FED UP IN RI EXPOSES THE FACT…THAT THE COMMERCE CORPORATION OWES EVERY PENNY BACK!

LegislationBooks1

Today, in correspondence sent to the Governor, the RI Commerce Corporation/RICC, the General Treasurers Office, and the RI Department of Administration, Fed Up in RI is demanding to know when the Taxpayers of this State in accordance with Rhode Island General Law are going to get back the money which has been paid out by the General Assembly thus far for the 38 Studio bond payments?

You see, there is a Rhode Island Law, that requires the Commerce Corporation/EDC to pay the Taxpayers back every penny appropriated from the General Assembly for payment of the RICC/EDC’s debt service on the 38 Studio bonds, or any other bonds it may have issued!

Adopted in 1974 – Section 42-64-18(5) governs the relationship between the RICC/EDC and the State when the state appropriates money to pay Commerce Corporation/EDC bonds:

CHAPTER 42-64
Rhode Island Commerce Corporation
§ 42-64-18 Reserve funds and appropriations.
(5) “All amounts paid over to the corporation by the state pursuant to the provisions of this section shall constitute and be accounted for as advances by the state to the corporation and, subject to the rights of the holders of any bonds or notes of the corporation issued before or after, shall be repaid to the state without interest from all available operating revenues of the corporation in excess of amounts required for the payment of bonds, notes, or other obligations of the corporation, the capital reserve funds and operating expenses;”

But there’s a question that has not been answered: Why hasn’t ANYONE told the people this? When the State mandated that the people pay the bonds, they shouted from the rooftops that it was our ‘moral’ obligation. But the silence has been deafening concerning the ‘LEGAL’ obligation of the RI Commerce Corporation’s requirement to repay the people. For your information, this Law does not read, may be paid back… but, must be paid back.

We, of Fed Up in RI, find it amazing, with all that’s been reported on 38 Studios, that this has never been mentioned before. Could the machine have possibly believed that, if ignored, it would go undiscovered? Just as they thought, in 2012, that giving the Film Tax Credits to an entity which was not eligible to receive them (38 Studios) would slip through the cracks.

We’re not the only ones that are aware of this Law. It’s documented in the 38 Studios court filings for the EDC’s Civil Suit, where Attorney Wistow, on behalf of the EDC in his pleading to the court for alleged damages acknowledges that the EDC will have to reimburse the State, by stating; The EDC will be liable to reimburse the State of Rhode Island if the General Assembly appropriates funds to enable the EDC to pay the bondholders” – Atty. Max Wistow (See our 2013 email attached below.) Now, unless Mr. Wistow perjured himself before the court, which is highly unlikely, the EDC’s own attorney admits that they must pay the funds back to the State. It is also documented in the Judges decision that the EDC owes the money back to the State.  *Quotes from Judge Silverstein’s Decision;

DECISION – JUDGE SILVERSTEIN, J.
[FILED: August 28, 2013]
C.A. No. PB-12-5616

“The EDC contends that it ―will be liable to reimburse the State of Rhode Island if the General Assembly appropriates funds to enable the EDC to pay the bondholders.” (Compl. ¶ 219b.) – Judge Silverstein

“As the General Assembly has appropriated money to pay the bonds, a payment to the EDC is imminent and that payment ―shall constitute and be accounted for as [an advance] by the state to the corporation… the fact of an advance by the State and the method by which the EDC would have to repay the State.” – Judge Silverstein

“The EDC’s Liability for the General Assembly’s Appropriation of Funds… To the extent that the legislature has appropriated money ($2.5 million), the claim is actual, given that the appropriation constitutes an advance, and damage to the EDC is imminent.”- Judge Silverstein

“To be sure, future conduct, in particular the amount that the EDC would be required to repay the State by statute, will have an effect on the precise amount of damages that the EDC may claim under this theory.” – Judge Silverstein

And most importantly, it’s in Rhode Island General Law which anyone can go on line and read.

Equally worrying, is this bureaucratic silence of not calling on the Commerce Corporation to adhere to the law or a solution for reimbursement to the Taxpayers yet to be proposed by our General Assembly or the Governor.

Do any of you remember any politician, the media or “good government group” telling you that – by law – we should get all of this money back?

Would anybody believe what we have encountered, having the public picture of what has been portrayed, being quite the opposite?

We are not surprised, because so far, every Rhode Island scandal has displayed these same features — Taxpayers ripped off, left with nothing, politicians held unaccountable under a code of silence, while those benefiting from the profit-driven exploitations walk away with millions. It’s really quite extraordinary. However, that is NOT what Fed Up in RI is going to let happen and have sought legal advice in this case to guard that it doesn’t.

And so, although this may come as a shock to Rhode Island’s governmental ‘laws are for the little people’ mindset, we are formally notifying the Commerce Corporation/EDC, the Governor, and the General Treasury that they do not have the right or power to ignore state law, because to do so would be a breach of the rule of law, resulting in destruction. Destruction in this case of the public trust.

Therefore, we are asking the EDC to comply with this Law § 42-64-18 and ‘SHOW US THE MONEY’- because the Governor, the Treasurer and the General Assembly have not!

Add up all the above, and what do you get? Here’s the answer. ‘The Village’ remaining silent once again in order to keep the ‘Machine’ running smoothly. This State hasn’t gotten to where it is overnight.  38 Studios did not make this State what it is.  The State made 38 Studios what it became, and that is the dirty little secret that the Village protects. Because as far back as 2013, as our email below shows, we originally raised the ‘EDC liability to reimburse the State’ issue after the initial appropriation was made from the General Assembly to pay the first 38 Studio bond, because that was when the law became applicable to the situation. However, unfortunately those attempts on our part went unanswered.

Since then, the RICC/EDC payment now due and owing back to the State is approximately $27.3 million.

In looking at the RICC financials it seems that currently there is a $13.5 million surplus that according to this Law should be repaid to the General Funds.

https://drive.google.com/file/d/0B4my6hqps6zidU05YVN1X3V4ZWc/view (2015 RICC Financial)
https://drive.google.com/file/d/0B4my6hqps6ziNVJYNEp2ckVFdWc/view (2014 RIEDC Financial)

To add insult to injury, the net worth of the RICC went up from a little under $3 million in 2013 to $13.5 million at the end of 2014 and at the request of Governor Gina Raimondo the General Assembly still made the 38 Studio bond appropriation out of the General Fund instead of taking it out of the RICC surplus.

Thus, it is our position, that if the State of Rhode Island hasn’t presented the RICC/EDC with a bill yet, the State is in violation of the law that “all amounts paid over… be accounted for”.

We also suggest that these millions are badly needed and should be pursued forthwith to be used for repair of our deteriorating roads and bridges.

We have patiently observed and purposely given these transactions time to mature for ripeness of accounting and repayment to occur, but here it is, deja vu all over again. Because surely, we don’t believe that Fed Up in RI is the only one in this entire state that understands the operation of this law – just as it seemed in 2012 that no one else had understood the Tax Credits law either.

It’s simple. The State demanded from the People that which they did not legally owe…we are now demanding from the Commerce Corporation/EDC that which it does legally owe!

Although Rhode Islanders are used to being played by their politicians, it won’t be today, because we draw the line in the sand… once again. Except, this time – instead of stopping $14.3 million (tax credits) from being stolen from the General Treasury… we’re demanding millions (bond payments) be put back into it! Now, isn’t this more like it?

Gloria Garvin
Fed Up in RI
10/15/2015

Founded by Gloria Garvin in 2012, Fed Up in RI is an investigative team with tactical information backgrounds, focused on intelligence analysis of governmental activities, and organized to raise a new level of consciousness leading to revolutionary changes in our state.

_________________________________________

Attached is the *Original 2013 email to Representative Charleen Lima – ‘Reimbursement of bond appropriations’
From: rights Gloria Garvin to replima (819 days ago)
To: replima <replima@yahoo.com>
Sent: Wednesday, July 10, 2013 at 12:55 PM

Hi Charleen,

As always, thanks for taking my call. Although I know you need to recuperate from that horrid session, I didn’t think you would mind me bringing this to your attention. As promised, I’ve attached the link to the Lawsuit for your convenience and the statements regarding damages (in particular, b.) that I am seeking an explanation and guidance on. As I mentioned, when I tried to get general info yesterday directly from the law firm, I was told that I had no standing to ask them anything. Maybe you can do better as an elected Representative!

Therefore, I would like to know what they relied on in making statement (b.) to the court? And where their statement can be confirmed in documentation?

Please let me know if you are successful in getting any information, and thank you for your continued efforts on behalf of the People.

Beat regards,
Gloria Garvin

http://www.riedc.com/files/Complaint-with-exhibit-final.pdf

See @ pg. 71

“The EDC’s damages include but are not limited to the following:

a.The EDC lost the $75 million it loaned to 38 Studios
and instead will receive at most a small fraction
thereof from the bankruptcy and receivership
proceedings;

b.The EDC will be liable to
reimburse the State of Rhode Island if the General Assembly appropriates
funds to enable the EDC to pay the bondholders;

c.Defendants’ conduct reduced the EDC’s ability to
issue bonds or other guaranties under the Jobs
Creation Guaranty Fund from $125 million to $50
million; and

d.Defendants’ conduct injured the EDC’s reputation and credibility.”

_______________________________________________

Fed Up in RI current emails sent out 10/15/15:

38 Studios Bond payments: Status of The RI Commerce Corp. reimbursement to the State – RIGL “Section 42-64-18(5)”

Office of the Governor
Governor Gina M. Raimondo
governor@governor.ri.gov

Dear Governor Raimondo,

I am writing you in your dual capacity as Governor of the state of Rhode Island and also as Chair of the Board of the RI Commerce Corporation/ EDC.

As Governor of Rhode Island, the RI Constitution requires you to “faithfully execute” the laws of Rhode Island. As a Board member of the Rhode Island Commerce Corporation, which is the subject of this email, Fed Up in RI is bringing to your attention the fact that Rhode Island General Law requires the RICC to reimburse to the State:

“All amounts paid over to the corporation {the Rhode Island Commerce Corporation and its predecessors} by the state pursuant to the provisions of this section shall constitute and be accounted for as advances by the state to the corporation and, subject to the rights of the holders of any bonds or notes of the corporation issued before or after, shall be repaid to the state without interest from all available operating revenues of the corporation in excess of amounts required for the payment of bonds, notes, or other obligations of the corporation, the capital reserve funds and operating expenses; “Section 42-64-18(5)

“I thought that it may be of interest, in light of the impending outcome of this very public situation that is of great importance to the integrity of our State.” Whereas, breaches of the rule of law at all levels of government creates low social trust and a lack of confidence in the leadership and quality of our Government.

Therefore, in either of your capacities, do you know if any of the $27.3 million that the General Assembly appropriated funds to enable the EDC to pay the 38 Studios bondholders, thus far, has been reimbursed to the State by the RI Commerce Corporation? And if not, why?

And could you point Fed Up in RI to where those transactions are accounted for in the RICC Financial Statements of Net Position, or anywhere else we may find the accounting of that information within Rhode Island State Governmental agencies?

We would further like to know where we can find the complete accounting for all the monies expended by the State to the RICC under its present name, or the names of it predecessors – the Economic Development Corporation, or the Industrial Facilities Corporation, et al. since the enactment of Section 42-64 of RIGL, which are outstanding, and which – by law – must all be accounted for and be reimbursed back to the State of Rhode Island General Fund?

Thank you for your cooperation. I would greatly appreciate if you provide me with this information and any further additional information I should be aware of.

If you have any questions regarding this request, please telephone me at the number below.

We await your response.

Sincerely,
Gloria Garvin
Fed Up in RI

__________________________________________

38 Studios Bond payments: Status of The RI Commerce Corp. reimbursement to the State – RIGL “Section 42-64-18(5)”

Rhode Island Commerce Corporation/EDC
Lisa Lasky, Chief Financial Officer
lisa.lasky@commerceri.com

Dear Ms. Lasky,
In case you were unaware, Fed Up in RI is bringing to your attention the fact that Rhode Island General Law requires your corporation to reimburse to the State:
“All amounts paid over to the corporation ( the Rhode Island Commerce Commission and its predecessors) by the state pursuant to the provisions of this section shall constitute and be accounted for as advances by the state to the corporation and, subject to the rights of the holders of any bonds or notes of the corporation issued before or after, shall be repaid to the state without interest from all available operating revenues of the corporation in excess of amounts required for the payment of bonds, notes, or other obligations of the corporation, the capital reserve funds and operating expenses; “
Section 42-64-18(5)
Therefore, we wish to know if any of the $27.3 million that the General Assembly appropriated funds to enable the EDC to pay the 38 Studios bondholders, thus far, has been reimbursed back to the State? And if not, we are formally asking the Rhode Island Commerce Corporation/EDC to comply with RIGL Law § 42-64-18 in doing so.

Further, could you point Fed Up in RI to where the 38 Studio bond transactions are accounted for in your financial statements of Net Position, or anywhere else we may find the accounting of that information?

Lastly, we would like to know where we can find the complete accounting for all the monies expended by the State to your corporation under its present name, or the names of it predecessors – the Economic Development Corporation, or the Industrial Facilities Commission, et al. since the enactment of Section 42-64 of RIGL, which are outstanding and which – by law – must all be reimbursed back to the State of Rhode Island General Fund?

Thank you for your cooperation. I would greatly appreciate if you provide me with this information and any further additional information I should be aware of.

If you have any questions regarding this request, please telephone me at the number below.

We await your response.

Sincerely,
Gloria Garvin
Fed Up in RI

_____________________________________________

38 Studios Bond payments: Status of The RI Commerce Corp. reimbursement to the State – RIGL “Section 42-64-18(5)”

Office of the RI General Treasurer
General Treasurer Seth Magaziner
generaltreasurer@treasury.ri.gov

Dear Treasurer Magaziner,
Our organization, Fed Up in RI, is aware that Rhode Island General Law requires the Rhode Island Commerce Corporation to reimburse the State for:
“All amounts paid over to the corporation [the Rhode Island Commerce Coporation and its predecessors] by the state pursuant to the provisions of this section shall constitute and be accounted for as advances by the state to the corporation and, subject to the rights of the holders of any bonds or notes of the corporation issued before or after, shall be repaid to the state without interest from all available operating revenues of the corporation in excess of amounts required for the payment of bonds, notes, or other obligations of the corporation, the capital reserve funds and operating expenses; “Section 42-64-18(5)
Are you aware of any of the $27.3 million paid out by the General Fund to the 38 Studios Bondholders being paid back to the State as of this date and could you point Fed Up in RI to where any payments which might have been made have been accounted for by your office, if that is something that is required of your office? If nothing has been reimbursed back to the State yet, are you aware if the Rhode Island Commerce Corporation has even received a bill from the State?
And we would further like to know if you are aware of where we can find the complete accounting for all the monies expended by the State that the General Assembly appropriated funds, that are outstanding and owing to the General Fund by the RICC, or it predecessors – the Economic Development Corporation, or the Industrial Facilities Commission, et al. since the enactment of Section 42-64 of Rhode Island General Law?
Thank you for your cooperation. I would greatly appreciate if you provide me with this information and any further additional information I should be aware of.

If you have any questions regarding this request, please telephone me at the number below.

We await your response.

Sincerely,
Gloria Garvin
Fed Up in RI

_____________________________________________

Department of Administration
Office of Accounts and Control
State Controller: Marc A. Leonetti
marc.leonetti@doa.ri.gov
Dear Mr. Leonetti,
Our organization, Fed Up in RI, is aware that Rhode Island General Law requires the Rhode Island Commerce Corporation to pay back to the State:
“All amounts paid over to the corporation [the Rhode Island Commerce Corporation and its predecessors] by the state pursuant to the provisions of this section shall constitute and be accounted for as advances by the state to the corporation and, subject to the rights of the holders of any bonds or notes of the corporation issued before or after, shall be repaid to the state without interest from all available operating revenues of the corporation in excess of amounts required for the payment of bonds, notes, or other obligations of the corporation, the capital reserve funds and operating expenses; “Section 42-64-18(5)
Has any of the $27.3 million paid out by the General Fund to the 38 Studios Bondholders been reimbursed back to the State as of yet; and could you point Fed Up in RI to where any payments which might have been made have been accounted for by your office? If nothing has been reimbursed back to the State yet, has the Rhode Island Commerce Corporation received any invoices from your office for the past three bond payments?
And we would further like to know where we can find the complete accounting for all the monies expended over the years by the State of RI that the General Assembly appropriated funds, that are outstanding and owing to the General Fund by the RICC, or under the names of it predecessors – the Economic Development Corporation or the Industrial Facilities Commission, et al. since the enactment of Section 42-64 of Rhode Island General Law?
Thank you for your cooperation. I would greatly appreciate if you provide me with this information and any further additional information I should be aware of.

If you have any questions regarding this request, please telephone me at the number below.

We await your response.

Sincerely,
Gloria Garvin
Fed Up in RI

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s