Advocacy Groups Call For An In-Depth Probe On 38 Studios

Aug 20, 2015

Gordon Fox in the House chamber in 2014.
Credit Ian Donnis/File Photo / RIPR

Three advocacy groups called Thursday afternoon for an in-depth investigation into the state’s disastrous experience with video-game maker 38 Studios.

This comes after Channel 12 reported new revelations involving former House Speaker Gordon Fox (D-Providence).

Former Republican gubernatorial candidate Ken Block, the leader of one of the groups, said someone from outside of Rhode Island is needed to shine a light on the full story of 38 Studios.

"Rhode Islanders across the board are incredibly frustrated that after all this time we still don't really know the story behind 38 Studios," Block said in an interview. "The facts have been hidden from the public. I think that a lot of the pushback that we see on the [PawSox] stadium proposal is in part due to the fact that we haven't had the transparency and answers we need on 38 Studios."

The three groups calling for the probe are the RI Taxpayers Association, Block's Watchdog RI project, and the Rhode Island Center for Freedom & Prosperity.

Speaking on part of the three advocacy groups, Block said, "Ideally, we'd like to see the governor invite, essentially, a special prosecutor-type person to come in, to conduct a no-holds-barred investigation, to tell us, first of all, what happened and why it happened. And then if there were any illegalities that come out of that investigation, to then follow through on handing off to whatever law enforcement is necessary to do the follow-up on that."

In a statement, Governor Gina Raimondo's spokeswoman, Marie Aberger, said, "The governor remains fully committed to uncovering any wrongdoing with 38 Studios. The first step, however, is to complete the ongoing litigation -- this is an important and essential step in establishing facts, proving culpability, and recovering taxpayer dollars. We do not want to interfere or jeopardize this litigation in any way. The governor supports the Commerce Corporation's request to the [Superior] Court to lift the confidentiality order, providing full transparency and public disclosure." (As Ted Nesi notes, Raimondo said, "Yes, I will," when asked during a 2014 debate if she would back an independent probe of 38 Studios.)

State lawyers argue in a court papers cited by Channel 12 that Gordon Fox, who was House speaker at the time, orchestrated the deal for 38 Studios.

The lawyers contend that Fox set the deal in motion prior to a March 2010 encounter between 38 Studios owner Curt Schilling and then-governor Don Carcieri. Until now, the 2010 meeting was thought to mark the start of the state’s interest in 38 Studios.

Block and the other advocacy groups point to how these findings contradict previous statements by Fox, who is now serving a prison sentence for corruption in an unrelated case. They say the findings justify an unfettered investigation into the state’s involvement with 38 Studios.

The attorney general's office has said that an investigation into 38 Studios is ongoing.

Block said that isn't good enough, in part since Attorney General Peter Kilmartin is a former state representative.

"One of the things that we're advocating for as a collective group is that the investigation and the truth-telling occur behind 38 Studios happen from somebody outside Rhode Island," Block said. "We want an unconflicted voice to tell us what happened .... To really get an honest assessment of what happened, and a clear assessment of what happened, we need someone to be doing who's wholly outside any political sphere of influence of Rhode Island politics."

The three advocacy groups say they also plan to call for greater transparency on the possible relocation to Providence of the Pawtucket Red Sox, to avoid that from becoming a boondoggle.

House Speaker Nicholas Mattiello issued the following statement in response to the call for an investigation of 38 Studios: “Former Speaker Fox has admitted to serious criminal offenses and is currently serving time in federal prison. The newest allegation about his involvement in the 38 Studios deal does not change the fact that the General Assembly is not an investigative body. If the State Police, the Attorney General’s office or the FBI feel that an investigation is warranted after learning of this new information, then I would encourage them as the appropriate agencies to do so.”

In calling for a 38 Studios probe, Providence Journal op-ed contributor Steve Frias has cited how the House Oversight Committee investigated Fairmount Foundry in the 1970s.

38 Studios went bankrupt in 2012, leaving Rhode Island taxpayers responsible for more than $100 million. The company was attracted to the state with a $75 million state loan guarantee. The loan was approved by the state's economic-development agency, after the General Assembly voted to create a business-loan program.