A closer look at the Texas billionaire who backed EngageRI

May 20th, 2013 at 9:34 am by under Nesi's Notes, On the Main Site

laura_john_arnoldHouston 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)

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9 Responses to “A closer look at the Texas billionaire who backed EngageRI”

  1. rlewis says:

    Pension “Reform” – slash benefits by 30% and make people work longer.

    And, of course, cut taxes for billionaires.

  2. Bob says:

    “….make people work longer.”
    Can’t retire in their 50s anymore. It’s just not fair.

    1. rlewis says:

      Yeah, especially after employees have contributed 8.75% of their pay for 30 years, essentially paying for 98% of their own pension benefit.

      How much have you been forced to contribute to your retirement?

      1. Bob says:

        “…essentially paying for 98% of their own pension benefit”

        sarcasm, right?

      2. Rlewis says:

        Read the actuarial report, Bob. It’s called the employer normal cost.

        And that’s with an assumed rate of return that has been exceeded over that period.

  3. Zephyr says:

    This was obviously a Sunday feel-good puff piece put together using press packets from expensive publicists. You’ll note there are no serious questions asked by a reporter. I’m sure Mr. Arnold is trying to rehabilitate his image in Houston and nationwide. Enron billionaires are not the stuff of popularity contests. However I find it curious that a man who made billions in a hedge fund is providing charitable funding to an organization like Engage Rhode Island whose prime beneficiaries to date are hedge funds and private equity funds. Charity? I think that fits LOL.

  4. Mr. Fish says:

    BTW, as the Tea Party cries their crocodile tears over the IRS, guys like Arnold and EngageRI are laughing all the way to the bank because now there will be even LESS scrutiny of their attempt to muddy the political waters.

    1. Zephyr says:

      What does the Tea Party have to do with the Rhode Island Pension System? NADA… Nothing!!! Mr.Fish, you think the IRS(Ideological Revenue Service) is doing a fine job of thuggery… good for you!!! For those of us concerned about how the current General Treasurer is functioning, her connections to Hedge Fund operators,the sources of political-campaign contributions, and what is a Legislature not attending to its’ oversight functions, attempted smears/innuendos about persons and groups exercising their rights adds nothing to what has been little but shill coverage of the General Treasurer and the whole topic of the constitutionality of what she promoted. Some of us recognize government by cronyism when we see it… whether it’s Rhode Island or the Federal government.

  5. Jeff says:

    Hey Rhode Islanders, how’s it feel to be part of a rich mans experiment. Talk about being owned. WOW. Now get on your hands and knees and beg, do as your told.