Chafee, GOP candidates at odds over 38 Studios debt

PROVIDENCE, R.I. (WPRI) — The failure of former Red Sox star Curt Schilling’s video game company 38 Studios, financed with moral obligation bonds, has left Rhode Island taxpayers on the hook for millions. Now, as some lawmakers push to default on the debt, others insist the state should repay.

An election is just months away and Gov. Lincoln Chafee, who is not seeking reelection, is at odds with both Republican gubernatorial candidates. Chafee told Eyewitness News he is furious that both Republican gubernatorial candidates are against paying back the roughly $90 million in debt from the state’s investment in 38 Studios.

The governor argues that Rhode Island’s taxpayers must pay back the debt or risk severe financial consequences for the state and possibly damage the state’s lawsuit.

“I think any governor or candidate for governor that doesn’t see these two truths is really unfit to serve here,” said Chafee.

Both Republican candidates – Cranston Mayor Allan Fung and Barrington businessman Ken Block – argue against Chafee’s stance.

“What I’m proposing that we do, is that we don’t pay on these bonds while there are questions about whether the bonds were correctly underwritten or not,” Block said.

In a written statement, Mayor Fung wrote that Gov. Chafee “doesn’t seem to understand that we still have the highest unemployment rate, and one of the highest overall tax rates of any state in the nation. Taxpayers cannot afford this added burden.”

All three Democratic gubernatorial candidates – Angel Taveras, Gina Raimondo and Clay Pell – support repaying the debt.

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