Fox lawyer cites grand jury at 38 Studios hearing

PROVIDENCE, R.I. (WPRI) – A lawyer for former House Speaker Gordon Fox said Thursday a grand jury is investigating matters that may include the failed 38 Studios deal, the latest twist in the swirl of legal issues surrounding the lawmaker.

Albin Moser, Fox’s lawyer, said during a hearing in Rhode Island Superior Court that he was aware of more than 100 subpoenas stemming from a grand jury investigation. He cited them as part of his argument for why Fox should not be forced to comply with a subpoena in a separate 38 Studios lawsuit brought by the state.

“We do believe that federal and state investigators are interested in the subject matter of 38 Studios,” Moser said. He separately referred to a “wide-ranging” probe, suggesting investigators are casting a wide net in their efforts.

Moser’s comments came during a hearing held Thursday as part of the pre-trial process for the Chafee administration’s lawsuit against the architects of the 38 Studios deal, which brought Curt Schilling’s game company to Rhode Island in 2010 in exchange for a $75-million taxpayer-guaranteed loan. The company collapsed in 2012.

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After the hearing, Moser declined to elaborate when reporters pressed him about his comments regarding a grand jury. Fox has not been identified as the target of any investigation.

R.I. State Police Col. Steven O’Donnell confirmed Thursday that a state police investigation into 38 Studios is ongoing. U.S. Attorney Peter Neronha said earlier this year on WPRI 12’s Newsmakers that federal investigators were not looking into the deal.

A spokesman for Neronha declined to comment on Moser’s statements in court Thursday afternoon. Target 12 has previously reported that investigators were seeking campaign-finance records related to Fox when they raided his home and State House office March 21.

Superior Court Judge Michael Silverstein heard arguments Thursday on a number of issues, including whether he should force Fox – who resigned as speaker after the law-enforcement raids – to comply with a subpoena issued by Wells Fargo, one of the defendants in the 38 Studios lawsuit.

Moser has invoked Fox’s constitutional rights against self-incrimination and illegal search and seizure in an effort to quash the subpoena, which asks for the ex-speaker to provide a wide range of documents related to 38 Studios.

Silverstein gave Moser until Tuesday to make his argument to quash the subpoena, and he gave the lawyers from Wells Fargo until next Thursday to respond.

Michael Corso, a Fox associate and longtime fixture at the State House who was closely involved in the 38 Studios deal, is also fighting a subpoena.

In a related development, Silverstein ordered lawyers in the case to finish their depositions for the trial by Aug. 15, rejecting a request from the defendants to give them a deadline of Dec. 17. Max Wistow, a lawyer for the EDC, argued that the defendants have had plenty of time to depose many of the prominent figures involved in the 38 Studios deal.

Lawyers for several defendants rattled off several prominent current and former elected officials they have subpoenaed, including Senate President M. Teresa Paiva Weed and Steven Costantino, who currently serves as the state director of health and human services and was the chairman of the House Finance Committee when the loan program that ultimately guaranteed 38 Studios $75 million was created.

“The Senate president received a subpoena to produce various categories of documents related to the civil litigation on 38 Studios,” Greg Pare, a spokesman for Paiva Weed, said in a statement. “She is in the process of responding to the request.”

Costantino did not immediately respond to a request for comment.

Thomas Holt, a lawyer representing Wells Fargo, also said he expects former Gov. Don Carcieri to be deposed, but Carcieri has not yet been issued a subpoena.

In a separate motion, Silverstein ruled that the state and the defendants must split the cost of hiring an IT consultant to search for various documents related to 38 Studios that Carcieri maintained during his time as governor. The documents are maintained in state archives.

Lawyers on both sides are scheduled to appear in court again Monday at 9:30 a.m.

Dan McGowan ( dmcgowan@wpri.com ) covers politics and the city of Providence for WPRI.com. Follow him on Twitter: @danmcgowan

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @white_tim

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

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