The Saturday Morning Post
1. Mark your calendars: WPRI 12 and The Providence Journal will release a new exclusive Campaign 2014 poll next week. We asked Democratic primary voters whether they support Angel Taveras, Gina Raimondo, Clay Pell or Todd Giroux for governor, whether they could still change their minds, and how they plan to vote in the other statewide primary races. We’ll release the first results live on WPRI 12 and WPRI.com Tuesday at 5 p.m. Tune in!
2. It’s safe to say this was not the best week of the campaign for Republican gubernatorial candidate Allan Fung. Filming a TV ad in Ohio is a rational decision even if it opens you up to attacks; refusing to answer a reporter’s phone calls for 48 hours after he finds out you did so is just silly. Also interesting is the controversial Ohio consulting firm Fung is using: Strategy Group for Media, which BuzzFeed’s McKay Coppins described in 2013 as “a campaign and strategy clearing house for the uncompromisingly conservative wing” of the House GOP. Indeed, nine Strategy Group employees – including founder Rex Elsass – donated a combined $6,850 to Fung’s campaign between May 29 and June 3, which will boost the candidate’s state matching funds if he makes it to the general election. (Fung allies were quick to point out that his rival Ken Block is using New Jersey-based Jamestown Associates, another controversial firm in Republican circles, but they’ve filmed Block’s ads locally.) Block criticized Fung as well for backing out of a cable-access debate scheduled for this week, which Fung’s campaign attributed to the candidate’s initial plans to attend the Asian American Journalists Association conference in Washington. (In the end, though, Fung decided to stay in Rhode Island.) These sorts of stories are hardly fatal to Fung’s campaign in and of themselves – few if any voters are going to pick a candidate based on his TV ad locations. But the negative headlines are an unwelcome distraction just three weeks before the primary. Plenty of Republicans seem open to Block despite his previous apostasies – he is, after all, a fiscally conservative businessman who rails against the Democratic General Assembly and played an instrumental role in killing the master lever. The result could come down to how high Fung can drive his vote totals in Cranston and Warwick.
I’m back! Happy Saturday. Here’s another edition of the weekend column here on WPRI.com - thank you to Dan McGowan for ably manning it in my absence. As always, send your takes, tips and trial balloons to email@example.com, and follow @tednesi on Twitter.
1. With less than a month left before voters go to the polls, the Democratic primary for governor shifted to a new phase this week as Angel Taveras went on the attack against Clay Pell, a major strategic shift by a candidate who spent the last month decrying negative campaigning by Gina Raimondo. It’s the strongest evidence yet that Pell’s largely self-funded campaign is indeed getting traction and becoming a real problem for the mayor. Taveras now has to put forward three messages at once: the case against Raimondo, the case against Pell, and the case for himself. That’s not easy to do, especially with the smallest budget of the three – perhaps Taveras needs a signature issue that will set him apart. (On Friday his campaign highlighted education, also a key focus for Pell.) To the extent it reinforces the idea that he’s a viable candidate, Pell supporters actually seemed pleased to see their candidate taking fire; Pell booster Bob Walsh of NEARI went so far as to suggest Taveras is now the spoiler, which surely made Taveras backers’ heads explode. The question of spoilers, though, isn’t going to go away as Gina Raimondo floats above the Taveras-Pell fight with her new positive ad. If Pell overtakes Taveras as Raimondo’s main rival, how high is he ceiling of support? Could he actually woo enough voters to win outright – or only enough to help the treasurer secure victory?
2. One reason Clay Pell has become a force in the Democratic primary: his spending on TV and radio advertising through mid-August will total $1.4 million, slightly more than the $1.3 million that Gina Raimondo will spend and way more than the $641,000 that Angel Taveras has booked, according to tracking figures from one of the campaigns. Taveras has also already booked another $255,000 between Aug. 19 and Sept. 9. All told the three Democrats have booked $3.6 million in commercial time on broadcast TV, cable and radio so far – and that’s before Pell or Raimondo buy anything after Aug. 18, as they surely will. Those dollar figures don’t tell the whole story, though, because the candidates are paying different amounts for the ads. By another metric – gross rating points – Raimondo is tops with 11,654 points through Aug. 18, compared with 8,534 points for Pell and 6,589 points for Taveras.
Thanks for reading the Saturday Morning Post while Ted was away. He’s back in action next week and like you, I couldn’t be happier. 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. While the $3.1 million Clay Pell has already loaned his campaign is nearly as much as incumbent Gov. Lincoln Chafee and former Republican Gov. Don Carcieri combined to spend on themselves for elections in 2002, 2006 and 2010, he hasn’t quite cracked the top of the list for campaign loans in Rhode Island. That honor goes to former state Sen. Myrth York, who spent just a shade under $4 million on herself during her unsuccessful bid for governor in 2002. (York did win Democratic primaries in 1994, 1998 and 2002.) Although Pell’s personal fortune is the biggest story of the latest round of campaign finance reports – he’s up with yet another new commercial today – it’s worth noting that Gina Raimondo has now raised more than $5.66 million since launching her 2010 campaign for state treasurer. Put another way, Raimondo’s war chest has collected $18,099 in interest since 2010; that’s more than nine members of the Providence City Council currently have in their campaign accounts. The third contender in this year’s Democratic gubernatorial primary, Providence Mayor Angel Taveras, is no slouch himself when it comes to fundraising. Taveras still finished the second quarter with more than $1.3 million in the bank, but with two better-funded opponents, you have to wonder if he’s kicking himself for pushing so hard to ban outside spending in the race.
2. On the Republican side, businessman Ken Block and Cranston Mayor Allan Fung know they’ll likely be outspent by the Democratic nominee, but all they have to do is call John Robitaille to learn how to run a competitive general election race. At the same point in 2010, the $40,190 in Robitaille’s campaign account was 43 times less than the amount held by Democrat Frank Caprio, who didn’t even have a primary. Robitaille went on to benefit from matching funds and some outside help from the Republican Governors Association, which you have to assume will happen for either Block or Fung again this time around. Block ended the quarter with $584,995 cash on hand, while Fung finished with $364,141.
Company policy dictates that you get a week off for every award you win, so after Ted’s performance at the Best of Rhode Island party this week, you’re stuck with me for the foreseeable future. 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. Here’s one thing we learned from Democratic secretary of state candidates Nellie Gorbea and Guillaume De Ramel during their 30-minute debate on WPRI 12’s Newsmakers: what they lack in policy differences between one another, they more than make up for in delivery. Facing a steep financial disadvantage in the race, Gorbea came out swinging, attacking her opponent for his connection to Ray Rickman, the former state representative and lobbyist who failed to disclose a $10,000 loan he gave to then-House Majority Leader Gordon Fox in 2009. “It’s not just about policy ideas, but also what are you going to do in the line of fire,” she said. For his part, De Ramel, the perceived favorite thanks to his personal wealth and a stack of endorsements, stayed on message. He agreed that the loan to Fox was inappropriate, but said Rickman is entitled to due process in the probe. De Ramel never quite engaged with Gorbea, except to suggest that one difference between the two is “I’ve never roamed the halls of the State House as a staffer.”
2. Friday’s forum wrapped up a month of debates for all of the statewide races that have a significant primary. If you missed any of them, here’s a breakdown: Democratic governor; Republican governor; lieutenant governor; general treasurer; secretary of state. We’ll be back in action next month with more gubernatorial debates.
3. He may be using Hillary Clinton’s old campaign office, but former Providence Mayor Buddy Cianci is hoping the technology used by conservative upstart David Brat will help build his ground game as he seeks to win back his old job. Cianci, the 73-year-old independent who hasn’t run a competitive race since 1994 – he ran unopposed in ’98 – has signed on to use the well-respected rVotes software to help modernize his campaign, company founder Steve Adler said this week during a taping of myRITV’s Executive Suite. Adler, a Providence native who helped launch the campaign technology that put the Democrats years ahead of their rivals when it came to fundraising and field efforts, has now switched sides and developed a similar program for the GOP. Although Adler’s biggest win came last month when Brat shocked the political world by defeating House Majority Leader Eric Cantor in a Republican primary, it’s worth noting that former Rhode Island GOP Chairman Ken McKay embraced the program several years ago. McKay is now political director for the Republican Governors Association. It’s too early to know what rVotes will mean for Cianci in November, but it is a sign that the former mayor understands what it takes to win a race in 2014. Now all he needs is a functioning website.
1. The Democratic lieutenant-governor primary between Frank Ferri, Dan McKee and Ralph Mollis isn’t exactly the hottest race in town, but it’s still a feisty fight. And it could matter: as Tim White points out, a lieutenant governor became governor 22 times between 2000 and 2010 alone. The three candidates met Friday for the second of this month’s pre-primary debates on Newsmakers to make their pitch for the votes – and attention – of viewers at home. The conventional wisdom has Mollis as the frontrunner in the race, and the debate will reinforce that thinking. The two-term secretary of state stayed calm and collected throughout, and kept his cool in the face of a blistering series of attacks on his record by McKee. The man had done his homework. McKee was on the offensive throughout the debate, jabbing Mollis – and occasionally Ferri too – about everything from 38 Studios to North Providence’s bond rating; he also spoke passionately about education policy. Ferri, a latecomer to the race, was understandably nervous and sometimes spoke haltingly in his first major debate with the other two. He eschewed attacks – other than one on Don Carcieri – and drew clear distinctions on issues such as health care, marijuana and immigration that could play well with progressives. Right now, though, it looks like Rhode Island could be in for a rematch between Mollis and Republican Catherine Taylor.
2. Frank Ferri has represented Warwick in the Rhode Island House since 2007, and he made some interesting comments during the debate when he expressed regret about his vote for the 2011 pension law championed by Gina Raimondo. “When we were presented with a pension reform, we thought we had the best offer on the table. We thought that was the best that we could get,” he said. “I know I worked hard on trying to lower the [retirement] age and a little more consideration to COLAs. But now we learn – after the court ordered that they go back into negotiations – there was a better deal. So knowing that there was a better deal, knowing now that not everybody that should have been at the table was at the table, I’m not sure how I would have voted back then.” In fact, he continued: “Now that I know there was a better deal for the workers I probably would have not voted for it back then.”
1. The three candidates running for general treasurer – Ernie Almonte, Frank Caprio and Seth Magaziner – squared off Friday in the first of this month’s pre-primary debates on Newsmakers, and the hour-long exchange gave a clear indication of how Caprio and Magaziner are pitching themselves to Democratic primary voters. Caprio, a familiar face, touted his record during his previous term in the treasurer’s office, casting himself as not only more experienced than Magaziner but also wiser today than he was when he made his botched run for governor. Even though he’s not technically the incumbent, in many ways Caprio is really running a re-election campaign, with all the advantages and challenges that implies. Magaziner is keeping a tight focus on the pension fund’s investment returns, and the need for the state to start matching the national average. (Cate Long might approve.) The 30-year-old is also trying to use his youth to his advantage by arguing the State House needs new faces, and to cast Caprio as a fair-weather Democrat who isn’t loyal to the party. Waiting in the wings is Almonte, a Democrat until last month who now has tacit GOP support for his independent bid. He emphasized his background as an accountant, suggesting the treasurer should be focused on math and money rather than partisan politics. That message could resonate in a state where one in two voters are registered independents, though non-party bids are always uphill battles.
2. Both Frank Caprio and Seth Magaziner are trying to navigate political tightropes in their campaigns. Caprio’s political profile was long that of a moderate or even conservative Democrat, and he’s acknowledged flirting with the Republican Party. Yet in his comeback bid for treasurer he’s striking a populist tone critical of Wall Street and high finance that wouldn’t be out of place with the party’s Elizabeth Warren wing: he strongly opposed the rehiring of the state’s longtime financial advisers at First Southwest, suggested the state is wasting money with hedge funds, and raised doubts about paying the 38 Studios bonds. All that sounds like an appeal to voters who dislike Gina Raimondo – but when asked to judge Raimondo’s work as treasurer, Caprio gave her an “A” grade. Magaziner, though, has challenges of his own. He is strongly supported by some progressives, who bonded with him while he was serving on the Marriage Equality Rhode Island board, and has won the endorsement of unions such as the National Education Association Rhode Island. Yet he’s also backed by some pro-Raimondo types who see him as the best option to protect her pension law, he is open to investing with hedge funds, and he supports paying the 38 Studios bonds. Meanwhile, a huge question remains unanswered: what will Bill and Hillary Clinton do to help Magaziner, the son of their old friend Ira?
1. I hope all of you had a safe and happy Independence Day! (Rhode Island, of course, effectively declared its independence on May 4, 1776. Is a second holiday in order?)
2. House Speaker Nicholas Mattiello is hoping an uptick in Rhode Island’s economic growth – spurred in part by the tax cuts he just pushed through the General Assembly – will be enough to wash away the budget deficits currently projected for the coming years, which are set to rise from more than $100 million in 2015-16 to more than $400 million in 2018-19. If growth alone isn’t enough, though, don’t expect Mattiello to raise taxes to fill the gap. “I’m not looking to raise taxes in the future,” Mattiello said on this week’s Newsmakers. “My goal is to continue to create a better economic environment and atmosphere and to grow our economy. I think the way we work on reducing that structural deficit is to do things differently, and this budget was the first budget to do things differently and move in a different direction, to create that better economic environment, that better economic activity.” When pressed on what spending cuts he might consider if tax increases are off the table, however, Mattiello sounded a note of caution: “The reality is, even though it’s an $8-plus-billion budget, a lot of the spending is fixed and there’s not a lot of areas to look at anymore. But we will always look at efficiencies and making cuts where appropriate.”
1. Quite a week in Rhode Island politics, eh?
2. Here’s some news WPRI 12 broke late Friday that you might have missed – the state has reached a 38 Studios legal settlement with Moses Afonso Ryan and Tony Afonso. “I hope this is going to be the first in a series,” state attorney Max Wistow tells me.
3. If you’re wondering whom to thank – or blame – for the improbable comeback campaign of Buddy Cianci, put the Great Recession near the top of the list. The economic meltdown that began in 2007 was a body blow to Rhode Island and its capital city, one whose effects are still being felt seven years later. The downturn’s cascading financial fallout nearly drove Providence into bankruptcy, and although Angel Taveras avoided that drastic step, the city is still stuck with high unemployment, high taxes, too many potholes and too few prospects. Voters are looking for a savior – and Cianci thinks he’s well-positioned to play the part. His checkered past is real, but so is his love for Providence, and his name is synonymous with the happier days of the 1990s. The ironies here are numerous. For one thing, as Tim White reported Thursday night, some of Providence’s biggest financial problems have their roots in the Cianci days – as his opponents will remind voters in the coming months. For another, the stage for Cianci’s comeback was partly set by the actions of his successor and nemesis, David Cicilline, whose East Side allies are appalled at the prospect of his return to City Hall. To the extent that the Cicilline administration mismanaged the city’s finances in 2009 and 2010 – and then misled voters about the situation – they undercut their own case that post-Cianci Providence is better than what came before.
1. The Republican primary for governor between Allan Fung and Ken Block continues to be quite a fight. As Walt Buteau put it after Tuesday’s WPRI 12/Providence Journal debate, the gloves didn’t have to come off during it because they were never on in the first place. Fung once again hammered Block for backing Barack Obama in 2008 and 2012; considering only 6% of Republicans voted for the president two years ago, that certainly makes him an outlier. Yet the former Moderate Party chief has worked to offset his heresy by acting as a relentless – and effective – opponent of top General Assembly Democrats, whom some Republican regulars dislike even more intensely than Obama. Looking ahead, Fung is set up well to win the Rhode Island Republican Party’s endorsement Thursday after being recommended by its Steve Frias-led nominating committee, though that wasn’t enough to secure previous nominations for Jim Bennett or Ron Machtley. Either way, the final decision will be made by a tiny swath of Rhode Island’s 743,000-strong electorate: as Scott MacKay noted after Tuesday’s debate, Don Carcieri defeated Bennett with just 17,227 votes back in 2002.
2. Speaking of Republicans, the party is now set to field competitive candidates for at least three of the five statewide offices. Either Fung or Block is poised to lead the GOP at the top of the ticket, and both could have crossover appeal to some independents and Democrats. Catherine Taylor – a proven vote-getter who nearly defeated Ralph Mollis in 2010 – will kick off her campaign for lieutenant governor Monday at Saul Kaplan’s Business Innovation Factory. (It could easily wind up being a rematch against Mollis.) Dawson Hodgson is running a spirited, if underfunded, campaign for attorney general against incumbent Peter Kilmartin that’s trying to harness voters’ anger over 38 Studios. (Rhode Island State Police Col. Steven O’Donnell didn’t help Hodgson’s cause this week, though.) Also, John Carlevale, who placed fourth in the 1994 Democratic primary for secretary of state, will make another attempt this year on the GOP ticket. That leaves general treasurer as the only office without a known Republican candidate at this time. Over in the General Assembly there’s almost nowhere to go but up for Republicans, who control just 11 of 113 seats in the wake of Obama’s 2012 landslide. GOP Chairman Mark Smiley tells RIPR he expects the party to field at least 40 “viable” candidates in “targeted races that we believe we have a really good shot at winning.” One tough break for most GOP candidates: the Rhode Island Senate kept the master lever in place for this November’s election.
1. When are the gloves going to come off in the Democratic primary for governor? With less than three months to go, soft support for the frontrunner and 22% of voters undecided, it’s hard to believe the campaign will stay as polite as it looked at our WPRI 12/Providence Journal debate Tuesday night. It’s widely assumed Gina Raimondo will be the first to go negative on TV – she has the money, she’s running a close second, and Providence offers plenty of fodder for her to criticize Angel Taveras (fairly or otherwise). There are risks, though. Campaign pros say negative ads can be very effective despite voters’ dislike of them. But if Raimondo and Taveras get into a bruising battle, it could make some disenchanted voters take a closer look at Clay Pell – who went on the air Friday with a positive spot. As the debate showed, there are very few policy differences between the three candidates, especially Taveras and Raimondo; they’re going to have to find somewhere to disagree.
2. If Gina Raimondo wants a lesson in the promise and peril of negative advertising, she should look across the aisle to the Allan Fung campaign. His “Blockheads” ad attacking Ken Block got people’s attention, driving home his relentless message that Block is a squish who voted for Barack Obama. (“Twice!”) But the use of a phrase like “blockheads” has opened Fung up to criticism that he’s insulting primary voters, and the ad’s slippery phrasing about Block and Obamacare earned him a “Pants on Fire” from PolitiFact – not exactly the kind of free media you want. You only need to look at Eric Cantor’s shock loss in Virginia to see how an attack ad can backfire on an establishment candidate if it raises the profile of his opponent (and if it doesn’t pass the smell test, as in Cantor’s case); but if it works, Fung’s team will end up looking smart. Fung and Block are set for their first TV debate Tuesday night at 7 on WPRI 12, and as Scott MacKay puts it: “There may be more teeth on the floor at WPRI than at the ESPN fisticuffs.” Whatever happens Tuesday, the idea that Fung will be able to wait in the wings as the positive candidate while the Democrats drive up each others’ negatives has gone out the window.
1. A quick look at our new WPRI 12/Providence Journal poll suggests the Democratic primary for governor is Angel Taveras’s to lose. Three months out from the vote, the mayor is looking at some heartening numbers. He continues to lead Gina Raimondo, this time by 33% to 29%, the same margin as in our February poll. He’s also very popular with likely Democratic primary voters: 67% of them rate him favorably, while 54% rate her favorably. Even among voters in union households, where his negatives are highest, only 24% rate him unfavorably. Yet a closer look at the poll should give Taveras pause. Raimondo’s favorable numbers aren’t bad, after all – they’re just not as good as his. She leads him among independents and, more importantly, senior citizens, who are likely to go to the polls. And only 33% of those currently backing Taveras say they’ll definitely vote for him on Sept. 9, compared with 44% of Raimondo voters, giving her a tiny edge among those who’ve made up their minds. That suggests Taveras’s support is soft – and Raimondo has the financial resources to take advantage of that using a fusillade of negative ads. Who wins? Who knows. This race is as competitive as it looks.
2. And then there’s Clay Pell. His support has dipped to 12%, and his negatives have shot up after the Mystery of the Missing Prius. For a little-known candidate facing two formidable opponents, that’s not exactly what you want to see with three months to go. Yet Pell’s backers remain adamant that he won’t get out of the race. They’re making a big bet on the combined power of Tad Devine’s TV ads and Bob Walsh’s NEARI-powered ground game to carry him to victory. For skeptics, the thing to watch is whether Pell actually shells out significant cash. So far he’s only loaned his campaign $2 million – until he spends the money, he can still take it back. The size and duration of his first TV buy will be telling. Indeed, next week is shaping up to be a big one for the 32-year-old: Tuesday night’s WPRI 12 debate will be his first chance to make a new impression on many voters, and his campaign will likely go up on TV soon thereafter.
1. Mark your calendars: WPRI 12 and The Providence Journal will release a new exclusive Campaign 2014 poll next week. We asked Democratic primary voters whether they support Angel Taveras, Gina Raimondo, Clay Pell or Todd Giroux for governor, whether they back Frank Caprio, Ernie Almonte or Seth Magaziner for general treasurer, and how they feel about other big issues. We’ll release the first results live on WPRI 12 and WPRI.com Tuesday at 5 p.m. Tune in!
2. This week’s Diversity and Inclusion Professionals gubernatorial forum illustrated how differently the Democratic and Republican primaries are playing out. Democrats Taveras, Raimondo and Pell were relentlessly polite, eschewing attacks and accentuating the positive. Most of their comments were, to be honest, pretty bland. Meanwhile over at the next table, Republicans Allan Fung and Ken Block took repeated shots at each other, with Block particularly aggressive in his criticisms of Fung. The Cranston mayor’s campaign is clearly having to work harder for the nomination than they expected, and their early TV debut and growing use of GOP surrogates is evidence of how serious the threat from Block is. Their debate June 17 should be feisty. As for the Democrats, there’s no way their race is going to stay as sedate as it looked at the forum. Taveras has a target on his back as the frontrunner; Raimondo has plenty of money but plenty of baggage; and Pell needs to shake things up if he wants to lap the other two. The Rhode Island Association of Democratic City and Town Chairs’ inability to reach consensus and endorse one of the three Thursday night is another reminder their party’s nod really is up for grabs. Watch for Pell to join Raimondo on the airwaves before long, increasing the pressure on Taveras to match them both – though his campaign has to be careful with its more limited financial resources.
2. Four months after Governor Chafee proposed his budget for the fiscal year that starts July 1, a roughly $70 million shortfall has opened up in his tax-and-spending plan. The culprits include soaring Medicaid enrollment, weak tax revenue, unbudgeted union raises, and $4.6 million for HealthSource RI. Richard Licht, the governor’s right-hand man, says the administration is “looking at lots of options” to close the gap. “We have a $70 million problem – we will solve it, working cooperatively with the General Assembly,” Licht said on this week’s Newsmakers. “I wish we had $70 million to spend; unfortunately, we have $70 million to cut, and we will.” Of course, that $70 million shortfall doesn’t account for the cost of the General Assembly’s own priorities – notably tax cuts and nixing the Sakonnet tolls. A two-step on the corporate tax – dropping the rate to 7% while switching to combined reporting – has momentum and is apparently revenue neutral, so its passage is highly likely. Another Speaker Mattiello priority – restructuring the estate tax to eliminate the “cliff” at $921,655 – will be more challenging but could still find its way into the final document. A solution on tolls remains uncertain. The budget machinations are all taking place against the backdrop of an election year, which has lawmakers hoping to finish the session early without making anybody too mad – especially before the June 25 filing deadline for candidates.
1. Ken Block says he’s leading in the Republican primary for governor – and he’s got a poll to prove it. A survey of 300 likely Republican primary voters commissioned last month by Block’s campaign puts him on top at 46%, with Allan Fung at 37% and 16% undecided. The poll was done by the respected Florida firm Fabrizio, Lee & Associates. “What we really wanted to know was, is what we have been doing working? Is it being received by the voters well inside the Republican primary?” Block said on this week’s Newsmakers. “And the answer to all those questions is a really resounding yes.” The Block campaign’s previous internal poll last October put Fung at 53% and Block at 25%, so the new poll represents a 37-point swing in Block’s favor. These are internal surveys, though, and the Republican primary electorate is notoriously hard to poll. Fung campaign manager Patrick Sweeney dismissed Block’s findings, saying in an email: “Our internal polling shows Republicans are rejecting Ken Block because he supported Obamacare and voted for President Obama twice.” (Fung, unlike Block, isn’t releasing his internals.) We’ll see who’s right. But if the GOP primary is as competitive as Block argues, the first TV face-off between the pair June 17 on WPRI 12 is looming as a big moment.
2. The latest issue of Architectural Digest says Providence is the country’s best small city. Agreed!
1. The most revealing comment in this week’s debate about repaying the 38 Studios bonds may have come from Rep. Karen MacBeth, who told RIPEC’s John Simmons at a hearing: “This committee isn’t about, is it cheaper or not to pay? It’s whether we should or should not.” Governor Chafee, Simmons and others are emphasizing that it would be more costly for the state to default than to pay, because default would damage the state’s credit rating – an argument buttressed by the SJ Advisors study released Friday. But MacBeth’s comment suggests she – and perhaps others – might refuse to pay even if it would cost the state more money in the long run. How much is Rhode Island willing to spend for the psychic and cathartic benefits of knowing taxpayer money isn’t being used to pay back the 38 Studios bondholders? At net present value, the SJ Advisors study puts the added cost from refusing to pay at $14 million to $219 million. Is it more palatable to Rhode Island lawmakers – and voters – to spend that money (spread across other bond transactions) for the satisfaction of knowing the 38 Studios bonds weren’t repaid directly? Plus, nobody can say with certainty what default would actually cost; interest rates remain historically low, Detroit and Greece are already borrowing again, and the 38 Studios debt is clearly unique. MacBeth also suggested a default is necessary to force negotiations with Assured Guaranty, the bond insurer, which is responsible for making the 38 Studios bondholders whole if Rhode Island won’t; bond analyst Cate Long suggests Assured Guaranty would make the payments but sue the state if that’s the path lawmakers take. (Now those would be some interesting depositions.)
2. Here’s a compromise option for Chafee, Teresa Paiva Weed and Nick Mattiello if they want rank-and-file lawmakers to approve the 38 Studios bond payment: in exchange, they could agree to Dawson Hodgson’s proposal for an independent investigative commission into the entire affair, armed with subpoena power. That might placate some lawmakers, and it would clear the air faster than a drip-drip-drip of leaks to Tim White. As Scott MacKay wrote Friday, “about all Chafee has done is file suit against the law firms and financial advisors that rode the gravy train all the way to bankruptcy. It is very sad that neither the Assembly nor Chafee had earlier put together a special commission to probe this deal and recommend a way forward.”
1. It’s looking increasingly likely that Rhode Island will raise its minimum wage again before long, perhaps up to $10.10 an hour, as the issue gets talked up locally by Democratic gubernatorial candidates and nationally by a host of liberal politicians. But what if they focused instead on easing Rhode Island’s housing regulations to allow more building? That idea comes from National Review’s Reihan Salam. He notes that making it cheaper to pay the rent or a mortgage lifts the living standards of the lower-paid, too, and unlike a minimum wage hike it doesn’t have the potential to reduce employment – though it could upset current residents who don’t want their neighborhoods to grow. Salam writes: “It turns out that for affluent liberal voters living in picturesque cities, it is cheap to back minimum wage hikes that might reduce employment levels for the less-skilled or raise prices for the kind of people who frequent quick-service restaurants and other establishments that employ low-wage workers while it is very dear to back policies that will increase housing supply.” Of course, this isn’t necessarily an either/or proposal – Rhode Island can encourage more residential construction regardless of the minimum wage. But it’s a reminder that just as raising wages can improve living standards, so can lowering prices.
2. Tim White and I have a new investigation into the 38 Studios deal coming Monday at 11 p.m. It’s already making waves, even before we’ve aired it. Watch the preview and tune in Monday night.
1. The last time a Republican who wasn’t named Chafee won a Rhode Island U.S. Senate seat was in 1930, when Jesse Metcalf beat Peter Gerry. That bit of history illustrates just what an uphill battle erstwhile Jack Reed challenger Ray McKay would face this November – even if his employer, Warwick City Hall, weren’t trying to bar him from running, and even if his opponent, Reed, hadn’t been given 99% odds of victory by Nate Silver and The New York Times. (Reed refused to weigh in on McKay’s legal battle during an interview on this week’s Newsmakers.) True, Reed is a uniquely well-liked politician. But even his more partisan colleague Sheldon Whitehouse managed to pull off a 30-point landslide in 2012. So what made John Chafee different from just about every other local Republican who’s run for Senate over the last 84 years? Among other things, he built trust with the state’s heavily Democratic electorate by serving as governor first and establishing a reputation independent of his party’s. By 1976 he was a known quantity, not a generic Republican; he also got his start as a three-term state lawmaker. That said, even John Chafee might have trouble winning an open federal seat in Rhode Island today, with the congressional parties so clearly sorted by ideology. But Republican hopefuls still might be well-served by his model of starting out farther down the ballot and winning their way up.
2. As for Jesse Metcalf, he lost his seat to legendary Democrat T.F. Green in 1936; Peter Gerry, who’d previously been a senator from 1917 to 1923, made a comeback to win two more terms in 1934 and 1940.
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.
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.