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Thanks Don

May 18, 2012

Welcome to Governor Lincoln Chafee’s world as he copes with fallout from his predecessor, Donald Carcieri. RIPR political analyst Scott MacKay explains.

 

Governor Chafee was sitting at a spare conference table in his State House office staring grimly at budget figures when a visitor ambled in and blurted, “So governor, it looks like you are having another  `thanks Don’ afternoon.’

Chafee’s face creased into a rueful `that’s-not-even-funny’ grimace. Thanks Don refers, of course, to former Gov. Donald Carcieri, the conservative Republican who held the office for eight years before Chafee took over 17 months ago.

Chafee has spent way too much time sweeping up the mess he inherited from Carcieri, the once ubiquitous Rhode Island politician who is now retired  in his Saunderstown manse by the sea, hiding from the media and the taxpayers he so avidly fleeced.

Until last week, Chafee thought he was making some progress cleaning up the various dysfunctional state government departments he assumed from Carcieri. The endless lines that clotted the DMV have been largely fixed. And the unemployed no longer linger on hold at the DLT telephone exchange.

Then the governor was hit with the runaway freight train that is the Curt Schilling 38 Studios default, the worst hangover from the Carcieri tenure. A quick history lesson here: as he was headed out the door Carcieri saddled the taxpayers with a $75 million crony capitalism deal to lure the washed up Red Sox pitcher’s video game company to move from Massachusetts to Providence.

At the time, Chafee was campaigning for governor as an independent. Chafee vigorously opposed the deal, as did Ken Block of the Moderate Party. What Carcieri and his enablers in the General Assembly did was bet $75 million in state loan guarantees on a celebrity jock with no business experience, unless you think throwing a fastball qualifies one for an MBA.

The ironies here are delicious. When Carcieri ran for governor in 2002, he posed as an outsider business executive who would bring good jobs to a state in dire need of them. Carcieri branded his opponent, Democrat Myrth York, as a big spending liberal who favored expanding welfare for the undeserving poor. Carcieri won and expanded welfare to the rich, using his office to help Schilling. And don’t forget the sweet no-bid 20-year state lottery contract Carcieri cut for gambling giant GTECH.

And how about the ocean of hypocrisy on the parts of Schilling and Carcieri, both self-styled conservative Republicans who purport to believe in free markets and small government. Except, of course, when a failing governor desperate for an economic legacy bribes a wealthy ballplayer to R.I. with OUR money.

There is only one reason Schilling decided to move his company from Massachusetts. Massachusetts economic development gurus were willing to help Schilling’s company with such traditional economic development tools as tax breaks, but they refused to put the taxpayers on the hook for millions by investing in a very risky business.

So Carcieri bet Rhode Island taxpayers money instead of letting the free market of venture capitalists finance 38 Studios. In return, Rhode Island poached several hundred jobs from the Bay State when Schilling moved the company to Providence.

The saddest part of all this is what could have been done to help home-grown Rhode Island businesses with state-backed loans. Seventy-five million could have been distributed to 75 different small businesses that were having a hard time getting to access to traditional financing in the aftermath of the Wall Street Crash.

Before the 38 Studios fiasco, Chafee was trying to deal with the financial crisis that has pushed such distressed Rhode Island communities as Providence, West Warwick, Woonsocket and Pawtucket to the precipice of bankruptcy. Chafee has been fighting this lonely battle himself, without any cooperation from either Assembly Democratic leaders or State Treasurer Gina Raimondo. (Chafee cracked last week that Raimondo is “more I than RI.’’

Chafee has trekked from Westerly to Woonsocket seeking support from local town and city councils for a package of legislation to help cash-strapped communities. So far 33 have signed on.

One of the big reasons the cities and towns are hurting were the devastating cuts in state aid pushed by Carcieri and approved by his legislative enablers in the budgets from 2009 to 2011. State aid to Providence was slashed by $55 million. Aid to Pawtucket dropped by $20 million, Woonsocket lost $13 million in state aid and West Warwick was cut by $6 million.

At the same time Carcieri was starving the communities of state aid, he cut taxes for the wealthy and allowed communities to raise the odious clunker tax on vehicles worth less than $6,000.

Chafee and Carcieri are much different characters. Chafee is less impressed with the trappings of office than any recent governor, except Republican Lincoln Almond. Can you see Chafee pulling a Carcieri and booting his communications director from a plush State House office so he could turn it over to his wife?

Rhode Island politicians never seem to learn from the mistakes of the past. Our state government has been down this business subsidy road before. In the early 1990s, then-Gov. Bruce Sundlun gave Alpha Beta, a Massachusetts bio tech company, $33 million in loan guarantees to move to Rhode Island. Alpha-Beta moved here because then-Massachusetts Gov. Bill Weld refused to match the Rhode Island deal.  Rhode Island even built Alpha Beta a factory. Then the company went belly-up after Sundlun left office.

The mess landed in Almond’s lap. (Has anyone noticed how much better Almond’s tenure looks these days?) Almond’s economic development director, John Swenn, was able to find a company to move into the factory. In the end, Rhode Island taxpayers took a $4.5 million loss, which didn’t make Almond happy but did avert a much deeper river of red ink.

A 38 Studios failure would be much worse. What can the state salvage from Schilling’s company, which is housed in leased offices in downtown Providence? What do you think used laptops are worth? How about vaporware? And do you know any lawyers who specialize on foreclosing cyber space?

So Rhode Island is once again a national laughingstock. Thanks Don.

 

 

 

 

 

24 Comments leave one →
  1. Pablo Rodriguez permalink
    May 18, 2012 10:51 pm

    Please Scott, don’t hold back, tell us what you think! We don’t even have a personal guarantee from Schilling so he gets to keep his money while we lose ours. Maybe we can get the bloody sock!

    • moby dick permalink
      May 22, 2012 11:44 am

      just the tip of the ice burg. the public has yet to grasp the news feeds which keep telling everyone “the taxpayer will be left holding the bag”! first, our tax dollars are gone. if the state had that much extra money to begin with, then your being overtaxed. second, now the idiot politicians have to scramble to replace the lost revenue. UNDERSTAND YET? YOUR GOING TO PAY FOR THIS TWICE!!! your being fleeced by these so called self-important, arrogant born leaders, because your seen as stupid and your la-di-la life allows this to happen. WAKE-UP!
      This is only their right hand. while your watching this story, they are fleecing you more so with their left hand. yes, this cape wind crap is going to leave you wounded and bloody on so many levels. this project will be looked back on as cape-enron. these wind turbines freeze up in the winter. heaters have to be installed. the turbines do not produce enough energy to run the heaters. duh! schilling story is a drop in the bucket in comparison. why? because you (the public) are stupid and deserve the cattle prodding! btw, the press is not your friend.

  2. John Castellucci permalink
    May 18, 2012 11:07 pm

    Swen is spelled with one “n”

  3. tim1999 permalink
    May 19, 2012 4:07 am

    Scotso, you didn’t have your scotch on the rocks before you wrote this did you??
    We can always tell when you’re “in need”. Your red face is coming through the blog. ha ha ha ha Hilarious!!!
    Btw Scotso, a little advice. Best to wait ’til the 38 Studios game is over before making your silly proclaimations. Wouldn’t want egg on your face now would you??
    We know you libs are actively rooting for 38 Studios to fail but you might want to hold off on the celebration. Quite quite premmie.

    And speaking of premmies……

    Hey Pablo, how many premmie socks have you bloodied over the years?
    Demon.

  4. Jim permalink
    May 19, 2012 5:15 am

    This is actually hilarious… Mr. McKay has, of course, ceased to be influential in any sense. Now, however, he feels he must take the reins as a Defender for Lincoln Chafee, who, without question is one of the dumbest intellects on the planet. Gov. Chafee conducted no audit, did not exercise his own due diligence but left 38 Studios in the hands of Keith Stokes… all because he caved to Sen. Weed? Really? Really?

    There is no “sole responsibility” for the 38 Studios debacle. RI has the weakest consittutional form of governorship in the nation. Our Gov. can do NOTHING without the consent of Speaker Fox and Paiva-Weed. Even the General Assembly is irrelevant for it is the Speakers and Sen. Pres. who are the marionettes of governmental policy and lawmaking in RI. Everyone knows this… especially the leftists who can’t get Fox to sign onto to their hairbrained ideas like raising taxes on those who earn, produce and contribute in this, the Little State that has failed, and failed on a Grand Scale. Don Carcieri, for sure, was a cheerleader for this disgraceful taxpayer guaranteed loan… but we heard little discontent from those who truly hold the reins of power. THere’s only one way out of this… bring in Ms. Raimondo to fix it.

  5. May 19, 2012 10:39 am

    Please remember that all the things we accuse Gov. Carcieri of doing, he did with assistance from the Democratic leaders of the General Assembly. We cannot ignore the role played by Speaker Fox, President Paiva-Weed and their predecessors in the debacles, immoral deals, and feed-the-rich tax policies that occurred under Carcieri’s watch. They passed budget that cut taxes for the rich and cut programs for the poor and middle class. College tuition went up as the flat tax doled out largesse to their friends. Yes, he deserves much of the blame (and is a total coward for hiding from the public now that he’s out of office), but he is not alone in bearing guilt. Democratic leaders embraced trickle-down economics and corporate welfare just as surely as did the “small government” conservative Carcieri.

  6. archibaldtuttle permalink
    May 21, 2012 12:59 pm

    scott,

    can’t believe you could go on that kind of rant and not bring up Deepwater. That will cost taxpayers, i.e ratepayers, 10 times as much as 38 studios, and that assumes, which is not yet in evidence, that the legislature doesn’t give the bondholders a haircut. I won’t hold my breath because the one thing for sure about this legislature isn’t that it will act progressively or conservatively, but that it will display no intestinal fortitude. They weren’t willing to stand up to Carcieri on the worst of his ideas.

    It may fall to Chafee, who has embraced pension reform in the after effect, to take the bondholders to the woodshed. That is what the bully pulpit is for after all.

  7. May 21, 2012 5:40 pm

    we got “schilled”—–jut like like a tourist in a hooker bar !

  8. tim1999 permalink
    May 21, 2012 8:46 pm

    Hey Joe ProCap Vileno, speaking of getting schilled why don’t you tell us about 422 Pine St. And the hooker bar reference coming from you is priceless.
    You and Scotso must form a comedy team.

    Hey Scotso, kitty cat got your tongue?? Nothing to say about Mike Stanton’s excellent piece in Sunday’s ProJo?? The one where connecting the dots in the 38 Studios story is leading to the Democrats controling the General Assembly.

    • scott mackay permalink
      May 23, 2012 3:46 pm

      Of course I mentioned the Democrats. They bear responsibility. at this point, however, Chafee doesn’t. It was Thanks Don who brought this mess to fruition.

  9. May 21, 2012 8:47 pm

    Fantastic article, gentlemen. Now we need to repeal the unconstitutional law that allows state government to give away the peoples’ money–to anyone.
    Let’s also abolish the EDC, which is nothing more than a socialist planning agency.

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