August 31, 2010

38 Studios Loan Guarantee: the General Treasurer Pivots, Then Switches to Offense

Monique Chartier

Further to Andrew's post. Remember that it was just last month that the G.T. was telling Ian Donnis that he favors the Schilling deal.

Now, however,

R.I. General Treasurer Frank T. Caprio said Tuesday he is attempting to block the state’s $75 million loan guarantee promised to Curt Schilling’s video game company, urging the rating agencies reviewing the deal to hold off until a new administration is in office.

Caprio, the Democratic gubernatorial candidate, said he voiced concerns about the loan guarantee to Moody’s Investors Service on Monday and to Standard & Poor’s on Tuesday morning. Both agencies have been commissioned by the state and Schilling’s 38 Studios to issue bond ratings on the deal for institutional investors.

Jeepers, he's mucking around with the bond rating agencies.

Look, no question, this is a bad idea. The loan guarantees issued recently to 38 Studios and other companies should be the last ones issued by the state. We cannot substitute taxpayer funded loan guarantees for the good business climate that the General Assembly inexplicably refuses to create. So I'm pleased that anyone, with or without a bully pulpit, would speak out against this arrangement.

What's confusing is the G.T.'s volte face. Keep in mind that this is his area of expertise. Wasn't he well positioned to examine and understand all aspects of this guarantee before he gave the thumbs up to Ian D? So what has changed in the last thirty days that this went from a deal for which the state should do "everything in a top-shelf fashion" to "a risky moral obligation for the state, which could adversely affect the state’s bond rating"?

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This is just the latest example of the poisonous "anti everything" climate that exists here in Rhode Island. And you wonder why it takes sweet deals to get businessmen to even sniff this place?? It's just so embarrassing to be from here. My hope is Caprio succeeds at stopping this and Schill takes his dream team elsewhere and builds a highly successful company. This place is coastal appalachia and that will never change because of the mindset of so many who live here. Sad!! You can do better Schill. Do YOURSELF a favor and take your business elsewhere. This place is bush league and nothing will change that.

Posted by: Tim at August 31, 2010 10:15 PM

Ok so let me get this straight.

Monique is against this 38 studios loan guarantee debacle. The fact that John Robitaille is for it is really no big deal to her (because he's a Republican.)

What bothers her, however, is that the General Treasurer has come around to her supposed way of thinking and moved to block the deal.

So now she's criticizing the guy who aims to block the deal, which she opposes, and not criticizing the guy who is in favor of it, (again, he's Republican).

Yeah, lots of intellectual honesty here!

And we wonder why this state is so screwed up. Even the so-called "good guys" are really bad.

Posted by: Rasputin at September 1, 2010 9:35 AM

Regardless of where you stand on 38 Studios, Caprio's new strategy of telling the bond agencies to hold off appears to set a very had precedent. That sounds like mucking around with the rules of the game for political gain after he got caught on the wrong side of a hot issue.

Posted by: rhody at September 1, 2010 1:43 PM
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