Even the Winners are Losers in 38 Studios Fallout


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(via Wikipedia)

With all of the financial trouble coming out of Curt Schilling’s 38 Studios, quite a number of Rhode Islanders are probably justified in saying “I told you so.” And probably another bunch aren’t justified, but are saying it anyways. But here’s the thing, beyond the “things worked out the way I said they would” factor, do you actually feel good?

I don’t. I can’t rejoice in this turn of events. I certainly doubted the feasibility of it, but I wanted those doubts to be proven wrong. Was anyone truly hoping that 38 Studios would fail? They shouldn’t have been. Success would’ve been sweet.

But the problem remains that this was approved in the first place. It shouldn’t have been. You can practically hear the thoughts that were running through our politicians’ heads; World of Warcraft makes gazillions of dollars. Imagine if we could get in on it. You can see how easily that temptation could sway people to advocate for this sort thing, especially if they’re almost entirely unfamiliar with the world of video games except that it makes a ton of money. Notice that the national press rarely plays up the gaming industry’s flops, instead focusing on the amazing successes of games like World of Warcraft and Call of Duty. Does anyone but gaming media focus on failures of titles like Sonic Unleashed?

What’s becoming increasingly apparent in all this is that large swathes of our government are suckers. It’s bad when they get swindled by the Institute for International Sport, or when a Major League Baseball pitcher comes along offering to create a World of Warcraft-killer. It’s bad not only because it costs the state tons of money, but also because it undermines the credibility of our government.

It’s surprising how much incompetence a credible government can get away with (acquisitions by the U.S. Defense Department come to mind). Rhode Island doesn’t have the luxury of having a highly-credible government. We’re perceived (wrongly) by even our own citizens as being exceedingly corrupt. Know-a-guyism remains a powerful tool for success. And then you see our politicians fall for prestige projects like the Institute for International Sport or 38 Studios.

What remains astounding to me is just how little of the beauty of Rhode Island our politicians see. Take our small business community. These are some of the most vibrant, interesting, and truly dynamic businesses in our state. And yet, they face a hostile business climate almost completely aimed at cutting them off at the knees. They’ve received almost none of the help that GTECH and 38 Studios got.

That’s a huge issue here. Our politicians are overly focused on luring outsiders to the state through sweetheart deals, instead of focusing on what actually attracts people to Rhode Island; its culture and people. People are truly enamored with Rhode Island, how much art per square mile we pack into it; how much food we create. Our quirky small businesses are the ones doing all the work to find new economic niches, and they get nothing for it; not even recognition. Instead of focusing on making Rhode Island function for the people who already live here, we’re attempting to forcibly graft large outside businesses onto it. We can’t compete with the lumbering bulls.

Instead of playing to our strengths; our small size, our access to the ocean, our cultural dominance, and even our agricultural production; the economic “plan” for Rhode Island seems to be find big company and lure big company to move here. We must work to create a better climate; some of that will mean attacking laws that stifle innovation, such as the ones that make Rhode Island one of the most hostile states towards cooperatives. And occasionally, this will mean guaranteeing loans for businesses. Some have criticized this as “picking winners and losers.” But perhaps that would be all right, if the winners weren’t always outsiders, and the losers weren’t always Rhode Islanders.

38 Studios Debacle: RI’s Own Green Monster


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Curt Schilling was a magnificent baseball player for a number of years. He was instrumental in removing the Curse of the Bambino for the Red Sox, and who can ever forget the ‘Bloody Sock’? Great stuff indeed. While it is evident that Mr. Schilling displayed significant talent on the diamond, his recent exploration into the world of business has come up a bit short.

Some pretty intelligent political and business types came up with the idea of giving the hard throwing Mr. Schilling $75 million to move his video game business to Rhode Island. Initially, a number of folk questioned this move but eventually their doubts were set aside and it was full speed ahead for 38 Studios.

Well, we all know what happened. The 38 Studios project appears to have fallen on hard times. Many in R.I. are asking why? Others are pointing fingers and assigning blame. I think all of this is a waste of time. The real question that needs answering is this: what did you think was going to happen?

You’re telling me that a bunch of business types got together and the best they could come up with was – let’s try the retired baseball star with little or no real business experience. How did this ever get by the Board Room? The equivalent would be having the highly respected business leader Gary Sasse being selected to start the 7th game of the World Series. Not gonna happen.

I’m hoping that somehow we will be able to sort all of this out. R.I. (and the country) is in the midst of a difficult financial crisis. We’ll need smart people making sound business decisions to help navigate us through this mess.

I’m wondering if the ghost of George Herman Ruth is trying to get back at the Red Sox. Basically, the Curse Of The Bambino R.I. style. The Sox got off to a difficult start this year and now 38 Studios. This possible explanation makes as much sense as anything else we’ve been hearing.

Curt Schilling is obviously a pretty bright guy. He is an insightful baseball analyst. But maybe not an astute business leader. While he extolled the virtues of 38 Studios it was a number of local politicians and business leaders who bought into the concept. Now it appears as if the Ocean State has its own ‘Green Monster’ – only this one is financial.

I recently read that gambling revenue is our state’s third highest source of income. Did you ever think that this and supporting 38 Studios would be among our best bets? I am sure we can do better than this. I am sure we can find ways to support our schools, promote real economic development and create an atmosphere of trust and cooperation amongst our political leaders. Right now its nothing but goose eggs. Not only are we experiencing a major financial problem we are also experiencing a leadership crisis as well.

Ciccone Bill Would Repeal Marriage Equality Order


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As we first reported last week, Sen. Frank Ciccone is pushing a bill that would weaken Gov. Chafee’s executive affirmation that Rhode Island recognizes same sex marriages performed in other states.

The Democrat from Providence submitted on Thursday “a joint resolution of the House and Senate on Thursday rejecting the order’s assertion,” according to the Projo.

Marriage Equality Rhode Island responded to the filing with a press release saying:

“Gov. Chafee’s executive order sent a powerful message that all Rhode Island families should be valued, respected and treated equally under the law. It’s a sad day for our state when members of the Senate would introduce a resolution whose ultimate purpose is to strip Rhode Island citizens of their civil rights. Sen. Ciccone’s position is indefensible, and we urge the members of the General Assembly to reject this outrageous assalut on equality, common sense and fundamental decency.”

A bill that would legalize marriage equality has not yet been heard by a Senate committee yet this year, and its chances are looking increasingly grim with some hoping to be done with the session by June 1.

Chairman of the Judiciary Committee Sen. Michael McCaffrey does not support the bill, but I haven’t yet asked him if it would at least have a hearing.

Ray Sullivan, of Marriage Equality Rhode Island said he hasn’t heard if there will be a hearing.

We haven’t been told officially or definitively whether or not we’ll receive a hearing on our legislation,” he said in an email. “That being said, we would not be surprised if the Senate did not schedule hearings.”

Taveras Bikes to City Hall, Creates Velo Comission


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As part of Bike to Work Week, Providence Mayor Angel Taveras pedaled from his home in the Mount Pleasant neighborhood to City Hall this morning. More importantly, he announced that he’s creating a Bicycle and Pedestrian Advisory Commission for the Capital City.

“Cities that make a commitment to walkable and bikeable living are healthier cities, with a more dynamic and engaged quality of life,” Taveras said. “The Bicycle and Pedestrian Advisory Commission will move Providence forward in our efforts to make biking and walking more regular modes of transportation for more of our neighbors.”

The five-member Commission, who will be appointed by the mayor, will study:

  • Changes in laws concerning bicycles and pedestrians
  • Coordinate cooperation on bicycle and pedestrian matters
  • Advise the public and the City on matters affecting the relationship between bicycle and pedestrian transportation and parks, schools, transit stops, and other major facilities
  • Incorporate bicycle and pedestrian planning in the City’s Sustainability Action Plan.

The Department of Planning and Development will provide administrative support to the Commission.

 

Tea Party Pledge: ‘Forget the Needy, Help the Greedy


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A fellow named Frank Sloan sent me this pretty funny video this morning that takes a lyrical and humorous look at anti-tax pledges and the theory of austerity. Check it out:

Stokes, Schilling Take Hits but Carcieri Is to Blame


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While Keith Stokes might be the one to have lost his job and Curt Schilling might lose his business, the person most responsible for the 38 Studios financial fiasco is former Governor Don Carcieri.

The CEO governor billed himself as having the business background necessary to boost the economy and create new jobs. But as it turned out, Carcieri was the worst steward of the state’s fiscal situation in a generation or more.

He’ll now be forever remembered as the one who wanted the now-infamous guaranteed gamble/guaranteed loan to 38 Studios which seems almost guaranteed to fail. And this comes on the heels of Rhode Island finally recognizing that his aid cuts to cities and towns simply pushed the burden onto local property taxes, an added expense that the poorest cities in the state couldn’t withstand.

Carcieri’s credibility is literally vanishing before Rhode Island’s eyes.

Almost as soon as mayors and media pundits started to blame Carcieri’s cuts for the financial struggles of our highly distressed cities, his swan song and biggest economic achievement, the dreaded 38 Studios deal, seems likely to enter the annals of fiduciary disasters.

The last guy to cause Rhode Island so much fiscal pain was Joe Mollicone, and he only made off with $13 million. Carcieri’s got that beat more than five times over. In fact, Carcieri’s ill-fated decision to invest nearly $100 million in an ex-baseball player’s ability to develop video games could cost the state about a quarter of what it saved on pension reform this year.

Speaking of which, there are those who blame Carcieri for exacerbating the pension problems in Rhode Island, too. When he laid off state workers, he drastically reduced the number of people paying into the retirement system while more people were retiring than ever.

One has to wonder what Carcieri was thinking – I mean, I can’t imagine he would have made this loan when he was working in the private sector at Old Stone Bank so why did he do so when he was working for the public sector? Was he star struck by Schilling? Is he a secret video game junkie? Did he actually think this was a good deal for the state? Of course hindsight is 20/20, but it seems the only thing that makes sense is that Schilling sold him snake oil.

Ironically enough, prior to the 38 Studios debacle, Carcieri’s biggest public blunder was having the Narragansett Indians beat up for not paying taxes on cigarettes they were selling while opposing their efforts to develop a casino. But a casino would have generated twice the number of jobs as 38 Studios and the taxes the smoke shop owed paled in comparison to what Carcieri invested in 38 Studios.

It’s all evidence that CEO’s don’t necessarily make for good government leaders. The two jobs just aren’t the same. Carcieri was a great executive (and he’s a really nice guy) but he was a disaster as a governor. It will be interesting to see if he remains a visible part of Mitt Romney’s presidential campaign. Romney, another CEO governor, had the good sense to at least act like a moderate while he was the governor of Massachusetts. Carcieri never seemed to realize that politics is the art of the possible, not of the ideological.

Forget About Schilling, Stokes; Let’s Rethink EDC


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As we think about the potential debacle that 38 Studios represents, it’s worth putting a quarter into the time machine and revisiting some great moments in EDC history.

This is from a 2009 column I wrote about EDC (link – scroll down to “EDC: What’s the point?”).  A report had just come out scolding EDC’s performance, and this was my review of that report.

But what of EDC itself? The panel complained they were without focus, and alternately complained they didn’t spend enough time working with already-existing local companies and that they don’t have a good marketing approach to attract companies from elsewhere. So which one should the refocused EDC take on? Both, says the panel. That will sure improve the focus, won’t it?

Some background you might not remember: Back in the misty dawn of time, EDC was born as the RI Port Authority and tasked with issuing bonds to develop and preserve the Port of Providence. When the Navy pulled out of Quonset, the Authority’s authority expanded there. Then, in 1995, when Governor Almond decided that the state’s economic development apparatus should no longer be a department of the state, he laid off the entire department, and transformed the Port Authority into EDC.

Why the Port Authority? Simple. Almost alone among state agencies the Port Authority had been granted unlimited borrowing authority when it was formed, which EDC inherited. And borrow they have, for good and for, well, less good. They blew $30 million on Alpha-Beta, a bio-tech flop, and EDC’s authority was a pivotal part of the deal that allowed state debt to balloon in order to pay for the I-boondoggle rearrangement of Route 195. There’s plenty more, including $14 million for the Masonic Temple hotel project, and $30 million for the troubled Wyatt jail in Central Falls.

What’s more, freed from the state personnel system, EDC was free to pay its executives whatever they please, and to conduct their business however they pleased. Their executives could wear good suits, house their operation in first-class office space, and generally conduct themselves just like the overpaid CEOs they spend their time with.

This isn’t to say EDC hasn’t done some good. I’ve written approvingly about the geek dinners they promoted under Saul Kaplan, its last director, and there have been other networking initiatives that bore some fruit, too. But let’s be honest. What’s the point of EDC at all? In large part, the best things the state can do for the state’s economy have to do with those essential things that the private sector can’t (or won’t) do: universal public education; maintaining roads, bridges, water lines and the like; policing the marketplace; protecting the environment; facilitating grant-funded research. These are the factors that could make ours a stronger economy. What an EDC can do will only ever be a minor effect compared to these others.

This, of course, is a political problem for the agency because expectations are so much higher than can be achieved.

What happens at an agency with such an ill-defined and difficult role? Failure, that’s what. Over the years, EDC has seen some good people come through its doors (along with the inevitable few who only look good in a suit) but they’ve been tasked with the impossible. Their mission has been to make our state’s economy bloom despite the fact that we are shrinking our investments in our infrastructure, our workforce and our environment. And what have we seen? Tremendous pressure to do something has produced ill-considered loans, and nebulous and occasionally laughable plans.

A future EDC or something like it could play a useful part in monitoring the state’s economy, and in technology transfer, trying to push new technologies into the market to advantage local businesses. They could be useful promoting networking and centralizing some information businesses need. But our EDC has served mostly as an ATM for corporations, and as a state-paid corporate lobbyist, pushing tax cuts in the legislature, oblivious to the effects these cuts have had on permitting delays, to say nothing of education and bridge maintenance. The agency needs to be rethought, but the changes must go a lot farther than this panel envisions.

A correction is in order: the Alpha-Beta deal only cost the state $4.5 million in the end, since the building was resold.  You could argue that the investment worked in that case, since Dow Biopharmaceutical used that space, and has expanded since.  The dozen neighbors we displaced through eminent domain on Dow’s behalf might differ, but the real point is that the occasional winner doesn’t prove that a lottery ticket is a good investment.  There are investments that will produce a return and investments that might.  Which one would you rather bet on?

Stokes Resigns Over 38 Studios Deal


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Keith Stokes, the executive director of the state Economic Development Corporation, resigned yesterday during the emergency meeting concerning the 38 Studios guaranteed loan debacle.

In a post this morning, RI Future predicted this would happen.

Here’s the statement from Governor Chafee:

Yesterday, Keith Stokes offered his resignation as Executive Director of the Rhode Island Economic Development Corporation (RIEDC), which I accepted.

I thank Keith for his service to Rhode Island, not only at the helm of the EDC, but also as a former Board member of that agency and as the long-time Executive Director of the Newport County Chamber of Commerce.

Keith is committed to seeing Rhode Island succeed and I am confident that he will continue to be very involved in the state he loves.

 

Stokes Pushed Too Hard for 38 Studios Deal


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Expect Keith Stokes to lose his job as executive director of the state Economic Development Corporation over the debacle with 38 Studios. In fact, he ought to offer his resignation, if he hasn’t already.

He pushed for the hugely risky deal and even begged at least one lawmaker not to propose legislation that would have protected taxpayers from the exact danger they are faced with today.

According to the Providence Journal this morning, Rep. Larry Ehrhardt, a North Kingstown Republican, was all set to introduce a bill that would cap the guaranteed loan program that Schilling and 38 Studios benefited from at $10 million per company. 38 Studios got a now-infamous $75 million loan from the program.

“He pleaded with me not to submit the amendment,” Ehrhardt is quoted as saying in the Projo this morning. “He basically said it would upset — and he did not name 38 Studios because none of us or very few of us knew about 38 Studios at the time. His words were something to the effect that it would upset a transaction they were working on …, and I said to him, as a gesture of good faith and trust, I will withdraw the amendment.”

In fact, initially the loan program was only supposed to be for $50 million, but Stokes lobbied to increase it to $125 million. In a fantastic 2010 Projo article, that details how the deal was put together, Stokes is quoted as saying that 38 Studios “shared with us that their capital need was approaching about $75 million. As we started to feel 38 had some legs I went to the leadership and said ‘Why not look at the $50 million and add $75 million’?”

Stokes also seemingly misled Rhode Islanders about the viability of the deal. In 2010, he wrote, “Independent industry and financial experts performed an extensive analysis of the interactive entertainment sector and 38 Studios. Based on months of due diligence, the board then crafted an agreement that includes strict performance milestones 38 Studios must meet and that goes to great lengths to safeguard taxpayers and ensure economic performance. It was the right call at the right time…”

But according to the 2010 Projo article, it was – at best – risky. Here’s an excerpt from that article that speaks to the “due diligence Stokes was referring to:

Strategy Analytics, one of two companies Stokes hired to do the work, said in a letter to the EDC it could do the work within three weeks, a timeline it considered “aggressive.”

In their reports, Strategy Analytics and Perimeter Partners each noted the difficulties of pulling off Stokes’ plan to use one company –– 38 Studios –– as the “anchor” to attract other similar businesses.

The analysts pointed out that Schilling’s company had no sales yet and planned the release of its first game in 2011 and a major multiplayer online game some time after that. “One major difference with Rhode Island’s effort, as we discussed, is that most clusters that bring in ‘anchor’ tenants are established revenue-bearing entities that are producing titles,” wrote Barry Gilbert, of Strategy Analytics.

Many states are trying to create clusters of video-game companies, the reports said. And the cluster strategy takes time –– a decade or longer to develop, Gilbert noted.

Also, there will be competition in the marketplace when 38 Studios releases its multiplayer game, the report stated. Five other companies plan major video-game releases between the end of 2010 and 2012, when 38 Studios plans the release of its multiplayer game, the analysts said. Among the new games will be World of Warcraft: Cataclysm –– a sequel to the dominant multiplayer game, and another based on the “Star Wars” movie series.

“With a large single focus, [the multiplayer game] 38 Studios will have little wiggle room upon release –– this is analogous to an ‘all in’ hand in poker,” stated in the analysts report.

The EDC also was aware of a separate study by Economists Incorporated, commissioned by the video-game industry trade group Entertainment Software, that showed more than 32,000 people directly employed by video-game publishers and developers in 34 states. The study estimated the video-game industry added $4.5 billion to the U.S. economy in 2009.

Keith Stokes is a good man and a good public official. But he pushed too hard for this deal that was too fraught with risk. And as the old saying goes, those who live by the sword should be willing to die by it.

It’s a Showdown in CD1


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(via Wikipedia)

Elections didn’t used to be this way in Rhode Island. If you ran for federal office and won, you were pretty much guaranteed an unassailable position from which to plot your next step in life; be that a higher federal office, a cabinet position, retirement, or death. In fact, for roughly three out of four of our federal officers, that’s still pretty much the case. But our newest addition to our federal delegation isn’t finding it so easy.

Yes, the latest news out of WPRI’s pollster Fleming & Associates is that incumbent U.S. Representative David Cicilline has a 4.3% lead among likely primary voters over challenger Anthony Gemma, with 19.9% of voters undecided. Rep. Cicilline triumphed with a 14.1% lead over Mr. Gemma and slightly larger leads over David Segal and Bill Lynch in 2010; a year that had older voters motivated in a right-wing backlash against Barack Obama and the Democratic Party.

The poll ultimately shows that Rep. Cicilline draws strong support from 18-39 year-olds, and has an advantage among female voters. It also shows that according to voters, his apology hasn’t had much impact or made them less likely to vote for him. However, the key issue that 45.7% of voters cared about was “Economy/Jobs”. “Providence Finances” came in fifth at 7.3%, behind “Best Chance to Win in November” (7.9%), “Experience” (11.3%) and “Character” (23.8%).

The good news for Rep. Cicilline is that his job approval ratings are higher among primary voters than the general electorate; in February, just 19.6% of registered voters said that Rep. Cicilline’s job performance was “Excellent” or “Good”. Among likely primary voters, that number is 32.1%. Not stunning, but not terrible either. And since 33.8% of voters rank his performance as “Fair” (whatever that means), there’s a cushion there.

The other good news, one that cuts both ways, is that Anthony Gemma remains an unknown quantity to most primary voters, 45.4% said they didn’t know enough to give him a favorability rating. Among those who did, 37.7% ranked him as “Very” or “Somewhat Favorable”. WPRI’s Joe Fleming points out that this allows Mr. Gemma to build himself up, or alternatively, allows Rep. Cicilline to tear him down.

Anthony GemmaMr. Gemma Trying To Ride Two Horses At Once

Mr. Gemma has had some serious issues already. Beyond the initial SNAFU when his announcement devolved into him abandoning it in an attempt to avoid the press, Mr. Gemma has been embroiled in trouble over whether he’d be a sore loser if he fails to triumph in the primary in September; and lingering questions of just how committed he is to the Democratic Party. After a meeting with the Democratic City and Town Committee Chairs Association, Mr. Gemma was blasted by Tiverton Democratic Town Committee chair Mike Burk, who claimed that Mr. Gemma would mount an independent campaign if he lost. Portsmouth Democratic Town Committee chair says that Mr. Gemma said he’d merely write his own name in.

But beyond the he-said, he-said of that particular exchange, Mr. Burk also claimed that Mr. Gemma’s 2012 campaign was reminiscent of his 2010 campaign, which sounded more like he was running for governor than for U.S. representative. Indeed, he’s promised 10,000 jobs to Rhode Island, a claim which sounds far-fetched even if he was running for governor, much less a junior representative in a party likely to be in the minority in the 113th Congress.

Also undercutting him is a problem of insincerity. Having claimed to be the progressive in the race, Mr. Gemma comes from a strong business background, one that was cited for 32 labor violations. He did not vote in the 2008 Democratic presidential primary (one of the closest presidential primary races in recent history), and only affiliated as a Democrat prior to his first run in 2010. He also has said that he is anti-abortion, but would not vote against a woman’s right to choose. Which doesn’t signal strong convictions more than it signals a willingness to do what’s necessary to get elected; a criticism Mr. Gemma has lobbed against Rep. Cicilline on more than one occasion.

Brendan Doherty Lies Waiting in the General

Regardless of which Democrat wins, they’ll run up against Republican Brendan Doherty. Between a WPRI Newsmakers interview where he came out in favor of letting all of the Bush tax cuts expire and a recent statement that he favored the reinstatement of Glass-Steagall to separate commercial and investment banks, Mr. Doherty now has an economic policy far to the left of many Democrats in the U.S. House of Representatives. It should be noted he also has said he favors “right to work” legislation and that Rep. Cicilline has signed onto a bill to reinstate Glass-Steagall and supports ending the Bush tax cuts for those earning more thant $250,000 a year.

But Mr. Doherty’s statement on Glass-Steagall (repealed in the early 1990s under the neoliberal bonanza of the Clinton presidency) raises the specter of accusations during his primary campaign that he was merely a Republican-in-name-only, something which is not helped by Mr. Doherty also having a lead among unionized workers versus Rep. Cicilline in the last poll in which they were matched.

If the economy remains the number one issue for voters, Rhode Island’s Congressional District 1 may have a thunderous battle over economic policies that tilt towards the left if Mr. Cicilline makes it through. On the other hand, Democratic primary voters may face a more traditional interventionist vs. laissez-faire economic debate.

It used to be that federal office in Rhode Island was a secure perch. But even if Mr. Cicilline fails to survive this, his successor, imperfect as the leading two candidates for it are, may face a similar struggle in 2014.

Gemma Said He Wouldn’t Vote For Cicilline


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Anthony Gemma

Anthony GemmaAnthony Gemma says he running against Congressman David Cicilline to help keep the CD1 seat in the hands of the Democrats. But he also said that he wouldn’t vote for Cicilline in the general election if the incumbent beats him in the primary.

“I said in good consciousness I cannot support David Cicilline,” Gemma told me, recounting what he said Monday night at the endorsement meeting for the Rhode Island Association of Democratic City and Town Chairpersons.

After talking about it with me, Gemma softened his position, saying, “We’re in a political fight right now. On September 12, I will reassess my position.”

He added, My number one objective is to keep the seat Democratic. I will rally behind the Democratic party.”

But some at the Monday night meeting doubt that is really Gemma’s objective.

Leonard Katzman, the chairman of the Portsmouth Democratic Town Committee said Gemma told the group he would write in his own name rather than vote for Cicilline, a statement that made him question Gemma’s motives.
“His entire pitch is that he wants to ensure that the seat remains with the Democratic party,” Katzman said. “If he’s not willing to support the eventual nominee, that tells me he’s really not interested in keeping it with the Democrats.”
In an email sent out after the meeting, Mike Burk, chair of the Tiverton Democratic Town Committee, wrote that Gemma said he would run as an independent if he doesn’t win the primary, even if that helps the GOP retain control of the House of Representatives. Gemma refutes this allegation and says he has an audio recording of the meeting to prove it.

Environmental Justice on the Polluting Waterfront


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Mt. TaverasQuestion:  What do  junkyards, hazardous waste processors, hospitals, and Environmental Justice areas have in common?

Answer:  They’re all located adjacent one another in Providence.

Projo reports that the DEM has ordered waterfront junkyards, Sims Metal Management and Rhode Island Recycled Metals, to cease operations for “[failing] to obtain the necessary approval for their scrap metal businesses” and for “violation of storm water regulations.” PBN has more details on the violations:

DEM accused Rhode Island Recycled Metals, which has been a repeated target of environmental group Save The Bay this year, of not receiving the proper permits to salvage automobiles or dismantle a variety of marine vessels at its waterfront site at 434 Allens Ave. [RC – see “Save the Bay: ‘Grave Concerns’ Over Polluting Waterfront Junkyard”]

The charges accuse Rhode Island Recycled Metals of failing to install required stormwater runoff controls and of having oil leaks staining the ground of their property.

The violation comes with a $46,250 fine and orders Rhode Island Recycled Metals to stop all car crushing, stop receiving new scrap metal, new derelict vessels or automobiles and to install pollution containment boom in the river around the property.

The company is ordered to remove all scrap metal from its property within 60 days.

Sims Metal Management, which purchased Promet Marine Services last October, is accused by DEM of failing to transfer the old business’ stormwater permit and apply for a new permit to expand operations into scrap metal recycling.

The facility at 242 Allens Ave. is now Sims principal New England scrap metal export terminal.

The DEM violation notice, which carries a $25,000 fine, orders Sims to stop receiving any new scrap metal at the site or accept new ship repair jobs, and to remove any scrap metal from the facility within 60 days.

This after news last month that Polluting Waterfront member, PSC Environmental Services, has been fined by the EPA for lax environmental controls at their facility along Allens Avenue.  The EPA press release reported:

Northland Environmental and PSC Environmental Services (operator and owner of the facility, respectively) violated state and federal hazardous waste laws, as well as their state issued permit to operate a commercial hazardous waste and non-hazardous waste treatment, storage and transfer facility located on Allens Avenue in Providence.

The facility is located in a densely populated Environmental Justice (EJ) area of Providence.  EPA considers it an EJ area due to the high proportion of minority and low-income population, which historically has had higher exposure to pollutants than other segments of the population.

The EPA found that “many incompatible hazardous wastes were stored next to one another without adequate means of separation or protection, potentially resulting in fires or explosions” [my emphasis]. Believe it or not, the Taveras administration actually ran on a promise to give these “existing industrial businesses the confidence needed to expand!” Lipstick on pig, indeed.

Yes, what shows our commitment to Environmental Justice more than locating hazardous waste processing firms and scrap heaps in the neighborhood? Can we honestly say this urban neighborhood doesn’t “bear a disproportionate share of the negative environmental consequences resulting from industrial, municipal, and commercial operations?” Can we say without a nod and a wink that “affected community residents have an appropriate opportunity to participate in decisions about a proposed activity that will affect their environment and/or health?”

Hard to Tell Who Knew of 38 Studios Deal


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Kingdoms of Amalur Cover
Kingdoms of Amalur Cover
(via Wikipedia)

Rhode Island is hyperfocused on Curt Schilling. But unlike eight years ago when he heroically hurled us to a World Series victory, this time we have to rely on his business – not athletic – acumen. His video game company, 38 Studios, was given a taxpayer guaranteed $75 million loan to move from Massachusetts to the Ocean State. But already he’s missed a $1.125 payment to the state.

It seems as if both liberals and conservatives opposed the deal as it was being rushed through at the tail end of the Carcieri Administration. Colleen Conley, of local Tea Party fame, told me she opposed it and told the governor as much. And certainly Rhode Island progressives didn’t like the idea of providing such a giant corporate welfare check to just one company.

So who supported it, other than the former governor? It’s hard to tell.

Funding for the program that granted Schilling his loan was rushed through the State House in a supplemental budget proposal submitted by the governor in April of 2010. Legislators say they asked if the money was wired for a specific recipient and were told it wasn’t, though some doubt that now. In the House, all but six voted for the expenditure. They were Reps. Driver, Ehrhardt, Jacquard, Lima, Newberry and Watson.

One person who sure did is Chafee and Carcieri’s economic development director Keith Stokes. In a letter to the local business community dated August 2010, he wrote:

“Many community leaders, like you, have inquired about why the RIEDC would offer so much credit enhancement to one company. Simply put, our extensive due diligence revealed that while 38 Studios could raise venture equity and stay in their current location, its investors and management team are willing to relocate the company and the related opportunities for Rhode Island if we provide an alternative to their equity dilution.

The RIEDC board is comprised of Rhode Island’s top CEOs, university, hospital and industry executives, heads of small businesses and labor. Members used their considerable business expertise to thoroughly assess the opportunities and risks associated with this transaction. They asked all the hard questions the media and the public have asked, and more.”

Gov. Chafee has called an emergency meeting of the EDC this morning to discuss the matter. We’ll keep you posted.

‘Two Handfuls’ of Senators Block Marriage Equality


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Forget about a marriage equality bill making it out of the Senate this session, such legislation hasn’t even been heard in committee this year. It was introduced on February 16, but still hasn’t received its customary hearing.

“I think you know what my position is on this,” said Sen. Michael McCafffrey, a Warwick Democrat, when asked for his position on marriage equality. It is well-known that McCaffrey, the chairman of the Judiciary Committee, doesn’t support the bill.

The next hurdle is that several other Democrats on the Judiciary Committee don’t love it either. Sen Harold Metts is on record as not supporting it, and Sen. Paul Jabour, a Democrat who represents Federal Hill and the West Side, told me he “still prefers civil unions.”

Jabour said he’s still weighing whether or not to support actual marriage equality.

Sen. William Walaska, a conservative Democrat from Warwick who is also on the Judiciary Committee, wasn’t tipping his hand, saying, “You’re asking me about a vote that isn’t on the floor yet. I’d have to look at the legislation.”

Even Sen. Erin Lynch, a Warwick Democrat who co-sponsored such a bill last year, wouldn’t fully commit this year, saying she supports marriage equality in theory but that “it depends on the language of the bill.”

Outside of the committee, there are a number of Democrats who don’t support marriage equality, including Sens. Dominick Ruggerio, the majority leader, from North Providence, Frank Ciccone, of Providence and Louis DiPalma, of Middletown.

Ciccone said he will submit a bill soon that would reverse Gov. Chafee’s executive order that recognizes same sex marriages performed in other states. “I think the governor exceeded his authority,” he said, noting a recent court case before the state Supreme Court. “I don’t think an executive order can supersede a Supreme Court decision.”

Of course, there’s also Senate President Teresa Paiva Weed, who wouldn’t even answer my questions last night at the State House.

By the way, I think every Senator I just mentioned is Catholic (I’m not sure about Metts or Lynch). And, it’s worth noting, there is no shortage of GOP support for marriage equality in the chamber. Sens. Christopher Ottiano, a Portsmouth Republican, and Dawson Hodgson, a socially-liberal Republican who represents East Greenwich and North Kingstown, would support marriage equality if it came to a floor vote. Nick Kettle, of Coventry, said he likely would too, but only after taking the pulse of his constituents.

“Probably two handfuls,” is the way Sen. DiPalma described it to me when I asked him about the opposition to marriage equality in the Senate. Based on my very informal whip count, that sounds about right. The President, the entire congressional delegation, the governor and the House all would support marriage equality in Rhode Island. But “probably two handfuls” of Catholic state Senators still stand in the way.

Help RI Future Succeed: Donate Now!


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Photo courtesy of The Phoenix and Richard McCaffrey

To date, my new business plan for RI Future has consisted mostly of me wearing sweaters on cold nights and eating a lot of peanut butter and bread for meals. But this state’s only source of progressive news and information now needs a new computer. Since our readership is growing just as rapidly as the number of in-person and online compliments we’re getting, I thought I’d reach out to you all, our loyal readers, for some help.

The long term plan for RI Future is to have the free market support us, and in the near future you will start seeing some paid advertising on the site. But just getting there will require a small investment, and I’d like to ask for your help.

And please keep in mind:

That’s just a sample of the great news and information we’ve delivered to you, free of charge, over the past few months … if you like what we do here at RI Future, or even if you just want us to stick around so you can beat us up in the comments section, please do what you can and help support independent media.

Click on the link below to donate to RI Future:

ACLU Questions Legality of Barrington Tuition Idea


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The Barrington School Committee finally has a legal opinion on its idea to allow a small number of out-of-town students to to pay tuition to attend its high-performing public schools. It’s from the RI ACLU.

“The Barrington School Department has no obligation to establish a special program to accept students from out-of-town, but once it does so, it cannot simply declare students with disabilities off-limits,” wrote Steven Brown, the executive director of the local affiliate of the ACLU. “While in some circumstances schools may have some leeway in dealing with special-needs students, such as when significant problems might arise in providing them necessary accommodations, we are not aware of any basis whatsoever for a school to have a policy of automatically and categorically excluding special education students from an enrollment policy. Such blatant discrimination flies in the face of the numerous laws designed to treat such students equally, not segregate or stigmatize them.”

Brown’s letter assumed Barrington would not accept students with special needs, which was the initial idea. But after School Committee President Patrick Guida had a conversation with RIDE officials, he said they would likely accommodate for a percentage of students with special needs so long as they could pay the cost of their education there.

Brown wrote, “I realize that this policy is still a work in progress, but I would appreciate learning the basis behind the decision, however tentative, to exclude special education students.”

The Barrington School Committee will discuss the matter at its meeting on Thursday night.

38 Studios and the ‘Job Creator’ Logic


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Kingdoms of Amalur Cover
Kingdoms of Amalur Cover
(via Wikipedia)

Word started buzzing around the State House just prior to Gov. Chafee making his historic executive order recognizing same sex marriages from other states – but the rumors weren’t about marriage equality, they were about 38 Studios.

By the end of the day, Bill Rappleye of Channel 10 broke what very well could become the biggest story to date of 2012: the state is working with 38 Studios to help keep it solvent.

38 Studios, former Red Sox Curt Schilling’s company, was given a $75 million guaranteed loan to move from Massachusetts to Rhode Island by former Gov. Don Carcieri. The former CEO governor, who always touted his business experience as reason to trust him as a public official, pushed through the highly controversial loan to his friend and political ally as a way to shore up his otherwise poor economic development record while in office.

It worked; whatever happens to 38 Studios, Carcieri owns it.

One needn’t to be a business expert to know that investing in 38 Studios was a risky proposition. In fact, our own Sam Howard detailed why it was in a post earlier this year. 38 Studios has made some money on its new single player game Kingdoms of Amular. But the project Rhode Island is vested in is a huge multiplayer game called Copernicus. Howard points out here why the former is a much safer investment than the latter:

“…one of the things that [Amular] had going for it was that it’s single-player. Single-player games are like novels, in a lot of ways. People are more willing to get into a new one. But [multiplayer games] are in a lot of ways like a bowling league. Once you’re part of one, why join another?”

Indeed, business experts knew this was a risky investment as well. Ted Nesi reports: “Last June, PricewaterhouseCoopers audited 38 Studios and issued a “going concern” opinion that expressed “substantial doubt” about whether the company would be able to stay solvent, the disclosure filing said.”

Why didn’t Carcieri, who was lauded for his business acumen, see this? Why didn’t Keith Stokes, Carcieri’s economic development chief who lauded the loan and was then kept on by Chafee, even though the current governor vociferously argued against granting 38 Studios the risky loan? Why didn’t taxpayers? Where was the Tea Party on this one?

Why might not matter now. What matters most is how to protect the state’s investment, and its economy.

In the meantime, as the local media has been looking for the “next Central Falls,” Rappleye might just have stumbled onto it … but this time there will be no way to argue that pensions or union contracts are the problem. This time the issue seems squarely to be that the public servants simply placed too much faith in private sector.

Curt Schilling was supposed to be the state’s ultimate job creator. It’s high time Rhode Island realizes that, whether it’s tax cuts or tax giveaways, such an economic strategy is far too risky keep placing so much blind faith in.

Deb Tevyaw, Pat Baker Never Got to Enjoy Equality


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Deb Tevyaw and Pat Baker would have benefited greatly from Gov. Chafee’s executive order recognizing same sex marriages from other states. The two women married in Massachusetts in 2005 and resided in Rhode Island. But after impassioned efforts on behalf of marriage equality last session, they didn’t get to testify together this year, or watch the governor decree their relationship marriage valid yesterday.

Baker lost her battle with cancer in August.

Instead, Tevyaw took in the governor’s historic executive order without her longtime spouse, and spoke of how the lack of such legal protections added undo consternation to last days of her lover’s life.

“I can’t begin to really tell you what this was like,” she said, holding back tears, as she spoke at the event to mark Chafee’s executive order. “All the late nights Pat spent on the phone and on the computer trying to get answers about pensions, survival benefits and social security. All things that most people in their last month of their life wouldn’t be forced to worry about.”

In what was otherwise a joyous occasion, Tevyaw’s remarks were a stark reminder that marriage equality is more than a mere matter of politics. To some, it is literally about life and death. And for Tevyaw and Baker, marriage equality did not come soon enough.

With Jack Reed now supporting same sex marriage, Teresa Paiva Weed is the last of Rhode Island’s premier politicians to stand in the way of marriage equality. Thus the only thing stopping Rhode Island from approving the legislation is the state Senate. Here’s hoping she sees what a smart politician her fellow Catholic Jack Reed was being and allows the measure to proceed before any more couples miss out on their chance.

Here’s a video on Deb and Pat’s struggle to attain equal rights made by Marriage Equality Rhode Island several months ago:

RI Recognizes Out-of-State, Same Sex Marriages


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Gov Chafee and Ray Sullivan of Marriage Equality Rhode Island celebrate the RI recognizing out-of-state same sex marriages.

Saying Rhode Island should pass its own marriage equality law, Gov. Lincoln Chafee signed an executive order today that asserts this state recognizes same sex marriages performed in other states.

“Let’s get there ourselves,” he said to an enthusiastic crowd packed into the State Room of the State House. “This is the home of Roger Williams. Come on, let’s go.”

The governor’s executive order reaffirms a 2007 memo from the attorney general that said Rhode Island recognizes all marriages performed in other states per a 1904 law. But Chafee said there has been some confusion in state government as to whether or not same sex marriages performed in other states are valid in Rhode Island.

“This executive order,” he said, “sends a clear message to married Rhode Islanders, regardless of their sexual orientation, that they can and should rely on their marriage to protect them and their families in important ways.”

Ray Sullivan, of Marriage Equality Rhode Island, said Rhode Island is the first state in the country “to sign an executive order providing critical clarity and direction to government agencies regarding the recognition of same-sex, out-of-state marriages.”

Sullivan said, in a press release, “While this moves us closer to full marriage equality, nothing less is sufficient, and we will keep fighting.”

Chafee said talks are ongoing between him and legislative leaders about passing a marriage equality law this session. Senate President Teresa Paiva Weed is still standing in the way of the bill’s passage. Chafee said she is not amenable to passing the bill this session. When asked if she seemed willing to support the bill this year, Chafee said, “To be perfectly honest with you, not in this session.”

He indicated that House Speaker Gordon Fox is ready to pass the bill. When asked who supports passing marriage equality this session, he said, “You can probably guess who is supportive and who isn’t.”

Fox, who is openly gay, fought behind the scenes to get Paiva Weed to support same sex marriage last session, but never called for a full vote in his chamber because some members did not want to have to go on record if they knew it wouldn’t pass in the Senate.

Woonsocket: How Tax Equity Can Reduce Burden

There’s no debate about it, Woonsocket, and many other distressed communities, are in trouble. However, while the residents wait for the General Assembly to vote on whether they can issue a supplemental tax bill, there are other measures on the calendar on Smith Hill that could also help the city’s already maxed-out  taxpayers.

Tonight (Monday, May 14) at 5:30 pm in Cercle Laurier, 165 E. School St., residents can come learn how the tax equity bills, making their way through the House an Senate in the form of  H-7729 and S-2622, can raise $131 milllion in revenue; and how that revenue should be targeted to providing relief to distressed cities and towns, like Woonsocket.

While our elected officials continue to give massive tax breaks to Rhode Island’s wealthiest citizens and corporations, and Woonsocket Rep. Jon Brien and Sen. Marc Cote defend these breaks,  lower and middle income Rhode Islanders are struggling to feed their families.

It’s time for people making over $250K/year to pay their fair share and help the middle class–because a strong middle class means more spending and more jobs in local communities. Come to the meeting and help convince Rep. Brien and Sen. Cote top sign onto the tax equity bills, Woonsocket would greatly benefit by your actions.


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