2. Tim White, Dan McGowan and I spent a lot of time reporting on the Gordon Fox investigation over the past five days, and we know a good deal more today than we did a week ago. As we reported Tuesday and Wednesday, just before the March 21 raids investigators visited longtime Fox aide Ruth Desmarais in search of campaign-finance documents, and they also sought information from the R.I. Board of Elections. (“They were not searching my house,” Desmarais told Tim in an interview, “but that is all I will tell you.”) Fox has been the treasurer of his own campaign-finance account for the last 10 years, giving him responsibility for hundreds of thousands of dollars in cash (though he’d designated Desmarais as his point person with elections officials). Just this week, as we reported Thursday, investigators sought additional information about Fox from the Providence city treasurer’s office; Fox has earned money from the city on and off since 1996. Put it all together and this is looking more and more like a classic “follow the money” case. What we don’t know, of course, is where the money leads. It’s important to reiterate that Fox has not been charged or even identified as the target of all this activity; that said, he and his lawyer have said nothing to counter the widespread impression that he’s in a jam.
The Saturday Morning Post
By Dan McGowan
Even Batman takes vacations, so I’m filling in for Ted while he’s living large in Washington, D.C. As always, send your takes, tips and trial balloons to firstname.lastname@example.org and email@example.com. For quick hits all week long, follow @danmcgowan and @tednesi.
1. Friday afternoon’s announcement that mediation has failed and the Rhode Island pension law will go to trial Sept. 15 all but guarantees the process will continue when a new governor takes office in January, but how long could it go? Former R.I. Supreme Court Justice Robert Flanders believes it could be more than a year before the dust finally settles. Flanders told WPRI.com Superior Court Judge Sarah Taft-Carter could render a decision before the end of this year, but that the case will ultimately head to the state’s highest court. “That court can move relatively quickly when it wants,” Flanders said. As it currently stands, the trial will begin a week after the Sept. 9 Democratic gubernatorial primary that includes Treasurer Gina Raimondo, Providence Mayor Angel Taveras and Clay Pell. While Raimondo will probably take the brunt of the criticism from union members, a trial will also likely force Taveras and Pell to take a position on the 2011 pension law once and for all. Flanders said he believes the state will ultimately prevail. “My view all along has been the state has the better case here,” he said.
2. Even when Batman is on vacation, he knows how to help out in a pinch. Here’s the first of two Nesi dispatches for the week: “Brown University is once again making jaw-dropping predictions about this year’s primary for governor. In a repeat of the methodology I noted last October, Brown’s new poll says 395 of the 600 Rhode Island voters in its general-electorate sample are likely to vote in the Democratic primary, implying a voter turnout level of roughly 66% in the upcoming Sept. 9 Democratic primary. As I said before, this would be a massive increase over the 18% of registered voters who turned out for the hard-fought 2002 Democratic primary between Myrth York, Sheldon Whitehouse and Tony Pires. Additionally, Democratic primary electorates are different from general electorates – the voters are typically more concentrated geographically in the urban core around Providence, especially in a year like this one where the capital city will also have an open mayoral race on the same ballot. So while Brown’s top-line finding – a tight race between Gina Raimondo and Angel Taveras, with Clay Pell far behind – isn’t so absurd as to be dismissed out of hand, it should be treated with extreme caution for now. (As for the tiny 86-voter Republican primary survey – any result that carries a margin of error above 10% should be taken with a full can of Morton Salt.)”
1. Who is Nick Mattiello? Just before he was elected speaker, I suggested the Cranston Democrat was a moderate who might be a Republican if he was in another state. Others – particularly unhappy progressives – have suggested Mattiello isn’t really a Democrat at all. But the speaker himself rejected that suggestion on Friday. “I’m a Democrat. I’m a proud Democrat,” Mattiello said on this week’s Newsmakers. “I don’t believe that Democrats all have to be on the furthest-left outpost. There’s some people that believe that, but that is not the majority of the Democrats in Rhode Island. I believe I represent a typical Democrat.” Noting his support for “an appropriate safety net,” Mattiello said: “Middle-class values are in the middle, and I tend to politically be situated in the middle.” Asked why he appointed Republican Rep. Doreen Costa as vice-chair of House Judiciary, Mattiello said: “There’s too much raucous debate between the parties. I think that we have to respect each other more. … It doesn’t mean I’m less of a Democrat.” One reason Mattiello’s views are interesting – the speaker will play a key role in determining whether Angel Taveras, Gina Raimondo or Clay Pell gets the Rhode Island Democratic Party’s gubernatorial endorsement. His No. 2, John DeSimone, has already endorsed Taveras.
2. Mattiello repeated his policy mantra – “jobs and the economy” – roughly 500 times on Newsmakers. But no politician campaigns against jobs and the economy, so what does the new speaker think would help? Two items to watch: Rhode Island’s corporate and estate taxes. On the corporate tax, Mattiello told us he wants to get the rate down to 7% from its current level of 9%. On the estate tax, Mattiello noted that Rhode Island currently has one of the lowest exemptions in the nation – $921,655 in 2014 – and that it has a “cliff,” where an estate valued at $1 more than the exemption triggers a tax on the entire estate (not just the amount above the exemption). “We’re looking to eliminate the cliff and possibly increase that threshold a little bit so that we can keep high wage-earners and people that have accumulated wealth in Rhode Island, rather than have them leave as soon as they retire,” Mattiello said. All that will be music to the ears of the Greater Providence Chamber of Commerce, which has long made the case that those changes would improve Rhode Island’s business-climate ranking and cost less than, say, lowering the sales tax. But they’ll still reduce revenue in a difficult budget climate, and they’ll face serious pushback from the left.
Happy Saturday! Ted won a shiny fellowship and is gallivanting around Denver this weekend, so I’m making sure his suits are dry-cleaned, the car is washed and his column is updated. As always, send your takes, tips and trial balloons to firstname.lastname@example.org and email@example.com. For quick hits all week long, follow @danmcgowan and @tednesi.
1. How do you go from declaring yourself the next House speaker late on a Saturday night to dead in the water by Sunday dinner? The rapid collapse of the leadership team led by Reps. Michael Marcello and Chris Blazejewski had a lot of lawmakers scratching their heads this week, but the consensus seems to be that once the union-backed Woonsocket delegation and most of the Republican caucus moved to Rep. Nick Mattiello, the battle was over. “When they had all those people in room on Sunday night, that’s when the floodgates opened,” Rep. Patrick O’Neill told WPRI.com. So could it have gone differently? We know Rep. Doreen Costa – the new vice chair of the Judiciary Committee – said she simply couldn’t back a team that was supported by so many liberal lawmakers because “the progressive movement is very dangerous.” For his case, O’Neill, who fought until the end for Marcello, said the group considered several different leadership combos – including offering Rep. John DeSimone one of the top two spots – but “we went all-in on Marcello and Blazejewski on Saturday.” That’s why it was so disappointing to see Blazejewski and some of the others end up voting for Mattiello, according to O’Neill. Blazejewski chalked his vote up to “my belief that egos shouldn’t get in the way” of moving the state forward, a comment that irked more than a few of his colleagues. “That’s just very disappointing,” O’Neill said.
2. Do not miss Ted Nesi’s deep-dive on new Speaker Nick Mattiello to understand what his promotion will mean for Rhode Island. While you’re at it, make sure you read Providence Journal reporter Katherine Gregg’s hour-by-hour rundown of how Mattiello put together his team while Rome was burning last week.
Happy Saturday! Here’s an abbreviated edition of my weekend column after one of the most dramatic Fridays in recent Rhode Island history – as always, send your takes, tips and trial balloons to firstname.lastname@example.org. For quick hits all week long, follow @tednesi.
1. You could almost feel the shock wave ripple through Rhode Island’s political class around 11 a.m. Friday when news broke that state and local law enforcement officials were searching Gordon Fox’s State House office and East Side home. For all the bad coverage Fox has garnered over the years – PEDP, 38 Studios, GTECH – Friday’s action was a stunningly high-profile move against Rhode Island’s most powerful politician by investigators from the state police, the FBI and the IRS. It’s hard – very hard – to see how Fox can survive as speaker after such a blow to his stature, unless it’s quickly made clear he’s not the target of the investigation. Assuming Fox is on the way out, the coming days and weeks are going to be very consequential ones for Rhode Island.
2. I asked Tim White, an expert on law enforcement, to explain exactly what happened Friday and what to expect next: “Before federal and state investigators could even move in on the State House, they had to convince a judge that they had the authority to do so. Detectives and agents presented evidence to a federal judge to get the permission to execute a search warrant on the State House, and what we believe to be a second search warrant on Gordon Fox’s home. You use a warrant because you think someone’s going to say no. You can always ask permission to get information that you’re looking for, but if you have a judge’s OK – that is, a warrant – you have the authorization to go in and take it. In my job, the most interesting thing about warrants (which in this case we’ll only get if they’re eventually unsealed) isn’t what they find, but what they told the judge they wanted to look for. The affidavit to obtain the search warrant is basically a mini-case that tells a judge what they’ve discovered so far in an investigation, and that is truly telling. It might tell us who is cooperating with investigators; it might tell us what they’ve found so far; and certainly it will tell us the motive for wanting the warrant. And of course that warrant wasn’t to break down just any door – it was a door in one of the most historic buildings in the state, leading into the office of arguably the most powerful politician in the state. The big question is, when do we get to see what’s on the search warrant? And the answer is, we probably won’t see the search warrant unless someone is charged. That’s when these things usually become public. But that day – if it ever comes – is probably at least weeks away if not longer.”
3. From WPRI.com reporter Dan McGowan, a look at what happens next: “Investigators were only at the beginning of their six-hour raid on Gordon Fox’s State House office when his colleagues began putting the wheels in motion to discuss a potential replacement for the speaker in the event that he tenders his resignation. One of the factions is led by House Majority Leader Nick Mattiello, who convinced at least 25 lawmakers to attend a closed-door meeting at the Providence Marriott Friday evening. The Cranston Democrat said he’s ‘confident’ he has the votes to be the next speaker if Fox decides to resign, but told reporters he had not talked with Fox. The question now is who else wants to be top dog in the House? We know a separate group of lawmakers that included Reps. Mike Marcello, D-Scituate, Patrick O’Neill, D-Pawtucket, John Lombardi, D-Providence, and Greg Costantino, D-Lincoln, met at Venda Ravioli in Providence, but it’s unclear who called the meeting. It’s also widely believed that Majority Whip Stephen Ucci, D-Johnston, and Deputy Majority Whip Chris Blazejewski, D-Providence, could be leading another team of lawmakers hoping to assume leadership. Regardless, it’s not clear that anyone went to bed Friday with the 38 votes needed to become the next speaker if and when the job becomes open. All eyes are now on Tuesday, the next time members of the House convene.”
4. Missed last night’s wall-to-wall TV coverage of the Fox raids and the fallout from them? Click here to watch 23 minutes of WPRI 12 team coverage covering all the angles:
5. Set your DVRs: This week on Newsmakers – treasurer candidate Ernie Almonte, plus UMass Dartmouth’s Clyde Barrow and Providence College’s Patrick Kelly on casinos. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – Nabsys CEO Dr. Barrett Bready. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). See you back here next Saturday morning.
1. It’s time for Rhode Island to take a deep breath about the old I-195 land – particularly the state’s politicians, who’ve been promising big things from the 19 acres of potential redevelopment for years now. I-195 Commission Chairman Colin Kane said on this week’s Executive Suite he doesn’t expect construction on any buildings to begin there before the fall of 2015, with the spring of 2016 more likely. And as Jef Nickerson has pointed out, Providence already has plenty of undeveloped land in prime locations in the form of surface parking lots (not to mention Victory Place); the fact that developers aren’t snapping those up suggests weak demand. But why should demand be weak, at least for residential construction, when almost all downtown apartments are occupied? Because Providence’s cost structure is out of whack. “Where our challenges are from an economic perspective – in all secondary cities and tertiary cities, not just Providence – is that our rents are not high enough to support appropriate investor returns,” Kane said. Jan Brodie, the 195 commission’s executive director, said property taxes are 30% to 40% higher in Providence than in Boston. Fixing that equation – whether by lowering taxes, raising incomes, loosening labor laws or easing building restrictions – would not only help spur the 195 redevelopment, it would also make other proposed projects such as the Superman building conversion more viable.
2. Speaking of the I-195 land, Gina Raimondo suggested this week it could be given away or sold at low cost to provide a campus of her proposed Rhode Island Innovation Institute. That may or may not be a good idea, but it’s definitely not cost-free. Last April the EDC borrowed $38.4 million on the 195 commission’s behalf to buy the old highway land from the state, which helped defray the original costs of the Iway project. The 195 commission must repay those bonds – plus $7.5 million in interest – over the next 19 years, and if the land isn’t sold at market value Rhode Island taxpayers would presumably have to pay off the bonds instead.
1. Don’t forget to set your clocks forward tonight!
2. Tomorrow is March 9, which means Rhode Island’s primary election is exactly six months away – and it’s going to be a whirlwind six months for Angel Taveras, Gina Raimondo and Clay Pell. The WPRI/Journal poll suggested all three have a path to victory, if an uphill one for Pell. Three things to watch as the campaign grinds on are money, TV, and field. Like it or not, Raimondo’s big financial advantage over Taveras ($2.5 million to $1.03 million) and Pell’s personal fortune matter a lot. It will determine how many TV ads they can run, and when; how big a paid ground game they can put together; and how much internal polling they can conduct down the stretch. With even Steve Jobs’ widow pitching in, it seems clear Raimondo will have no trouble stockpiling more cash during 2014, putting more pressure on Taveras. A big strategic question now facing all three campaigns: when do they go on the air? The smart money says TV ads will start running in May, before viewers begin to go on summer vacation and tune out. Raimondo and perhaps Pell will have the luxury of running positive ads without worrying about whether they’ll have the money to counter attacks; Taveras will have to keep a close eye on whether he has enough for the crucial final weeks in August and September. (His aides will also be crossing their fingers that Pell fails to catch fire and decides to drop out.) The money and resources being devoted to the ground game will also be crucial – look no further than last year’s successful push to legalize same-sex marriage for evidence of how effective a targeted field operation can be. As for the Republican side, Allan Fung is still treating Ken Block as a nuisance more than a real threat; Block has his work cut out for him to nab the nomination. But never say never.
3. Former BankRI CEO Merrill Sherman isn’t commenting on whether she’s interested in purchasing The Providence Journal. “I have no comment on anything like that,” Sherman told me this week.
1. Rhode Island has found a potent way to bring down its official unemployment rate: drive thousands of people out of the labor force. That’s one major takeaway from Thursday’s dismal revised jobs data, which showed the state’s jobless rate never actually fell below 9% in 2013 and was still the highest in the nation as of December. It reinforces the need to put the rate in context before celebrating its decline: believe it or not, nearly 7,000 more Rhode Islanders had a job when the unemployment rate hit its peak – 11.9% in March 2010 – than do today. So what’s really driving the rate down? A collapse in Rhode Islanders’ labor-force participation. About 27,000 workers left the labor force from 2007 through 2013, meaning they’re not employed and they’re not actively looking for work; that’s pushed the share of adult Rhode Islanders who have a job to the lowest level since the aftermath of the Volcker recession in 1983. It’s also coincided with a 16% decrease in Rhode Island’s 35- to 54-year-old population; if it weren’t for a huge jump in the number of senior citizens staying in the work force, the working population would be even smaller. Now, not all of this is unique to Rhode Island – there’s a heated debate happening among economists nationally about how much of the employment decline is demographic as opposed to recession-caused. But make no mistake: seven years after the jobs crisis started, Rhode Island’s labor market remains very weak. No wonder the state ranks 47th in The New York Times’ comparison of the 50 states’ recoveries.
2. Fun fact: Clay Pell donated $250 to Gina Raimondo’s campaign for treasurer in June 2010, making his future opponent one of only two state-level candidates he supported with a contribution before he began exploring a gubernatorial campaign late last year. The other was Lt. Gov. Elizabeth Roberts, who got $125 from Pell in 2005; Roberts is supporting Raimondo for governor.
1. Don’t believe anybody who says they’re sure of whether the pension settlement is going to go through. As I chronicled Thursday, there at least 10 flavors of opinion on the merits of the deal, a sign of how fluid and heated the debate around it is. That said, keep in mind that the settlement doesn’t necessarily have to be popular to pass. That’s particularly true during the upcoming first round of votes by union and retiree plaintiffs, which must be finished by mid-April. As Kathy Gregg first noted, a ballot that isn’t returned will be counted as a “yes” – so rank-and-file opponents of the deal have to convince at least 50% of their brethren to affirmatively mail in a ballot marked “no” to kill it. That’s a tall order when the voters are split into six groups that won’t be gathering together in any local union hall: state workers, teachers, police officers, firefighters, municipal employees and retirees. Put another way: the deal’s proponents are organized and well-financed; the opponents aren’t. Still, it’s possible a groundswell of opposition could torpedo it. But if the settlement passes that vote and a second one on the union/retiree side, labor lobbyists only need to convince half of the state legislature to back the deal to get it enacted. That seems doable, particularly if proponents of the settlement can win the spin war by highlighting how lopsided its financial impact is.
2. One way the deal’s supporters could get it passed: pay off the municipalities. Specifically, the General Assembly could agree to pay the extra pension contributions the settlement requires from cities and towns. (Clay Pell put forward a version of this idea, though he didn’t suggest covering the full cost.) As the Rhode Island League of Cities & Towns’ Dan Beardsley reminded me this week, back in 1989 the legislature helped close a budget deficit by changing the calculation for teacher pension contributions from 60% state and 40% municipal to 60% municipal and 40% state. “They said we’re going to flip it for one year; it’s been like that since 1989,” he said. If the settlement passes as is, Beardsley said, it would be “probably the second-worst unfunded mandate pushed onto the cities and towns in my four decades here at the League” after the 1989 switch. And it’s not like places such as Providence (facing a $1.2 million hit in 2015-16 under the settlement), Woonsocket ($559,000), East Providence ($506,000) or Central Falls ($216,000) are exactly rolling in dough to pay the higher tab.
1. How much should Rhode Island pay for lawsuit insurance? That’s one way to look at the proposed pension settlement finally unveiled Friday afternoon: by giving back $232 million of the taxpayer savings from the 2011 overhaul, the General Assembly can lock in the remainder – $3.9 billion. We’re thus talking about the difference between a 46% decrease in Rhode Island’s unfunded pension liability and a 43% decrease in the unfunded liability – measurable but not major. In most cases, lawmakers would gladly grab 94% of what they originally sought and declare victory. But this isn’t most cases. For Senate President Teresa Paiva Weed and others, getting told by Gina Raimondo for the second time in three years that they need to pass the treasurer’s unchangeable pension proposal is tough to swallow. There’s also the broader constitutional question, emphasized by House Minority Leader Brian Newberry and others, of whether the legislature has the right to alter pension benefits; passing a settlement leaves that unanswered. Still, if the unions had called senior state leaders in early 2011 and said, “Hey, we have a proposal we’ll back to slash the unfunded pension liability by more than 40% without a legal fight,” they probably would have jumped at the chance. Will they really say no to it now?
2. Of course, that’s assuming the proposed settlement doesn’t get torpedoed by workers and retirees before the General Assembly even takes it up. The flip side of Raimondo and Governor Chafee locking in 94% of the 2011 pension law’s savings is that the unions would only get back about 6% of what they lost when it passed, at least as measured by the unfunded liability. After the hot rhetoric of the past few years, it may shock the rank and file to see they’d get so little out of a settlement their leaders have already approved. “Our unions actually voted for this settlement?” Providence’s Candace McCall wrote on Twitter. “I’ll be there to help vote it DOWN!!!!!” She added: “This pension settlement is a disgrace. I didn’t pay in 9.5% of my pay for thirty years for this! Unions screwed up! … Let’s go to court!” It will be interesting to see how many others agree with McCall. Then again, should Rhode Island’s workers and retirees accept this to avoid the possibility of an adverse legal outcome that could set a precedent for pensioners coast to coast?
3. Under the terms of the settlement, the pension funds for state employees and teachers would reach the crucial 80% funding level when full annual COLAs are restored in 2031, or 17 years from now.
1. Mark your calendars: WPRI 12 and The Providence Journal will release a new exclusive Campaign 2014 poll next week – testing whether Democratic primary voters support Angel Taveras, Gina Raimondo, Clay Pell or Todd Giroux for governor, and how they feel about the big issues. We’ll release the first results live on WPRI 12 and WPRI.com Tuesday at 5 p.m. Tune in!
2. The 49-degree kickoff temperature at last weekend’s Super Bowl in New Jersey has bolstered Pats owner Bob Kraft’s push to have Gillette Stadium host a Super Bowl as soon as 2019 – and Governor Chafee, an old friend of Bill Belichick’s, is taking notice. Chafee’s spokeswoman tells me he plans to discuss the proposal with his fellow New England governors at the National Governors Association meeting later this month: “They will talk about how they can help the Patriots make a solid presentation to the owners in May when the NFL owners meet to decide Super Bowl sites.” Kraft has long seen a role for Rhode Island in such an effort. “I sort of like Boston-Providence” as the site, he said last year, adding: “Part of what it will require is political people in Boston and Providence coming together so we could really have the right number of hotel rooms and have the support. It would require cooperation from all of the political folks who would have to gather together and want this and come together, like they do in other parts of the country.” (Cranston Mayor Allan Fung is off base, though, to suggest “Rhode Island” could be the primary host city; the state has nowhere near the necessary 30,000 hotel rooms, and Kraft wouldn’t snub his home state.) There’s also been talk of New England hosting the Olympic Games at some point – what role would Rhode Island play there, with its sailing facilities and stadiums?
1. So, who is Clay Pell? We know quite a bit more about him today than we did a week ago, thanks to his kickoff speech and his inaugural Newsmakers interview. He’s been a legal resident of Rhode Island since he graduated from Harvard in 2005, but his only employment in the state has been Coast Guard training in Newport. He’s in favor of binding arbitration for teachers, against standardized testing, and skeptical of charter schools. He’s not big on raising taxes. (“We have an $8.5 billion budget – I’m confident that as governor we will be able to find areas of growth in order to focus on the things we have to do.”) He opposes putting tolls on the Sakonnet River Bridge. He’s pro-choice. He won’t say whether he would have signed the 2011 pension law, or whether he thinks the law is constitutional. He’s not sure about legalizing recreational pot à la Colorado. And he wouldn’t have put $12.5 million in taxpayer money into the state budget to make the next payment on the 38 Studios bonds. “This isn’t about rolling the dice,” Pell told Tim White in regards to the bond payment. “This is about taking taxpayer dollars very seriously, and not sending money in that direction when it might not be fully necessary.” Pell was understandably a bit nervous during our interview, but the career of his grandfather – famously dubbed “the least electable man in America” by JFK – suggests charisma isn’t always a prerequisite for political success. But Claiborne Pell was 41 when he won his first election; can his grandson do it at just 32?
2. One thing Pell won’t lack is money. Campaign-finance reports were filed Friday, and Pell’s revealed he had $1.1 million on hand as of Dec. 31 – a bit more than $1 million of it from a personal loan he made to his campaign. (Other Pell donors included Vicki Kennedy, Patrick Kennedy, Vera Wang, Billie Jean King and Jared Polis.) That still leaves Pell with far less money than Gina Raimondo, who reported $2.5 million on hand after hauling in nearly $500,000 over three months. But it actually puts him slightly ahead of Angel Taveras, who reported just over $1 million on hand. Obviously, the pressure is on Taveras now to maintain the solid pace of cash collection he managed in the fourth quarter if he wants to keep up with Raimondo’s fundraising machine and Pell’s wealth. On the other hand, the fact that the mayor was able to stay in the game at all should quiet speculation for now that lack of funds will push him out of the primary. More broadly, this is shaping up to be a very expensive race. The three Democratic candidates finished 2013 with a combined $4.6 million on hand; how much will the winner be forced to spend by Sept. 9?
1. Clay Pell is bringing on some top talent to help him with his upstart campaign for governor, which kicks off Tuesday morning at the Rhode Island Convention Center. Pell’s media consultant – the man tasked with putting together those crucial TV ads – will be Tad Devine, the veteran Democratic strategist and Providence native whose previous experience includes Lincoln Chafee‘s 2010 bid for governor, John Kerry’s 2004 presidential run and Ted Kennedy’s 1994 contest against Mitt Romney. (The 32-year-old Pell won’t be Devine’s only youthful Rhode Island client this year, either: he’s also aiding 30-year-old Seth Magaziner with the latter’s campaign for treasurer.) Pell’s other big hire is his campaign pollster: Boston’s Tom Kiley, another longtime Kennedy and Kerry hand who also worked for Patrick Kennedy; Kiley just had a good cycle polling for the winning 2012 U.S. Senate campaigns of Elizabeth Warren, Angus King and Claire McCaskill. Tapping Devine and Kiley is another sign of how seriously Pell is taking his campaign, and his willingness to spend top dollar on consultants; it’s also a reminder of his family’s ties to the close-knit world of New England’s U.S. senators. RIPR’s Scott MacKay, who’s seen many a campaign in his day, thinks Pell has an opening – but it’s a narrow one.
2. Our weekly Saturday Morning Post dispatch from WPRI.com reporter Dan McGowan: “Tuesday’s announcement at the Convention Center is getting all the attention, but Clay Pell isn’t the only big name kicking off his campaign next week. On Monday, term-limited Secretary of State Ralph Mollis will launch his campaign for lieutenant governor, where he’ll take on Cumberland Mayor Daniel McKee in a Democratic primary. Both Mollis and McKee were courting Nick Hemond and Peter Baptista from the Hamilton Group to help with their respective campaigns, but it looks like Mollis won out. Nick Cicchitelli, a former Mollis volunteer and campaign spokesman for Republican Senate candidate Barry Hinckley, will run the campaign. Meanwhile, fresh off winning impressive endorsements from Councilwoman Sabina Matos and former state Rep. Linda Kushner, City Council President Michael Solomon will kick off his mayoral campaign on Wednesday in Olneyville. The Hamilton Group is also consulting with Solomon, and Baptista will serve as his mayoral campaign’s spokesman.”
1. Late-breaking news out of Governor Chafee’s office. In a quintessential “Friday afternoon news dump” – the statement landed in my inbox at 4:14 p.m. – Chafee announced he’s replaced spokeswoman Christine Hunsinger with Faye Zuckerman, a former longtime Projo reporter who’s been working in his office since the departure of Christian Varieka. Hunsinger – whom the statement said is leaving “to pursue other opportunities” – has always been a straight-shooter in my experiences dealing with her, and I wish her all the best.
2. If you want to track the State House education of Lincoln Chafee, look no further than his four budgets. The first, presented shortly after his inauguration in 2011, was a bold call for sweeping changes to the state’s tax system that went down in flames; the last, presented this week, is a cautious document that mostly maintains the status quo. As such, opinions about the new budget aren’t so much a comment on the specifics of his proposal as they are a reflection of how people feel about the size and priorities of Rhode Island’s modern-day state government. Voters haven’t exactly been rallying to those who’d overturn the current arrangements: it was only 14 months ago that Democrats captured 101 of 113 Assembly seats. As long as the electorate sends a similar message to the General Assembly at the polls this November, there’s little reason to think the great ship of state will turn in a strikingly different direction come 2015. Meanwhile, one of the best analyses out there are the four charts put together by Anchor Rising’s Andrew Morse, which look at the size of the budget in both nominal and real dollars. One of Morse’s most striking findings is that once you adjust for inflation, state-government spending in Rhode Island has been basically flat during the Chafee administration following an increase of roughly $3 billion during the Carcieri and Almond years. But while overall state spending has been flat, where it comes from has changed significantly: the federal share has dropped since the stimulus ended, leaving state taxpayers to make up the difference.
1. The numbers are in: about 33,000 people signed up for insurance coverage through HealthSource RI during the notably functional marketplace’s first three months of operation, two-thirds of them for Medicaid and the rest for a commercial plan. That’s on track with enrollment goals set by the state and federal governments, though the number of sign-ups for commercial plans has a ways to go to meet Avalere Health’s forecast. More information is coming next week, which is good because lots of questions still remain. How many of those who enrolled were uninsured before? What’s the mix of healthy (cheap) versus sick (expensive) enrollees? How many signed up for Blue Cross plans versus Neighborhood ones? And then there’s the biggest question of all: is the architecture of the Affordable Care Act going to work or not? For the pessimistic take, read Ezra Klein’s interview with Robert Laszewski, an industry consultant. “The problem with Obamacare is it’s product driven and not market driven,” Laszewski argues. “They didn’t ask the customer what they wanted. And I think that’s the fundamental problem with Obamacare. It meets the needs of very poor people because you’re giving them health insurance for free. But it doesn’t really meet the needs of healthy people and middle-class people.” Yet the situation may be different in Rhode Island because the state’s insurance market was already heavily regulated before Obamacare, and is dominated by one carrier (Blue Cross) that’s heavily invested in making HealthSource a success.
2. WPRI 12 is making a big announcement in a commercial airing during tonight’s Patriots playoff game, which starts at 8:15 p.m. on our station. The spot will come on during halftime – don’t miss it!
1. Happy New Year! Today’s Saturday Morning Post may be a brisker read than usual after a whacky week that saw a holiday followed by two days of snow coverage (including one of those always-delightful 4 a.m. shifts). But I can’t complain: I got to report from inside while my trooper colleagues froze through their live shots in Providence, New Bedford, Cape Cod and elsewhere. I hope all of you are shoveled out and have plenty of heat to get through this bitter cold spell. As always, our WPRI 12 meteorologists are the best source for all things atmospheric. Onward!
2. This week is going to be a big one for U.S. Sen. Jack Reed, who’s leading the push to get emergency unemployment benefits extended retroactively for another three months after they expired Dec. 28. The Senate is expected to vote on the measure early next week, but so far Nevada’s Dean Heller is the only Republican backing Reed publicly. “On a human level, many of these people are desperate,” Reed told The Guardian this week. “It is the difference between being able to pay their mortgage or not.” According to Democrats on the House Ways and Means Committee, 4,907 unemployed Rhode Island workers have lost an average of $337 a week in benefits since the program expired, for a combined $1.7 million unpaid in the first week alone. And it’s not just liberals who agree with Reed: center-right wonks Jim Pethokoukis and Michael Strain have both suggested unemployment checks shouldn’t be cut back while the labor market remains weak. Yet even if Reed wins passage in the Senate, the outlook in the GOP-controlled House is uncertain. His own colleague Congressman David Cicilline, in fact, is pushing an alternative measure that would pay for the $6.5 billion cost of the extension by cutting subsidies and corporate tax breaks – which goes against Reed’s argument that unemployment benefits are emergency spending and therefore shouldn’t require immediate offsets. (Speaker John Boehner also wants an offset, though probably not Cicilline’s.) No. 2 House Democrat Steny Hoyer also poured cold water on Cicilline’s proposal Friday: “I have not heard any representation from the leadership yet that they would support unemployment insurance with an offset.”
1. Former Lifespan CEO George Vecchione is a Warwick resident no more. My colleague Tim White reports Vecchione – who took home $39.2 million during his 14 years at the not-for-profit hospital group – sold his Blackstone Avenue compound in October for a cool $1.36 million. That was $512,500 more than he paid for the property back in 1999. Residential Properties’ polished video hawking the house describes it as a “sprawling post-and-beam contemporary home proudly sits on a magnificent 3.2-acre waterfront parcel overlooking Greenwich Bay, delivering panormaic water views from almost every room.” (Seriously, watch the video – the place is gorgeous.) Vecchione may not be entirely through with Rhode Island, however. His wife still owns a waterfront condo in Narragansett, which she paid $1.3 million for in 2007. The condo is registered to a third property of Vecchione’s, an apartment in a co-op on the Upper East Side of Manhattan, which records show cost him $690,000 in 2007.
2. Next year is shaping up to be a great one for Rhode Island political junkies, with the possibility of competitive primary or general elections for all five statewide offices plus Providence mayor. This will be the third election cycle in a row with at least one hard-fought high-profile race – and make sure you enjoy it because, barring unforeseen scandals or retirements, 2016 could be decidedly less exciting. If Hillary Clinton runs it’s hard to imagine any Democrat giving her a run for her money in the Rhode Island presidential primary, considering she defeated Obama by a decisive 18-point margin here in 2008. There’s not much down the ballot, either: no statewide officers or U.S. senators will be up, and David Cicilline and Jim Langevin look firmly entrenched in the U.S. House. That means 2018 could be the next big cycle – but there will be a lot of incumbents on the ballot since this year was so wide open, and incumbents usually have an advantage, especially in lower-profile races. That said, it’s usually safe to bet on Rhode Island politics staying interesting.
1. Merry Christmas!
2. To the surprise of just about nobody, Gina Raimondo jumped into the race for governor this week; to the apparent surprise of some, she did so as a Democrat. Her announcement video was highly polished but slightly stilted – luckily for her Angel Taveras and Clay Pell aren’t exactly Obama-level orators themselves. We still know next to nothing about what policy proposals Raimondo (let alone Pell) will run on. But we do know something about where their campaigns start financially: Raimondo has $2.3 million, Taveras has less than $800,000, and Pell has nothing. Moreover, as Scott MacKay astutely notes, starting Jan. 1 Raimondo can go back to her sizable network of donors and ask every one of them to give her another $1,000, while Pell is thought to have plenty of money in his own bank account to pour into a campaign. That leaves Taveras as the odd man out, possessing neither a large personal fortune nor a vast fundraising network to counter his rivals. The Taveras camp’s deep concern about that was on vivid display in an email he sent Friday with the stark subject line “3:1″ – a reference to Raimondo’s financial advantage. “This is a campaign based on Main Street values,” the mayor wrote his supporters. “But we need to make sure we have the resources to make sure our story and vision can be heard. Can you help us get the word out by donating $35, $50, $100 or whatever you can afford before our Dec. 31 deadline to make sure we have enough?” Nobody can accuse Taveras of sugarcoating: the email republished Raimondo’s first attack on him and MacKay’s doubts about his fundraising. Still, money isn’t everything; National Journal’s Karyn Bruggeman noted this week that Rhode Island’s last three gubernatorial winners – Chafee, Carcieri ’06 and Carcieri ’02 – were all outspent.
1. The Republican primary fight between Allan Fung and Ken Block is starting to get interesting, as well it should – the GOP nomination is a valuable commodity. The Rhode Island Democratic Party hasn’t won an election for governor since 1992. The Washington Post’s Aaron Blake has suggested that recent Republican gubernatorial wins in Southern New England have been part of a slow fadeout for the party locally, akin to how Democrats held onto some Southern congressional seats well into the 1990s. Maybe. Then again, Don Carcieri managed to win re-election in 2006 despite an extremely difficult political environment for Republicans. Carcieri won 18,000 more votes than Lincoln Chafee that year; John McCain underperformed Carcieri by 32,000 in 2008, and Mitt Romney did so by 40,000 in 2012. So both Fung and Block have good reason to fight for the GOP banner if they want to be the next governor. Fung remains the favorite because of his longer history with the party and previous elected experience, but the decision this week by Carcieri fundraiser Tony Bucci to sign on with Block is another sign the former Moderate Party founder will be competitive.
2. Congratulations to Brown University’s Mark Blyth on having his book “Austerity: The History of a Dangerous Idea” chosen by the Financial Times as one of the best of 2013. “The argument is overstated,” the pink paper opined. “But the central point is right: if closely intertwined countries all cut public spending, the outcome will be a deeper depression and more public debt.” Check out Blyth’s April interview on Executive Suite for more about the book and how he came to write it.
1. How much is The Providence Journal worth? To many in Rhode Island it’s a priceless civic asset, but to a potential buyer it’s a business enterprise with an uncertain future. How do you estimate the valuation of an individual newspaper when the whole industry’s future is in doubt? Remember that A.H. Belo has kept The Journal quite profitable – cutting the staff in half will do that. While the paper’s annual revenue has dropped by 38% since 2007, its revenue per employee has stayed at more than $200,000; Ken Doctor estimates its current EBITDA at roughly $12 million a year. The concern for any buyer, then, won’t be huge losses but rather huge uncertainty. How much more room is there to cut expenses if sales keep declining? At what point have you done irreparable harm to the enterprise? And even if you invest in great journalism, as the Providence Newspaper Guild’s John Hill suggests, how confident can you be that a viable business model will be found? The Boston Globe and its Worcester sister paper went for $70 million a few months ago, but that deal included The Globe’s valuable property on Morrissey Boulevard; A.H. Belo is selling the Projo newspaper separately from its Fountain Street headquarters. Another key factor is how desperate CEO Jim Moroney is to sell The Journal. It’s possible some prestige-minded local group will cough up $40 million for the paper, but don’t be surprised if Moroney accepts far less than that.
2. Want to learn more about The Providence Journal’s situation? Nesi’s Notes has you covered. If you’re looking for a video, watch my appearance on Dan Yorke State of Mind from Thursday night or our Newsmakers roundtable with John Hill and Ian Donnis. For the written word, start with my WPRI.com story on the news and second-day update. On the business side, we have the latest circulation statistics (76,000 on weekdays) and the latest revenue numbers ($23 million in Q3). From the archive, there’s an overview of 2012 Projo revenue, a 2010 story on how much the paper might sell for, a post comparing the Projo and The Globe, and 2011 posts on the outlook for the paywall and the paper’s underfunded pension plan.
1. Even the most glass-half-full Rhode Islander probably would admit the state hasn’t seen a huge economic recovery since 2009. So why has the amount of food donated to the Rhode Island Community Food Bank plunged by 22%, from 8.2 million pounds in 2008-09 to 6.4 million pounds in 2012-13? One of the biggest reasons: digital inventory systems are making the food sector much more efficient. ”Food banks were founded on the idea that there was lots of excess food in the system, and that all we had to do was get supermarkets and the food industry to donate it – it was a win-win for everybody,” Food Bank CEO Andrew Schiff said on this week’s Newsmakers. “When I first began in this work, 10 or 12 years ago, there was lots of extra, surplus food available to food banks. And that’s just not true anymore.” Yet even as donations have decreased, demand has grown. The latest federal data shows 17% of Rhode Island’s population – 180,294 residents – are on food stamps, and the monthly payment to a family of four was cut by $36 on Nov. 1. “The economy just hasn’t improved enough for the people we serve,” Schiff said. “Folks are back to work, but at low-wage jobs that don’t give enough earned income to afford enough adequate food for their families.” But he rejects the idea the food-stamp program is creating dependency: “Folks would much rather have an increase in their wages or a better job and get off the benefit completely, to be able to afford food themselves.”
2. I hope you and your family had a safe and happy Thanksgiving, and that you’re continuing to enjoy the festivities if you’re celebrating Hannukah. Like all of you, I’m thankful for the love and support of family and friends, and the blessing of a good job in a great country. I’m also deeply grateful to all the loyal readers who’ve made The Saturday Morning Post and Nesi’s Notes a success over the last three years. Thank you.
1. I know you’re expecting me to lead with the poll, but first let’s revisit the Target 12 investigation Tim White and I put out Monday examining how cities and towns invest their independent local pension plans. (Investment returns play a crucial role in determining a plan’s financial health.) While you can play with our interactive chart to see how your city fares, my biggest takeaways from the story were that (a) there’s little rhyme or reason to the different ways each municipality handles millions in investments and (b) many municipal officials aren’t keeping close tabs on them in the first place. It wasn’t easy to track down this information: individual requests had to be made with each of the 24 cities and towns, and in many cases it took weeks or months of back-and-forth to get answers. More than one community sent us seemingly random pension-related PDFs that didn’t actually answer our quite specific questions. And sometimes obtaining the correct data just raised new questions. For instance, Warwick has its municipal side manage four of its five local pension plans, but the school department manages the fifth – and the school one gets markedly lower returns on its investments. Do Warwick taxpayers, who are on the hook for all five, actually think it’s best to manage the school plan separately? Still, at least Warwick could provide all the data we sought – some places could not even say how their investments performed over the last 10 years, let alone a longer time horizon. Some enterprising state rep or senator should pass a law mandating regular, thorough financial reporting by municipalities about their investment track records, so that taxpayers and other officials can see whether they’re getting bang for their buck.
2. And while they’re at it, lawmakers should force all those special districts to file annual audits, too.
1. There was some late-breaking news as The Saturday Morning Post headed to press Friday night. First Angel Taveras aide Peter Baptista resigned from the mayor’s nascent gubernatorial campaign, saying in a statement: “This afternoon I informed Mayor Angel Taveras that I could no longer serve in the capacity of finance director for his gubernatorial campaign.” Paired with the departures of Arianne Lynch and Matt Jerzyk, this means that in the three weeks since Taveras kicked off his bid for governor he’s lost three of the most loyal staffers associated with him. That could increase the influence George Caruolo, Mark Ryan, Joe DeLorenzo and Mike D’Amico have with the mayor, who is already facing scrutiny from progressives. All the Team Taveras turmoil comes as Gina Raimondo taps Eric Hyers, the energetic campaign manager who piloted David Cicilline’s two U.S. House campaigns. … Meanwhile, two minutes after Baptista’s statement another landed in my inbox, this one from HealthSource RI Executive Director Christine Ferguson and Health Insurance Commissioner Kathleen Hittner, saying thanks but no thanks to President Obama’s hastily announced policy shift on canceled insurance plans. “All plans available in 2014, whether through HealthSource RI or in the private market, have been through a rigorous review process designed to ensure that they meet the standards set forth in the Affordable Care Act,” they said. “After reviewing the president’s announcement, we have decided to continue in the direction we are going, and therefore will not be adopting the option made available to us by the president.”
2. Few enterprises play a more outsized role in the Rhode Island economy than Brown University. For evidence of that tune into this week’s Executive Suite, an exclusive interview with Brown President Christina Paxson. Paxson and I discussed a host of topics – Ray Kelly, the new strategic plan, the medical school, Lifespan’s troubles, the Jewelry District, the Dynamo House – but they all relate back to how Brown’s future will impact Rhode Island’s. One of the more intriguing comments: Paxson didn’t rule out the possibility that Brown will join other top medical schools in creating a faculty group practice, employing doctors who generate revenue for the school by providing direct patient care. Paxson told me: “This is something we can talk about with Lifespan and our partners over time, but that’s still very much in progress.” (Don’t forget that Brown and Lifespan are currently renegotiating their affiliation.) Paxson also said that while Brown will invest in real estate in the coming years, she expects its biggest economic contribution will be spillover effects from research – particularly brain science. But even in that area, the work will have to be specifically targeted due to the more limited financial resources of Brown and its partners compared with, say, Columbia.
1. Lifespan executives are trying to contain the fallout from our Wednesday exclusive about former CEO George Vecchione’s pay climbing to $7.88 million in 2011. Unfortunately, a set of talking points distributed early Friday to senior Lifespan officials (with the suggestion they “be used to respond to staff”) and obtained by WPRI.com is both misleading and inaccurate. First off, Lifespan officials claim they “diligently provided all of the relevant background” before our story aired. That’s untrue. Lifespan denied requests for an interview when Tim White and I asked, and refused to break out specific numbers to establish how much Vecchione was paid in each year after accounting for actuarial changes. Contrary to Lifespan’s assertions, the story did include the information they provided for context – about the one-year payouts, $39.2-million cumulative total and $2.5-million annual average. The talking points also repeatedly say Vecchione received his two largest pay packages in 2009 and 2012, but Lifespan officials have their years mixed up: he received those amounts in 2008 and 2011. On that last point, though, part of the blame should go to the IRS. The annual Form 990s filed by not-for-profits include executive compensation data based on the idea that the way tax-exempt organizations use subsidized dollars should be subject to public scrutiny. Yet the rules the IRS has set for how Lifespan and other groups report the information is extremely confusing: Lifespan has a case when it complains that the 990s inflate Vecchione’s already high pay above what it actually cost the organization, and it’s not clear on the documents exactly what year the figures are for. However, that’s precisely why we pushed Lifespan to confirm that $7.88 million was an actual amount of money they spent on Vecchione in 2011 and not an accounting mirage. It’s also why we pressed them to give us a bottom-line figure for how much his compensation actually totaled from 1998 to 2012, which we got: $39.2 million. However, if Lifespan officials are serious about wanting to provide more context regarding Vecchione’s compensation, we can schedule an on-the-record interview as soon as they’d like.
2. Allan Fung will never be mistaken for Ken Cuccinelli. The Cranston mayor describes himself as a Republican more along the lines of Chris Christie, who won a re-election landslide this week and will be running the Republican Governors Association next year as Fung campaigns to join it. Fung took policy positions that were cautious and idiosyncratic during Friday’s taping of Newsmakers. He opposes getting rid of the sales tax, but backs a full review of how Rhode Island raises state revenue. He opposes Obamacare, but wants HealthSource RI to stay state-run. (“Are you kidding? Hand it back to the federal government when you’re seeing what’s going on right now?”) He opposes the Sakonnet River Bridge tolls, but thinks Rhode Island should create an infrastructure bank in the mold of Chicago Mayor Rahm Emanuel’s. He opposes repaying the 38 Studios bonds, but would consider privatizing RIPTA. He opposes any pension settlement that raises costs for taxpayers, but agrees on principle with negotiating. He’d welcome political support from unions despite “philosophical differences with many labor positions.” (Don’t forget: the Rhode Island Laborers’ District Council endorsed Republican Lincoln Almond in 1994 and 1998.) But be wary of Fung’s supposedly ambitious promise to create 20,000 jobs during his first term – the last consensus economic forecast already predicts Rhode Island will add 19,300 from 2015 to 2018.
1. For a long time Jim Langevin has had a unique response when his campaign contributors got in trouble with the law: he always keeps their money. Over the past few years Langevin’s financial backers have been accused of ripping off the Navy, profiting off the dying and bribing North Providence leaders; in each case the 2nd District Democrat told reporters he would keep the cash because he accepted it “in good faith” – a contrast with his colleagues, who usually donated such funds to charity. Not anymore. When I reached out to Langevin’s office this week to get more details about his keep-the-cash policy, the response was a surprise: he’s had a change of heart. “In recent months, after careful consideration, I have decided to change my longstanding policy about the status of contributions from people who at a later point are convicted of a serious crime,” Langevin said in a statement. His spokeswoman Meg Fraser said all such money that Langevin’s campaign has raised – a whopping $31,820 since his election to Congress in 2000 – “will be donated anonymously to a Rhode Island-based charity.” The new policy – which applies only when donors get convicted and not when they get indicted, as Richard Baccari was this week – “will apply to all future donations,” according to Fraser. Still, Langevin emphasized that the decision doesn’t reflect any larger truth about the donations. “I accept every campaign contribution in good faith with absolutely no strings attached, and use those funds for their intended purpose,” he said.
2. Our weekly Saturday Morning Post dispatch from WPRI.com reporter Dan McGowan: “Clay Pell isn’t just thinking about running for governor in 2014, he’s making the rounds. Pell, the 31-year-old grandson of revered late U.S. Sen. Claiborne Pell, made two appearances this week at high-profile Democratic functions alongside his wife, Olympic figure-skating medalist Michelle Kwan. They left little question about his plans for next year. On Tuesday, the power couple attended the monthly meeting of the R.I. Association of Democratic City and Town Chairs at Antonio’s Trattoria in Cranston, according to Michael Sepe, the chairman of the Cranston Democratic City Committee. ‘It was very interesting. He definitely appears to be serious,’ Sepe told WPRI.com. Sepe said Treasurer Gina Raimondo also attended the event, but Providence Mayor Angel Taveras couldn’t make it. Pell and Kwan were back on the trail two days later, this time attending the National Education Association Rhode Island union’s Executive Committee and Delegates meeting at the West Valley Inn in West Warwick; neither Raimondo nor Taveras attended that meeting. Attempting to woo party elders is hardly a surprising move, but Pell’s visit to the state’s largest teachers’ union is notable. The group already despises Raimondo and has become increasingly frustrated with Taveras; Pell, who left his job with the U.S. Department of Education last week, would at least give the union another option in the Democratic primary.”
Ted went on vacation and the government shutdown ended. Just saying. While he’s on the left coast, feel free to send your takes, tips and trial balloons to email@example.com or firstname.lastname@example.org. For quick hits all week long, follow both of us on Twitter: @danmcgowan & @tednesi.
1. The talk about former Providence Mayor Vincent “Buddy” Cianci running for mayor again in 2014 just won’t go away. Even with some of his allies confirming that he has extended his contract at WPRO-AM, former Mayor Joe Paolino – one of Buddy’s best friends – told me that more and more people are urging Cianci to throw his hat in the ring if Angel Taveras runs for governor. “There are many qualified leaders in the city of Providence who are encouraging him to run and I am privy to those conversations,” Paolino told WPRI.com. Without a viable Republican candidate in the race, Cianci would likely have to at least consider running in what is shaping up to be a crowded Democratic primary that already includes City Council President Michael Solomon, former Housing Court Judge Jorge Elorza, former Water Supply Board Chairman Brett Smiley and, more than likely, state Rep. John Lombardi. Paolino acknowledged that there are several good candidates – “Solomon is the strongest City Council President in years” – but said he thinks Cianci would have a good chance at reclaiming City Hall. “Of course, I think I’m the best candidate, but I’m not running,” Paolino said. “I think his experience and can-do attitude would make him a very qualified candidate. He would do a good job.”
2. Nobody in General Treasurer Gina Raimondo’s office was caught off guard by the information included in union analyst Edward Siedle’s 106-page pension beat down Thursday, but even if the U.S. Securities and Exchange Commission takes a flyer on investigating the state’s pension fund, a year’s worth of opposition research for about $20,000 isn’t a bad deal for organized labor. Other pieces of the anti-Raimondo effort are starting to come together as well. Two days before the treasurer held her big women’s fundraiser at Roger Williams Park Casino in September, a Facebook group called “Women United for Economic Security“ was formed by a progressive activist. The group now has 437 members. Perhaps more problematic is the “Anybody But Gina” contingent that doesn’t necessarily love Providence Mayor Angel Taveras – her likely opponent in next year’s Democratic primary for governor – but will do whatever it takes to make sure Raimondo isn’t victorious. “I’ll use what modest influence I have to do whatever I can to make sure that Taveras wins, and that Raimondo loses – along with the architects of the financial crisis and would-be Social Security slashers who are bankrolling her career,” former state Rep. David Segal, one of the most talented organizers in Rhode Island, told WPRI.com. Siedle probably did his job adding fuel – and providing plenty of backup gasoline – to that fire. (more…)
1. Brown University’s new poll makes some fairly stunning predictions about next year’s Democratic primary for governor. Brown polled a sample of 638 registered Rhode Island voters, and said 433 of them are likely to vote in next year’s Democratic primary. Since Brown’s full sample is supposed to be an accurate picture of the Rhode Island electorate, this implies 68% of registered voters will cast a ballot in the Democratic primary. To put that in perspective, only 18% of registered voters turned out in the 2002 Democratic primary between Myrth York, Sheldon Whitehouse and Tony Pires. Put another way, Brown’s poll suggests turnout in the September 2014 Democratic primary will be higher than in any November gubernatorial election since at least 1994. That’s an extraordinary forecast. In addition, Brown is projecting that just 40% of Democratic primary voters next year will be registered Democrats. However, Warwick native Matt McDermott of D.C. polling firm Lake Research Partners reports that registered Democrats made up 74% and 77% of the Democratic primary electorates in 2010 and 2006, respectively – much, much higher. Brown’s Marion Orr is standing by his projections, telling me: “This is why we asked the filter question about one’s likelihood of voting in a Democratic primary.”
2. Gina Raimondo’s eight-point primary lead in the Brown poll captured the headlines, but the survey also contained some potentially good news for Angel Taveras. When Brown queried all 638 registered voters about their opinions on various politicians, nearly 90% said they’ve already formed an opinion about both first-term Democrats. Taveras came out ahead, with 64% rating the job he’s doing as mayor of Providence as excellent or good; Raimondo’s job rating was 54% positive, and her “poor” rating was nearly twice as high (13.5% vs. 7.2%). Those findings are particularly intriguing because only 31% of Brown’s survey respondents were registered Democrats, even though their actual share of the electorate is 40%.
1. HealthSource RI, Rhode Island’s Obamacare marketplace, got off to a relatively smooth start this week – despite the failings of the Obama administration itself, which by all accounts seriously botched the back-end technology. HealthSource RI executive director Christine Ferguson lauds her team for their work on the local system, which had processed 580 applications for coverage as of Thursday. But she also admits that there were more individuals and small businesses who were stymied by the buggy federal identity-verification process when they tried to enroll this week. The federal data hub “was a really disappointing component and very unfortunate,” Ferguson said Friday on Newsmakers. “I mean, I understand, but it’s unfortunate.” HealthSource RI is using backstops while the feds get their act together. “But at the end of the day, that data hub is going to have to work more effectively or we’re going to have to do everything manually,” Ferguson said. “In the long run it’s not a killer, because coverage doesn’t start until Jan. 1, [but] it’s disappointing.” Looking ahead, Ferguson hopes the General Assembly will give HealthSource RI an annual administrative budget of $17.9 million to $23.9 million starting in 2015, when federal funding runs out and the insurance exchanges have to become self-sustaining. But it’s unclear whether lawmakers will buy into her expansive vision for HealthSource – or, if they do, where they’ll find all that money.
2. For a 29-year-old earning $46,000, the cheapest available plan on HealthSource RI carries a steep premium of $186 a month, or more than $2,200 a year – even though the plan also has a $5,000 deductible. That’s a big cost for a young person who may already be on the fence about whether health coverage is worth buying. One way to change that: deregulation. Specifically, next year the General Assembly should look at whether all the benefits that state law mandates for all health plans are absolutely necessary. And it looks like at least some people are already thinking along these lines. The new health law passed this year by Sen. Josh Miller calls for a close examination at Rhode Island’s health mandates, and the R.I. Center for Freedom and Prosperity says a report it’s releasing later this month will “propose multiple market-based solutions to address this access-to-healthcare shortfall, without requiring additional taxpayer funding.”
1. Shutdown or no shutdown, the single biggest expansion of the U.S. welfare state since the 1960s will begin Tuesday when enrollment in the new Obamacare insurance exchanges starts. Many of those marketplaces have had to delay crucial functions because of technical problems – but not Rhode Island’s, built by consultants from Deloitte LLP with $84 million in federal money. “We are going to be fully operational on 10/1,” HealthSource RI spokesman Ian Lang told me Friday. “People will be able to experience the entire system. We’re ready to go.” Lang admitted there may be some glitches once they flip the switch, but he said multiple rounds of testing have revealed no issues on the scale of those in Washington, D.C., where subsidies are being calculated wrong. HealthSource RI’s marketplace for small businesses will also let employees choose between plans right off the bat, unlike the federal ones, a particular point of pride to exchange chief Christine Ferguson. A smooth rollout would be good news for Lincoln Chafee, who made the exchange a priority even before last year’s U.S. Supreme Court decision and whose aides have surely prayed it wouldn’t become another DMV-style fiasco. ”We’re not sitting here thinking, ‘Oh my God,’” Lang said. “We’re confident it’s going to work, and we have contingency plans in place if we need them. … There are not many private-sector companies that would agree to bring up something of this magnitude in nine or 10 months or a year, and we’ve been able to pull it together.”
2. Matt Taibbi’s big Rolling Stone article taking aim at Gina Raimondo and other pension reformers reads like a preview of the message the treasurer’s opponents will be pushing next year if she seeks the governor’s office. (Former state Rep. David Segal also made the case for the prosecution.) The critique is a broad one, casting Raimondo as too sympathetic to the financial sector – a similar argument to the one liberals used to derail Larry Summers’ nomination to lead the Federal Reserve. Notably, there are two policy changes by Raimondo at issue. The first is, of course, the 2011 pension law, which was passed with overwhelming support from the General Assembly and after a lot of public discussion. The second is the State Investment Commission’s decision to invest $1 billion of pension assets in hedge funds, something that happened much more quietly. The two aren’t directly related – Raimondo could have invested the pension money in hedge funds with no benefit changes at all – but they are feeding the same narrative. Yet as RIPR’s Ian Donnis notes, “we’re still a very long way from prime time and Raimondo’s superior fundraising firepower has yet to come into play. … A campaign, like baseball, is a marathon, not a sprint.”
1. When Angel Taveras released a polling memo this week suggesting the mayor has an early advantage in the Democratic gubernatorial race, a few people admonished me – not for the first time – about covering an election that’s still nearly 12 months away. “Ted, it’s only September 2013,” they scoff. “It’s still too early.” To that I say: hogwash. What’s happening right now, mostly behind the scenes, is what political scientists call the “invisible primary” – an effort by Taveras, Gina Raimondo, Allan Fung and other candidates to jockey for early advantage by raising money, firming up supporters, raising money, working to win endorsements, raising money, polling to test messages, and, of course, raising money. The context for next year’s campaign is also being set. Will the economy be improving or declining? What other issues will loom large? Who’s getting the grassroots excited? It can be tough for reporters to nail down where things stand in the invisible primary since so much of it takes place far from public view, which is why we spend a lot of time focusing on whatever clues and signs turn up. But make no mistake: the invisible primary matters, and it’s been under way for quite a while.
2. That Taveras poll – the bulk of which was not released by his campaign – put the mayor at 49% among likely primary voters, significantly ahead of Raimondo at 30%, with 21% of voters undecided. While Taveras uses a respected pollster - Peter Hart associate Fred Yang – it’s wise to stay a bit skeptical since we don’t have a full breakdown of the survey. Al things considered it’s obviously good to have a poll that shows you up 19 points against a popular rival, which may explain why Taveras allies were in such good moods before the findings came out. And it’s probably not an accident the numbers came out less than two weeks before the Sept. 30 deadline for Taveras to collect third-quarter donations. But it’s not all bad news for Raimondo. For one thing, Taveras has raised expectations significantly for how well he should be doing once independent polls start coming out. For another, Raimondo’s campaign – and Kate Coyne-McCoy’s super PAC – can point to the Taveras poll as evidence that the treasurer will need all the money she can get to defeat him next year, and why her supporters shouldn’t rest easy because of her current three-to-one advantage. Those next filings are going to be even more closely scrutinized now.