| | Advanced Search

 

Arthur Schaper: Grand Theft Auto Cicilline—MINDSETTER Arthur Schaper examine's Cicilline's role in Prov's…

Five Live Music Musts – April 18, 2014—Great vibes await

Report: Preston Murphy Leaving URI for Boston College—Preston Murphy Leaves URI for Boston College

EXCLUSIVE: Bryant Tells Grads No Selfies with President at Grad—Prohibiting selfies?

PC Athletics gets high marks—Friar winter sports #1 among Big East schools...

NEW: Providence’s Al Forno Featured as a Best Pizza Spot in the US—Another accolade for Al Forno

John Perilli: Peter Neronha, US Attorney & Rising Political Star?—He could be tough to beat...

NEW: Kate Simons Joins Shawmut Design as New Project Manager—Will manage construction projects for state's top hospitals

Local Songwriter Parodies Gordon Fox and Calamari Legislation—Check out these political parodies for yourself

Michael Riley: Rhode Island’s Potential Pension Nightmare—Headed for disaster...

 
 

Speaker Fox Cops to Campaign Finance Violation; Writes Check to Cover 2007 Fundraiser

Wednesday, July 25, 2012

 

House Speaker Gordon Fox on Tuesday wrote a check to the business owned by 38 Studios insider Michael Corso to cover previously undocumented expenses from a March 2007 fundraiser, according to a letter obtained by GoLocalProv.

The $648 payment came nearly two months after initial inquires into the event, which was hosted by Corso, Steven Nappa and Robert Britto of Nappa Building Corp. and former State Representative Ray Rickman. Fox spokesman Larry Berman said the payment will appear on Fox’s third quarter campaign finance reports.

“To be in compliance with campaign finance regulations, I am enclosing a check to cover the expenses,” Fox wrote in a letter addressed to Tazza Café, the Westminster Street lounge owned by Corso. “I am basing the amount on approximately 30 people who attended and a menu which included shrimp, cheese and crackers, grapes, and beer and wine. As there was limited food, I have estimated the cost to be $20 per person, in addition to 8% sales tax.”

The event was originally expected to be a small fundraiser held by Rickman, but Corso and Nappa took the lead on the event, with Corso offering catering services. According to a source in attendance, the event consisted mostly of individuals involved in the historic tax credit business, which Corso was connected to until moving on to film tax credits several years later. Records show Nappa contributed $1,000 to Fox.

According to a Providence Journal article from April 2007, Fox, then the House Majority Leader, raked in “$10,000 or so” at the $100-per-ticket private fundraiser, which was held at the Peerless Lofts, a property owned by Arnold “Buff” Chace.

Fox, Corso & 38 Studios

Just over three years later, Fox, the newly minted Speaker of the House, met Curt Schilling to discuss the former Red Sox ace’s video game company for the first time. The meeting, which included Fox, Schilling, 38 Studios executive Thomas Zaccagnino and former Economic Development Corporation (EDC) executive director Keith Stokes, was held in Corso’s downtown law office.

Approximately two months later, the House jammed through legislation that increased the EDC’s Job Creation Guaranty Program by $75 million (from $50 million to $125 million), the exact amount Schilling would later receive to move his company to the Ocean State. Fox has said repeatedly that he did not know the EDC planned to award Schilling the majority of the available funds.

Corso, by then the state’s top film tax credit broker, was hired as a lawyer for 38 Studios.

Nappa,ended up securing the contract to build out the interior of 38 Studios’ Empire Street headquarters. Separately, Nappa also received a $250,000 taxpayer-funded loan from the Providence Economic Development Partnership (PEDP) in May of 2009.

Tax Credits

Fox has defended the $75 million loan guarantee provided to 38 Studios, but the company never managed to turn a profit. After running up a $4-5 million-per-month burn rate, the company’s executives worked with Corso to attempt to secure additional financing from the state through film tax credits beginning late last year.

The company received initial certification for the tax credits in December 2011 and less than a month later, Corso pledged over $14 million in credits as collateral to obtain an $8.5 million loan from BankRI to help keep the company afloat. State and federal authorities are now investigating the loan.

By June, the company, which had already laid off its entire staff, filed for bankruptcy. Documents show 38 Studios LLC has less than $22 million in assets and owes just over $150 million to over 1,000 mostly-unsecured creditors. The state is the largest secured creditor at $115.9 million.

The largest unsecured creditor: Corso, who is owed over $11 million. Court records also show Corso was wired $232,000 by 38 Studios a month before the company missed its payment to the EDC and just over two months before the bankruptcy.

State Never Issued Tax Credits

Schilling has consistently pointed a finger at Governor Chafee for scaring off potential investors after Chafee told reporters the state just trying to keep the company “solvent” in May. Schilling maintains the company had interest from several groups, but many backed away following the Governor’s comments.

Chafee has called the company's first game, “Kingdoms of Amalur: Reckoning," a flop, which Schilling disputed until 38 Studios executives Bill Thomas and Rick Wester told the bankruptcy court judge that sales fell well short of the 2 million copies they expected to sell.

During the hearing, Thomas and Wester also suggested that a local investor was willing to loan the company $15 million as late as the morning the company filed for bankruptcy if the state signed off on tax credits.

 

Editor's Note: The original version of this story incorrectly stated Steve Nappa's construction company was in receivership shortly before it received the 38 Studios contract.

 

Dan McGowan can be reached at dmcgowan@golocalprov.com. Follow him on Twitter: @danmcgowan

 

Related Articles

 

Enjoy this post? Share it with others.

Comments:

Bobby Richardson

If anyone believes that fundraiser only cost $648, I've got a bridge in Brooklyn to sell you.

Isn't this completely illegal? Fox never bothered to report a fundraiser where he made $10,000. How many contribution weren't reported?

Dan, will he be fined?

vin coia

another unscrupulous incident uncovered that the untrustworthy fox is involved in .
any accountabilty for these actions ?

Gary Arnold

Close down Fox and the GA, it is a plunder farm for unemployable politicians and friends. Let's hire a business management team that gets paid on performance for the good of what they do for RI and it's citizens.

Joel Hovanesian

Rhode Island....State of corruption. Will the voters ever learn?

David Beagle

He's an elected Rhode Island democrat, is ANYONE surprised at ANYTHING he does, gets caught at, or doesn't get caught at?

Charles Beckers

Second photo in this piece is pure tabloid journalism and unworthy of a first rate news organization.

Blais Hazelwood

There isn't a doubt in my mind that the Speaker had his hand in the cookie jar during the entire 38 studios deal. Time for some changes on Smith Hill. Real changes not more of the same.

Ned Rivers

So Corso owns Tazza...

BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA, BOYCOTT TAZZA!

Captain Blacksocks

Dummies in RI will rush to relect him. I hope taxes go up 50%. I guess it's the only way regular people will realize how all the corruption in this state hurts them.

dis gusted

Vote out Gordon Fox. Gordon is a liar and hypocrite and part of the 38 Studios debacle.
Now he writes a $648 check to cover his lawyer buddy Michael Corso's restaurant Tazza's costs...
He is unscrupulous and the people in his district should not be voting this unethical self serving deal maker back into office.
People ofDistrict 4 in Providence
Vote him out
Vote him out
Vote him out
He is not serving you. He is serving himself.
Fox never even bothered to report a 10,000 fundraiser...This is illegal. He sould be in jail for non disclosure.
People of Providence, District 4
Vote him out
Vote him out
Vote him out
Also Vote out Fox's leadership buddies -Nick Mattiello, Majority leader- Helio Melo- shead of Finance and chief architect of the budget
They are hypocrites and liars.
They are not serving constituents.
These lawyer politicians serve themselves
They all were in on the 38 Studios deal..
Vote them out.
Mattiello, Fox, Paiva Weed .they are supposed to be the leaders of the GA
They are nothing but self serving sneaks.
Fellow Democrats, don;t vote them back in....
Helio Melo doesn't have an opponent. He dropped out. Write in a candidate's name......

Replace them all
Vote out Fox
Vote out Mattiello
Vote out Paiva Weed...
Clean house

bill bentley

$648? So, Fox can be bought for so little? All politicians are self-serving, has been that way since Rome. All these guys are Machiavellians trained by some Catholic or Protestant sages. Like anyone here really thinks there are good guys out there? Give me a break. Power corrupts, plain and simple. Mix politics with money and you have absolute corruption. I don't care who they are. You can't get elected without money. And you can't get money without owing somebody. Is this so difficult to figure out? Maybe only rich people should have power; yeah, like a benevolent dictatorship. Yeah, that's the ticket.

Joyce Bryant

While these GA pigs in the State House are playing with huge quantities of money do any of them think about the people who work in Human Services who had their paychecks cut 5%. Do they know these people are sharing apartments to make ends meet, do they know that they are getting their food at Food banks? Actions have consequences. Sadly though these people at the State House will Not be voted OUT.

Carol DeFeciani

What a CROCK -o-shite! I run a restaurant. You cannot feed 20 people INCLUDING ALCOHOLIC BERVERAGES!! for $648!!

WHEN ARE THE FEDS GOING TO SHOW UP? Please district 4 voters - this guy is ripping off the entire state and you put him back in office??

And he does ABSOLUTELY NOTHING for the LBGTQ community. Hems and haws and now election time is coming and he suddenly wants to push through same-sex marriage. WHAT A SCUMBAG.

And remember - his sister got caught pushing counterfeit $20s. This kind of corruption must be INBRED! SEND HIM TO JAIL!




Write your comment...

You must be logged in to post comments.