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Schilling Denies Using State Money To Repay Himself For Struggling Company

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Curt Schilling. (Photo by Taylor Hill/Getty Images)

Curt Schilling. (Photo by Taylor Hill/Getty Images)

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PROVIDENCE, R.I. (CBS/AP) — Former Red Sox pitcher Curt Schilling is responding to allegations that he used money from the state of Rhode Island intended for his struggling company to pay himself back.

His video game company 38 Studios defaulted on a $1.1 million payment to the state back on May 1 and Schilling wasn’t able to pay his employees this week.

There has been speculation about why he didn’t write a check himself, after having a lucrative career in Major League Baseball, but Schilling wasn’t talking to reporters this week.

Schilling hadn’t issued any comment about his company’s troubles until Thursday night, when he posted this message on his Facebook page:

“To all the prayers and well wishes to the team and families at 38, God Bless and thank you! We will find a way, and the strength, to endure.”

That brought dozens of comments on the page. But one person, Kevin Vahey, chose to ask Schilling directly about the money.

“What bothers me is that while you have said you put millions into starting 38 Studios the Providence media is reporting that you repaid yourself with the state money,” Vahey asked Friday morning.

Schilling replied six hours later: “That is not true.”

38 Studios was lured from Maynard in 2010 after Rhode Island offered the company a $75 million loan guarantee. The company has already received about $49 million of that money.

Rhode Island Governor Lincoln Chafee’s Director of Revenue Rosemary Booth Gallogly said the company has indicated that money has been spent.

After 38 Studios missed a scheduled $1.1 million payment to the state on May 1, Schilling asked the state for additional financial assistance.

38 Studios then delivered a $1.1 million check to the Rhode Island Economic Development Corporation Thursday evening, but the governor’s office said it couldn’t cash the check because the company doesn’t have enough money in the bank.

Gov. Chafee announced on Friday that the check has since cleared.

Chafee also said in the same news conference that the state would be changing the criteria for companies to be eligible for motion picture tax credits.

Schilling’s company has applied for a total of $14.5 million in film tax credits in the past two years.

He also said Schilling will need to seek out private financing to stay afloat.

“There’s no more easy money,” Chafee said at a press conference.

Chafee opposed the loan guarantee as a candidate for governor. He said the company has told him that private capital has not materialized.

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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