Riley: MacBeth Has the Scent and Should Not Back Down

Michael G. Riley, GoLocalProv MINDSETTER™

Riley: MacBeth Has the Scent and Should Not Back Down

Rep. Karen Macbeth
Karen MacBeth’s recent letter to the SEC is right on point. 

"Because these loans were applied for and granted on an expectation of the granting of [state] film tax credits that 38 Studios was never eligible for, I question if there is any violation of any banking or securities law, rule or regulation that the SEC has any jurisdiction over to investigate and prosecute,'' MacBeth wrote, in a letter that went out Tuesday to the regional director of the federal agency.

"I am formally requesting that the Securities Exchange Commission open an investigation into these loans, and upon the commencement or closing of any such investigation that your office informs the committee of the same," she wrote

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This crazy deal could not have happened without financing and without the insiders who were pulling all the levers. Insiders planned the deal and Corso with his pals Fox and Murphy appear to have been involved months before Carcieri. He may be the key to the entire loan debacle.  It was Corso who was the lynch pin here but he couldn’t have pulled it off on his own and without insiders help in the State. Plus he desperately needed a very highly placed individual at Bank Rhode Island to lend against possible film credits.  I don’t think anyone would be surprised to find out that it was someone very high up in the bank who gave the wink and nod to the state and to Corso so that they could get this $8 million dollar loan done.

It is going to be fascinating to hear Corso spill his guts as to who at Bank RI approved the tax credit loan without collateral. Very few at the bank had this authority. Merrill Sherman surely fits the “insider” profile. When Bank RI was about to tank in 2008-2009 it was bailed out by both TARP and the Chace family. Sherman denied the Bank was in trouble. Speaking of insiders, perhaps Kim Chace was involved? In either case, both Sherman and Chace are likely fully aware of the person who authorized the uncollateralized loan. That’s who we want to hear from. Was that person fired by Sherman or Chace or was it one of them?  

Rhode Island taxpayers are on the hook here and we deserve to know what bank executive at Bank RI extended the un-collateralized loan that allowed Moody’s to rate the $75 million dollar EDC debt offering as AA++. What was Moodys told? We need to subpoena Moody’s because they are not innocent here. Did that lender at Bank RI have a working relationship with Gordon Fox or Nicolas “let’s move on” Mattiello or even Steven “I’m now in Vermont” Constantino? Mr. Constantino recently revealed that “he didn’t knew anything” and he was “tasked by his superiors." Who were Constantino’s superiors?  Could that be Gordon Fox, of Sushi bar extortion fame?  Was that the combined finding of the work of Attorney General Kilmartin, RI State Police, the FBI and US Attorney Nehrona?  Please, nobody is buying this crap.

Why do I think Gordon Fox is the “superior” Constantino referred to? Why do I think Speaker Mattielo knows about all of this? Shouldn’t Mattielo be subpoenaed and testify under oath as to what he knows about all this? Why does Mattielo get a pass? Follow the money someone once said. Not only should the SEC get involved but also the FBI. Mattielo needs to be investigated along with Corso, Constantino, Schilling and Bank RI executives Sherman, Chace and Meiklejohn. 

How about it Speaker?

This whole episode smells even worse now and those involved in any way need to be scrubbed clean and hung from their ankles and testify under oath before taxpayers let them borrow one more penny. If you really want us to “move on” Mr. Mattielo , then grant subpoenas to whoever the Oversight Committee sees fit to question, including you. Until then, I think you are covering up and dirty.

Michael G. Riley is vice chair at Rhode Island Center for Freedom and Prosperity, and is managing member and founder of Coastal Management Group, LLC. Riley has 35 years of experience in the financial industry, having managed divisions of PaineWebber, LETCO, and TD Securities (TD Bank). He has been quoted in Barron’s, Wall Street Transcript, NY Post, and various other print media and also appeared on NBC News, Yahoo TV, and CNBC.  

EDITOR'S NOTE: This article was updated 12/4/2015 to correct two fact timeline inconsistencies.


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