(Lack of) Monitoring – What Happened to IBM’s Monitoring Reports Once They Hit the EDC?
First of all, I agree with the leap-off point of Travis Rowley’s column this week: vilification of Kurt Schilling is completely misdirected.
Responsibility for the 38 Studios mess – “mess” as in, who is to blame that taxpayers will probably end up paying $90-100 million hard earned dollars with nothing to show for it – does not rest with Kurt Schilling but with our then-elected officials (G.A. leadership and the Governor; not rank-and-file legislators). Kurt Schilling – and any other businessperson – was perfectly within his rights to come to Rhode Island for a loan guarantee. It was up to us to properly evaluate and then either approve or reject the request. It is not Kurt’s fault that our elected officials apparently failed to carry out – or disregarded the results of – due diligence on our behalf.
So state officials failed miserably on advance due diligence. What about diligence and monitoring once the project was underway? From the AP.
The EDC and 38 Studios signed a monitoring agreement in November 2010 under which IBM would provide 38 Studios with an initial assessment of “Project Copernicus” — the development of the company’s second game — and quarterly “milestone verification” reports, according to a copy of the agreement.
The initial assessment was to include a review of project plans, financials and financial management as well as an analysis of risks and recommendations on how to mitigate them. Subsequent reports would essentially be progress checks, which IBM suggested would include a review of the project’s financial status and a list of results “relevant to Rhode Island’s interests.”
The agreement said 38 Studios would provide to the EDC copies of all materials prepared by IBM and invite EDC to attend all discussions between 38 Studios and IBM.
But in August, the EDC and 38 Studios signed a “modification and waiver” to the agreement saying that, instead of being provided with IBM’s actual reports, the economic agency would agree to briefings from IBM on the findings. This came at the request of 38 Studios.
Observers have pointed out that Governor Chafee has been restrained in not crowing about the failure of a tax-payer backed arrangement which he so vigorously opposed. He has been wise to do so and not just for the sake of decorum but because two of the major questions that have emerged from this mess pertain to his administration:
1.) Who in Governor Chafee’s EDC agreed to with 38 Studios’ request that IBM switch from written to verbal reports and why did they do so?
2.) What happened to that information once it reached the EDC? Who at the EDC was receiving those reports, written and subsequently verbal? Did those reports contain information that foreshadowed the events of the last two weeks?