Rhode Island Lawmakers Examine 38 Studios Loan Debacle

A Rhode Island House committee opened hearings today to look into the events leading up to awarding a $75 million loan guarantee to former Red Sox pitcher Curt Schilling's 38 Studios. The oversight panel will start by sifting through 8,000 pages of documents related to the loan guarantee, according to what House Oversight Committee Chairman Rep. Michael Marcello (D-Scituate, Cranston) told talk radio station WPRO.

"What went into the decision making process, and what type of factors were put in there to ensure that, you know the money going to be not only well spent, but that it was going to be a good investment," said Rep. Marcello.

Marcello also said that the committee would eventually like to hear testimony directly from former 38 Studio executives and the Rhode Island Economic Development Corporation. Of course many of those company executives are being sued by the state, which means that they would be reticent to provide testimony at this time.

"We're more focused on their due diligence and what was in place, and what they did. And, until that suit gets going, we're having a very hard time getting people to testify," said Marcello.

Marcello said that the committee's work is not meant to prove one way or the other the moral obligation the state has to pay back the default caused by 38 Studios' failure to meet its obligations.

"The focus of the hearings is not whether the bonds should or should not be repaid, at least from my perspective or the majority of the House," Marcello said. "They have to be repaid for a variety of reasons including the long term credit of the state."

We will have more on this story as it develops.

Source: WPRO

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