Trove of New 38 Studios Money Docs Underscores Importance of Real Investigation


Monday’s must-read, the Providence Journal’s Political Scene, today by Kathy Gregg and Patrick Anderson, once again doesn’t disappoint.

They report that, on Thursday, the House Oversight Committee will be looking at some very interesting documents and figures that came out of a non-audit audit ordered by then-Governor Lincoln Chafee. It appears that the former governor wanted the headline that an audit would take place but not an actual audit, presumably because the public might actually learn things about 38 Studios from an audit and heaven knows we can’t have that.

In 2014, the EDC refused to release (not at ALL suspicious on their part) any documents about the non-audit audit to House Oversight. But happily, Deloitte has forked them over.

Deloitte Financial Advisory Services provided the lawmakers on the Rhode Island House Oversight Committee with hundreds of pages of correspondence about the 2012 “audit” that never was, and more than 1,670 pages of 38 Studios ledger entries reflecting where the money went, right down to the last $3,066 check before the company collapsed. The recipient: Scoop Marketing.

Money in. Money out: $232,000 to “consultant” Mike Corso on March 30, 2012. A March 29, 2012, payment to the Maynard Police Department ($300). Back-to-back MasterCard payments totaling more than $90,000 in April; $16,205.96 for “chk 2850 voided on 5/23/2012” for financing fees, that hinged on unspecified R.I. Film and Television Office action, now part of the well-chronicled history.

The document release — which will be the focus of a House Oversight Committee hearing on Thursday — is stunning on multiple levels.

Once again, we are reminded that Michael Corso, close political ally/crony of former Speaker Gordon Fox, received millions of dollars from 38 Studios – millions that are now coming out of taxpayers’ wallets as we (inexplicably) repay the 38 Studios bonds. We have been assured for years that a State Police investigation of 38 Studios is underway. However, it is important to note that, ultimately, Attorney General Peter Kilmartin has a huge say in the direction and result of any investigation. Unless the investigation includes a real audit (not a Chafee audit) of where every dollar that Michael Corso received from 38 Studios went, how much went to any elected officials, under what circumstance, AND THE RESULTS MADE PUBLIC, this investigation will be an enormous sham and cover up by the Attorney General.

  • ShannonEntropy

    … as we (inexplicably) repay the 38 Studios bonds. …

    The State paid $563K to Assured Guaranty Municipal Corporation to insure the 38 Stupido bonds … money that came out the bonds’ principle

    So why doesn’t the State file a claim to recoup the losses ??

    NOT for the usual stated reason i.e. that it would hurt our bond ratings in the future. It is cuz AGMC would demand and conduct a full forensic audit of where the money went — which includes stuff like exterminator fees at Schilling’s Mass home and payment of his personal expenses and most likely bribes and kick·backs

    … and when they uncovered evidence of State mis- or mal-feasance they would refuse to pay.. They might even come after the State … but almost certainly individuals involved in the whole mess might end up as Gordon Fox-In-The-Hen·house’s cell mates

    and heaven knows we can’t have that