PROVIDENCE, R.I. (WPRI) – Republican gubernatorial nominee Allan Fung released the first TV attack ad of the fall campaign on Monday, criticizing his Democratic rival Gina Raimondo for supporting repayment of the 38 Studios bonds.
“Wall Street investors took a risk and went bust,” the narrator says in the new ad, which is slated to start running Tuesday. “But Gina Raimondo wants to use our money to bail them out.” He goes on to say Raimondo is “looking out for Wall Street, not Main Street.”
The R.I. Economic Development Corporation borrowed $75 million in 2010 to lure Curt Schilling’s 38 Studios to Rhode Island, but the company’s subsequent bankruptcy left taxpayers on the hook for roughly $90 million in principal and interest payments.
Whether to pay the money has become a major source of controversy. Raimondo and other leading Democrats have said taxpayers should pay off the so-called “moral-obligation bonds” to protect Rhode Island’s reputation in the credit markets, but Fung and other top Republicans have said the state should refuse, citing the legal status of that specific type of bonds.
House Speaker Nicholas Mattiello sided with his fellow Democrats during the General Assembly session earlier this year and included roughly $12 million in the new state budget to cover the next 38 Studios bond payment. Mattiello has said the bonds will continue to be paid as long as he remains speaker.
Nicole Kayner, a spokeswoman for Raimondo, emphasized that Raimondo had opposed the 38 Studios deal when she was first running for treasurer in 2010 while the transaction was being negotiated by the Carcieri administration. “If [Fung] had said anything about 38 Studios at the time,” she said, “he would have known Gina Raimondo was one of the loudest voices telling the state not to approve the deal.”
“Allan Fung wants the people of Rhode Island to believe that the first step to rebuilding our economy is to default on our debts,” she said. “Multiple independent reviews have shown that this would end up costing Rhode Island taxpayers millions more in the future.”
Fung’s ad describes Raimondo as “a former Wall Street financier,” repeating an attack used during the Democratic primary by Raimondo rival Providence Mayor Angel Taveras. Though Raimondo has never worked on Wall Street or for a major bank, prior to running for office she co-founded a venture-capital firm.
In addition, the ad criticizes Raimondo and incumbent Gov. Lincoln Chafee for retaining First Southwest as the state’s financial adviser even though the company is currently being sued by the Chafee administration for alleged negligence in the advice it provided when the 38 Studios deal was being constructed.
There was no immediate response to the ad from Chafee’s office.
Fung’s attack ad was released the same day the Rhode Island Democratic Party’s coordinated campaign went on the air with a new commercial that links Raimondo to U.S. Sen. Jack Reed and suggests the pair will work together to increase the number of manufacturing jobs in Rhode Island.
The anti-Raimondo ad is the second one Fung has aired since the pair won their respective party primaries on Sept. 9. Fung’s first ad, which began airing Sept. 19, was a biographical spot that played up his background and economic plans.
The Fung campaign has booked $93,041 in TV advertising time from Sept. 29 through Oct. 8, a Federal Communications Commission disclosure shows. The campaign recently received an infusion of cash from the R.I. Board of Elections through the state matching-funds program.
In a statement, Fung said if elected he will push to cut taxes by $200 million “and help to make Rhode Island one of the most competitive states to do business in the Northeast.”
A new Rasmussen poll released Saturday showed Raimondo leading Fung 42% to 37%. The other three candidates on the ballot for governor are Moderate Party nominee Bob Healey and independents Kate Fletcher and Leon Kayarian.
The general election is Nov. 4.