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Disgraced Speaker Fox Fueled the ShapeUp State-Taxpayer Gravytrain

Responding to a question related to my finding that ShapeUp, which made news recently when its new owner, Virgin Pulse, agreed to remain in Rhode Island in exchange for $5.7 million in state-government subsidies, a Rhode Island House spokesman tells me that the Economic Development Corp. (EDC, now the Commerce Corp.) and Dept. of Health weren’t the only government agencies that whet the company’s appetite for taxpayer dollars.

Disgraced and imprisoned former Speaker of the House Gordon Fox, a progressive Providence Democrat, directed $12,000 to ShapeUp through the General Assembly’s controversial legislative grant program.  The first $7,000 installment of that money arrived in 2007, shortly after the non-profit started.  Another $5,000, half in 2010 and half in 2012, flowed the company’s way as it moved toward for-profit status and received its $100,000 EDC handout.

One wonders how much companies that buy Rhode Island start-ups consider the many paths of claiming Rhode Island taxpayer dollars when shopping for acquisitions.

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The Important Caveat on Rhode Island’s Virginity

As Ted Nesi reports for WPRI, Virgin Pulse, which bought the RI-based start-up ShapeUp not long ago, has provided Democrat Governor Gina Raimondo some much-needed blush for the otherwise sickly cheeks of Rhode Island’s economic news:

“If we want to attract Millennials fresh out of college to come and bring energy to our company, if we want to get the best and brightest, this is the place to find them,” he said. “People are moving to cities. They want to be part of a culture, they want to have access to great entertainment and great food and a city with a great lifestyle, and this is a place where we can find all those things.”

“I believe in the city. I believe in the state,” [ShapeUp founder Rajiv] Kumar added. “We saw at ShapeUp over the years just how supportive the environment, the culture, has been for our business. And I knew that Virgin Pulse would thrive in a place like Rhode Island.”

The notion of a “supportive environment” is important, here, recalling a couple of posts I wrote almost exactly a year ago.  In them, I noted that ShapeUp had relied pretty heavily on the many means of collecting taxpayer dollars from the state.  Even as ShapeUp, under various names, registered as a corporation in Delaware, it collected $100,000 directly from the Commerce Corp. and $18,750 from the Department of Health.  Disgraced former Democrat Speaker of the House Gordon Fox also directed $12,000 in legislative grants the company’s way.

That was all before Raimondo promised the company $5.7 million in tax credits as it started jobs in the state.  So, yeah, maybe some of the glowing assessment of Providence is genuine, but let’s not forget how integral government dough has been for the company.

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