Ex-gov. to break silence on 38 Studios

PROVIDENCE, R.I. (AP) -- Former Gov. Don Carcieri said Thursday he plans to break his silence soon on Rhode Island's $75 million loan guarantee for former Boston Red Sox pitcher Curt Schilling's failed video game company.

The Republican, who left office in 2011, told WPRO-AM he will offer the "reasoning" behind the guarantee for 38 Studios, which laid off its nearly 300 employees in Providence in May and filed for bankruptcy in June.

"I have been quiet on it, but I have some thoughts on it," Carcieri, a strong proponent of the deal, told the station from the Republican National Convention in Tampa, Fla.

The board of the state Economic Development Corp. in 2010 approved the loan guarantee for 38 Studios as a way to lure it to Rhode Island from Massachusetts. State officials said the deal would mean 450 jobs and millions of dollars in tax revenue for the economically depressed state, but it was roundly criticized at the time as being too risky.

Commenting on the loan guarantee in a 2010 interview with The Providence Journal, Carcieri said: "There is only a risk if everything goes wrong."

With 38 Studios' collapse into bankruptcy, Rhode Island is now likely on the hook for more than $100 million, when interest is factored in on the bonds the state issued on the company's behalf.
Carcieri told WPRO he plans to address the issue after the Labor Day weekend and that the timing is right. But he pointed out that he has been out of office for a year and a half, saying he is "a long way away from it."

"My information as to what's been going on is pretty limited," he said.
The EDC in June hired an outside attorney to determine whether there is any third-party liability in connection with the loan guarantee. The agency's board this week voted to set up a litigation subcommittee "as part of the next step of looking into possible legal action related to 38 Studios."

Schilling tweeted on Thursday that he imagined Carcieri would have regrets about the deal -- "like me," Schilling said. But he added that Carcieri is a "good man who tried to create jobs and a foundational anchor in the tech district. Had he remained 38 and the state would still be going."

Schilling has accused Carcieri's successor, Gov. Lincoln Chafee, who was critical of the loan guarantee, of having an agenda that hurt 38 Studios. He recently called Chafee a "dunce of epic proportions" and a "buffoon."