Just about every fiscal fiasco in Rhode Island started out as the brainchild of some “smart people”, a/k/a politically connected campaign contributors, who sold the idea to the state, put the taxpayers on the line for underwriting their initiatives, and when things went bust exited the project without one penny of their money at risk. Let’s take a walk down memory lane before we let the present Paw Sox owners stiff the taxpayers again through a fall campaign.

RIHMFC
This so-called low interest mortgage loan plans was raided by applicants who borrowed funds for house construction or purchase, and never paid off the money they borrowed. Never once did they and their cronies have to pledge their personal guarantee. This repertoire of announcing “noble plans” when they presented the proposals, then raiding the pot of money for multiple dips into the treasure chest was possible precisely because they had no personal risk through their own guarantee.

RISDIC
The credit unions with RISDIC insurance which failed were the personal piggy banks for those developers who were campaign contributors, who got humongous “loans” for their respective development projects and never lost a dime — unlike the depositors. These developers were allowed to borrow millions of dollars through their respective corporations of which they had many as conduits to suck up the funds, and when the credit unions went bust precisely because of their perfidy, they walked away unscathed since they weren’t asked to personally guarantee their loans.

38 Studios
No personal funds were required in order to access that pot of gold. At least Curt Shilling put some of his own money into the venture but he didn’t have to guarantee one red cent. Taxpayers were on the hook.

Paw Sox development
Now that we see the legislation put forward by the billionaires behind the Paw Sox ownership, we see they don’t have to personally guarantee anything beyond $1 million each — pocket change to them. All the risk is on the public. The remaining $71 million would be borrowed by 3 sets of bonds with taxpayers on the hook. The monies would allegedly come to pay off the bonds from attendance at the 90-plus games (so patrons really are paying while the owners pay no real estate taxes) which translated means that the taxpayer has to hope that the trend of losing 200,000 attendees over the past years doesn’t continue. McCoy stadium generated insignificant dollars from ancillary events but now the tooth fairy is going to somehow gin up related activities, like an off-season water park. Another source would be things like sales tax revenues which are dependent upon shoppers to the new mall around the stadium once the stores open. These sources would also allegedly be used to pay sales taxes to the City of Pawtucket for them to pay off their bonds. In short, all the risk falls on the public. To underscore the reality of the taxpayers being on the hook, the Governor has to include money in her budget proposals to ensure full payment of the state and city shares of the debt, i.e. a taxpayer guarantee.

Fortunately, for now, Speaker Nick Mattiello hasn’t swallowed the kool-aid. Let’s pray that he doesn’t get a summer thirst!

Arlene Violet is an attorney and former Rhode Island Attorney General.