Lawmakers describe Statehouse secrets of survival

Lawmakers describe Statehouse secrets of survival

State police release statements from local reps in 38 Studios investigation

PROVIDENCE – Portraying the House of Representatives as a fixed political game where those who do not follow leadership are left out, and only insiders know the real agenda, current and former representatives from northern Rhode Island gave their take on how the state got involved in a $75 million loan to the failed 38 Studios gaming company in statements released last week by the Rhode Island State Police.

The testimony paints a picture of an environment where records go missing, where politicians are rewarded for their loyalty – and punished when they lack it – and where those who refuse to follow suit are kept from important appointments.

“If the average person in the state really knew how the legislative process worked, they’d vote everybody out,” said Rene Menard, a former representative from Lincoln who served from 1988 to 2012, in a statement to Detective Cpl. Kenneth Buonaiuto.

Menard was among more than 100 witnesses contacted as part of the investigation of the fiscal debacle, which began with the 2010 approval of the Jobs Creation Guarantee Program and ended with the bankruptcy of a speculative company the state had promised $75 million in loans. He, and others, repeated the mantra heard across Rhode Island since former Red Sox pitcher Curt Schilling’s video game company 38 Studios went under that year: we thought we were promoting small business.

Rep. Karen MacBeth, who served District 52 in Cumberland from 2009 to 2016, said of the 2010 bill, “I felt very uncomfortable, but I had senior reps and people ... (who) had served longer than me telling me it was a job creation bill, I would have to support it; it would be a bad message to the business community if I didn’t.”

MacBeth said she questioned House leadership at the time about how they planned to spend the money, an assertion verified by others who spoke with Buonaiuto.

“I could tell (House Finance Chairman Steven) Costantino was nervous with my questions but at the same time, the speaker wasn’t letting anything on that there was an issue,” she said.

MacBeth told police that when it was revealed that Costantino and others in the know had lied about their plan for the $125 million – nearly 3/4 of the funds were given to entice Schilling to move his fledging gaming company to the state from Massachusetts – she attempted to pull records on the committee hearings where the deal first won approval – and found them missing from the State Archives.

“Whatever law we’re supposed to follow, those have to be kept, and they haven’t been. I know that there’s others that are gone now,” MacBeth told police.

No charges were ultimately filed in the investigation.

A portion of MacBeth’s testimony is redacted from the records released last week, in which she discusses a conversation that she had with an FBI agent after receiving threats related to the issue.

Also released was a record of the corporal’s conversation with former Pawtucket and East Providence Rep. Roberto DaSilva. DaSilva served in the House of Representatives for four years, and now serves as a captain for the Pawtucket Police Department.

“The purpose of the bill, that I understood it at that time, was that this was going to create a program whereby small businesses could get low interest loans to help them stay in business and expand,” DaSilva said.

“I was not part of the inner circle. I was a new rep,” DaSilva told police. “So much so in the outer circle that I was cut out of my district when they were trying to redistrict. That’s why I’m not there anymore.”

Rep. Thomas Winfield, who has served for District 53 in Smithfield and Glocester since 1992, said that either Menard or MacBeth asked Costantino about the bill, “‘Is this particularly earmarked for one company?’ And he said absolutely not. I’ll never forget it.”

But Buonaiuto holds a more revealing conversation with Menard, who served as deputy majority whip when the bill was passed in 2010, and tells the corporal that it’s important investigators understand the legislative process and the role of the Finance Committee that sent the bill to the House floor.

“For the most part, a sitting committee member doesn’t really have a say,” Menard said. “Someone’s made that decision beyond the committee process. The committees are set up that are supportive of leadership. Whatever leadership wants or doesn’t want is really the outcome of the committee vote.”

Some committee memberships, Menard notes, are sought-after roles, so members tend to go along with leadership. The three big ones, he said, are Finance, Judiciary and Corporations.

“After that, they created committees just to say that they give a chairmanship out,” Menard said.

Buonaiuto asks Menard what’s illegal about the way the system works.

“The only thing that would possibly be illegal is that if someone cut a deal that helped someone specifically and the rest of us didn’t know,” Menard replies.

Buonaiuto continues, “What is law enforcement going to be able to do when it’s not in violation of any statute?”

Menard says he believes the decision was made between Costantino, former Speaker of the House Gordon Fox and another former speaker, William Murphy.

Menard says he told Fox, “We’re $200 million in the hole. We’re at 10 percent unemployment. You’ve been on the job for eight years. You’re not part of the solution, you’re part of the problem.”

Fox is now serving time in federal prison after pleading guilty to charges including bribery, fraud, and filing a false tax return.

Former Woonsocket Rep. Christopher Fierro was on the Finance Committee when the bill was passed.

“This time four years ago I was a freshman member, we were doing a budget and 100 bills at the end of the year and I was worried about re-election,” said Fierro, who later took a job as district director for U.S. Rep. David Cicciline. The bill, he said was passed as part of “the flurry at the end of session.”

Former Woonsocket District 50 Rep. Jon Brien, who now serves on the City Council, was a co-sponsor of the bill.

Brien told Buonaiuto, “I was an outsider at the time. I hadn’t voted for Gordon Fox for speaker. I voted for Greg Schadone from North Providence. I was in the version of legislative Siberia.”

Brien said he was shocked when the speaker said they wanted to tack a bill of his – which was developed as a support system to help Rhode Island businesses bid on federal contracts – onto the Loan Guarantee Program.

“I was perplexed at the time - why the hell would they want me,” Brien said. “At the time I couldn’t get a bill passed that said ‘today is Thursday.’”

Brien said he believed his sponsorship was sought to make the bill look better by including an outsider critical of leadership.

“At the time I was grateful because I felt like I was going to get my legislation through,” he said, adding that he had no idea the plan was to lend most of the money to 38 Studios, rather than split it among the state’s small businesses.

Since then, Brien noted that his portion of the legislation has become part of Rhode Island law, but has never been funded.

“It’s a totally useless statute on the books,” he said. “They took this legislation and they tacked it on and never intended to implement it whatsoever.”

Woonsocket Mayor Lisa Baldelli Hunt, who at the time was representing the city’s District 49, gave a somewhat similar account of Brien’s involvement.

“When you’re in the General Assembly, there are legislators who, you know, want their names to be on a bill because they want to get credit for things,” Baldelli-Hunt said.

The now mayor said Brien was “beside himself,”when the Loan Guarantee Program was being passed because he felt they took his idea. She recalls Brien “storming down the aisle” to get Costantino to put his name on it.

For her part in becoming more of an insider with an appointment to the Finance Committee under the new Speaker Nicholas Mattiello, MacBeth admitted, “You are typically not put on Finance unless you agree to vote the way you’re told to vote by leadership.”

She says that she received a phone call from Mattiello after she was put on the committee informing her of how she’s supposed to vote, and saying it’s a talk he had when he served on finance.

“I said ‘I don’t think you know me very well,’” MacBeth told Buonaiuto of her conversation with the speaker. “I didn’t listen.”

Comments

Speakers come and Speakers go but the game remains the same.Just look at the last election,Speaker Mattiello spent over 250k on his pet State Representatives elections. Look at the campaign finance reports it's the same names on report after report as the Speaker directs who gets the money and who doesn't. And yet the public keeps putting the same good old people back in election after election,all the time while wondering why things don't get better.