Chafee, Schilling respond to Carcieri over 38 Studios

PROVIDENCE, R.I. (WPRI) - Gov. Lincoln Chafee and Curt Schilling wasted no time before responding Thursday to former Gov. Donald Carcieri's first interview about the collapse of 38 Studios, with the former Red Sox having a sometimes heated online exchange with Rhode Island media personalities.

Chafee dismissed the suggestion by Carcieri - who broke a four-month silence about his deal with Schilling in an exclusive interview Thursday with WPRI 12 - that his successor failed to monitor the company's progress and could have done more to save it.

"This was a risky deal to start with," Chafee told WPRI 12. "Looking back at it, it's not exaggerating to say it was insanity to risk that much money in a volatile industry with someone who has never even run a lemonade stand." Carcieri and Chafee were both Republicans until Chafee left the party in 2007.

• Related: Carcieri breaks four-month silence
• Watch: Tim White's full interview with Carcieri

Chafee said he attended all but one meeting of the R.I. Economic Development Corporation's board and saw no indication 38 Studios was in trouble before he and House Speaker Gordon Fox were called to the company's headquarters last April for an alarming briefing.

The governor expressed no retrospective regrets Thursday about how he handled the 38 Studios crisis. "We made the right decision," he said. "I am certain of that." Lawyers are now preparing to sell off its assets and perhaps file lawsuits in an effort to recoup some of taxpayers' potential losses.

Schilling's reaction to Carcieri's interview came after Providence Journal political columnist Ed Fitzpatrick sought the former pitcher's reaction on Twitter. "For the most part he's spot on," Schilling replied. "Gov Carcieri was and is an honest man," he added later. "I knew he could be trusted, regardless."

Schilling continued to dispute Chafee's version of what happened. "The state was NOT surprised, ever, they knew our position every 30 days, only way ANYTHING could have been a surprise would be if no one was paying ANY attention, which was the case," he wrote.

"I am ABSOLUTELY to blame, never denied that, but you better know if the Gov or anyone on that side would have listened it would NOT have happened," he wrote, suggesting the company had a plan to prevent its June collapse into bankruptcy but couldn't obtain money from the state's film and TV tax credit program.

"This was a [$100 million-plus] 'I told you so,' and nothing more," Schilling wrote. "Terrifying, but true."

Other Rhode Island media personalities, eventually including a number of regular citizens, joined in the Twitter conversation. WPRO talk-show host Matt Allen chimed in: "This [EDC loan] program should never have existed. Supposed small government conservatives selling out."

Allen also told Schilling his mistake was in entrusting his company's future to Rhode Island government. Schilling replied: "Totally valid argument, but once you enter into a partnership you have to work, BOTH SIDES, at success no?" He described Chafee's arguments that 38 Studios couldn't secure enough private money as "a complete lie."

Fitzpatrick echoed Allen's criticism and questioned Schilling on his simultaneous support for Republicans who praise small government and acceptance of a taxpayer-backed company loan.

Schilling dismissed that connection as "laughable" and rejected the idea that he's a hypocrite. "I want a smaller gov't, not a government that DOES less, those aren't nearly the same things," he said.

He added: "Neither of you would have done any different, pour [$40 million] of your own money into a [company] and someone offers to help you take it if it means a significantly higher chance you will succeed, everyone would."

A number of local reporters, including WPRI 12's Tim White, repeated longstanding invitations for Schilling to agree to a broadcast interview in Rhode Island, but Schilling defended his decision to engage with the press on Twitter: "No ability to cut sound bites, or pare down column inches here."

WPRO's John DePetro jumped in, saying: "gov chafee was against you from start. Period. I was [the] one who interviewed him on bloody sock insult. Chafee wanted 38 to fail." Schilling agreed, replying: "No question."

After more back-and-forth, Schilling eventually said he had to log off Twitter. "Gotta run, appreciate the questions, I'll talk to the folks who deserve to hear, good, bad, indiffereent, what happened (RI taxpayers and 38)," he wrote at 7:42 p.m., a little more than an hour after the conversation began.

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