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RI Senate Candidate Hinckley Demands Full Audit of $100 Million Boondoggle

By    |   Friday, 08 June 2012 04:24 PM EDT

Rhode Island Republican Senate candidate Barry Hinckley has backed Democratic Sen. Jack Reed in his quest to have the state conduct an extensive audit of the gaming company 38 Studios’ finances.

"As a result of the video game company's financial troubles, hundreds of employees have been laid off, and Rhode Island taxpayers are potentially exposed to obligations of over $100 million. Just today, it was revealed that 38 Studios has filed for bankruptcy," Hinckley said in a news release.

"As I have often said, this deal was a loser for Rhode Island from day one," a tone similar to the one the Rhode Island Republican struck earlier with Newsmax. "Whether we're talking about Solyndra on the federal level, or 38 Studios right here in Rhode Island, this sort of cronyism has repeatedly blown up in taxpayers' faces. That being said, the focus of the Governor and the EDC at this point should be solely on how we limit the fallout from this latest disaster.

"The 38 Studios situation remains unclear on a number of fronts," Hinckley continued. "How much taxpayer money is at stake, and where were funds raised from state-backed bond sales used? Does 38 Studios have a credible and sustainable pathway to fulfilling its obligations to it's bondholders, or is it time to salvage what we can by liquidating the company's collateral?

"Most importantly, how do we make sure that bond issues that never went to the voters for approval are never again treated as a taxpayer obligation? These are questions that can only be thoughtfully answered after a complete audit of 38 Studios, and its relationship with the Economic Development Corporation (EDC)," said Hinckley.

"A full investigation will also clarify the extent to which 38 Studios violated its agreement with the EDC," Hinckley added. "It appears now that the company was in breach of contract when it unilaterally laid off its Rhode Island employees, as well as in selling state film-tax credits that have not even been issued. The bondholders and employees of 38 Studios, and especially the taxpayers of Rhode Island, deserve a complete accounting of the facts.

"Finally, we owe it to ourselves to ensure that our state is never again manipulated by the corrupt relationship between government and politically-connected corporations. Whether it's Solyndra or 38 Studios, this sort of arrangement all too often ends up leaving the taxpayers with nothing more than an empty building," concluded Hinckley.

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Friday, 08 June 2012 04:24 PM
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