Amazingly, at this late date, Rhode Island Attorney General Peter Kilmartin still doesn’t seem to understand what he voted for when he voted as a state representative to approve the loan guarantee program used to finance the 38 Studios deal. During an appearance this weekend on WJAR-TV’s 10 News Conference, Kilmartin tried to compare a non-payment of 38 Studios bonds to a Federal default on general obligation bonds.

Although most Current-Anchor readers will be aware of the facts that follow, since Rhode Island’s Attorney General apparently isn’t, I will summarize them once again; the 38 Studios bonds are not general obligation bonds, i.e. they are not backed by the full faith-and-credit of the state. They are only moral obligation bonds. According to the state constitution, bonded debt over $50,000 cannot be made the responsibility of the taxpayers of Rhode Island, unless approved by voter referendum. Because of this, there is no obvious way for non-payment of a moral obligation bond to severely impact general obligation borrowing rates, in the absence of Wall Street collusion.

Kilmartin said at one point during the Channel 10 debate “if there’s a problem with Wall Street, then I’m not afraid to go after it”. Well, there is a problem. Wall Street wants to ignore significant legal differences between moral obligation and general obligation bonds, which are clearly codified in laws specifically intended to protect Rhode Island taxpayers from leadership debacles like 38 Studios — but the Attorney General is unwilling to take the side of the people of Rhode Island on this matter, giving every appearance of being unwilling to go against the interests of his political insider constituency and their Wall Street benefactors.

For Peter Kilmartin not to see any problem here is for him to be ignorant of the law, or ignorant of his responsibilities, or afraid of Wall Street, or probably all of the above.