October 19, 2012

"Everyone Knew"

Patrick Laverty

How many times have we heard our incumbent legislators tell us that they had no idea the $75 million addition to the EDC was for 38 Studios? Many times. Even Senator Daniel DaPonte, the Senate Finance Chairman, claimed during his Newsmakers debate that this was done "above my pay grade."

In the first hour on the Dan Yorke Show, Dan is playing audio from the Summit debate between Gordon Fox and Mark Binder. Fox is answering a question about the 38 Studios debacle and even states that legislators are saying that they didn't know, but that it was in all the newspapers. He even said, "Everyone knew."

So there you go. The Speaker is telling us that the General Assembly knew who the $75M was going to be for, in spite of many of them telling us otherwise. Who's lying?

Update: State Rep. Jon Brien called in to deny any knowledge that the legislators were aware that the money was earmarked for 38 Studios, along with a very detailed timeline of the events.

Update: State Rep. Rene Menard called in to also deny knowledge. He added that then-Finance Chairman Steven Costantino was questioned about where the $75M was going to go. Menard said Costantino told them that it was going to be dispersed in one to two million dollars to small businesses.

Update: State Rep. J. Patrick O'Neill called in to also deny knowledge. Said they were merely told that Schilling wanted to bring his company to RI, but there was never any mention of money or amounts. O'Neill claims that Fox was "one of five" people involved in the direct negotiations. Recounted Rep. Larry Ehrhardt offering an amendment to the $75M bill that would have capped the amount to any one business at $10M. Ehrhardt was asked to withdraw the amendment by Keith Stokes, without explanation as to why.

Update: State Rep. Charlene Lima called in to also deny knowledge. Said she questioned who the money was for and where was the transparency. She voted against it in the supplemental budget but then voted in favor of the $75M by thinking that some would go to small businesses in her district.

Update: On Newsmakers, Fox explained that this money was not "earmarked" because that would have been in violation of Separation of Powers. His explanation is the Assembly merely agreed to increase the program by $75M and then it was up to the EDC to decide how it was dispersed. (Starting at 14:00)

Update: Gordon Fox's campaign spokesman Bill Fischer came on to explain that Speaker Fox is not claiming that all legislators knew the $75 million was intended solely for 38 Studios. Fischer additionally stated that not even Fox knew that 38 Studios would get the $75 million. Fischer stated it was up to the EDC to decide what amount that 38 Studios would receive. Fischer announced that oversight hearings will begin during the next legislative session.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

This who-knew-who-didn't bickering is like being angry your gambling addict friend lost the money you loaned him on blackjack instead of poker when you dropped him off at the casino. At a minimum, they knew that a massive amount of taxpayer money would go to the EDC to be loaned out to private companies (on a political basis - who could have guessed?). So 38 Studios was a high-risk/high-reward gamble instead of doing 100 low-risk/low-reward gambles - what difference does it make? It's terrible economic policy either way.

Central economic planning doesn't work. Public-private loan schemes, or "company seeding," or however the statists in the General Assembly and over on RIFuture are marketing it, doesn't work. It has never worked, it will never work. Period. Not one of these legislators can give a principled explanation of why 38 Studios was a mistake compared with any other loan made by the EDC. They can't because they don't understand the fundamentals of why top-down economic development is inefficient.

Posted by: Dan at October 19, 2012 1:18 PM

Rene Menard is out,so that doesn't matter. O'Neill has no opponent. But Jon is trying to win a write-in campaign and he was a co-sponsor of the bill that ended up funding 38 studios. The mailer from the Casey campaign is probably already in print now and all the denials in the world won't undo the damage done by the speaker, who contributed to Casey's campaign.

Who needs two parties when the Democrats so regularly eat their own!

Posted by: John at October 19, 2012 1:38 PM

Me thinks Fox is self destructing before our very eyes. He might be better off saying nothing at all...sorry, didn't mean to give him any good ideas.

Posted by: Max D. at October 19, 2012 3:18 PM

Hey progressive-types and legislators, here is a great opportunity to get in on the ground floor criticizing an EDC deal before it happens for a change:


Instead of finger-pointing over the 38 Studios loan with incoherent, unprincipled ramblings about Carcieri and Curt Schilling after all the damage has been done, now you can take a principled stance ex ante alongside us free market advocates.

So who's willing to step up and oppose this?

Posted by: Dan at October 19, 2012 4:26 PM

Poor Foxy...once the lies start flying it becoming increasingly difficult to remember truth from fiction. Sadly...even if he loses he'll be replaced as Speaker by yet another currupt self-serving democrat. Keep pulling the D lever folks...you'll get what you get.

Posted by: JTR at October 19, 2012 4:31 PM

" I commend the RIEDC Board for its EXTENSIVE DUE DILIGENCE and for taking this significant step to bring jobs to Rhode Island," Don Carcieri said the night the agency approved the loan to Schilling.

Rhode Island's director of revenue said she "was not in favor" of the 38 Studios deal and expressed those concerns DIRECTLY to then-Gov. Don Carcieri

Gov. Carcieri still won't face taxpayers despite the stunning implosion of the $75 million loan guarantee he got them to give Schilling's video game company,

Posted by: Sammy in Arizona at October 19, 2012 4:36 PM

Sammy, what do you consider to be "facing taxpayers"? Because Carcieri did sit down with Tim White on Channel 12 and answered questions. What else do you want? Or were you not aware of his TV appearance?

Posted by: Patrick at October 19, 2012 4:58 PM


If Sammy's comment seems like it's out of date, it's because the Ted Nesi article he plagiarized was from May 26.


Posted by: Andrew at October 19, 2012 5:11 PM

Sammy fills a vital role-he makes us all feel more intelligent.

Posted by: Mike at October 19, 2012 6:43 PM

If you miss one of Sammy's trolls the first time around, never fear, you'll have the opportunity to read it again once it gets recycled, even though it may have lost all of its relevance by that point. It's cool this blog allows spam trolls like Sammy to continue their spammmings unlike every other blog on the planet.

Posted by: Dan at October 19, 2012 6:55 PM

Great post, Patrick.

For the record, below is the excerpt from the Kathy Gregg ProJo article of today containing what Mark Binder and Gordon Fox said. (It's a little unclear when and where Speaker Fox made these comments.)

Binder began his news conference talking about Fox’s “ground-breaking admission” the night before about what he knew when the General Assembly voted to add $75 million to a jobs-incentive program in 2010. The Economic Development Corporation committed the entire $75 million to retired Red Sox pitcher Curt Schilling’s doomed video-game venture, 38 Studios, as a state loan guarantee.

When the bill came up for a House vote, Fox said he knew 38 Studios was talking to former Governor Carcieri’s administration about a big loan guarantee, and others in the House knew as well.

“I am not going to stand here and say that we didn’t know 38 Studios was part of it,” Fox said. “It was all over the press that he was in there talking about that. We now have Reps who will say ‘I never even heard of it. I don’t know who Curt Schilling is.’ ”

Fox said it would have been inappropriate to earmark the money, but “everyone knew.”

He said he trusted the EDC to properly “vet” the proposal. Given the subsequent collapse of the company, leaving taxpayers on the hook for a potential $100 million, “I am sorry for doing it,” Fox said.


Posted by: Monique at October 19, 2012 8:49 PM

This points up another failing of Dan "I want to be liked by the lefty's" Yorke. Someday, WPRO will come to in senses and dump this clown. He is rooting for Cicilline and Fox because he wants to in with the in crowd. What he fails to realize is how much he turns off the loyal listener. Here's what I recommend - Noon to 3:00 at WHJJ 920 Rush! Get lost Yorke!

Posted by: Dan at October 20, 2012 10:11 AM

Too many Dan's on here... Dan #2, you want to go by Daniel or should I?

As a follow-up, to those always complaining about the EDC after the fact, the EDC is having a public meeting at 5pm on Monday, October 22. 315 Iron Horse Way, Suite 101, Providence, RI 02908.

It would be helpful if people actually showed up and told them what a bunch of fools they are and how they're wrecking the economy with these gambles. Tell them the new loans and tax credits they're considering are a horrible idea. I know the progressive crowd won't be there because they actually support the EDC and only attack 38 Studios because a Republican was involved.

Posted by: Dan at October 20, 2012 10:17 AM

"As a follow-up, to those always complaining about the EDC after the fact, the EDC is having a public meeting at 5pm on Monday, October 22. 315 Iron Horse Way, Suite 101, Providence, RI 02908."

All of their Rhode Island assets are being auctioned Tuesday the 23. Coincidence?

Posted by: Warrington Faust at October 21, 2012 9:59 PM

Warrington - Wish I could attend, but I'm travelling on business. Save me a 38 studios logo and I'll pay you back next time I'm in RI. I'd like a memento of failed top-down economic planning from my home state.

Posted by: Dan at October 22, 2012 7:22 AM

this is like being in a crowded subway car in the winter with the heaters going full blast and someone cuts a horrendous fart that makes the air sparkle and everyone tries to look innocent as hell.

Posted by: joe bernstein at October 22, 2012 7:31 PM
Post a comment

Remember personal info?

Important note: The text "http:" cannot appear anywhere in your comment.