dealings with Capco Steel and 38 Studios, clearly demonstrates that he knows NOTHING about jobs -- except how to make them go away. Now Cicilline is trying to get re-elected because, in part, he "works hard" to create jobs. No jobs plan. No record of anything but failure. No truth. All lies, all the time.
All Anthony Gemma has done is offer a spectacular jobs plan, warn against the folly of 38 Studios, and -- over and over again -- tell the truth.
Enough is enough.
Russ C
10:23am on Thursday, May 31, 2012
"While House and Senate leadership have remained quiet regarding the Schilling’s company in recent weeks..."
Huh? Dan, have you been calling Obama and Reid asking for comment on Schilling? Got to be a typo.
John McGrath
10:43am on Thursday, May 31, 2012
I am shocked. How could such a thing ever happen in RI?
Another reason that voting for Cicilline will seal the deal that only the corrupt thrive in RI. But his East Side fans will continue to support their impish little darling.
J. Ferreira
11:35am on Thursday, May 31, 2012
I know that it mightn't be popular in this forum, but if @bob ingerson is going to praise Bob Watson, then let's offer equal praise to Lincoln Chafee for opposing this deal as well. Whether it was election year politics (which makes no sense since Carcieri was on his way out, so Chafee wasn't campaigning against him, per se) or a genuine belief that this deal would be bad for the state, Chafee deserves credit for opposing this fiasco and, now, having to clean up the bloody mess left to him by Carcieri and his minions from BOTH parties, and that includes Speaker Gordon Fox & Sen. President Theresa Paiva-Weed.
Joyce Bryant
11:45am on Thursday, May 31, 2012
Political insiders profit, WOW what a surprise. Keep voting the same politicians in Rhode Island voters.
jon paycheck
12:37pm on Thursday, May 31, 2012
i would like to know how much IBM got paid.
they were supposed to be monitoring the progress of the deal.
it looks like the deal is almost a year behind? was this ever reported?
and why did keith stokes waive the requirement for a written report from ibm?
there are so many questions here.
Fabiano Terrenni
1:04pm on Thursday, May 31, 2012
So when are the names of Montalbano, Ruggiero and Alves going to surface in this debacle? Or didn’t they know what was going on?
Or is the rumor that Alves has become an FBI "source" really true?
Has he really turned on his former colleagues at the General Assembly while still raking in the $$$$ as a highly paid lobbyist?
Captain Blacksocks
1:06pm on Thursday, May 31, 2012
There is corruption to be found in every business deal in RI if it is even partly funded by taxpayer dollars. Campaign contributions, lobbying, cronyism, blatantly incestous partnerships between law firms and legislators....It is how business is done in RI, so much so that nobody even bothers to get upset about it anymore. Does RI have an Ethics Commission? What do those jokers do, what do they get paid, and how to we eliminate them?
Rob K
1:14pm on Thursday, May 31, 2012
"RI Ethics Commission" sounds like a non sequitur.
pearl fanch
1:28pm on Thursday, May 31, 2012
J Ferreira....You want to give Chaffee credit?
Are you out of your mind?!?!?!?
He's been governor for the past year and a half, and has never checked up on the company. What the heck kind of leadership is that?!?!?!? Credit....blame.....call it what you want, but he's just as responsible for this mess.
J. Ferreira
1:55pm on Thursday, May 31, 2012
pearl fanch, YOU WANT TO BLAME Chafee? How completely partisan of you. Just how does a governor fighting a desperate budget situation devote himself to playing watchdog over a supposedly private (?!?) company. Carcierei gave 38 Studios carte blanche and Caprio and the other clowns running for governor in 2010, had they won, would be handing over the keys to the state treasury to Schilling by now. Interesting how small government/laissez faire types can suddenly look to blame the government for NOT regulating business after screaming that they want and need less regulation. Well, here's the perfect storm of consequences for NOT having adequate oversight AND even thinking of investing public funds into a select private business instead of sticking to the proper role of government in business: supplying and maintaining public infrastructure such as roads, bridges, railways, etc.
J. Ferreira
1:57pm on Thursday, May 31, 2012
Actually, RI Ethics Commission sounds like an oxymoron...
Edward Smith
5:34pm on Thursday, May 31, 2012
Can someone explain exactly how Cicilline gets thrown into the mix here? Is it because he received campaign contributions from Nappa and Corso? So has nearly every other successful politician in this state.
We get all lathered up over corruption - and rightfully so. That said the fact that some high profile lawyers got lots of billable hours related to this deal a) doesn't mean they are corrupt, and b) doesn't take those who actually agreed to this deal off the hook.
High profile lawyers get high profile gigs. Perhaps the state should have hired Rob Levine or Brian Cunha instead?
Charles Drago
5:44pm on Thursday, May 31, 2012
In contemporary Rhode Island politics, there are two basic truths:
1. If it stinks, David Cicilline is involved in it.
2. If its criminal, Brendan "Sergeant Schultz" Doherty sees NOTHING (especially any criminality in the Cicilline Brothers' bounced $75K check scam)!
Todd B
12:26am on Friday, June 01, 2012
Rep. Watson, who has significant chemical dependency issues, turns out to have the most lucid perception of the situation.
Gov. Chafee, who has no business experience, offers the insight that the business will punish "anyone who doesn't know what they're doing".
Other insiders in RI made hundreds of thousands of dollars from the deal.
Yet none of this surprises me in the least. Perhaps I've been in RI far too long....
paul zecchino
8:55pm on Friday, June 01, 2012
Wouldn't former federal prosecutor turned novelist, the late George V. Higgins, adroitly employ the Mandeville Talent to convert this mess of money laundering pottage into a first rate novel and film?
Who would play the role of "The Mandeville Talent"'s Marco Piantidosi, the NYC 'businessman' who 'retired' to Key Biscayne to spend his days clad smartly in button down sweaters and those tinted shades that all the psychos wear?
Who'd play crack investigator Baldo Ianucci? Wouldn't he love demolishing this racket?
Doesn't the bouquet from this stink of an aroma similar to that emanating from 'mastermind' Girard R. Visconti's 'Zecchino Estate Grift', in which capital crimes were committed to facilitate diversion of a Living Trust to Lifescam/Brown's 'knowledge center'?
This is turning out to be yet more interesting than first suspected, with Mr. Schilling appearing to be more and more a 'MOB Pigeon', an avian species with which we're most well acquainted.
Paul Vincent Zecchino
Manasota Key, Florida
01 June, 2012
Charles Drago
11:07pm on Friday, June 01, 2012
And don't forget the "B" story -- the misdirection of investigative attention to the gang that couldn't think straight -- the friends of Gordo Fox.
Then of course there are Corso and Nappa -- the Rosencrantz and Guildenstern of our tale.
Life imitates are -- which brings the process full circle.
pearl fanch
12:01pm on Saturday, June 02, 2012
J Ferreira, I'm not, not blaming governor Carcieri, or the reigning GA. They are definitely to blame. I'm simply saying that, as reigning governor, Chaffee was responsible for the oversight of 75 million dollars. HE FAILED.
Now he wants to sit back and say, I didn't want it to happen, but we're hope that 38 Studios pulls through.
No, he had the opportunity to get involved when he became governor. Like everything else, he stuck his head in a hole.
He's just as much to blame.
paul zecchino
2:46pm on Saturday, June 02, 2012
pearl fanch -
Agree. The Governor claims his gainsaying of 38 Studios is not responsible for its predicament. Perhaps not completely responsible, but surely his statements which cast doubt on the venture didn't help.
For him to say otherwise would be to ludicrously assert that statements made by the highest elected official in the state are meaningless. To claim his negative remarks had no effect upon 38 Studios would be like saying that his zealous promotion of another venture would have no effect upon its success.
Words mean things. When spoken by those in posiitons of responsibility, they mean much and often if not always steer outcomes.
For him to try to convince us otherwise begs many questions.
Paul Vincent Zecchino
Manasota Key, Florida
02 June, 2012
Jack Cottone
1:32pm on Wednesday, June 06, 2012
“This is a business that punishes those who don’t know what they’re doing,” Chafee has repeatedly said.
To which business does he refer? Video games? I doubt it. Banking? Venture capitalism? Getting warmer.
Perhaps closer, "This is a state that punishes those who don't know what they're doing."
Jack Cottone
1:42pm on Wednesday, June 06, 2012
Although Dan’s article “Providence Investors Gave Schilling 7-Figure Loan in 2009” is not on the related reading list above, please read! It traces the history of loan money to Schilling’s company which may have been paid off with money from the second loan (yes, this is the second loan coming from RI). Note that Schilling also bought Maryland company Big Huge Games after the first loan.
What were the rules on the RIEDC loan? Was the company allowed to purchase out of state businesses with RI taxpayer money? Got any other good questions anyone?
http://www.golocalprov.com/news/38-studios-loan/