AG hires outside counsel for 38 Studios subpoena

PROVIDENCE, R.I. (WPRI) – R.I. Attorney General Peter Kilmartin’s office said Friday it has hired outside legal counsel to assist the Rhode Island House of Representatives in response to a subpoena issued in the state’s lawsuit against failed video game company 38 Studios.

Providence lawyer Marc DeSisto will be paid $150 per hour to represent the House after the attorney general’s office determined it needed to hire conflict counsel because it is also involved in a criminal investigation related to 38 Studios, according to Kilmartin spokeswoman Amy Kempe.

“Because the office has been, and continues to be, involved in a publicly documented criminal investigation of the same general transaction that is the subject of the civil litigation, the office determined that it would be a conflict for the office to directly provide representation to the House of Representatives,” Kempe told WPRI.com.

Kempe did not identify who issued the subpoena and said the office could not comment on the status of the criminal investigation. House Spokesman Larry Berman confirmed that DeSisto is representing the House, but said the subpoena was for former House Speaker Gordon Fox.

Kempe’s comments came a day after Albin Moser, a lawyer for Fox, said in court that a grand jury is investigating matters that may include 38 Studios. Moser cited more than 100 subpoenas stemming from a grand jury investigation as part of an argument for why Fox should not be forced to comply with a separate subpoena in the 38 Studios lawsuit.

In addition to the House and Fox, lawyers said Thursday that Senate President M. Teresa Paiva Weed, former House Finance Chairman Steven Costantino and Providence attorney Michael Corso have all been subpoenaed in the state’s civil suit against the key 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.

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. 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.

Lawyers on both sides of the state’s lawsuit are scheduled to appear in court again Monday at 9:30 a.m.

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

Tim White and Ted Nesi contributed to this report.

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