Rhode Island Sen. James Sheehan, D-Narragansett, called for major changes in the governance structure and responsibilities of the Rhode Island Economic Development Corp.
The corporation, which in 2010 guaranteed a $75 million loan to video-game company 38 Studios LLC only to see the company to file for liquidation last month, also said recently it has been making payments off a $5 million loan guarantee by its subsidiary, the Industrial Recreational Building Authority, to struggling construction company Capco Steel LLC of Providence.
Sheehan called for a review of the decision to make a loan guarantee to a steel fabricating company during a recession that hit the housing and construction industries the hardest.
"This may or may not have been a bad decision by EDC. But, the lack of transparency about Capco Steel's default makes one question the wisdom of the initial decision," Sheehan said.
According to the Providence Journal, the EDC board of directors, which lost half its members to resignation amid the 38 Studios controversy, spent nearly 40 minutes last week discussing whether to adopt drafted minutes from past meetings the board held with 38 Studios owner and former Boston Red Sox pitcher Curt Schilling.
