Farce and tragedy of 38 Studios warrants full disclosure

Farce and tragedy of 38 Studios warrants full disclosure

Edward Fitzpatrick, RWU director of media and public relations, a New England First Amendment Coalition and Common Cause Rhode Island board member, and a former Providence Journal columnist:

It is our Watergate.

The 38 Studios debacle might not have produced a constitutional crisis or a legal battle (over the Nixon White House tapes) that went all the way to the Supreme Court of the United States.

But Curt Schilling’s ill-fated video-game venture certainly produced a monumental crisis here in Rhode Island – leaving taxpayers on the hook for a $75-million loan guarantee, fueling already toxic levels of distrust in government leaders, poisoning the well for other projects – and now a legal battle (over 38 Studios grand jury records) has gone all the way to the Rhode Island Supreme Court.

I’ll leave it to you to decide who is the Little Rhody version of Nixon and Ehrlichman, G. Gordon Liddy and E. Howard Hunt.

But the Watergate comparison is part of a legal brief just filed in support of Governor Gina M. Raimondo’s attempt to secure the release of 38 Studios grand jury records. The American Civil Liberties Union, Common Cause Rhode Island, the New England First Amendment Coalition and the Rhode Island Press Association joined in a friend-of-the-court brief, arguing that 38 Studios represents the rare exception in which the public interest in transparency outweighs the need for grand jury secrecy.

In the brief, Roger Williams University School of Law Professors Andrew Horwitz and Jared A. Goldstein agree that grand jury proceedings should remain secret in most cases. But in a very few extraordinary cases, they say, the public’s right to know trumps the need for secrecy. As examples, they cite the independent counsel’s investigation of President Bill Clinton, investigations of labor union leader Jimmy Hoffa and the Watergate investigation.

“To be sure, the 38 Studios case may not have the national implications of these cases,” Horwitz and Goldstein wrote, “but within Rhode Island, 38 Studios may well be comparable to Watergate.”

Indeed, it is our Watergate.

“The 38 Studios debacle has left Rhode Island taxpayers dumbfounded and with myriad unanswered questions about their government,” they wrote. “How could this have happened? Who was responsible? Did public officials violate the public trust? How can we make sure it doesn’t happen again?”

The public had hoped the grand jury process would answer some of those questions.

A statewide grand jury sat for 18 months, and 146 witnesses were interviewed, including all but one member of the 2010 General Assembly, former state Economic Development Corporation board members and staff, plus 38 Studios executives. But the grand jury issued no indictments.

With questions remaining, Raimondo has called for release of the grand jury materials, and the General Assembly has enacted the 38 Studios Transparency Act, which requires the release of 38 Studios records.

But Attorney General Peter F. Kilmartin (an RWU Law graduate who as a state legislator in 2010 voted to authorize the bond program used by 38 Studios) has argued against release of those records. In May 2017, Superior Court Presiding Justice Alice B. Gibney ruled in Kilmartin’s favor, saying, “Allowing public clamor alone to justify disclosure would cause the exception to swallow the rule.” And now the case is before the state Supreme Court, with arguments expected in the fall.

In court documents, Kilmartin’s office has said, “The Governor’s ‘transparency’ based argument is squarely at odds with the centuries of precedent protecting the grand jury and its process. The Governor’s petition and public statements have done nothing but fuel misguided speculation about the grand jury process, undermine its integrity and cast a negative light on the entire process.”

Kilmartin’s office claims the governor has provided no legal argument for making an exception to a rule – 6(e) – restricting the release of grand jury materials. “[I]f courts granted disclosure whenever the public had an interest in grand jury proceedings, Rule 6(e) would be eviscerated,” it said, quoting a court ruling. “Without sufficient legal basis, the Governor threatens the confidence of the protections afforded the grand jury, the sanctity of which must be maintained.”

But Horwitz and Goldstein say no one is claiming that grand jury records should be disclosed whenever the public has an interest in those proceedings.

“Instead, what is at issue here is whether the public interest in the 38 Studios investigation is sufficient to overcome the ordinary principle of grand jury secrecy,” they wrote. “While Rhode Islanders do not have a right to know what is said in every grand jury investigation, they do have a right to know how Governor Carcieri, the General Assembly and the EDC decided to invest $75 million in taxpayer funds in 38 Studios, and they have a right to know whether the Attorney General adequately investigated those decisions. This investigation presents a truly exceptional circumstance that justifies disclosure.”

Even if the Supreme Court rules that 38 Studios does not represent the rare exception to grand jury secrecy, it should send the case back to the Superior Court to decide if the 38 Studios Transparency Act applies to grand jury records, Horwitz and Goldstein said.

In a news release, ACLU of Rhode Island executive director Steven Brown said, “Clearly, something went very wrong in the 38 Studios fiasco. The grand jury records might not answer all the questions that remain in this saga, but having access to them may restore some of the public’s confidence in the workings of our state government.”

New England First Amendment Coalition executive director Justin Silverman said, “Six years and millions of dollars later, we still don’t know everything about 38 Studios. Rhode Island residents deserve a full accounting of what happened and why. That’s the only way we can make sure a similar debacle doesn’t happen again.”

In their legal brief, Horwitz and Goldstein quote James Madison: “A popular Government without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or perhaps both. Knowledge will forever govern ignorance. And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.”

The 38 Studios saga is already a farce and a tragedy. It is already our Watergate. If we wish to rebuild public trust in government, the government must trust the public with the knowledge it seeks.