My Take on the News

Default on 38 Studios loan? What could these people be thinking?


FOX'S UNBELIEVABLE INTERVIEW: House Speaker Gordon Fox finally spoke to a reporter about his involvement in the botched 38 Studios loan guarantee – the day following the deadline for potential opponents to file candidacy papers to run against him. He said the political deadline had nothing to do with his waiting to talk to the media. Does he think we are all idiots? Of course it did! His talk didn't shed much light on his involvement and included at least two more unbelievable assertions – that he was not aware that his friend, lawyer Michael Corso, was working for 38 Studios when Fox attended a meeting in Corso's office in March of 2010 to discuss bringing the company to Rhode Island, and that he was unaware of the hefty size of the intended loan to the company when he packaged it with the $125 million bill that authorized the loan guarantee program. Both are extremely hard to believe. Further, Fox worries that House members may think "...I intentionally misled them, especially to personally benefit myself, which I did not do and would never do. " Of course he misled them! Why else did none of his fellow legislators know that the majority of the $125 million of taxpayer money they were voting for was for 38 Studios? Two things Fox said were on target. That it appeared Governor Chafee's actions toward 38 Studios just before the company's default was intended to "cut off your nose to spite your face." Many of Chafee's actions seemed to fit that statement. Fox also admitted the loan guarantee was not properly vetted by himself or the EDC, saying, "...maybe we didn't have the expertise to do venture capital." Unfortunately, his interview just confirms that we seem to have idiots and cunningly manipulative foxes running the State House.

DEFAULT ON 38 STUDIOS BOND? Three finance "experts" – former state administration director Gary Sasse, former Central Falls receiver Robert Flanders, and Bloomberg News reporter Josh Barro – all suggested that Rhode Island should perhaps purposely default on the approximately $100 million owed to bond holders as the result of the 38 Studios bankruptcy. How can any responsible financial advisor suggest such a thing? Every Rhode Islander should be absolutely appalled at such suggestions! Borrowing money when you shouldn't and spending recklessly is exactly what gets people in trouble in their personal finances. When such folks run out of this easy money and stop paying their bills, their creditors end up with pennies on the dollar from the credit they had extended – and it costs us all in increased prices creditors must then charge in order to regain some of what they lost to these parasites. Now our state government may consider doing the same insidious thing by refusing to pay its bills and defaulting on its promise to 38 Studios bondholders. Our state government has to be the "responsible adult" here and pay the bills it agreed to. Government should not set such a terribly bad example for our citizens by doing the opposite of what it encourages them to do – pay their bills! Additionally, it will be just one more reason for companies to refuse to do business in Rhode Island.

KEEPING SCORE ON RELIGIOUS SYMBOLS: First it was the prayer banner in a Cranston high school. In that case, the violation of our constitution's establishment clause was clear. Regardless how long it had been there, it was in a government building where people (students, teachers and parents) had to enter. The court was right to order its removal. The second case involved the war memorial with a cross atop that was built on Woonsocket public property long ago to honor soldiers killed in World War I. In this case, unlike the prayer banner, the memorial was not meant to be a religious reminder; it was meant simply to honor soldiers. Additionally, unlike the prayer banner in a school, no one has to visit the memorial. The memorial does not seem to violate any constitutional provision. Now comes the third and most recent case – the case of a business owner in Providence, Peter Montaquila, who erected a cross on a public median in front of his business. The very noticeable white cross is inscribed with the phrase "God Bless America." Though the business owner says he erected the cross to honor veterans, there is nothing about the cross that denotes anything other than religious symbolism. Unlike the soldiers memorial where the cross is secondary to the memorial's primary purpose – honoring soldiers – the Providence cross can claim no such thing. It is a religious symbol that relays no message other than a religious one, and it is on public property. It needs to go. Otherwise, Providence is edging over the constitutional line into improper "establishment of a religion" territory. And, by the way, Mr. Montaquila – how do you honor veterans with a cross when many of us are Jewish, Hindu, Muslim and Atheist?

DEFEATING GERRYMANDERING: Kudos to Donald A. Fox, the Republican candidate who lost the District 47 (Burrillville) R.I. House race by a thin margin in 2010 to Democrat Cale Keable. After the narrow Democrat victory, the Democrat-controlled legislature changed (gerrymandered) the district lines to cut Fox's home out of District 47 and put it in District 48 – a move obviously intended to eliminate a strong opponent and help ensure Democrat Keable's re-election in 2012. Not frightened away by the unethical and possibly illegal redistricting by Democrats, Fox has moved so that he now lives in the new District 47 and can again run against Keable. If only we had more citizens like Donald Fox, more folks with the guts to fight the entrenched "good old boy" network at the State House – even if it means pulling up your roots and replanting yourself in a new neighborhood.

INDEPENDENCE DAY: Many of us took the week off and are still celebrating our country’s independence. The fact that we can read this in an uncensored newspaper is the greatest cause for celebration, so long as we remember that we retain this freedom only because others were willing to give their lives to ensure it prevails. Happy Birthday, America!


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