Rhode Island has rehired a financial adviser that it is suing for fraud and legal malpractice in connection with the failed 38 Studios deal.
According to the Providence Journal, Lincoln-based First Southwest was chosen in March by the state Budget Office and the Treasury for a new two-year contract as the state's financial adviser.
The governor's office said First Southwest was picked after a thorough review over another company, PFM Group.
"You may continue to get good service. It's just a basic ethical issue. How can I sue you one day and ask for trusted confidential advice the next? It's that simple," said Gary Sasse, director of the Hassenfeld Institute for Public Leadership.
However, Gov. Lincoln Chafee says it's not simple. He said First Southwest is an experienced firm and familiar with the state and municipal issues in Rhode Island.
"You have to factor in the experience they have with the state of Rhode Island, whether we go to somebody new, the learning curve, learning about our state, what that costs us," Chafee told NBC 10.
First Southwest is one of 14 defendants in the state's 2012 lawsuit that attempts to recoup the losses from the $75-million investment in 38 Studios, Curt Schilling's video-game company.
The state's outside counsel in the pension lawsuit is John Tarantino, of Adler Pollack & Sheehan, which is also named in the 38 Studios lawsuit.
NBC 10 contributed to this report.