Sen. Sheehan calls for end to First Southwest contract
STATE HOUSE – In response to an August 28 article in The Providence Journal, Sen. James C. Sheehan (D-Dist. 36, North Kingstown, Narragansett) is calling upon Gov. Gina Raimondo and General Treasurer Seth Magaziner to formally end the state’s relationship with financial advisor First Southwest in light of their opposition to agreed upon settlements with defendants of the state’s lawsuit relating to 38 Studios.
“In the first instance, it is disconcerting to me that we as taxpayers still have a business relationship with First Southwest,” said Senator Sheehan. “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. Yet, First Southwest is still advising the state. 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.
Senator Sheehan’s reaction stems from news that First Southwest is petitioning the court to block the $12.5 million settlement between the state and defendants Keith Stokes, J. Michael Saul, Robert Stolzman and his law firm Adler Pollock & Sheehan. The firm was hired by former governor Lincoln Chafee and then-treasurer Raimondo in 2014.
“The time has come to end the state's business relationship with First Southwest now,” concluded Senator Sheehan.
For more information, contact:
Andrew Caruolo, Publicist
State House Room 20
Providence, RI 02903