In Rhode Island, a state known for cronyism and corruption, the 38 Studios scam may go down as one of the greatest ever. And the best part of it all is that it involves the political troglodyte and toxic gas bag known as Curt Schilling, the former Red Sox pitcher and Trump supporter.
News broke yesterday that the state and 38 Studio’s bankrupt ownership had reached a partial settlement in a case involving $88 million in state bonds issued to support Schilling’s company. According to the Providence Journal, the sum total spent by the state on the deal, audits, investigations, and everything else totals upwards of $138.5 million, with costs still liable to rise before the affair is resolved. What happened?
Following the 2008 crash, the state was desperate to revive the economy. Two years later, GOP Governor Don Carcieri, who had been elected on a program calling for fiscal responsibility, found himself at a fundraiser hosted by Schilling. At the time, the lunkheaded pitcher was roughly as popular as Jesus Christ because in 2004 he had shed blood as he helped the Red Sox defeat their arch rival, the New York Yankees, in the playoffs and then the St. Louis Cardinals in the World Series.
Whether it matters that Schilling was also a Republican is tough to discern, but he somehow was able to convince the former banker and executive Carcieri that his start-up video game company, 38 Studios, would be a huge success and create tech jobs in Providence, a town desperate for employment. All that the former pitcher needed was an injection of capital to push his new epic online fantasy video game akin to Worlds of Warcraft, code named Project Copernicus, over the finish line into the completion and release stage.
Or so he said.
I’ve personally read through the testimony in the case and it’s pretty obvious that Carcieri had no idea he was being played. Even with all the state money injected into the company, 38 Studios never came close to finishing Copernicus. In other words, the state spent millions of dollars on absolutely nothing of value. The video trailer above was the only thing 38 Studios ever completed for public viewing.
Let me repeat that: the state of Rhode Island, in the midst of a massive recession, spent close to $100 million for a 1:45 minute video of interior shots inside medieval-styled digital buildings.
Schilling apparently was able to get away with this because he hired expensive political help and found support from key officials. He retained a powerful attorney, Michael Corso; legislative kingmaker and House Speaker William Murphy briefed Schilling several times before his meeting with Governor Carcieri; and Gordon Fox, Murphy’s successor as House Speaker, signed off on the state money for 38 Studios. (See this illustrated timeline in the Providence Journal to see how the whole debacle unfolded.)
The ultimate irony of 38 Studios is that Schilling was a self-described “fiscal conservative” but raided the state treasury with the same abandon as the greediest crony capitalist. And in case you were wondering, Schilling suffered no legal or financial consequences for his role in this brazen raid on taxpayers.
Naturally. In America 2016, white collar scams get you a slap on the wrist or, at worse, a scolding from Senator Elizabeth Warren but it’s rare that anyone goes to jail or even has to repay the money they made off with. Punishment is for the little people, not the rich and famous.