Rhode Island is enmeshed in its own “Solyndra” scandal involving $75 million of taxpayers' money, star-struck politicians and Curt Schilling, one of New England’s greatest sports heroes, the state’s GOP Senate hopeful tells Newsmax.
“This is a prime example of why our government should not be in the business of picking winners and losers in the marketplace, Barry Hinckley said as the scandal grew.
“This is Rhode Island's very own Solyndra.
“We all lose when our government gives special favors to corporations with political connections,” Hinckley said. “The taxpayers of Rhode Island have lost, the employees of 38 Studios have lost, and the business environment in Rhode Island has lost.”
Schilling, the pitcher who was on four World Series-winning teams, including two with the Boston Red Sox, runs Providence-based 38 Studios, which Rhode Island lured from neighboring Massachusetts in 2010. The state guaranteed $75 million in loans to Schilling, who, at the time had never developed a video game.
But he was a New England sports legend, who gained near-cult status when he led the Red Sox to victory in game seven of the 2004 American League Championship Series against the hated New York Yankees, with an ankle so badly injured that his sock was soaked with blood.
That, many locals believe, is how he persuaded officials in the Ocean State to give his company such a sweetheart deal. GOP state Rep. Robert Watson told the Boston Globe that former Gov. Donald Carcieri, who signed off on the deal “had stars in his eyes,” adding, “The whole idea of playing ball with a baseball player intrigued him and others. I think they got blinded by that celebrity.”
But now 38 Studios — where Schilling revels in the title “founder, chairman and executive visionary” — says it doesn’t have the money to pay its 400 employees and initially missed a $1.1 million payment this week. Rhode Island’s Independent Gov. Lincoln Chafee said the company may well receive millions of dollars in additional subsidies under a state program for moviemakers and video game companies, The Globe reported.
Schilling’s company eventually made the $1.1 million payment on Friday and could now be eligible for millions in additional funding under Rhode Island's film tax credit program, which is open to video game companies.
Despite the payment, Hinckley — who is trying to unseat Rhode Island's one-term Democratic Sen. Sheldon Whitehouse — still remains dissatisfied, especially since Chaffee said the state could be legally obligated to provide additional aid to 38 Studios, The Globe reported.
“The people who are most outraged by this latest disaster are the small-business owners across Rhode Island who were unable to get loans from their banks in order to help them run or expand their businesses,” Hinckley said. “Government can out-compete private businesses for capital by offering tax-free bonds.
“To give one business a $75 million dollar loan is a clear-cut abuse of that power.” The loan to 38 Studios now totals $112.6 million with interest, Hinckley told Newsmax.
Solyndra, the failed California-based solar company, received $528 million in guaranteed loans from the federal government and has become a target for Republican attacks on the Obama administration.
© 2014 Newsmax. All rights reserved.