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Governor McKee says new chief of staff did nothing wrong in 38 Studios case

The Boston Globe logo The Boston Globe 8/31/2021 Edward Fitzpatrick
a man wearing a suit and tie: Rhode Island Governor Daniel J. McKee speaks during his weekly news conference on Tuesday. © Edward Fitzpatrick Rhode Island Governor Daniel J. McKee speaks during his weekly news conference on Tuesday.

PROVIDENCE — One day after his chief of staff stepped down amid controversy, Governor Daniel J. McKee said the new chief of staff did nothing wrong when he was involved in the 38 Studios controversy more than a decade ago.

On Monday, McKee announced that Anthony J. Silva was retiring amid an investigation by the attorney general’s office and the Rhode Island State Police into his attempts to influence a controversial wetlands development in Cumberland.

On Tuesday, McKee said the public record would reveal no wrongdoing by Silva’s replacement, Antonio Afonso Jr., when it comes to 38 Studios, which remains a sore point in Rhode Island 11 years after the state provided a $75-million loan guarantee for former Boston Red Sox pitcher Curt Schilling’s ill-fated video game venture.

“All I can say is: Go to the public record. You are not going to find anything that says that there was anything that he did wrong,” McKee said.

In 2014, Afonso and his former law firm, Moses Afonso Ryan, reached a settlement with the state in a lawsuit stemming from the 38 Studios fiasco. The company agreed to pay $4.37 million from the law firm’s insurance policy to settle their part in the litigation.

The state agency then known as the Economic Development Corporation (now Rhode Island Commerce) sued 14 individuals, law firms and financial institutions involved in the 38 Studios deal. Moses Afonso worked on the sale of the bonds that financed that deal, and the company was the first to settle.

“That is an insurance company that paid that,” McKee said of the $4.37 million settlement.

The Democratic governor said he knew the 38 Studios matter would come up again, as it has in the past, if he named Afonso his chief of staff. But he reiterated that Afonso did nothing wrong, and he said he has already been a valuable part of his administration as his senior deputy chief of staff.

“Thank God we have had someone like Tony on board, helping us with the teacher contract and multiple other things right now,” McKee said.

In July, McKee announced a tentative agreement on a Providence teachers contract, saying Afonso had played a key role in the negotiations that resulted in a new pact being ratified.

On Monday, McKee announced that he and 65-year-old Silva had “reached a mutual agreement that it is in the best interest of the administration for him to retire from state government effective immediately.”

The move came five days after McKee had asked Attorney General Peter F. Neronha to conduct an independent investigation of Silva’s actions regarding a proposed wetlands development in Cumberland. The state Republican Party had called for the attorney general’s office to probe whether Silva attempted to influence the state Department of Environmental Management over a permit to develop a piece of land that is 93 percent wetlands.

DEM had rejected an application put forward on Silva’s behalf to develop the Canning Street parcel in 2019, but the agency reversed course this year despite local opposition. Silva denied trying to influence DEM and claimed he transferred his interest in the property to his son to build a house. After the proposal drew media attention and litigation, the Silva family announced Aug. 13 that it would transfer the lot to the town.

Neronha’s office has said the investigation will continue even though Silva has now stepped down from his $196,792-a-year job as chief of staff.

And on Tuesday, McKee said his administration has told the attorney general that all state employees will cooperate with the investigation. “That wouldn’t exempt me as the governor,” he said. “If I am called for any reason, I will go and willingly.”

But he noted Silva is a former Cumberland police chief who has had a long career in law enforcement and emergency management.

And he said, “I don’t think that anything that happened at DEM is going to really prove to be something that is of a criminal nature. I hope not, because I don’t want anyone at DEM actually to be in the middle of the crosshairs, either. If something happens, it takes two to tango, right?”

McKee said he was concerned about the “disruption” that the Silva controversy had caused. “We can’t have this disruption at a time when we are going through a health crisis, an economic crisis, and an education crisis,” he said.

But now, McKee said, “The people of Rhode Island need to know that there is no longer any disruption in our office.”

“I caught my breath,” he said. “I am ready to go. We hit the ground running today, meeting all around the state.”

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