The thing about Curt Schilling’s video game fiasco is that when it comes to hypocrisy among the high and mighty, there is more than enough to go around.
At the top of my list is the smug reaction of some media commentators here in Massachusetts to the news that Rhode Island is on the hook for a $75 million loan to Schilling’s troubled startup, 38 Studios.
The decision by Bay State officials to dodge Schilling’s now apparently errant pitch is being trumpeted as some huge act of wisdom. But it conveniently ignores our own state’s foolish turn at playing venture capitalist with the Evergreen Solar mess.
And let’s not let Rhode Island officials off the hook here, either. Former Republican Gov. Donald Carcieri liked to talk tough about state spending, and spent years battling plans to bring full-fledged casino gambling to Rhode Island. But he apparently had no inhibitions about making what amounts to a reckless $75 million bet with taxpayer money.
It’s hard to top the spectacle of an avowedly Republican sports-star-turned-entrepreneur who gorges his promising start-up to death on tens of millions in public loan guarantees.
But Schilling, for all his faults, hardly has a lock on hypocrisy in this train wreck.
Short Memories
Yes, Massachusetts economic development officials were right in turning Schilling away empty handed back in 2010, calling the deal too rich and too risky.
But even as it was saying no to Schilling – who had (has?) dreams of creating a $1 billion game franchise – the Patrick Administration was saying yes to Evergreen Solar, which had its own ridiculously inflated ambitions.
Evergreen loaded itself up with $58 million in initial loan commitments and tax credits from Massachusetts, rolling out a $400 million plant at Fort Devens and hiring as many 800 to staff it.
But the Evergreen mirage all came crashing down last year, when the reality of cutthroat Chinese competition – like that was a hard one to spot – thrust Evergreen on the path to eventual bankruptcy. That now empty and useless Devens plant was recently auctioned off.
Hardly anything worth crowing about for Patrick Administration supporters.
And if you think this is all ancient history, think again.
Evergreen is one disaster that will likely get a second life as the presidential campaign heats up, with Republicans already mentioning it in the same breath as the Solyndra, another solar company flameout in which the Obama Administration put federal taxpayers on the hook for $585 million in loan guarantees.
Rhode Island Circus
Of course, there is plenty to look askance at in how Rhode Island officials handled the whole Schilling affair.
Carcieri, the former Republican governor, liked to pretend he was a tough-minded fiscal reformer. He pushed back against state spending on welfare programs and shot down a 2004 referendum that would have legalized full-scale casino gambling.
Apparently, that was all just a little too risky – better to take $75 million and bet it on a first-time entrepreneur with a big sports name but no business accomplishments to his name.
Carcieri’s not saying much these days about the meltdown of Schilling’s firm and the tens of millions in loan guarantees his administration put state taxpayers on the hook for. But he wasn’t so tongue-tied back in 2010, when he announced the deal to lure Schilling’s nascent firm to Rhode Island, turning the job of due diligence over to the crackerjack Rhode Island Economic Development Corp. (RIEDC) – whose director was recently cashiered.
Carcieri was apparently star-struck after a visit to Schilling’s Medfield manse.
“I commend the RIEDC Board for its extensive due diligence and for taking this significant step to bring jobs to Rhode Island,” Carcieri said in a press statement at the time. “This investment in our economic development has the potential to spark the expansion of a new industry in our state and generate additional new business growth.”
Hypocrisy aside, there is a larger issue here in which politicians on both sides of the aisle appear to believe they are equipped to play venture capitalist, with increasingly disastrous results.
Carcieri, a Republican, thought he could do it with Schilling’s 38 Studios. Patrick, a Democrat, got his turn at playing banker with Evergreen.
Given Carcieri’s silence, it’s not clear what the former Rhode Island governor has learned other than to be grateful for not being on the hot seat right now – that dubious honor goes to his successor, Gov. Lincoln Chafee.
For its part, the Patrick Administration has been revealing in the way it has responded to the Schilling mess.
Instead of questioning the idea of politicians playing venture capitalist, it is defending its policy of showering loans and tax credits on individual companies with expansion plans.
Despite the Evergreen meltdown, our state bureaucrats apparently think they are simply smarter than those chumps down in Rhode Island.
File under: more trouble ahead.
