- Associated Press - Tuesday, November 24, 2015

PROVIDENCE, R.I. (AP) - A state Senate committee opened hearings Tuesday into Rhode Island’s $75 million deal with Curt Schilling’s failed video game company, 38 Studios.

The Senate Committee on Government Oversight was briefed on the status of the lawsuit over the deal. It reviewed details of the loan guarantee program used to get 38 Studios its money.

Chairman James Sheehan said the committee is looking into what went wrong so senators can propose legislation next session to prevent similar deals in the future.

“The public certainly deserves to know what happened and I think we’ve gone a long way to figuring that out,” he said. “I think the next step is to recover as much of the money lost in that deal through the civil suit, then the third leg of the stool is to make sure we put measures in place to avoid the recurrence of this kind of problem.”

The video game company relocated to Rhode Island from Massachusetts in 2010 in exchange for a $75 million state loan guarantee. It later went bankrupt, leaving taxpayers on the hook. The state’s economic development agency sued Schilling and others who aided the deal to try to recoup the money.

The House Oversight Committee is also investigating and asked House Speaker Nicholas Mattiello on Monday issued a subpoena to compel Schilling to testify.

The subpoena isn’t enforceable outside Rhode Island. Schilling lives in neighboring Massachusetts, so it’s unclear whether he will ever be served with it.

The former Boston Red Sox pitcher has never publicly answered questions about how the 38 Studios deal went wrong, and he was not deposed in the lawsuit. He declined through his lawyers to speak to the committee voluntarily, citing the lawsuit.

Sheehan isn’t planning to try to subpoena Schilling.

The North Kingstown Democrat wants to hold at least two more hearings this year to examine the state’s use of taxpayer-backed bonds, and whether quasi-public agencies are complying with transparency and accountability safeguards.

The committee has discussed 38 Studios in the past. Sheehan said he’s returning to the topic now because much more is known about the deal.

Hundreds of documents and tens of thousands of pages related to the lawsuit were released in September, including court filings, emails and depositions of key players.


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