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38 Studios: Police Investigate Individuals Connected With Loan Guarantee

| 8 Jul 2014 12:42
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Rhode Island House Speaker Nicholas Mattiello isn't a target of the investigation, but he has been talking to state police.

According to Rhode Island House Speaker Nicholas Mattiello, the Rhode Island State Police have become involved in the 38 Studios loan guarantee debacle. Speaker Mattiello says the police are interested in "certain individuals," but declines to name names, as the inquiry has to do with an ongoing investigation. Speaker Mattiello was majority leader when the general assembly voted to authorize a $75 million loan guarantee program that ended up giving Curt Schilling's 38 Studios a huge cash injection. The collapse of 38 Studios in 2012 shortly after release of its only title, Kingdoms of Amalur: Reckoning, left Rhode Island in the hole to the tune of $100 million, including interest on the loan.

Speaker Mattiello's conversation with the state police - a 10 minute phone call - covered the basics of the passage of the loan guarantee program, and he confirms that, to his knowledge, other legislators have also been contacted by the state police concerning this investigation. Speaker Mattiello has said several times in the past that, at the time the guarantee was being discussed, he had no idea that the entire $75 million was earmarked for 38 Studios.

The loan guarantee was discussed for less than a week, and passed on a 66-1 vote. Former Governor Don Carcieri signed it the same day. The entirety of the loan guarantee was immediately used to lure 38 Studios to Rhode Island from Massachusetts, to Rhode Island's eventual detriment.

38 Studios' IP raised just $320,000 at auction, with its Copernicus described as 'junk' by Governor Lincoln Chaffee. Though the state has discussed defaulting on its loan guarantee, it has been estimated that doing so would put Rhode Island's bond rating at less than investment grade, and leave the state on the hook for anything between $36 million to $361 million dollars, though that estimate has been disputed.

Though former House Speaker Gordon Fox, in charge at the time the loan guarantee was being discussed, is being investigated by state and federal authorities, a law enforcement spokesman has said that this investigation is state level only, and separate from the state-federal case.

"This request [made of Speaker Mattiello] was intended to ensure that any legislator, who has relevant information regarding the 2010 vote on the 'Job Creation Guarantee Program,' provides that information to investigators," says state police Supt. Steven G. O'Donnell. "It is important to recognize that the goal of this request is to ensure that anyone with information, who has not been previously contacted, has the opportunity to present it. No member of the legislature is suspected of wrongdoing simply because of their vote."

Sources: Providence Journal, WRPI 12

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