Game over for RIEDC head in wake of 38 Studios controversy

PROVIDENCE, R.I. (WPRI/AP) - Rhode Island Economic Development Director Keith Stokes has resigned amid a swarm of public criticism over the quasi-public agency's $75 million loan guarantee to 38 Studios, Curt Schilling's video-game company.

Former Gov. Donald Carcieri hired Stokes, who was then executive director of the Newport County Chamber of Commerce, to run the EDC in January 2010 after Carcieri's initial pick, Ioanna Morfessis, abruptly reversed her decision to take the job.

During his campaign for governor, Chafee strongly criticized Carcieri and Stokes for approving a $75 million taxpayer-guaranteed loan from the EDC to 38 Studios. After taking office, Chafee deliberated at length before opting to retain Stokes at the agency.

Keith Stokes offered his resignation Wednesday as executive director of the Economic Development Corp., Gov. Lincoln Chafee said.

The governor said he accepted it, and thanked Stokes for his service.

"I thank Keith for his service to Rhode Island, not only at the helm of the EDC, but also as a former board member of that agency and as the long-time executive director of the Newport County Chamber of Commerce," said Chafee. "Keith is committed to seeing Rhode Island succeed and I am confident that he will continue to be very involved in the state he loves."

House Speaker Gordon Fox also released a statement on Stokes' resignation.

“Throughout my legislative career, I have worked closely with Keith, dating back to his days with the Newport County Chamber of Commerce.  He was instrumental in working with federal and state leaders throughout the Base Realignment and Closure (BRAC) process to maintain the Navy’s vital presence in Newport," said Fox.

Leonard Lardaro, an economics professor at the University of Rhode Island, called Stokes' resignation "ridiculous," saying he is being held responsible for the mistakes of political leaders like Carcieri, who pushed for the deal with 38 Studios.

"He is absolutely first-rate," Lardaro said of Stokes. "We can't afford to lose really good people like that. We're not going to get anyone better."

After Wednesday’s meeting with the EDC, Curt Schilling said almost nothing to reporters from throughout New England.

“My priority right now is to get back to my company, talk to my team,” said Curt Schilling, owner of 38 Studios.

Stokes met with his staff Thursday morning on the question of whether the mess at 38 Studios triggered his decision.

Stokes quoted novelist William Faulkner to The Associated Press, saying "all of us fail to match our dreams of perfection."

The 38 Studios deal was the most high-profile move the EDC made under Stokes, but the game company now appears to be in financial trouble after defaulting on a $1.125 million payment to the state May 1. Chafee, Stokes and the EDC board met with 38 Studios executives behind closed doors Wednesday to discuss what to do next.

The board did not vote on the request and is scheduled to meet again on Monday.

Before becoming the EDC's executive director, Stokes was a longtime member of the agency's board. He'd previously worked as a senior policy adviser to former R.I. Gov. Bruce Sundlun and executive director of the Omni Development Corporation, a Providence nonprofit. He also served three terms on the Newport City Council.