38 Studios Loan Guarantee: the General Treasurer Pivots, Then Switches to Offense
R.I. General Treasurer Frank T. Caprio said Tuesday he is attempting to block the state’s $75 million loan guarantee promised to Curt Schilling’s video game company, urging the rating agencies reviewing the deal to hold off until a new administration is in office.
Caprio, the Democratic gubernatorial candidate, said he voiced concerns about the loan guarantee to Moody’s Investors Service on Monday and to Standard & Poor’s on Tuesday morning. Both agencies have been commissioned by the state and Schilling’s 38 Studios to issue bond ratings on the deal for institutional investors.
Jeepers, he’s mucking around with the bond rating agencies.
Look, no question, this is a bad idea. The loan guarantees issued recently to 38 Studios and other companies should be the last ones issued by the state. We cannot substitute taxpayer funded loan guarantees for the good business climate that the General Assembly inexplicably refuses to create. So I’m pleased that anyone, with or without a bully pulpit, would speak out against this arrangement.
What’s confusing is the G.T.’s volte face. Keep in mind that this is his area of expertise. Wasn’t he well positioned to examine and understand all aspects of this guarantee before he gave the thumbs up to Ian D? So what has changed in the last thirty days that this went from a deal for which the state should do “everything in a top-shelf fashion” to “a risky moral obligation for the state, which could adversely affect the state’s bond rating”?