There will be a day when Rhode Island moves beyond 38 Studios, but that day is a long time off. The public release Thursday of tens of thousands of pages of documents is just one more step toward trying to get a better understanding of Rhode Island's most recent scandal. So with that in mind, thanks for stopping by for my weekly column. Your tips and thoughts are welcome at idonnis (at) ripr (dot) org, and you can follow me all week on the twitters. Here we go.
1. For all the new details in the 38 Studios document dump, the picture that emerges mostly reinforced the existing view of how political insiders (Gordon Fox and Michael Corso) were involved at the outset, and how the project got wired to move ahead in the absence of appropriate skepticism from elected officials and business leaders alike. The documents offer a window on the relationship-based decision-making that takes place at the Statehouse, as seen in part by the $75 million bumping up of the so-called job creation guaranty program later used to attract 38 Studios. Former EDC employee Sean Esten and former state budget official Rosemary Booth Gallogly were among the small number of people raising important questions about 38 Studios. It should have been a red flag when state government in more prosperous Massachusetts and the Bay State's venture capital community elected not to invest in 38 Studios. Yet these concerns were brushed aside. Rhode Island will likely continue to face the fallout for years to come. In one such example, with state lawsuit defendants Wells Fargo and First Southwest appearing unlikely to settle, at least for now, a high-profile trial could play out next year against the backdrop of the legislative budget process and the gearing-up of re-election campaigns.
2. Gordon Fox apologized to Rhode Islanders when he was sentenced for corruption in June. Yet if Fox was truly sorry, would he share what he knows about 38 Studios? That's one of the big questions left hanging by the former speaker's extensive taking of the fifth during two depositions. Of course, it's possible that talking could expose Fox to further legal jeopardy, or perhaps complicate life for his associate, Michael Corso, who also clammed up during the deposition process. What is known is that Corso got $2 million for his role in aiding 38 Studios, and Fox was having financial problems that, he says, led him to take bribes and pilfer his own campaign account. (Update: Corso's lawyer, in a statement to WPRI, says Corso experienced millions in losses due to 38 Studios.)
3. The 38 Studios mess exploded when the company went bankrupt in 2012, 21 years after the credit union credit greeted the start of Bruce Sundlun's first term as governor. Both scandals were by the byproduct of cronyism. Yet the banking crisis sparked a reform movement and a subsequent series of changes, including legislative downsizing, four-year terms for state general officers, and changes in the selection of judges. The 38 Studios case has sparked the creation of coalition of groups calling an outside investigation, among other steps. Yet there haven't been any tangible changes, as the story of what went wrong with 38 Studios continues to slowly bleed out. Former Republican gubernatorial candidate Ken Block, writing on Facebook, traces the root of the problem to Rhode Island's unusually strong legislative branch: "The most powerful political figure in RI is the Speaker of the House, who is elected by a couple of thousand people as a Representative, then has to get elected by a majority of Reps as Speaker. To win the Speaker's spot, the winning candidate cuts back room deals like crazy with other Reps. The whole thing is corrupting and corrupt." Across the partisan aisle, Democratic Governor Gina Raimondo would no doubt welcome an increase in her executive power. Yet this kind of institutional change is not going to happen in the absence of a broader, bolder public movement.
4. In the view of more than a few local observers, 38 Studios is causing an already cynical public to adopt an even dimmer view of politics, and they think the continuing fallout will discourage good people from seeking elective office. John Marion, executive director of Common Cause of Rhode Island, and a close observer of the Statehouse, offers these recommendations as an antidote: "Common Cause believes that the policies we have been pursuing will help us guard against these failures in the future. Restoring the full jurisdiction of the Ethics Commission over the legislature, enacting meaningful lobbying reform, fully implementing Separation of Powers through serious advice and consent and active legislative oversight, amending the House and Senate rules to empower the rank-and-file and decentralize the flow of information in the General Assembly, amending our public records law to lift the carve out for the correspondence of elected officials. All these changes, and others, are necessary to move us forward. If we give those who seek office a more meaningful role in the process, by empowering the rank-and-file, people will want to fill those seats. If we reduce the role of fundraising in our elections we will encourage those whose goal is to make good policy to run for office. People need to demand that their Representatives and Senators make the necessary changes in the wake of 38 Studios, and resist the temptation to go along to get along on Smith Hill."
5. Rhode Island's economy has slowly emerged from the recession, helped by broader improvement in the US. So does the chilling effect caused by 38 Studios' bankruptcy flare anew following the release of the documents? The reflection on the Statehouse is not a good one, although the sheer number and complexity of the documents could limit out-of-town coverage of the latest details. The Raimondo administration appears to pushing on a variety of fronts to try to develop the economy, and remaining passive has not helped to improve things. "We need to learn from mistakes, and we need to move forward," Raimondo said in a statement Friday. If the state is lucky, 38 Studios may one day be remembered mostly as a cautionary tale of how to not pursue economic development.
6. While Pawtucket Mayor Donald Grebien is maintaining his call for the PawSox to remain at McCoy Stadium, that continues to appear to be an unlikely outcome. For starters, the team has remained consistent in saying that staying at McCoy is not an option. And neither House Speaker Nicholas Mattiello or Governor Raimondo appear enthused about using public dollars to pay for improvements at McCoy. “The business model at McCoy Stadium is outdated and attendance has been continually declining," Mattiello said in a statement to RIPR. "It would take a state investment of tens of millions of dollars to make the upgrades that are necessary there. I would weigh that against a business model that has the potential to work and generate money for the state at a different location. I would consider any proposal, but I am reluctant to invest significant state dollars at McCoy." Raimondo spokeswoman Marie Aberger said the administration is "open to exploring options regarding McCoy Stadium and other locations, but only if it makes sense for Rhode Island taxpayers" by being fair, benefiting the state, and growing the economy." Grebien shared his view this week on RI Public Radio's Political Roundtable and Bonus Q+A. "Clearly, we're going to be advocating to Boston to help try to change the model that they have and have them refocus in on Pawtucket." Grebien said. He said if the PawSox ultimately do leave McCoy -- a former swamp -- the best-case scenario could include involve attracting another minor league team, a business, or building a new "mega" high school there and/or relocating City Hall functions.
7. With the PawSox ruling out their preferred site on the former I-195 land, the Victory Place location appears like a potentially strong contender. Holy Cross professor Victor Matheson has remained skeptical that the PawSox would leave Rhode Island, and Worcester officials seem about disinterested in using a big public subsidy as their RI counterparts. Then again, the very negative public reaction to the Providence proposal probably may not have left Larry Lucchino with a very good taste, so the likelihood of an out-of-state move is hard to pin down.
8. The scrap between Lincoln Chafee and Curt Schilling seems unlikely to end any time soon, even if Thursday's document dump didn't include undisputed evidence for Schilling's contention that Chafee undermined 38 Studios. It was no secret the former governor took a distanced approach to the project he opposed as a candidate. Would closer monitoring have yielded a different result? Chafee rejects that possibility. He also praised the release of the documents, saying, "This is not a matter of 'he said, she said.' It’s a matter of what actually happened."
9. Speaking of Chafee, the Democratic presidential candidate closed a campaign release this week with a reference to Yoda, the spiritual figure from the Star Wars series: "Not only do we have to fight Islamaphobia because it is wrong and stands against the best principals of these United States, but also because such fear leads to aggression which manifests itself in policies that end up making the United States less safe. Not to mention poorer and less legitimate. Violent radicalism can never work, and will only make more suffering. But that is the exact lesson we need to learn ourselves. I am indeed frightened terribly by the rise of the Islamic State. They horrify the entire world. We must act. But in our Age of Information, we cannot solve our problems with airstrikes or a McCarthy Inquisition. We must solve our problems by providing solutions that address the root causes. That means diplomacy, that means economic development, that means global cooperation. Fear and intolerance cannot accomplish such things, only inhibit them. Politicians who depend on scaring voters endanger our nation. Republicans would be wise to heed the words of the great Jedi Master Yoda: 'Fear is the path to the Dark Side. Fear leads to anger, anger leads to hate, and hate leads to suffering.' There are too many people scared. We must be courageous."
10. State GOP Chairman Brandon Bell's ethics complaint against Donald Lally may have legs, since the state Ethics Commission voted to investigate the complaint. Meanwhile, conservative writer Justin Katz broke the news of how Governor Raimondo's administration is choosing not to release public records related to Lally's hiring.
11. As I reported earlier this week, longtime Democratic operative Peter Baptista has a new private-sector gig.
12. Rhode Island Republicans are staging a grand opening to celebrate their remodeled headquarters next Thursday, October 1, 6-8 pm, at 1800 Post Road, Suite 17-I, Warwick. The event is being hosted by GOP Chairman Brandon Bell, First Vice-Chair Russ Hryzan, National Committee members Lee Ann Sennick and Steve Frias, and co-hosts Eileen Grossman and Luis Vargas .... Rhode Island Democrats, meanwhile, are celebrating a new location on Sunday, October 4, 2-4 pm. The address is 200 Metro Center Boulevard, Suite 1, Warwick.
14. Will the Mashpee Wampanoag casino planned in Taunton, Massachusetts, help or hurt Twin River's desire to establish a convenience casino in Tiverton? FWIW, Twin River calls its plan the best way to maintain Rhode Island's third-largest revenue source.
15. Kate Brewster, who has led the organization now known as the Economic Progress Institute for 11 years, is stepping down to head the Jonnycake Center in Peace Dale. Brewster succeeded her friend, the late Nancy Gewirtz, the institute's co-founder, in leading the organization. EPI senior policy analyst Rachel Flum is taking over for Brewster at the EPI.
16. Coming Tuesday, September 29, 5:30-7 pm, Brown University's Taubman Center is presenting a timely public policy forum at Friedman Auditorium, 190 Thayer St: "The U.S. Military in a Dangerous World: How Much is Enough?" The panel includes Senator Carl Levin, former Chairman of the Armed Services Committee; Nicholas Burns, former Ambassador to NATO, currently Goodman Professor of Diplomacy and International Relations, Harvard Kennedy School; and Paula Thornhill, Retired U.S. Air Force Brigadier General, currently with RAND Corporation. The event is free, although registration is required.
17. Republican Barry Hinckley, who challenged Sheldon Whitehouse for the US Senate in 2012, is out with a new company, YotMe, billed as "the first public app for private parties." The company has high hopes. As YotMe's VP of entertainment said in an email, "We are so proud to be another FUTURE, fortune 500 company born in Rhode Island!"
This post has been updated.