38 Studios revelations show importance of vigilance


Years later, the shadow of the 38 Studios debacle continues to loom over Smith Hill.

Taxpayers are on the hook for tens of millions to repay bondholders following the 2012 failure of former Boston Red Sox pitcher Curt Schilling’s video game company. What had been pitched as a major economic development project quickly proved to be an enormous misstep, and calls for more answers and greater accountability have been constant.

Last week brought significant developments. A WPRI report revealed that according to lawyers for the state, disgraced former House Speaker Gordon Fox secretly met with Schilling and a 38 Studios board member long before first thought – and without the knowledge of then-Gov. Donald Carcieri.

Fox – who is currently serving a federal prison sentence after pleading guilty to unrelated charges, including bribery, wire fraud and filing a false tax return – is also said to have ordered what was then known as the Rhode Island Economic Development Corporation to complete the 38 Studios deal, long before related legislation had been approved.

The revelations come from court documents filed in the state’s lawsuit over 38 Studios, which remains ongoing in Superior Court.

After the report, several local watchdog groups jointly called for a complete, independent investigation of the 38 Studios matter, and for the judge in the lawsuit to grant a motion seeking the unsealing of records in the case. The groups include Watchdog RI, the Rhode Island Center for Freedom and Prosperity, the Rhode Island Taxpayers Association, and Operation Clean Government.

“The newest court document revelations are deeply disturbing on a multitude of levels,” said Ken Block, a former gubernatorial candidate and founder of Watchdog RI. “We deserve the full story.”

“It is government at its worst when special-interest deals and other major policy programs are secretly developed and implemented by crony insiders, at great expense to taxpayers, without rigorous public debate or adequate oversight by our duly elected state legislators,” said Mike Stenhouse, who heads the Center for Freedom and Prosperity.

House Speaker Nicholas Mattiello rejected the call for an independent investigation, saying the General Assembly is not an investigative body and that such action should be left to the discretion of law enforcement. Gov. Gina Raimondo, who last year had pledged an independent probe, cautioned that the state must not take steps that may jeopardize the ongoing litigation, although she voiced support for making the documents in the case public.

For most Rhode Islanders, the new revelations regarding Fox’s apparent involvement in the episode likely resulted in renewed anger and frustration. While some of those targeted in the state’s lawsuit have settled, 38 Studios remains a major loss for the state.

The company has become synonymous with the kind of insider deals and cronyism of which Stenhouse spoke, its name now a catchall for what is wrong with government in the Ocean State. It has been constantly evoked during the ongoing debate over the proposal to build a new, waterfront stadium in Providence for the Pawtucket Red Sox – largely in response to the team ownership’s plan to secure tens of millions in public money toward that purpose.

Rhode Islanders deserve transparency with the stadium talks, and they deserve to know the full truth of how the 38 Studios debacle unfolded. That may be best served through an independent probe, or perhaps soon a trove of documents will be released, shedding new light on the matter.

However the situation develops, we applaud those who continue to shine a spotlight on 38 Studios, and to pursue answers and accountability.


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