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December 3, 2010
Questions about the EDC's Loan to Trainor
I note a couple things from the ProJo story about Chafee spokesman Michael Trainor's defaulted loan from the RI EDC.
1) Trainor and his partners approached the RHODE ISLAND EDC for a loan for a business based in CONNECTICUT.
2) The business plan centered on the purchase of three companies in the south that would make hurricane shutters, which would be then distributed in the Northeast. Got that: manufacturing jobs in the south, sales jobs in the Northeast...out of Connecticut.
Then the company went bankrupt and Trainor and his partners still owe the EDC around $250k.
In the meantime, we heard Trainor, acting as Chafee's mouthpiece, being critical of the deal that the same EDC gave to Curt Shilling's 38 Studios. Hypocrisy? Not according to Trainor:
“The state handed him $75 million in loan guarantees without any personal obligation,” Trainor said. “I’ve had to place myself in bankruptcy.”That may be so, though the EDC seems to challenge Trainor on this a bit and doesn't seem to expect payback any time soon. That's a wait-and-see.
I know businesses fail, especially lately, and I'm certainly not criticizing entrepreneurship. Obviously, the scale of the Trainor and 38 Studios deals are much different (millions vs. thousands), but at least 38 Studios is actually coming to RHODE ISLAND and hiring RHODE ISLANDERS.
So, given some of the facts surrounding Trainor's company and the EDC loan, I've got some genuine questions. 1) How often do non-RI companies get RI EDC loans without showing they are going to employ--or even be based in--the state? (Was that indeed the case in this deal or were there promises of RI-based sales staff or the like?). 2) Is just being a Rhode Islander (who may know the right people) good enough to get a loan? Basically, I'm not sure we've really gotten the whole story of how the EDC operates.
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The Trainor situation shows the Chafee gang for what they are-every bit as dirty as Caprio.
Posted by: joe bernstein at December 3, 2010 1:32 PMThis Trainor creep and his compadres walked away from a quarter mil obligation to RI taxpayers with NO personal responsibility.
Why doesn't the IRS hit them with an income equivalent on the forgiven portion of the loan?they do that to people who get foreclosed on and those who negotiate credit card debt.
Let's see the leftist sh&tmops here defend this.
"manufacturing jobs in the south, sales jobs in the Northeast...out of Connecticut."
This looks like a smaller scale version of another discovery just made: that the federal gov't has handed out American stimulus dollars to foreign countries.
So convenient to hand out dollars, state or federal, from someone else's checkbook.
Posted by: Monique at December 3, 2010 1:58 PMI would love to know if that is even legal - handing RI taxpayers money to an entity not based here.
Or, did someone lie to the RIEDC to get the loan?
Something stinks here, but one thing is for sure - if the RIEDC is able to give money to companies not based here, this is wrong and should be changed immediately.
Posted by: Mike Cappelli at December 3, 2010 4:40 PMThe whole story just sounds like a loan fraud scheme.
Posted by: G-Man at December 5, 2010 6:56 PM