- Associated Press - Wednesday, May 13, 2015

PROVIDENCE, R.I. (AP) - Rhode Island’s secretary of state dismissed the cases against two people accused of lobbying violations in the 38 Studios deal on Wednesday and closed an investigation into ex-Boston Red Sox pitcher Curt Schilling.

Secretary of State Nellie Gorbea said it is important to “move from frustration to solutions.” She wants to overhaul the state’s lobbying laws so any potential violations can be effectively investigated and fairly prosecuted in the future.

“It is not in our state’s best interest to spend taxpayer dollars on protracted litigation that could never do the crime justice,” Gorbea said.

Schilling’s video game company got a $75 million state-backed loan before it went bankrupt in 2012, leaving state taxpayers on the hook. Gorbea said she didn’t know how much the state has spent to date on the lobbying investigations.

Ex-38 Studios director Thomas Zaccagnino and attorney Michael Corso were ordered by Gorbea’s predecessor to file retroactive lobbying reports or face a $2,000 fine. Both appealed to Superior Court.

Gorbea hired former U.S. Attorney Robert Corrente to review the cases shortly after she took office in January.

Corrente said both orders would likely be overturned in court because of “multiple procedural deficiencies” in existing lobbying statutes. There are no explicit procedures to notify participants in a hearing about what set of rules apply or how they’re applied, for example, Corrente said.

The orders were vacated and both appeals have been dismissed as moot, he added.

Corso’s attorney says Gorbea made “the right call.”

“She’s rightfully focusing on the defective statutes that we have in the state of Rhode Island regarding lobbying,” Michael Lepizzera said Wednesday.

The secretary of state hadn’t issued a final order on whether Schilling violated lobbying laws. Corrente said there are similar procedural problems, and that investigation is closed.

Attorneys for Schilling and Zaccagnino could not immediately be reached for comment.

Rhode Island’s economic development agency sued Schilling and 13 others over the collapse, alleging fraud, negligence and breach of fiduciary duty, among other things. The lawsuit does not ask for a specific dollar amount but for the defendants to repay the bonds.

Lawmakers have introduced legislation on Gorbea’s behalf to make the state’s lobbying laws stronger and more transparent.

Although the Department of State oversees lobbyists and lobbying activity, it cannot independently oversee and enforce the laws and charge offenders. It is not granted subpoena powers for administrative hearings, and the penalties for breaking the lobbying laws are minimal.

If enacted, the Lobbying Reform Act of 2015 would clarify the definitions of lobbyist and lobbying, authorize administrative subpoena power for conducting investigations, increase the maximum penalties for non-compliance to $5,000, and allow the secretary of state to suspend a person’s lobbying privileges for up to three years, among other changes.

The new legislation also states that hearings will be conducted in accordance with the Rhode Island Administrative Procedures Act.

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