RI agency in disarray after 38 Studios collapse
PROVIDENCE, R.I. (AP) — The collapse of Curt Schilling’s video gaming company has left Rhode Island’s economic development agency in disarray — without a permanent chief and a half size board.
The Economic Development Corp. has been without a permanent executive director since May, when Keith Stokes resigned, facing questions over the $75 million loan guarantee the EDC board approved in 2010 for Schilling’s 38 Studios.
But several other leaders at the agency that oversees the state’s job-creation efforts have also stepped down, leaving six of the 12 appointed spots on the board vacant. The EDC is losing another top official this week as its chief financial officer, Susan Morgan, leaves to ‘‘pursue a new opportunity outside of government,’’ according to Judy Chong, an agency spokeswoman.
Chong didn’t immediately answer questions on how the vacancies are affecting the agency’s work in a state with an 11 percent unemployment rate, the second highest in the nation. The EDC’s day-to-day operations are being overseen by William Parsons, its deputy director.
38 Studios laid off all its employees in Rhode Island and a sister firm in Maryland in May and filed for bankruptcy last month.
Gov. Lincoln Chafee, who serves as the EDC board’s chairman, said the agency isn’t suffering from a leadership vacuum and that its work continues.
‘‘I'm confident that things are under control there,’’ he said. He noted that Parsons has decades of experience at the EDC and its predecessor agency. ‘‘We have a good team.’’
He also said: ‘‘Some bad decisions were made with full leadership in place.’’
Chafee had sought the resignations of board members who supported the 38 Studios loan guarantee, citing the need for a ‘‘fresh start.’’ He said he would not reappoint three who were serving beyond the expiration of their terms, and they are no longer serving, Chong said.
But even his hand-picked No. 2 for the board, who had not been on the panel when the guarantee was approved, resigned after 38 Studios’ financial troubles became public. In a statement announcing her resignation, Helena Foulkes wished the governor luck ‘‘in this very difficult challenge.’’
The state Senate, which must approve Chafee’s six pending nominations to the EDC board, has not set a time to do so and is not in session. The EDC board is scheduled to meet next on Monday.
A message was left Tuesday for the panel’s new vice chairman, Jerauld Adams.
Meanwhile, an outside group is undertaking a study of the EDC’s structure and effectiveness. Chafee, an independent, has said he does not intend to appoint a permanent executive director before Sept. 1, when the Rhode Island Public Expenditure Council is expected to be finished with its review.
The EDC has also hired a law firm to determine whether the state could recover any money from third parties — including former members of its own board — involved in the 38 Studios loan guarantee. That effort is separate from the money the state hopes to recoup in the bankruptcy proceedings.
Associated Press writer David Klepper contributed to this report.