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Monday, September 28, 2015

Vermont Health Leader's Role in Rhode Island Deal Is Questioned

Posted By on Mon, Sep 28, 2015 at 6:10 PM

click to enlarge Steven Costantino - CONTRIBUTED PHOTO
  • Contributed photo
  • Steven Costantino
The man Gov. Peter Shumlin hired in February to oversee Vermont’s publicly funded health care programs is facing questions in Rhode Island about his role in securing state backing for a failed business that involved former major league pitcher Curt Schilling.

Documents released last week say that Steven Costantino, who was chairman of Rhode Island’s House Finance Committee at the time, orchestrated a maneuver that helped Schilling's 38 Studios video-game making business secure a $75 million state loan guarantee, the Providence Journal reported. The paper said:

Former EDC Executive Director Keith Stokes testified that it was Rep. Steven M. Costantino, then chairman of the House Finance Committee, who suggested increasing the jobs program funding from $50 million to $125 million to accommodate 38 Studios.
After receiving the state-backed loan, Schilling’s company went bankrupt in 2012. Rhode Island is suing Wells Fargo Securities in hopes of recovering its losses.

The Rhode Island Superior Court released depositions related to that lawsuit Thursday, revealing a greater role for Costantino than had previously been reported.

Costantino, in a written statement Monday afternoon, told Seven Days: "My only involvement in the matter in RI was because of my former position in the RI legislature. I did not play any role in bringing the company to RI as did others in government. I was tasked with handling the legislation affecting the company by my superiors. After legislative activity, I had nothing to do with approving the loan to the company and have had nothing to do with the company ever since."

Rhode Island House Speaker Nicholas Mattiello told the Journal that the House plans oversight hearings related to the deal.

In 2010, legislators in RI voted to approve an economic development program. The Journal reported there was no indication Costantino revealed to House members as they voted that "$75 million of the $125 million in loan guarantees  was earmarked for 38 Studios." 

Costantino took over as commissioner of the Department of Vermont Health Access in March, as the department was under considerable scrutiny for the Vermont health exchange’s technical failures. At the time, Shumlin said he had known Costantino since the days they both served in their respective legislatures and said he understood him to be “dynamic, hands-on leader."

Said the governor, "His experience in both the executive and legislative branches of government will serve him and Vermonters well in this position.”

Shumlin spokesman Scott Coriell said Monday that Shumlin stands by Costantino’s work here. “Steve’s done a great job and we’re lucky to have him,” Coriell said.

Shumlin’s staff knew about 38 Studios’ troubles when Costantino was hired and that Costantino had been chair of the Rhode Island House Finance Committee at the time, Coriell said. But he added, “People were not paying particularly close attention to Rhode Island politics.”


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About The Author

Terri Hallenbeck

Terri Hallenbeck

Bio:
Terri Hallenbeck is a Seven Days staff writer covering politics, the Legislature and state issues.

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