Hodgson Renews Push for Independent Commission to Probe 38 Studios
State Senator Dawson Hodgson (R-North Kingstown) is pre-filing legislation Friday to renew his push to establish an independent commission to investigate Rhode Island's losing investment in 38 Studios. Hodgson says he'll work to create a bipartisan coalition to bring the bill to a vote early in the 2014 General Assembly session.
While House Oversight Committee Chairman Michael Marcello has defended his committee's inquiry into 38 Studios, other observers say a legislative panel can't be expected to adequately probe a misadventure that involved the General Assembly. House Speaker Gordon Fox, along with former Governor Don Carcieri and others in a small group of insiders, helped pave the way for the deal.
For a better approach to air the state's losing investment, critics point to how then-Brown University President Vartan Gregorian's Carved in Sand report offered an initial rough draft of history after Bruce Sundlun asked him to probe the state credit union crisis of 1991. A separate nine-member commission was also assembled to investigate the crisis.
Hodgson is eyeing a Republican run for attorney general next year. He has repeatedly called for an independent investigation of 38 Studios, which was lured to Rhode Island in 2011 with a $75 million state loan guaranty. Only one lawmaker opposed a key vote when the General Assembly moved in 2010 to expand the job creation program used to attract the company; lawmakers say they were unaware of the precise purpose of the increased funding. The state Economic Development Corporation later approved the loan guarantee for 38 Studios, and the company proceeded to go bankrupt last year.
Despite calls to go in the opposite direction, the legislature voted earlier this year to begin the process of paying back 38 Studios' bondholders. The failure of the company left Rhode Island taxpayers on the hook for about $90 million, and the General Assembly faces a series of annual votes to pay back more of that money.
Hodgson is filing his bill for an independent investigative commission on the first day to pre-file legislation for the 2014 General Assembly session.
In a letter to his 112 legislative colleagues, Hodgson writes:
"I know that I am not alone in the belief that the response of our government has been wholly insufficient to the task of delivering answers, accountability, and leadership in the wake of this massive destruction of public resources. Swift enactment of the bill and diligent prosecution of its mandate would vindicate these needs.
"This legislation is patterned upon the select commission created by the General Assembly in 1991 to provide a similar accounting for the RISDIC scandal, and allows wide latitude for exposition of negligence or malfeasance in matters involving transfer of public resources to private hands through various loan guarantee programs."
Hodgson closes his letter to other lawmakers by saying: "Working together, the General Assembly can and must deliver an introspective examination of the 38 Studios affair capable of restoring the public's confidence in our institution to lead this state."