A closer look at the Texas billionaire who backed EngageRIMay 20th, 2013 at 9:34 am by Ted Nesi under Nesi's Notes, On the Main Site
Houston hedge-fund billionaire and former Enron trader John Arnold has become a surprisingly famous figure in Rhode Island politics since it emerged that he donated more than $100,000 to Engage Rhode Island, the advocacy group that helped Gina Raimondo pass the pension law. Her opponents have seized on Arnold’s ties to high finance and the ill-fated energy firm to cast doubt on EngageRI’s motivations.
But Arnold’s actual story is actually more interesting than that, according to the summer issue of WSJ.Money magazine.
Arnold, 39, closed his hedge fund last year and retired to begin giving away his $2.8-billion fortune, mainly through the Laura and John Arnold Foundation he and his wife founded:
Arnold and his wife, Laura, have a somewhat unique approach to giving. Most billionaires tend to write checks to good causes they’re part of, hospitals where they were treated or universities they attended. … Or there are donors who make sizable gifts to meet an obvious need in a community, such as hunger or education. But at a time when charitable giving in the U.S. is still down from its peak in 2007, the Arnolds want to try something new and somewhat grander. John says the goal is to make “transformational” changes to society.
The Arnolds want to see if they can use their money to solve some of the country’s biggest problems through data analysis and science, with an unsentimental focus on results and an aversion to feel-good projects — the success of which can’t be quantified. No topic is too ambitious: Along with obesity, the Arnolds plan to dig into criminal justice and pension reform, among others.
Among Arnold’s critics is Rhode Island’s own Mike Downey of AFSCME Council 94:
J. Michael Downey, president of Rhode Island’s biggest union of state employees, says he considered it a “wonderful Christmas present” when The Wall Street Journal reported in December that Arnold was helping to fund a pension-reform effort in concert with Gina Raimondo, the state’s Democratic general treasurer. Downey says he’d never heard of Arnold before the article appeared but sees Arnold’s Enron background as evidence that he cares less about workers than pursuing a Darwinian form of capitalism. “That’s how he operates,” Downey says. For his part, Arnold says he is “pro-worker” and that solving pension reform will only save jobs in the long run.
EngageRI isn’t the Arnolds’ only involvement in Rhode Island; their foundation is partnering with the Pew Center on the States to help cities and towns, including Pawtucket and Scituate, deal with their underfunded municipal pension plans. They’ve also donated $8,000 to Treasurer Gina Raimondo and her political action committee since last May, according to R.I. Board of Elections filings.
The entire WSJ article is worth a read. It managed to win Arnold praise from Gawker’s Hamilton Nolan, archenemy of plutocrats. “We salute, John Arnold, and your cold-blooded and dead-eyed approach to making this world a better place,” Nolan wrote in a post on Friday. “If every billionaire were like John Arnold, we would be slightly less apoplectic. (Momentarily).”
• Related: EngageRI raised $900K in 2011 and 2012, tax returns show (May 13)
(photo: Laura and John Arnold Foundation)