Kilmartin Calls Open Records Lawsuit Against Him “Political”
Tuesday, August 02, 2016
The lawsuit, which was filed by the Energy & Environmental Legal Institute and Rhode Island attorney Will Wray, calls on Kilmartin’s office to release documents pertaining to the group of Attorneys General attempting to investigate if RICO statutes were violated regarding Exxon Mobil’s global warming stance, and the oil company’s ties to free market groups and think tanks, among other pursuits.
Kilmartin’s Public Information Officer Amy Kempe issued the following response following the filing of the lawsuit.
“It is clear that this is yet another means for which climate-change deniers, big oil, and those they convince to do their bidding for them, are trying to forestall a legal and legitimate inquiry. This politically motivated filing will not stop the Office of Attorney General from seeking the truth and does not dissuade the Attorney General’s commitment to protect the environment or to investigate and hold accountable our biggest corporate polluters who try to buy and bully their way out of their responsibility.”
Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity, who assisted national legal groups with the lawsuit, said the response from Kilmartin’s office was “missing the point.”
“The point is if what it is they’re doing is legitimate, they’ll release the documents,” said Stenhouse, of what he says is the AG group's "secrecy pact" documents related to their taxpayer funded activity.
Climate Change, Politics Collide
In March, New York Attorney General Eric T. Schneiderman joined Al Gore and a number of AGs, to announce a coalition of law enforcement officials to working together on “key climate change-related initiatives, such as ongoing and potential investigations into whether fossil fuel companies misled investors and the public on the impact of climate change on their businesses.”
It is the documents pertaining to aspects of that agreement that EELI — and Stenhouse — are attempting to secure.
“Third, the Center [for Freedom and Prosperity] released a report this year that shows exactly what the climate change is agenda is, which we detailed,” said Stenhouse. “We’re not doing this just to do this. It shows how economically harmful it is.”
“The fourth is the question, who’s driving this agenda? Is it a billionaire with special interests financing politicians?” quipped Stenhouse, referring to billionaire environmentalist Tom Steyer, whose political activities — and fundraising — were outlined in a recent Washington Times article.
“This is important to us. This isn’t political,” said Stenhouse. “Rhode Island is 50th in business climate, 48th on jobs and opportunity index, and I could go on. Meanwhile, three of our state’s politicians, which includes Senator [Sheldon] Whitehouse and Governor Raimondo, who just signed on to the group of Governors for a 'new energy future,' are all fixated on this."
“Isn't it time that politicians focus on issues important to Rhode Islanders than on advancing the interests of a dubious agenda? I guess not," said Stenhouse. "I guess it's all about advancing an agenda."
Related Slideshow: Seven 38 Studios Facts You Would Not Believe
Here are the seven facts that you would not (want to) beleive about the 38 Studios deal.
Meetings Started a Year Before When We Were Told
The first story was that Governor Carcieri went to a fundraiser for a WWII Veteran’s event at Curt Schilling’s home and that served as the spark to a meeting between Keith Stokes and the 38 Studios officials to try and lure the company from Massachusetts to Rhode Island.
Then, it was disclosed that meeting Speaker Fox had had meetings earlier in the spring through his relationship with his close friend Mike Corso.
In the documents released Thursday, Bill Murphy attested to how he sat in on a meeting with Corso, Fox and Curt Schilling while he was still Speaker.
But now, emails starting in July of 2009 between Corso and 38 Studios’ Tom Zaccagnino show the wheels were put in motion even earlier than we thought.
If Not for RI, 38 Studios Would Have Closed Within 1 Month
If RIEDC had turned down the deal in July 2010, documents released showed that 38 Studios would likely have missed making payroll the next month.
In a July 7 email from Rick Wester to Tom Zaccagnino, he wrote, “The latest would be the August 15th payroll at this point. I’m having doubts we can get through the 30th."
The RIEDC board approved the $75 million in bonds on July 26.
The Original 38 Studios Deal Was Small and Inexpensive
An internal email at 38 Studios dated February 18, 2010 outlines a Rhode Island staffing plan starting at 10 employees in 2010 and increasing to 40 in the future.
However, RIEDC mandated a high staffing level and thus a high burn rate.
For 38 Studios to receive its last payment the RIEDC agreement required staffing to elevate to 450 headcount.
38 Studios Knew RI Money Was Not Enough to Fund the Company
An email exchange between top 38 Studio leadership and Mike Corso, confidant to Speaker Gordon Fox, in preparation to meeting with the RIEDC Board led by Governor Don Carcieri showed that 38 Studios wanted to keep certain financial realities under wraps.
Tom Zaccagnino wrote to CEO Jen MacLEan, CFO Rick Webster, and Corso, “I really don’t think we should highlight the fact we might be undercapitalized…won’t go over well with staff or board."
Two and a half weeks earlier EDC Board gave preliminary approval and on July 26, the RIEDC Board gives final approval to the $75 million.
Style Over Substance
In October of 2010, RIEDC was preparing a public relations strategy because “the Gubernatorial candidates have politicized the 38 Studios deal.”
The Strategy document outlined the key messages, and the need to “accelerate development of an in-depth Providence Journal story, including offer of access to Board members. The Providence Journal team will be Andy Smith, Paul Grimaldi and Business Editor John Kostrzewa — we will push for Neil Dowling’s inclusion.”
At the same time as EDC was rolling out its PR strategy to sell to the public value of the 38 Studios deal, 38 Studios internal documents showed that the company was tittering on financial collapse. In fact, a demand for payment from Speaker Fox’s confidant for a $500,000 payment could not be met because it would cripple payroll.
An October 27 internal memo from CEO Jen MacLean to Schilling, Zaccagnino, CFO Rick Wester, and COO Bill Thomas said, “After running payroll, we have less than $500K in our Maynard accounts. We simply can’t pay Mike before the bonds close, no matter how much he might wish otherwise.”
The Deal Was Done Before Anyone Could Imagine
How deep were top EDC staff in on the deal to fund 38 Studios?
In an April 12 (2010) memo from RIEDC’s Michael Saul to Mike Corso and RIEDC’s attorney Rob Stolzman, he proposes “Determine whether any local institutions (RISD endowment, RI Foundation, Hasbro, Brown endowment, State Pension fund, etc) would commit to purchase a share of bond issue.” This is just one of ten “to do’s.”
EDC’s top staff were strategizing on how to sell the bonds, months before the bill ever hit the House floor for consideration.
This April 12 strategy session was supposedly just a little over a month after Governor Don Carcieri and Curt Schilling met and two months before the loan guarantee program is signed into law.
Did Rhode Island Pay for Improvements at Corso's Bar
In one email in May 2011, Mike Corso alerted top 38 Studio officials of over $600,000 in change orders to the build out of the Empire Street 38 Studios’ offices.
The change orders Corso pushed for increased the cost of contractor Nappa Constructions’ project cost from $10.9 million to $11.6 million. As GoLocal reported in 2014:
A former subcontractor for 38 Studios is alleging that his firm was ordered to work on former Speaker of the House Gordon Fox's business colleague Michael Corso's bar as part of their contract - and has produced what he says is documentation to prove it.
Project manager Michael Rossi with SyNet, Inc. has revealed a budget for work which he says shows at $25,000 line item for work to be done at Corso's Tazza Cafe in 2011 -- under a job order for the failed 38 Studios.
Warwick-based SyNet bills itself as "the premier design-build low voltage contractor of structured cabling, access control, surveillance and audio visual systems in the Northeast."
"I'm changing everything on job -- these were all no bids. Nappa construction picked Rossi Electric. I realize the job can't be done the way it's designed," said Rossi. "The money was getting kicked back in the form of goods and services to Corso and Fox. I said I'm not doing this. I knew I was getting set up for jail with this. I went out on sick leave, I was done."
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