State Report: Hurricane Aftermath, the 38 Studios Lawsuit & House Oversight
Saturday, November 03, 2012
This week’s State House Report leads off with a story dealing with the devastating Superstorm Sandy, which involves the state receiving $3 million in federal aid. Aside from storm-relating news, the weekly roundup also examines a pair of 38 Studios headlines, and a new report that grades the state’s General Assembly.
RI gets $3 million in storm road repairs
On Tuesday, the federal government announced that Rhode Island will receive $3 million in relief funds to repair roads damaged by Hurricane Sandy. The money will go to fix roads in Narragansett, South Kingstown, Charlestown, Westerly and Block Island, the towns most ravaged by Sandy’s harsh winds and storm surge on Monday.
"On behalf of our state, I thank President Obama, Secretary LaHood, and Administrator Mendez for their swift action to help Rhode Island recover from the damage wrought by Hurricane Sandy," Gov. Chafee said. "Some of our most important infrastructure – including sea walls that protect communities from surging seas – was damaged in this storm. The swift release of this federal funding will help us take quick action to begin these projects and put Rhode Islanders to work on needed repairs.”
Repairs will start after the state secures construction contracts, according to State Department of Transportation Director Michael Lewis. Rhode Island will also be eligible for additional aid or reimbursements for infrastructure repairs.
EDC sues Schilling over 38 Studios
After months of deliberation, the Rhode Island Economic Development Corporation has decided to take legal action against Curt Schilling and several former associates over the 38 Studios debacle. The suit, which was filed in Rhode Island Superior Court on Thursday, alleges that Schilling and others committed fraud and other acts that deceived the state into approving a $75 million loan guarantee to the defunct video game company.
Aside from Schilling, the company’s founder, the suit also names former EDC Executive Director Keith Stokes, EDC official Michael Saul and EDC secretary Robert Stolzman. The suit claims that Stokes was aware that 38 Studios would run out of money, but neglected to tell the EDC board. Wells Fargo Securities and Barclays Capital, which were hired by the EDC to assist with issuing bonds, are also included in the suit.
Gov. Lincoln Chafee, who has been criticized for his handling of the 38 Studios situation, responded to the lawsuit in a video statement saying: “My message to Rhode Islanders is this: I know you work hard for your paychecks, and for your tax dollars to be squandered is unacceptable.”
The lawsuit did not request a specific dollar amount, but wants Schilling and others to repay the bonds and asks for triple damages. The state is currently on the hook for $100 million including interest.
House to hold oversight hearings on 38 Studios
The House of Representatives will soon hold “substantive and through” oversight hearings on the 38 Studios disaster, according to House Speaker Gordon Fox. Fox says that the legislative hearings will focus on determining just what went wrong with the state’s $75 million loan guarantee to Curt Schilling’s former video game company.
The speaker says that the state deserves to know what transpired “during the vetting process at the EDC, what its review entailed and what occurred after the loan was approved.”
Despite the announcement, Fox previously stated that oversight hearing could hinder ongoing 38 Studios investigations, including state law enforcement's probe into the company’s finances.
New report says General Assembly is making ‘significant advances’
The state’s General Assembly has made major strides toward creating an open and transparent government, according to a new report by Common Cause of Rhode Island. A statement by Common Cause, a nonpartisan agency working towards open government, said, “the legislature passed long-sought changes to the Access to Public Records Act and enacted significant campaign finance disclosure legislation.”
The group utilized 27 Senate votes and 28 House votes in its research, concentrating on several key areas: ethics, lobbying reform, election reform, campaign finance reform, judicial selection and open government. Based on the data, the Senate received a score of 66 percent, while the House earned a score of 68 percent. The results are a noticeable increase compared to last year when the scores were 51 percent and 48 percent, respectively, for the Senate and House.
The results are encouraging according to Senate President M. Teresa Paiva Weed. “The Senate has been pleased to work closely with Common Cause to bring about tremendous progress on a range of important issues, including landmark reforms to the Access to Public Records Act and increased transparency in political campaigns,” said Weed. “I look forward to continuing to work with Common Cause to further improve government transparency and accountability.”
John Gardner, a Republican who was the Secretary of Health, Education, and Welfare under President Lyndon Johnson, founded common Cause in 1970.
Guerra to launch defamation suit against Shallcross Smith
Things are heating up in the House District 46 race between Republican candidate Matthew Guerra and Independent candidate Mary Ann Shallcross Smith. On Friday, Guerra, of Lincoln announced that he would take legal action against Shallcross Smith over a negative attack ad that’s been featured in local newspapers and mailers.
The ad includes the following allegations: that he is dishonest about his teaching credentials, maintains improper Twitter relationships with Lincoln High students, posts photos and text on Facebook that are demeaning to women, has been unemployed or working less than part time hours for years, and that he lives with his parents.
The ad also contains the name of a Facebook page called “Women who wear low-cut tops on Wheel of Fortune” and a photo from the show with the phrase, “Big TI_S.” The answer to the puzzle is "Big Tips," but the sexual innuendo is obvious. The attack stems from a Facebook page that Guerra “liked” and had forgotten about, according to spokesperson Michael Napolitano.
“In the past few days my opponent launched a malicious and libelous attack against me. I assure you that these accusations are false and I am appalled at the depths that someone will go to win a political race. This begs the question, how can someone think in such a hateful, dishonest and deprecating manner?,” said Guerra in a statement.
The four-person District 46 race also includes Independent Paul DiDomenico and incumbent Democrat Jeremiah O’Grady.
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