The end of the criminal investigation over 38 Studios is sparking debate about whether material from the probe should be released to the public.
The dispute reflects the questions many residents still have about the state-backed video game company and its costly meltdown.
Attorney General Peter Kilmartin quickly identified with Rhode Islanders’ sense of outrage over 38 Studios when he announced that no criminal charges would follow an extensive investigation of the company, and the state loan guarantee it received before landing in bankruptcy
“We all share the frustrations of all Rhode Islanders when it comes to the entire 38 Studios episode,” Kilmartin said. “I feel the same sense of betrayal and outrage. I believe these emotions are shared by all honest, good, hardworking Rhode Islanders.”
But as attorney general, Kilmartin said, he has to follow the law — not his emotions. And in terms of applying the law to the 38 Studios case, he said, “Bad politics, bad public policy, bad business decisions simply do not always rise to the level of criminal conduct.”
In the end, Kilmartin and State Police Colonel Steven O’Donnell said there was not enough evidence to bring charges against any of the figures involved with 38 Studios. That could have included lawmakers, company executives, or firms that consulted with the state on the $75 million loan guarantee for the video game company owned by former Red Sox star pitcher Curt Schilling.
Kilmartin says if fresh information becomes available, investigators will pursue it. And that’s part of the reason he won’t make material from the investigation public. The statute of limitations has yet to run out, and the case could become active again in the future.
“So for us to seek the court to open those grand jury records, would be a violation not only of the grand jury but the potential for the future portions of the grand jury being utilized and it would compromise the case,” Kilmartin said.
A coalition of civil liberties and good government groups, including the ACLU and Common Cause, and a growing number of state and local politicians, want the material from the criminal probe released. They say the official state investigation should not perpetuate the secrecy that led to a costly squander of taxpayers’ money.
“There’s just an extraordinary public interest in finding out what happened, to the extent that one is able to find out what happened,” said Steve Brown, executive director of the ACLU of Rhode Island. “And the investigation that took four years to complete certainly would be a basic place to start to help answer some of the questions that people legitimately have.”
Rhode Island taxpayers still owe nearly $62 million to pay back bondholders who invested in 38 Studios. That’s after paying down the original debt of more than $100 million. So it’s understandable that many people want more details on how the deal came together.
But Roger Williams University Law School professor Niki Kuckes said there are legitimate reasons for secrecy when the government is pursuing a criminal investigation.
“If it gets out who is talking to the grand jury, what the grand jury is asking about, et cetera, the thought is that any criminal investigation where the stakes are very high people will start destroying evidence, trying to pressure witnesses, et cetera,” she said.
In some other high profile cases, including the Station nightclub fire, authorities released records after the grand jury process ended. But Kuckes said that case was different because it did result in criminal charges.
“In the Station fire, one of the key distinctions was that the Station nightclub owners had already received a lot of the grand jury materials, because when you are charged in a criminal case one of the exceptions to grand jury secrecy is those records go the defendants,” she said.
The criminal investigation into 38 Studios also gathered material outside the grand jury process. But Attorney General Kilmartin said it would be irresponsible to release any information before the statute of limitations for potential charges runs out.
So the burning question for voters, reporters, and other observers remains: what was the behind the scenes maneuvering that put the 38 Studios deal on the fast-track in 2010?
Some details have come out through a civil lawsuit the state is pursuing. Tens of thousands of pages of emails, memos, and other documents were released last year. But some political observers have called for an independent probe to finally tell the full story of what happened with 38 Studios. Governor Gina Raimondo supported the idea as a candidate, but has since has backed away. It’s unclear whether the trial in the state’s civil suit will answer those questions. It’s scheduled to begin in October.
