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NEW: 38 Studios’ SJ Advisors Have Ties To Licht

Wednesday, May 14, 2014


RI Director of Administration Richard Licht

SJ Advisors, the advising firm brought in last week by the State to testify before House Oversight on the repayment of the 38 studios bond debt, appears to have close ties to Rhode Island Director of Administration Richard Licht.

Linda Port, one of two professionals listed with SJ Advisors, has in her bio 25 years experience as a bond attorney -- including as a partner at Mintz Levin.

President of Mintz Levin ML Strategies is David Leiter, Licht's former chief of staff while Lieutenant Governor. 

Records indicate that Mintz Levin gave over $5,000 to Richard Licht when he was a politician.

In a release sent out by the State following SJ Advisors testimony, Port's resume does not include Mintz Levin in her past work experience. 

Contract Award Called into Question

Former SEC lawyer and Forbes contributor Edward Siedle, who last fall conducted an investigation into General Treasurer Gina Raimondo's hedge fund strategy, said he offered to conduct the 38 studios investigation directly to Licht, but was turned away.

"I submitted a proposal to do the work for $50,000 with an impeccable resume, when no one else had submitted a proposal," said Siedle.   "So I reached out to [Licht] with the proposal, and he told me there's currently no contract out to bid, but if you want to send a proposal for review, please do. He acknowledged that he got it," said Siedle.

"Next thing I see, SJ Advisors gets hired -- for $75,000. Not only did I not get an opportunity, they hired a firm for 50% more," Siedle continued.  "My quarrel is not with SJ Advisors -- the state can prove their own due diligence in this case for the costs. But if officials are telling the General Assembly and voters there was only one applicant, that's simply not true."

"It is my recollection that the Governor's office announced that SJ Advisors was the sole applicant at the time," said House Oversight Co-Chair Karen MacBeth. "I wasn't the chairwoman when this happened, so I had to ask them for the RFP. When I got it, I alerted them to the fact that on page 4, it said it was a "confidential" document."

"Just to play devil's advocate, [Siedle] may not have filled out a formal RFP -- but he reached out to the state," said MacBeth.  "However, if there was someone who is qualified, or more qualified, it would be up to the state to consider them."


Related Slideshow: INVESTIGATION: Fox, Corso and 38 Studios

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The Early Years

Early 2000s

Fox was emerging as a powerful leader in the House via his role on the Finance Committee and later as Finance Committee Chair. Corso served on the management team at developer's Buff Chace's Cornish Associates.

The two worked together to write and pass the Historic Tax Credit Legislation.

Bio attached from the early 2000's - Cornish Assoicates Website.

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Insiders Had Hands All Over Schilling’s 38 Studios Deal

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.

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Movie Tax Credits

Corso and Movie Tax Credits

The Providence lawyer who pledged more than $14 million in Rhode Island motion picture tax credits that had not actually been issued as collateral in order to obtain an $8.5 million loan for Curt Schilling’s 38 Studios is now playing a behind-the-scenes role in a Michael Corrente movie that is slated to receive $625,000 in state tax credits, GoLocalProv has learned.

Michael Corso, a top tax credit broker whose loan agreement with BankRI is among several 38 Studios-related matters currently being investigated by state and federal authorities, is one of seven producers for “Backmask,” a horror film currently being shot in Exeter, according to IMDB. Corso’s business partner, Anthony Gudas, is listed as the executive producer and former State Rep. John Loughlin has a small role in the film.


On Monday, the Rhode Island Film and TV Office confirmed the film has received an “Initial Certification Letter” for the tax credits. Corso did not respond to a request for comment.

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Tazza Fundraiser

Questions Surround Speaker Fox’s Relationship with 38 Studios Insider

Several weeks after initial inquiries from GoLocalProv, House Speaker Gordon Fox still isn’t answering questions about a 2007 fundraiser held for him by the lawyer who would play a pivotal role in bringing Curt Schilling’s 38 Studios to Rhode Island three years later.

In March 2007, Michael Corso, Steven Nappa and Robert Britto of Nappa Building Corp. and former State Representative Ray Rickman were listed as the hosts of a private fundraiser held in the Peerless Lofts for the then-Majority Leader. The event, which helped Fox rake in approximately $10,000, was catered by Tazza, the downtown café owned by Corso.

But while Fox’s campaign finance reports from the time include details about several other fundraising events held during the first quarter of 2007, there is no information listed about expenses incurred for the Corso-hosted event, which may constitute a campaign finance violation.

“Speaker Fox has been extremely busy entering the final two weeks of the session, but he will soon be checking the campaign records from five years ago,” Fox spokesman Larry Berman told GoLocalProv on June 4. “If corrections are necessary to the report, he will make them.”

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Fox and Corso

38 Studios Insiders Have Been Connected Since May 2009

The lawyer at the center of the deal that brought Curt Schilling’s 38 Studios to Rhode Island had a business relationship with a top executive at the video game company a year before a piece of legislation that expanded the EDC’s Job Creation Guaranty Program was pushed rapidly through the General Assembly.

On May 29, 2009, Michael Corso, a top tax credit broker whose relationship with House Speaker Gordon Fox helped steer 38 Studios to the Ocean State, struck a deal to purchase credits handed out for the multi-million dollar Stone House hotel project in Little Compton from the Round Pond Management Corporation, whose President was Tom Zaccagnino.


By June of that year, Zaccagnino, who was also the co-managing director at the Wellesley Advisors Corporation in Maynard, MA, had become Vice Chairman and Lead Director of 38 Studios. A month later, Haymarket Capital, an LLC with the same address as the Wellesley Advisors Corporation, was involved with the seven-figure bridge loan a group of Rhode Island investors provided to 38 Studios.

In March of 2010, Zaccagnino and Schilling met with Speaker Fox and former EDC director Keith Stokes in Corso’s downtown law office. By May, the General Assembly had expanded the EDC’s loan guarantee fund from $50 million to $125 million, the exact amount the EDC awarded to 38 Studios later that summer.

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Crony's Bar

38 Studios Contractor Ordered to Install Equipment in Fox’s Crony’s Bar

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."
Representative Mike Chippendale, Senior Deputy Minority Leader and Secretary of House Oversight who is leading the investigation into 38 Studios along with Rep. Karen MacBeth, told GoLocal, "[Rossi] has hit a number of things on the head, things he wouldn't have been able to have known otherwise. He was able to validate some things, and the State Police has said they have determined the [budget] document has credibility."
"We're moving in the right direction," said Chipendale, who along with Macbeth have both been the target of mail threats in the past month. "We've kicked the hornets' nest."
Rossi said when he was working at SyNet, he was aware the 38 Studios work could be a possibility. "When my boss called me to say we got the project, that I was going to oversee the [network infrastructure] work, I thought, "Wow...38 Studios. This is big."
"As soon as I started working, they told me to order cable right away," continued Rossi. "I didn't have a permit. Arguments went back and forth. I walk out, I say I don't have a budget, I'm not doing it. I get berated by my boss to get back on the job. Next day, I get the budget, I'm back on the site -- and there are walls up already, with no permits pulled."
A portion of the SyNet 38 Studios budget document with a line item for work on Corso's Tazza bar and restaurant.
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Rhode Island Cartoonist Takes Aim on Fox and Corso

In the midst of Gordon Fox's 2012 re-election effort, he distanced himself from his longtime friend, Mike Corso.

Rhode Island's iconic catoonist took aim at Fox's claim and artfully tied Corso and Fox together.


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great work here by go local team ... didnt Licht just recently reveal he was negotiating without Chafees knowledge or approval and didn't Chafee inappropriately try to give him(Licht) a judgeship? This whole thing stinks to high heaven..time to bring in the feds!!! oh wait they are already here

Comment #1 by michael riley on 2014 05 13

The administration of the anti-cronyism governor strikes again.

Comment #2 by Max Diesel on 2014 05 13

Stop the presses. Another prominent politician, turned bureaucrat, that has an apparent conflict of interest. Really! Yep, great candidate to be a Judge, which Chafee will do just prior to leaving office.

Comment #3 by Walter Miller on 2014 05 13

Lets be real here. The state hired SJ Advisors because they knew they'd get the results they wanted. Edward Siedle the new hired gun on the scene is obviously not trust worthy in the State's eyes, not to mention he'd probably go off on a tangent and affix some of the 38 Studios blame on Gina Raimondo.

Comment #4 by David Beagle on 2014 05 13

It is disappointing but not surprising we cannot rely on our government to produce an honest report.
I note today's news indicates all 3 Democratic candidates want to use taxpayer funds to bail out the 38 Studios bondholders even though we don't have to, the 2 Republicans don't. For an independent like me, that is significant.

Comment #5 by barry schiller on 2014 05 13

I believe the state lied and said only SJ Advisors were the sole applicant. This is false. Ted Siedle also submitted a $50,000 bid to do the same job and cheaper too! This is the corruption and cronyism of this state. I bet Raimondo who does not like Ted Siedle for he criticizes her unethical ways and secrecy of the pension system which she says is her responsibility...that the people don't have to know what's going on..that she is the watchdog..she is a liar and a terrible watchdog...she is not transparent at all...never was transparent-even with her own company Point Judith. Raimondo with her wealthy corporate pals from NY and Wall Street lawyers/politicians/investors probably said disregard Siedle's bid and go for the Licht connection -SJ Advisors-
Ted Siedle went on to say RI is one of the states whose treasurer is secretive with pension system dealings. RAimondo's handling of the Och Ziff hedge fund is one good example of her secrecy. The Och Ziff hedgefund money is in a firm being investigated with the SEC and the Justice Dept. Their stock dropped 21% and Raimondo is remaining secret in this..she said people don't have to know how it works, that's my job. I am the watchdog...She is some watch dog! Why people are not angry at this secrecy is beyond me...
Siedle asked where is the media in this? They should be after her on the secrecy of handling the pension system There is no media asking what is she doing to keep this secret...Cianci said they are all in bed with Raimondo. The Projo is supporting her for governor and so are the other news media/people like Nesi, etc and boy is Buddy right on target....The question now is will Speaker by "quick coup" Mattiello vote to pay these bonds?

Comment #6 by joi fons on 2014 05 13

Just how much more of this disgusting behavior are we willing to take?

Comment #7 by Robert Anthony on 2014 05 13

There isn't a single honest politician in Rhode Island. They are all insiders looking to wet their beaks.

Is Siedle on the State bid list? You can't just send them a napkin with a number on it and call it a bid.

Comment #8 by Jim D on 2014 05 14

Smells like garbage that gives a stench to RI.

Comment #9 by Gary Arnold on 2014 05 15

that whole group at the governors office is incompetent and not fit to govern

Comment #10 by michael riley on 2014 05 15

I would be the last one to come to Licht's defense, but the first part of this article is non-news. Licht has not been a politician for quite a few years - pre-DUI, for certain, and Linda Port had a long stint at another law firm after Mintz Levin. Leiter, while formerly with Licht, also spent a number of years with John Kerry in various roles. I don't see any big deal, particularly as Mintz Levin writes checks to no small number of politicians.

As for the second part of the article, I don't know how Seidle has appointed himself master of all things RI Investigations. Digging up dirt on Raimondo's pension investments is a far cry from what is needed to investigate 38 Studios.

Lastly, I am surprised that no one has brought up Raimondo's Chief Investment Advisor's book in which she states that the best returns on investments are found in companies that mistreat their employees and offer the least benefits. Shouldn't that be newsworthy?

Comment #11 by David Allen on 2014 05 15

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