3 more named to EDC board; new overseer

PROVIDENCE, R.I. (WPRI) - Governor Chafee on Monday nominated three more people to the R.I. Economic Development Corporation's board and tasked a special advisor with overseeing the quasi-public agency as it deals with the fallout from its botched $75 million loan guarantee to 38 Studios.

Chafee's nominees are Roland Fiore, president of South County & Gavel Co. Inc.; Stephen Hardy, a longtime senior vice president at Bristol County Savings Bank who once worked for Chafee's father in the U.S. Senate; and William Holmes, business manager for the Rhode Island Carpenters Local 94 union.

In addition, Chafee said Paul McGreevy, director of the R.I. Department of Business Regulation, will serve as his special advisor at the EDC. McGreevy will work on stabilizing the agency and help the Rhode Island Public Expenditure Council with an independent outside review of the agency it is expected to deliver by Sept. 1.

McGreevy is a Newport resident who spent 13 years in the U.S. Navy before moving on to work as a senior management and IT consultant. Joseph Torti III, DBR's deputy director and insurance and banking superintendent, will oversee the department's day-to-day operations while McGreevy is working with EDC.

On Thursday, Chafee nominated three other replacements for EDC board members who resigned over 38 Studios - Marcia Blount, Pablo Rodriguez and Alison Vareika. Chafee said he's spoken with Senate President M. Teresa Paiva Weed about confirming all six nominees to the board before lawmakers adjourn this month.

"Time is running out and these are good nominees," the governor said.

Chafee said some of the agency's work, such as providing loans and other assistance to small businesses, remains useful. "I don't think EDC's irrevocably lost credibility because of 38 Studios," he said. "There's too much solid foundation of good work that's occurred."

The governor said he doesn't expect to name a new executive director to lead the agency until after RIPEC issues its report in September. Its previous leader, Keith Stokes, resigned last month after he campaigned for the 38 Studios deal and apparently failed to foresee its solvency crisis last month.

"This is a new day on what happens with taxpayer dollars," Chafee said. "We've been scorched. We've been burned." He repeatedly emphasized that he is "conservative" with taxpayer dollars.

Three years ago, the EDC was harshly criticized by a task force led by former Hasbro CEO Al Verrecchia which was convened by former Governor Carcieri. Its findings led lawmakers to make changes at the agency and led Carcieri to appoint a new board, which soon after approved the 38 Studios loan.

John Simmons, RIPEC's executive director, said he is actively seeking out individuals to serve on a working group that will assist his organization with the EDC review.

A newly hired team from the powerhouse consulting firm Deloitte began a forensic audit last week that will examine the video game company's finances stretching back to its founding by Curt Schilling in 2006. The state remains in touch with the company, which is still seeking new private investors, Chafee said Monday.

The governor recalled being told last November that 38 Studios was considering seeking film and television tax credits during a brief conversation with his former chief of staff, Patrick Rogers. Chafee said he expressed opposition to the idea of further public support going to Schilling's company.

Gaming news site The Verge reported Sunday many of the roughly 80 employees of 38 Studios' Baltimore subsidiary Big Huge Games are getting hired by Epic Games to develop a game similar to 38 Studios' first release, "Kingdoms of Amalur: Reckoning."

The Massachusetts Attorney General's office told The Boston Globe it has received complaints from allegedly unpaid 38 Studios workers and forwarded them to the R.I. Department of Labor and Training, which is investigating how employees were treated before they were laid off en masse last month.

The protest group Occupy Providence said it will target the 38 Studios deal starting Thursday as part of a four-day "sidewalk occupation" outside Netroots Nation, the national liberal political conference being held in Rhode Island's capital this week.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog. Follow him on Twitter: @tednesi

Material from The Associated Press was used in this report.