2013 -- S 0394

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LC01298

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - SELECT COMMISSION TO

INVESTIGATE THE FAILURE OF PUBLIC LOAN GUARANTEE PROGRAMS

     Introduced By: Senators Hodgson, Bates, Ottiano, Kettle, and Algiere

     Date Introduced: February 26, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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     CHAPTER 155

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SELECT COMMISSION TO INVESTIGATE THE FAILURE OF PUBLIC LOAN

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GUARANTEE PROGRAMS

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     42-155-1. Responsibilities of the commission. -- A commission is hereby created

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consisting of nine (9) citizens of the state for the purpose of conducting an inquiry into the

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creation and administration of loan guarantee programs funded or managed by the state of Rhode

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Island, it's municipalities, or quasi-public agencies thereof; and the failure of entities of

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government which might have prevented the loss of taxpayer dollars related thereto.   The

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responsibilities of the commission shall include, but not be limited to:

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     (1) Investigation as to the circumstances surrounding the enactment and administration of

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the Rhode Island jobs guaranty fund. 

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     (2) Investigation of the failed state investment in the 38 Studios video game company.

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     (3) Investigation of the administration of the industrial and recreational building

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authority.

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     (4) Investigation of the failed state investment in the CAPCO Steel Company.

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     (5) Investigation of the role state officials may have played in the administration of the

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various loan guarantee programs. 

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     (6) Investigation of transactions at the economic development corporation which may

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have resulted from improper and/or insider influence and/or information. 

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     (7) Investigation of those individuals and entities whose negligence and/or misconduct

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directly or indirectly contributed to such financial loss sustained by the state and its citizens.

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     (8) Making a public presentation of the evidence uncovered by the aforesaid investigation

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at hearings to be conducted by the commission. 

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     (9) Making recommendations as to prosecutions of any criminal wrongdoing uncovered

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by the investigation at hearings conducted by the commission.

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     (10) Making recommendations as to legislation to reform quasi-public administration of

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public funds.

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     42-155-2. Composition. – The commission shall be composed of nine (9) members, five

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(5) of whom shall be appointed by the governor, one of whom he shall designate as chairman; one

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member who shall be appointed by the attorney general, one member who shall be appointed by

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the speaker of the house of representatives, one member who shall be appointed by the president

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of the senate, and one member who shall be appointed jointly by the minority leaders of the house

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of representatives and senate. All commission members shall be subject to the provisions of

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chapter 14 of title 36, the Rhode Island code of ethics in government, and those members who are

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not already subject to the code of ethics shall be required to file a financial statement pursuant to

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the provisions of section 36-14-17 within thirty (30) days of his or her appointment to the

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commission.

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     42-155-3. Quorum. – (a) A quorum of the commission for the transaction of business

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shall consist of a majority of its members. Unless otherwise provided, decisions of the

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commission shall be by a majority of the votes cast. A vote by any member of the commission

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may be cast only in person and not by proxy. A member must be present in person to be counted

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toward a quorum. For the purpose of receiving evidence during the investigative phase of

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the commission's duties, a quorum will consist of one member. Transcripts of the testimony of all

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witnesses appearing at such sessions shall be maintained. All commission members will receive

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notification of all such meetings.

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     (b) All commission hearings and meetings shall be conducted by the chairperson or a

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member designated by the chairperson.

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     (c) The chairperson shall give posted notice of each hearing or meeting at least forty-

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eight (48) hours prior to the time such hearing or meeting is to begin. The commission shall be

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subject to chapter 42-46, the "Open meetings law."

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     42-155-4. Powers of the commission – rules and regulations. – The commission is

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authorized and empowered to do all things necessary and engage in all activities it deems

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necessary to carry out the responsibilities set forth in section 42-155-1. The commission is further

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authorized and empowered to adopt by a majority vote of its members, and from time to time to

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amend by a majority vote, the rules of procedure which shall govern all facets of the commission

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inquiry and the powers and duties of the special counsel which are deemed necessary to carry out

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the responsibilities set forth in section 42-155-1.

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     42-155-5. Special counsel. – The commission is authorized to supervise special counsel

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and such assistant special counsel, investigators, and clerical personnel as are necessary to

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implement the duties and responsibilities of this commission in its investigation of the failure of

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publicly funded loan guarantee programs. The attorney general is hereby authorized to appoint

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and empower special counsel and assistant special counsel as special assistant attorneys general

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for the purpose of investigating, indicting, informing against and prosecuting criminal acts within

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the scope of his/her inquiry. The special counsel and assistant special counsels are hereby

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authorized to, with the approval of the governor, bring civil actions in the name of the state of

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Rhode Island and the Rhode Island economic development corporation. All criminal and civil

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actions commenced pursuant to this authority shall have precedence on all court calendars, and all

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hearings and trials in such actions shall be accelerated, subject to applicable procedural rules.

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     42-155-6. Subpoena power. – The commission shall have the authority to issue

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subpoenas and orders for attendance of witnesses and the production of books, accounts, papers,

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documents and records. The members of the commission are hereby severally authorized and

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empowered to administer oaths and take oral or written evidence under oath or affirmation. All

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subpoenas issued shall be served as subpoenas in civil actions in the superior court are now

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served. Any person who shall neglect or refuse to attend and give testimony or to answer any

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lawful inquiry or to produce documentary material, if in his power to do so, may be adjudged in

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criminal or civil contempt by the presiding justice of the superior court or his/her designee. The

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commission and the superior court shall follow the procedure set forth in Section 22-6-2.1. If a

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person is adjudged to be in civil contempt, he/she shall remain in contempt until such time as

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he/she purges himself/herself of contempt by testifying or producing documentary material. Any

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person who commits perjury or false swearing in response to the subpoena or order of the

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commission shall be subject to the penalty for perjury pursuant to the provisions of chapter 33 of

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title 11. Notwithstanding any other provision of the general laws, any rule or regulation or

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common law right to the contrary, no person or business entity shall be allowed to assert a

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privilege against or interpose an objection to the production and/or disclosure of books, accounts,

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papers, documents and records, or information maintained in any form pertaining to accounts,

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loans, and other financial transactions associated with publicly funded loan guarantee programs

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which are the subject of this investigation.

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     42-155-7. Immunity of witnesses during commission proceedings. – (a) In the case of

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any individual who has been or may be called to testify or provide other information at any

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proceeding in connection with the investigation by the commission, the presiding justice of the

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superior court or his/her designee shall issue in accordance with subsections (b) and (c) of this

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section, upon the request of the chairperson of the commission, an order requiring such

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individuals to give testimony or provide other information which he/she refuses to give or provide

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on the basis of his/her privilege against self-incrimination. 

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     (b) Before issuing an order under subsection (a) of this section the presiding justice shall

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be required to specifically find that the request for such an order has been approved by an

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affirmative vote of a majority of the members of the commission five (5) days or more prior to

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the day on which the request for such an order was made, the attorney general was served with

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notice of an intention to request the order.

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     (c) The presiding justice or his/her designee, after notice to the witness, shall order the

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witness to answer all questions put to him/her or produce the evidence. The witness may not

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refuse to comply with the order on the basis of his/her privilege against self-incrimination, but the

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witness shall not be prosecuted or subjected to penalty or forfeiture for, or on account of, any

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transaction or matter regarding which in accordance with the order, he/she gave answer or

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produced evidence, and no testimony or other information compelled under the order or any

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information directly or indirectly derived from such testimony or other information shall be used

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against the witness in any criminal case except he/she may be prosecuted or subjected to penalty

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or forfeiture for any perjury false swearing or contempt committed in answering or failing to

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answer or producing, or failing to produce, evidence with the order.

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     42-155-8. Funding. – The members of the commission shall serve without compensation.

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All expenses incurred by the commission including the cost of the special counsel and assistant

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special counsels shall be paid out of the general revenue of the state of Rhode Island.

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     SECTION 2. This act shall take effect upon passage.

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LC01298

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - SELECT COMMISSION TO

INVESTIGATE THE FAILURE OF PUBLIC LOAN GUARANTEE PROGRAMS

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     This act would establish a select commission to investigate the failure of public loan

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guarantee programs and prescribes its powers and duties.

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     This act would take effect upon passage.

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LC01298

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