Moore: Senator Sheehan’s First Southwest Awakening
Monday, August 31, 2015
If people are confused as to why Donald Trump is surging in the Republican Primary polls, they can rest assured that he is striking a chord with the electorate by sounding commonsensical and straightforward. Basically, he sounds the opposite of most politically correct, poll-driven, and consultant obsessed politicians. Trump has been calling most politicians "stupid", and the crowds at his rallies are loving it.
Can anyone imagine what Trump would say about Rhode Island if he knew that our political leaders have continued doing business, for 3 years, with a company that the state is suing for fraud?
Sheehan's Leadership
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThat's why it was encouraging to see state senator James Sheehan (D-North Kingstown, Narragansett) come forward and call for an end to the state's annoying business relationship with First Southwest late last week.
Sheehan is perhaps the state's best senator on good government issues like transparency and ethics. Sheehan has led the frustrating fight on the senate side of the state legislature to amend the constitution to make the legislators subject to the jurisdiction of the ethics commission. The fact that the state legislature hasn't passed a strong ethics bill in the past 5 years is an insult to the people of Rhode Island.
First Southwest is the state's financial adviser, whom the state is currently suing for its role in the 38 Studio's debacle, despite the fact that we're still suing them.
"In the first instance, it is disconcerting to me that we as taxpayers still have a business relationship with First Southwest," said Sheehan in a press release. "We are suing this company for fraud. We are suing them for gross negligence. We are suing them for legal malpractice. All of these suits allege that First Southwest advised the Economic Development Corporation to enter into the ill-fated $75 million loan guarantee deal with the now bankrupt 38 Studios."
A Wise Call
The only question I have about Sheehan's wise call for the state to show First Southwest the door was what took him so long. I was the first in Rhode Island's print media to call on the state treasurer, now Governor Gina Raimondo, to can First Southwest back on March 10, of last year. That's almost 18 months ago.
It seems that Sheehan was most peeved by the fact that First Southwest has had the nerve to try and block a settlement between the state and some of the other defendants in the case, which would recover $12.5 million for the state's taxpayers, by asking the court to stifle the deal.
"Moreover, we learn that First Southwest is now attempting to stop the state from recouping money from the failed 38 Studios deal. To me, this represents a distinct financial conflict of interest making our current relationship with First Southwest untenable, especially in light of ongoing litigation against them," said Senator Sheehan.
Better Late Than Never
In any event, Sheehan's leadership is certainly better late than never, and he deserves credit for joining and helping lead the fight. His fellow legislators would do well to have the backbone and the common sense to join him in calling on the state government to do the common sense thing.
It's irritating that First Southwest apparently has no sympathy for the taxpayers of the state of Rhode Island, whatsoever. The company has an abundance of nerve in asking the court to prevent a settlement that would provide the state taxpayers with some much-needed relief. The company's rationale for fighting the settlement deal hasn't been made public, but I'm willing to bet dollars to donuts that their rationale is based on their own best interest, not the interest of us, the state taxpayers.
The time has come for someone in Rhode Island to stand up for the taxpayers. It was nice to see Senator Sheehan belatedly take up the right. Now it's time for everyone else to get behind his leadership.
Russell J. Moore has worked on both sides of the desk in RI media, both on political campaigns and for newspapers. Send him email at [email protected] Follow him on twitter @russmoore713
Related Slideshow: 38 Studios Legal Fees
New state records show that state legal fees associated with the 38 Studios bankruptcy are nearing $1 million. Below is a breakdown of how much each firm has made - and stands to make in the future. Figures are taken from documents provided by the Rhode Island Commerce Corporation.
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