The Saturday Morning Post: Quick hits on politics & more in RIJuly 14th, 2012 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site, The Saturday Morning Post
1. The 38 Studios bankruptcy hearing this week raises new questions about the due diligence done before the company got its $75 million EDC loan guarantee in 2010. Bizarrely, 38 Studios executive Bill Thomas expressed surprise about the company only getting about $50 million of the proceeds rather than all $75 million (the EDC kept some money in a debt reserve): “We were already $25 million behind the eight ball,” he said. Yet the structure of the payouts was publicly reported before the transaction closed - there’s no reason why it should have surprised Thomas; it should have been planned for. Moreover, Thomas said even getting the remaining $25 million wouldn’t have been enough: “We knew we needed to raise $30 million to $50 million to finalize the MMO.” Between the more limited loan proceeds and an expected infusion of $20 million that never panned out, Thomas said 38 Studios wound up at least $45 million “behind in our financing.” Did Governor Carcieri and Keith Stokes know that, too? Where was the money supposed to come from?
2. If Republican Brendan Doherty wins Rhode Island’s 1st Congressional District seat this fall, it could open an avenue for Angel Taveras and Gina Raimondo to avoid a 2014 clash in the Democratic primary for governor – one of them could run for Congress instead. It’s hardly a crazy idea; Taveras, who lives in the 2nd District, already ran in 2000 (and lost to Jim Langevin).
3. Elsewhere on the 2014 front, Ernie Almonte continues laying the groundwork for his Democratic gubernatorial bid. After raising $106,000 in the second quarter (which includes a $50,000 personal loan), the former auditor general announced this week he’s hired Jef Pollock as his campaign pollster. A connection: Pollock’s Global Strategy Group did the polling for Peter Kilmartin’s successful AG run in 2010 – earning a healthy $67,000 for its efforts – and Almonte served on Kilmartin’s transition team.
4. The Washington Post’s “Fix” blogger Chris Cillizza offers an observation that’s always worth remembering: ”One of the most common mistakes made in political reporting is to assume the average voter is following the daily news cycle as closely as we are. He or she isn’t.” Too true. (His new book also includes a Nesi’s Notes shoutout – thanks, Chris!)
5. The ongoing Libor scandal is explosive and – as usual – there’s a Rhode Island connection. Providence College accounting professor Michael Kraten co-authored a study of banks’ reported interest rates in 2008 that concluded “questionable patterns do exist with respect to the banks’ daily Libor quotes.” That’s drawing new attention from the FT, City A.M. and International Business Times. On his own blog, Kraten suggests Libor quotes should be audited: “Although an audit requirement may not be sufficient to eliminate any possibility of a future scandal, it may be difficult to feel confident about any self-reported bank data until the statistics undergo professional audit activities.”
6. Gina Raimondo and the General Assembly have taken a lot of heat for failing to include major reforms to Rhode Island’s 36 locally run municipal pension plans in last year’s pension law. For big cities with big problems (Providence and Cranston come to mind), that critique is understandable. But the law did require cities and towns to commission new studies of their pension plans, and that’s shining a light on the problem in places where it may have gone unnoticed. Look no further than the letters posted on Raimondo’s website sent by local officials to formally acknowledge their plans are in critical status.
7. Few companies invest more in the U.S. than Verizon Wireless, but two Amtrak rides this week showed there’s plenty of room left for upgrades on the East Coast. In particular, the company’s terrific new 4G data service is absurdly spotty on the train route from Providence through Connecticut, before improving significantly from New York down to Delaware. That’s frustrating for people who take the train in order to be able to work, and rely on Verizon’s network to avoid Amtrak’s molasses-slow internal WiFi.
8. George H.W. Bush and Dominick Ruggerio have something in common - a nickname.
9. Who’s a bigger media star, Jack Reed or Sheldon Whitehouse? So far this year, it’s Whitehouse by a mile: Smart Politics finds Rhode Island’s junior senator was mentioned in 25 news reports during the first six months of 2012, while his senior colleague was mentioned in 10. Among all U.S. senators, Whitehouse ranked 54th in mentions and Reed ranked 71st. Whitehouse had a high-profile first-half with his “Buffett Rule” advocacy and Super PAC critiques, but perhaps Reed will spike now thanks to the Libor scandal. Who got mentioned the most: John McCain (1,958 times), Marco Rubio (830), Harry Reid (448) and John Kerry (430).
10. Rubio’s name brings to mind the veepstakes. One oft-mentioned potential Romney running mate is Louisiana Gov. Bobby Jindal – and if he gets the nod, Jindal will be the first Brown University graduate ever to make a major party’s presidential ticket. University spokeswoman Marisa Quinn confirms it, adding that seven U.S. presidents have received honorary doctorates from Brown: George Washington, John Adams, Thomas Jefferson, William Howard Taft, Woodrow Wilson, Herbert Hoover and Lyndon Johnson. (Washington was the only one in office when the degree was conferred.) Of course, presidents aren’t the only influential men in Washington – legendary New Dealer-turned-lobbyist Thomas “Tommy the Cork” Corcoran went to Brown, too. [See update below.]
12. This week on Newsmakers – Narragansett Indian Tribe Chief Sachem Matthew Thomas and state Sen. Rhoda Perry. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – the Business Innovation Factory’s Saul Kaplan. Watch Sunday at 6 p.m. on myRITV (or 6 a.m. on Fox). See you back here next Saturday morning.
Update: Nesi’s Notes editor emeritus M. Charles Bakst writes in to correct the university and me: Charles Evans Hughes, Brown Class of 1881, was the Republican candidate for president in 1916, losing to Woodrow Wilson. Hughes later served as secretary of state and chief justice of the United States.