RI Lawmaker Wants Subpoena Power in EDC-38 Studios Deal Review

Rhode Island State Representative Karen MacBeth (D-Cumberland) wants the House Oversight Committee to grant subpoena power to a group of lawmakers looking into the Economic Development Corporation's 2010 deal with 38 Studios. Rep. MacBeth says that she wants to extract documents and compel appearances by key figures in Rhode Island's investment in Curt Schilling's now-bankrupt game development studio.

Right now the Committee has no subpoena power, and would require House Speaker Gordon Fox's approval. That seems unlikely, according to experts familiar with Rhode Island politics. Nonetheless, Rep. MacBeth says she will push a proposal for the committee to issue subpoenas.

"I will be presenting it as soon as I have it drafted with a request that it be put on the agenda for a vote," she tells RI NPR. "I can't speak for the speaker."

Rep. MacBeth is calling for subpoena power because many of the documents being reviewed from the state Economic Development Corporation have sections redacted. She would also like to hear from key figures in the 38 Studios deal, possibly including former governor Don Carcieri.

Oversight Chairman Michael Marcello (D-Scituate) said that the committee has already received "thousands of documents, pages of documents, already without issuing a subpoena."

"I believe that she [MacBeth] is misinformed in that she thinks somehow a subpoena is magically going to turn up documents that we didn't get," he added. "I think that if we were to issue a subpoena we're going to get the exact same documents that have already been produced."

All of this talk of subpoena power came after House staffers delivered a report on documents related to the EDC's Jobs Creation Guaranty Program. According to staffers who closely reviewed the documents, the EDC didn't adopt rules and regulations for the Job Creation Guaranty (JCG) program until a year after 38 Studios got its $75 million loan guarantee from the agency – on July 25. An audit report dated June 24, 2011 from PriceWaterhouseCoopers noted that "These circumstances raise substantial doubt about the company's ability to continue as a going concern."

Despite concerns about the stability of the company by auditors, the EDC discussed the deal with 38 Studios only four times between November 2010 and May 2012 – when Speaker Fox and Governor Lincoln Chafee held an emergency meeting with the company and EDC officials. 38 Studios later laid off its staff and filed for bankruptcy protection, leaving Rhode Island taxpayers on the hook for close to $100 million…

Earlier this week it was revealed that the Securities and Exchange Commission (SEC) has an active investigation into the deal between the EDC and Schilling's studio. Top lawmakers claim that they either didn't know about the investigation or could not comment on it due to pending litigation.

We will have more on this story as it develops.

Source: RI NPR

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