- Associated Press - Tuesday, May 6, 2014

PROVIDENCE, R.I. (AP) - The former head of Rhode Island’s economic development agency has declined to testify before the House Oversight Committee as it reviews the $75 million 38 Studios loan guarantee.

An attorney for former Economic Development Corp. Executive Director Keith Stokes wrote in a May 2 letter to Chairwoman Karen MacBeth that Stokes won’t testify as requested.

Lawyer David Martland said Stokes can’t do so now because of the litigation in the case. The agency sued Stokes, 38 Studios founder Curt Schilling and others after the startup video game company went bankrupt. The state remains responsible for some $87 million related to the deal, which lured the company to Providence from Massachusetts.

The oversight committee recently sent letters inviting testimony from six others, including Schilling, the former Red Sox pitcher; Stokes‘ former deputy, Michael Saul; attorney Michael Corso; and ex-Finance Committee Chairman Steven Costantino.

House spokesman Larry Berman said Tuesday the committee hasn’t received Stokes‘ letter or a response from anyone else.

In his letter to MacBeth, Martland also said the EDC, now called the Commerce Corp., and the governor’s office are withholding some documents, claiming they’re privileged, and that MacBeth’s investigation will be ineffective without them.

“We are sure you would agree that an incomplete review of this complex matter is in no one’s best interest,” Martland wrote.

The committee is seeking documents related to the suit as well, including deposition transcripts, but most of the defendants have objected. A judge has not yet ruled.

MacBeth, a Cumberland Democrat, said previously she would consider subpoenas as a last resort for witnesses who won’t appear before her panel voluntarily. She couldn’t immediately be reached for comment.

Also Tuesday, State Police Col. Steven O’Donnell said an investigation by police and the attorney general’s office into 38 Studios is still ongoing.

He said he spoke with Deputy Attorney General Gerry Coyne on Tuesday and was asked to investigate a WPRI-TV report that Corso may have acted as a lobbyist for 38 Studios without registering as one with the secretary of state’s office. O’Donnell said police will meet with staff from the secretary of state’s office and “take it whichever direction it goes.”

Corso’s lawyer did not comment.

Although state police typically don’t do administrative reviews, it is not a criminal investigation, O’Donnell said.

“We’ll review what they give us. If it’s criminal we’ll move forward with the attorney general’s office,” O’Donnell said. “You don’t know until you look at it.”

If they found a noncriminal violation, they would turn it back over to a civil agency such as the secretary of state or ethics commission, he said.


Associated Press writer Michelle R. Smith contributed to this report.

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