NEW: Government Reform Groups Call For Formal 38 Studios Investigation

Thursday, August 20, 2015


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The Rhode Island Center for Freedom and Prosperity joined with other self proclaimed "good government groups" to called for a formal investigation into 38 Studios.  Repeatedly, the General Assembly, the Attorney General and the US Attorney have refused.

Presently, Governor Lincoln Chafee's lawsuits against a range of individuals and companies have secured nearly $17 million in payments.

The statement by the groups calls on Superior Court Judge Silverstein, Governor Gina Raimondo and Speaker Mattiello to take action on related investigations and asks for document releases.  

Specifically, they call for:

1.       We call on Superior Court Judge Michael Silverstein to unseal all documents relating to the 38 Studios affair.  There is a compelling public interest to understand who the key players were in developing this deal, what their motivations were for doing so and how they may have profited from the deal.  We need to understand the dynamics that made it possible for this disastrous deal to be completed - so that we can ensure that it can never happen again.
2.       We call on Governor Raimondo to launch an independent investigation, potentially naming a special investigator outside of any Rhode Island-based sphere of political influence, to look into all participants and actions that led to the 38-Studio deal, so that the public can be fully informed of how this crony deal came to pass.  To function properly as a State, the public's trust must be restored that our elected leaders have our best interests at heart.  We believe that the pushback against the baseball stadium comes largely from a lack of trust on the part of the public that our government is acting in our best interests.
3.       We call on Speaker Mattiello to agree to grant any and all subpoena requests made by Chairwoman Karen MacBeth's House Oversight Committee with regard to the committee's 38 Studios investigation and to publicly support the resumption of committee hearings this fall.
4.       In order to avoid a "38 Stadium" boondoggle, we call on the Governor and the Speaker to immediately and publicly disclose the most recently proposed terms of the Pawtucket Red Sox relocation negotiations, and to pledge to make all future negotiations as public as possible.

Read the Statement Here

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"It is government at its worst when special-interest deals and other major policy programs are secretly developed and implemented by crony insiders, at great expense to taxpayers, without rigorous public debate or adequate oversight by our duly elected state legislators. This disturbing trend of insider government by executive fiat, regulatory despotism, and backroom negotiated deals supersedes the authority of the General Assembly and must come to an end. Further any individuals involved must be exposed and held accountable," said MIke Stenhouse, the Center's CEO.

Ken Block, the chairman of Watchdog RI also weighed in on the situation.

"It now seems more clear than ever that the current legislature, specifically the current Speaker, as well as Governor Raimondo, owe the state's taxpayers a government subpoena power investigation into exactly when, how, and under what arrangement 38 Studios was lured to Rhode Island; the full role of  disgraced former Speaker Fox; and who else knew what-and when. This insider deal resulted in a huge loan liability now owed by taxpayers, a costly state lawsuit, and a disgraced economic development agency. We deserve the full story," Block said.


Related Slideshow: 38 Studios Legal Fees

New state records show that state legal fees associated with the 38 Studios bankruptcy are nearing $1 million. Below is a breakdown of how much each firm has made - and stands to make in the future. Figures are taken from documents provided by the Rhode Island Commerce Corporation. 

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Cohen & Gresser, New York, NY

Billing rates:

Partners: $650-$750/hour
Counsel: $550-$650/hour
Associates: $300-$595/hour
Paralegal: $100-$225/hour

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Cohen & Gresser's Fees:

Total Fees (2013): $102,615.20

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Shechtman Halperin Savage, Providence, RI

Billing rates:

Attorneys: $250/hour
Paralegals: $100/hour
Legal Assistants: $50/hour

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Shechtman Halperin Savage's Fees

2012: $407,899.60
2013: $156,348.37
2014: $19,799.00

Total Fees: $584,046.97

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Wistow & Barylick, Providence, RI

Billing rates: 

Attorneys: $175/hour, $225/hour & $250/hour

Contingency Fee: The RI Commerce Corporation agreed to pay Wistow & Barylick 16 2/3% of the gross of any amount recovered from a lawsuit, compromise, settlement or otherwise. This is not stipulated with the other law firms. 

Note: Wistow & Barylick will only be paid at these rates if the state terminates its contract with the firm. 

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Wistow & Barylick's Fees:

2012: $18.121.05
2013: $90,630.15
2014: $48,054.17

Total Fees: $156,805.37

Note: The above amounts paid to Wistow & Barylick cover the cost of out-of-pocket expenses such as filing fees, costs of depositions, obtaining records, charges for computer-assisted legal research, costs of expert consultants, and the costs of witnesses.   


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