Former Allies Spar Over Bill Related to 38 Studios Loan Deal

Earlier this year, it seemed like the new Rhode Island House Speaker Nicholas Mattiello and new House Oversight Committee Chairwoman Karen MacBeth were on the same page when it came to investigating went happened with the failed $75 million 38 Studios loan deal.

But then Mattiello announced he would not authorize subpoenas to the key players in deal. And then on Wednesday, MacBeth sent Mattiello a letter formally objecting to the "failure of the House Finance Committee" to hold a hearing on her bill to prohibit payment of the 38 Studios bonds – something the Speaker is strongly against. The legislation she and her co-sponsors introduced on January 30 says that "the state shall not make payment on the moral obligation bonds related to 38 Studios."

Mattiello has said multiple times publicly that the state needs to pay the investors who purchased the $75 million in state-backed bonds that financed the now-bankrupt video game company, or risk taking an even bigger beating in the financial markets in the future and face a downgraded credit rating that could make financing major projects in the state very difficult.

But in a letter to Mattiello dated Wednesday, MacBeth said the House rules guaranteed a hearing she never got on her bill. She pointed out that she made the request on February 12, but (in violation of House rules) the bill "was not given a hearing within the required 30 days of submission nor was it given consideration by the April [committee-action] deadline."

"I am objecting to the failure of the House finance Committee to adhere to the [House rules]…and hereby request that you order the immediate discharge of said bill," she wrote.

Mattiello has not publicly responded to the letter, which came to light a day before the finance committee is expected to vote on a new budget bill that includes the next $12.3 million payment to the bondholders for the failed deal.

MacBeth’s co-sponsors included Democrats J. Patrick O’Neill, James McLaughlin, Spencer Dickinson and Republican Michael Chippendale.

Source: Providence Journal

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