State Report: Gemma’s Investigation, Governor Carcieri & a 38 Studios Lawsuit
Saturday, September 01, 2012
Not surprisingly, the never-ending 38 Studios once again made headlines this past week. Firstly, It appears that former Gov. Don Carcieri may finally be ready to offer an official comment on the 38 Studios bankruptcy. Additionally, Rhode Island is now exploring a possible lawsuit against the failed video game company, which may help the state recoup some of the losses incurred through its $75 million loan guarantee.
In other loan news, the RIEDC announced earlier this week that is prepared to grant a $1 million loan to an upstart solar energy company. In other monetary news, the General Assembly announced that the state’s innovative nonprofit program titled UP! will receive a $100,000 budget appropriation. Additionally, Anthony Gemma has divulged just how much his voter fraud investigation cost.
RIEDC explores possible lawsuit against 38 Studios
On Monday, the Rhode Island Economic Development Corporation voted to establish a litigation subcommittee, which may seek legal action against 38 Studios. The three-person subcommittee will offer “enhanced review and oversight” to legal counsel and “provide timely authority to take action,” said the EDC.
The EDC is exploring legal action in connection with the $75 million loan guarantee it granted to Curt Schilling’s now defunct video game company. Schilling laid of all of his 38 Studios employees in May and filed for bankruptcy one month later.
The creation of the subcommittee comes two months after the EDC hired an outside attorney to investigate any third-party liability in association with the 38 Studios loan guarantee. Since June, Max Wistow, a partner in the Providence firm of Wistow & Barylick has analyzed thousands of EDC documents, according to the Providence Journal. Wistow will reportedly offer his recommendation to the EDC subcommittee momentarily once he wraps up his probe. Gov. Lincoln Chafee, who is chairman of the EDC board, has not divulged whether the state might sue Schilling himself in relation to the 38 Studios disaster.
RIEDC approves $1 million loan to solar energy company
In other loan news, the board of the RIEDC voted on Monday to guarantee a $1 million loan to eNow, Inc., a Providence-based developer of solar panels for trucks and buses.
The loan was approved under new EDC regulations that aim to protect taxpayers by setting limits on loan guarantees. The new rules also require companies to invest a portion of their own money before requesting help from the state.
Since last year, eNow has developed solar energy panels for the roofs of buses, truck, and tractor trailers. eNow’s solar technology is designed to generate clean energy and reduce fuel consumption.
The $1 million loan will reportedly result in 10 new full-time jobs with an average salary of $88,281, according to the EDC.
eNow’s main office is currently located on North Main Street in Providence, but the company plans on expanding into larger spaces in Coventry and West Warwick.
Rhode Island’s EDC has managed that state’s Renewable Energy Fund since 2008.
Former Gov. Carcieri will soon speak of 38 Studios debacle
Although the 38 Studios saga has been ongoing for some time now, one man has been notably absent from the discussion: Former Gov. Don Carcieri. Despite his silence, Carcieri told WPRO-AM on Thursday that he will soon offer his “reasoning” behind the $75 million loan guarantee granted to 38 Studios.
Carcieri added, “I have been quiet on it, but I have some thoughts on it.” WPRO-AM caught up with Carcieri while he attending the Republican National Convention in Tampa, Fla.
As for what information Carcieri may provide, Rhode Islander taxpayers may be left wanting more. “My information as to what’s been going on is pretty limited,” said Carcieri. Carcieri also indicted that he has been “a long way away from it” since leaving office.
38 Studios founder Curt Schilling spoke of Carcieri on Thursday tweeting that the governor is a “good man who tried to create jobs and a fundamental anchor in the tech district. Had he remained 38 and the state would still be going.”
The former pitcher’s statement was an obvious dig at current Gov. Lincoln Chafee, who Schilling called a “dunce of epic proportions” one week ago.
Legislature announces $100,000 budget appropriation for school initiative
On Wednesday, Senate President M. Teresa Paiva Weed and House Speaker Gordon D. Fox announced a $100,000 budget appropriation to support United Providence (UP!), a nonprofit organization designed to manage the turnaround process of Providence’s lowest-performing schools. A first of its kind in the nation, UP! is a student-centered collaboration between labor and management.
The $100,000 grant was approved as part of the Department of Elementary and Secondary Education’s budget. The grant will also be combined with contributions from several other groups, including $100,000 from the Rhode Island Foundation. UP! will utilize the funds to focus on revamping the city’s three lowest performing schools through its innovative formula.
Sen. Paiva Weed spoke of the organizations unique approach at a news conference on Wednesday saying: "The unique, child-centered, approach United Providence is taking to maximize student achievement is particularly exciting because it can be proven successful then replicated throughout the city, the state, and elsewhere.”
Rep. Fox added: “I am proud that the General Assembly is supporting this innovative partnership. Combined with other educational initiatives taking place in our capital city and throughout the state, this funding will make a real difference in the lives of our students and their families."
UP! will likely have an uphill battle ahead of itself. Nearly 25 percent of all Providence district schools have been classified as among Rhode Island’s lowest-achieving schools.
Gemma spent $40k to investigate Cicilline voter fraud
Congressional candidate Anthony Gemma has revealed that he spent approximately $40,000 on a private investigation into voter fraud claims against Rep. David Cicilline. Gemma announced the amount during Tuesday’s debate with Cicilline, calling it “money well spent.”
Aside from divulging the money he spent on the investigation, Gemma once again laid out his evidence against Cicilline, which was mainly a rehash of last week’s press conference. Gemma once again mentioned his claims that Cicilline paid individuals inside of the polls to cast multiple ballots.
Moderator Tim White eventually interjected claiming that Gemma has still yet to provide any substantial evidence against Cicilline. White also took Gemma to task for not divulging his information in 2010, when he supposedly discovered Cicilline’s wrongdoings. Cicilline called Gemma’s accusations “absolutely absurd,” which was greeted by a round of cheers from the Rhode Island College audience. G
emma, on the other hand, received mostly jeers and shouts of “liar” and “where’s the proof?” in response to his accusations.
Stay tuned for the second debate between Cicilline and Gemma on Thursday, Sept. 6.
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