Chippendale Requests Corso, Esten for Hearing on 38 Studios
Thursday, May 01, 2014
Corso served as lawyer and consultant for 38 Studios. Esten was a former Financial Portfolio Manager for the RI Economic Development Corporation.
“Michael Corso certainly would be a valuable witness for the Oversight Committee. Folks who follow Rhode Island politics are likely familiar with this attorneys’ name. Mr. Corso is directly mentioned throughout the 38 Studios documentation, but is also vaguely alluded to in others. I have every reason to believe he is capable of clearly explaining his role in this deal.” continued Chippendale.
Accordng to Chippendale, Esten's responsibily was to assess the financial “pros and cons” of loaning 75 million dollars to Shilling’s business, 38 Studios and had raised red flags throughout the assessment process.
Rep. Chippendale said,“Mr. Esten plainly laid out financial concerns that did not require a finance degree for the leadership of the EDC to understand. He correctly pointed to the improbability of a start-up operating on loaned revenue, hitting all the financial milestones in the overly aggressive and frankly unrealistic business plan.”
“I know that all taxpayers will be interested in learning who else within RIEDC Mr. Esten had raised his concerns to in addition to the individuals that we have email documentation on. I think we need to learn if he also shared those concerns with others who had a different role to play in the process. The question for Mr. Esten that quickly comes to mind is; how his analyses were treated by his superiors, whether or not they were acknowledged, debated or just summarily dismissed.”
“Make no mistake, our committee has the power and authority to compel testimony through subpoenas - and we will not hesitate to go that route if we are stonewalled at any juncture by anyone the committee has requested an appearance by,” added Chippendale.
Chippendale said,“This loan package was prepared without the necessary attention to the company’s ability to survive long enough to generate revenue from its product. I owe it to my constituents - and all Rhode Island taxpayers to get answers to the burning questions regarding this fiasco.”
Related Slideshow: 7 Strategies for Rhode Island Economic Development in 2014
What will it take to move the Rhode Island economy forward in 2014? GoLocal talked with elected officials, candidates, and leaders for their economic development plans in the coming year.
Below are key elements of the economic priorities for Governor Lincoln Chafee, Speaker of the House Gordon Fox, Senate President M. Teresa Paiva-Weed, House Minority Leader Brian Newberry, gubernatorial hopefuls General Treasurer Gina Raimondo and Ken Block, and RI Center for Freedom and Prosperity's Mike Stenhouse.
Governor Lincoln Chafee
Speaker Gordon Fox
"Among the many pieces of legislation the House will address will be issues of higher education affordability, expanding apprenticeship opportunities, and offering help to our manufacturers. We will also look closely at our tax structure to make sure we are competitive with our neighboring states, including the corporate tax and the estate tax, and I will carefully review the recommendations of the commission studying our sales tax.”
Senate Pres. Paiva-Weed
Greg Pare, spokesperson for the Senate President, said that the Senate is planning to issue recommendations soon on workforce development initiatives to address the skills gap among Rhode Island job seekers.
"An example of a proposal anticipated in that report is the elimination of state’s Indirect Cost Recovery on the Job Development Fund, which is about $1.2 million this year. Those funds would be directed towards job training and skills development programs to provide immediate impact and help workers gain the skills necessary to succeed in today’s economy."
Gen. Treasurer Raimondo
"To grow our economy, we need to make Rhode Island a leader in manufacturing again. Great things can happen at the intersection of government, higher education, and the private sector. Rhode Island is lucky to have thriving institutions in each of these three sectors, and we need to foster collaboration among them to find solutions to our challenges, and spark our economy.
By promoting partnerships in high-growth areas, [Rhode Island Innovation Institute] will help grow our manufacturing base, and create new, high-quality jobs."
"First, we need to fix Rhode Island’s broken Unemployment Insurance program. The state’s Unemployment Insurance tax, paid by employers, is ranked worst in the country by the Tax Foundation. It is one of the factors that makes Rhode Island an uncompetitive place to do business. Also, it is inherently unfair that a large group of businesses are effectively subsidizing the payrolls of a small group of businesses who misuse the system. There is a simple change to state law that can fix this problem."
"Rhode Island’s temporary disability tax (TDI) is broken, and places an unnecessarily high tax burden on Rhode Islanders. This tax, paid for by employees, will be reduced by changing the way we manage the program. As Governor, I will substantially reduce the cost of purchasing this insurance by requiring that Rhode Island’s program adhere to national norms."
"To best encourage new job creation, I propose the following tax incentive: exempt from future capital gains taxes any new investments in Rhode Island-based businesses. This change would create a powerful incentive for investors who are deciding where to locate a new business, or where they relocate an existing one. This proposal has the potential change the economic playing field for Rhode Island."
Minority Leader Newberry
“It would be overly ambitious to set being #1 as a goal right now, but we think 25, the middle of the pack, is a reasonable goal to set, one we think we should pursue, and one we can achieve,” said Newberry. "One of the initiatives is a requirement that every bill receive a fiscal evaluation before it can be heard by committee, better insuring that legislators know the real cost of the legislation they are acting on."
"Another proposal would exempt social security income from RI state income tax, making Rhode Island more tax-friendly for our seniors and keeping them here rather than migrating to more tax-friendly states."
“Strong action is way overdue here. Nearly 60% of Rhode Islanders now believe that the state is headed in the wrong direction. We think they’re right, and our central goal is to get it turned around."
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