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High court blocks release of 38 Studios grand jury docs

Politics - Government

PROVIDENCE, R.I. (WPRI) — The R.I. Supreme Court on Wednesday unanimously rejected Gov. Gina Raimondo’s request to unseal grand jury records from the investigation into the failed 38 Studios deal, upholding a lower court decision.

“For many people in this state, particularly those who are currently holding public office, the 38 Studios situation and the company’s bankruptcy, occurring as it did just as the entire country was clawing its way out of the Great Recession, still stings,” Justice Francis Flaherty wrote in a 32-page opinion. “We certainly understand those feelings.”

“However, after careful consideration of the issues ably briefed and argued by the parties, the judgment of the Superior Court is affirmed,” he continued.

The governor had petitioned for the material’s release back in 2017, following the conclusion of the state’s civil lawsuit over the video-game company founded by former Red Sox star Curt Schilling, which went bankrupt after receiving a $75-million state-backed loan.

Raimondo argued that while grand jury secrecy usually means such material should remain under wraps, the “extraordinary public interest” in the 38 Studios saga was sufficient reason to order the documents released. But both Attorney General Peter Neronha and his predecessor, Peter Kilmartin, said doing so would undermine the grand jury process.

Josh Block, a spokesperson for Raimondo, said in a statement, “The governor has worked hard to end the culture of special deals like 38 Studios and to provide more transparency into the way we do business in Rhode Island.”

“While she respects the court’s decision, she is disappointed that the public will not be able to gain additional insight into the failure of the 38 Studios deal,” he added.

State Rep. Charlene Lima, who sponsored a law ordering release of the grand jury documents, called the ruling “unacceptable” on Twitter:

The four-year criminal probe into 38 Studios, which included 18 months before a grand jury, came to an end in the summer of 2016, when Kilmartin and then-R.I. State Police Col. Steven O’Donnell announced that there was no basis to file charges.

Neronha said in a statement he understands “today’s Supreme Court decision may result in frustration on the part of Rhode Islanders who favor more transparency in government.”

“Yet the Court’s decision today is what I expected the outcome to be under the current state of Rhode Island law, which simply does not allow the release of grand jury material in the absence of an indictment, except in very limited circumstances,” Neronha said.

He added, “This is why I introduced last year, and have introduced again this year, legislation that would allow a grand jury to issue a report in the absence of an indictment, with appropriate court oversight and procedural safeguards, in those limited circumstances where doing so would advance the public interest.”

Steven Brown, executive director of the ACLU’s Rhode Island chapter, which filed a brief in support of the release of materials, said the case raised “extremely important legal issues.”

“While we appreciate the court’s thorough analysis of those issues, we continue to believe that the overriding public interest in transparency regarding this exceptional episode in the state’s history warranted disclosure of the grand jury records,” Brown wrote in an email. “Lessons that could be learned from the 38 Studios disaster by reviewing those records will, unfortunately, now be lost to the passage of time.” 

38 Studios founder Curt Schilling had this to say:

Ted Nesi (tnesi@wpri.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

Tim White (twhite@wpri.com) is the Target 12 investigative reporter and host of Newsmakers for WPRI 12 and Fox Providence. Follow him on Twitter and on Facebook

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Providence

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