Bill would prohibit RIEDC from guaranteeing loans

RI bill would prohibit EDC from guaranteeing loans, like the one to Schilling's 38 Studios

Associated Press

PROVIDENCE, R.I. (AP) -- A bill introduced in the Rhode Island House would prohibit the state's economic development agency from guaranteeing loans like the one to Curt Schlling's now-defunct video game company.

Under Rep. Joseph Shekarchi's bill, the Economic Development Corp. would not be able to guarantee any loans and obligations. The Warwick Democrat says it would provide greater financial protection for the state and its taxpayers.

The EDC board approved a $75 million loan guarantee for Schilling's startup, 38 Studios, in 2010. The company later went bankrupt, and the state is likely on the hook for some $100 million related to the deal.

Shekarchi says the bill isn't just about the former Red Sox pitcher's company, though the state learned a painful lesson.

The bill has been referred to the Finance Committee.

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