Report: Carcieri says state could have aided 38 Studios

Former Rhode Island Gov. Don Carcieri said Thursday that the state could have done more to save former Red Sox pitcher Curt Schilling’s now-failed video game company once he left the governor’s office and Gov. Lincoln Chafee took over.

In his first in-depth interview since the company’s collapse, Carcieri told WPRI-TV on Thursday that he takes responsibility for the $75 million loan guarantee given to the company by the state’s economic development agency. But he questioned whether the state – under the leadership of Chafee – did enough to help the company stay afloat. He called the company’s collapse, and the loss of nearly 300 jobs in Providence, “extraordinarily unfortunate.”

“I will take responsibility for approving the deal,” he said.

“What I don’t know, and I question, is did it fail because it just needed some more money, or did it fail because they (38 Studios managers) didn’t know what they were doing. … That doesn’t look like what happened.”

38 Studios was lured to Rhode Island from Massachusetts in 2010 after Rhode Island offered a $75 million loan guarantee the state said would help bring hundreds of jobs and millions in tax revenue. Chafee and others criticized the loan guarantee at the time. The company filed for bankruptcy in June, potentially leaving the state on the hook for some $100 million.

Chafee said Thursday that while he had deep concerns about the deal before he took office, he became a cheerleader for 38 Studios and did everything he could to support 38 Studios when he became governor. He said the deal should never have been approved.

“This was such a risky deal to start with,” Chafee said, saying Schiling was “someone who had never even run a lemonade stand.”

Carcieri also questioned Chafee’s assertion that the state was caught by surprise when the company’s problems surfaced in the spring.

“Nobody should have been surprised that they were running out of money,” Carcieri said in the interview.

Chafee disputed that Thursday, saying he regularly attended EDC board meetings and stayed up to date on the company’s progress. He said he and other state leaders were shocked when the company acknowledged its financial problems.

Article source: http://www2.turnto10.com/business/2012/sep/13/report-carcieri-says-state-could-have-aided-38-stu-ar-1170826/

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