The Projo’s Ed Fitzpatrick quotes both Tim White and me in his column today about the painfully scripted answers the gubernatorial candidates have been giving at their roughly 3,000 debates and forums. As you can see, the boys of WPRI are equal opportunity in our snark:

Because these gentlemen have participated in about 30 debates and candidate forums, and by now they’ve got their campaign spiels down cold. From what I’ve seen, it would take a stick of dynamite to knock them off their talking points.

I mean, Orr could ask them about North Korean leader Kim Jong-il’s recent appearance at a military exercise with Kim Jong-un, his youngest son and heir apparent.

And within the space of a 60-second reply, independent candidate Lincoln D. Chafee would be offering his version of the ABCs (A is for Rhode Island’s assets, B is for the state budget, and C is for ending cronyism and corruption), and Democratic candidate Frank T. Caprio would be talking about Rhode Island families sitting at kitchen tables facing piles of bills.

“If you did a shot every time Frank Caprio uttered the phrase ‘kitchen table,’ you’d risk getting alcohol poisoning,” Ted Nesi wrote on WPRI.com. …

Caprio and Chafee are neck-and-neck in the polls, leading Republican John F. Robitaille and Block. So perhaps they want to play it safe and avoid gaffes. “They don’t want to put a bloody sock in their mouth,” [Tim] White said, referring to Chafee’s ill-advised swipe at Curt Schilling’s famous sock.

White said that as a moderator, it can be difficult to draw out unscripted answers, and Block stands out as “probably the most direct in answering the question with substance.” While repetition and staying on message have value, candidates can seem boxed in and less authentic when reciting rehearsed lines, he said.

I go back and forth on this issue. Scripted answers bug me as a reporter, since I’m hoping for something new to report and trying to get as clear an answer as possible to whatever question is at hand. But if I were advising the candidates, I’d probably tell them to stick to the script – going rogue risks causing a distraction by generating off-message headlines, as Chafee’s bloody sock comments did.

I’m not sure that advice would apply to debates, though. It’s one thing to stay careful when giving soundbites to a print or TV reporter, knowing you’ll only get a few words into the final piece – best to be careful, and who cares if you annoy some scribbler like me?

But during a 90-minute debate like the one we hosted last week, when more than 50,000 people are paying close attention to the candidates – many for the first time – scripted answers can sound inauthentic and weasely. And they don’t do much to elucidate how candidates would govern or how their approaches would differ.

I’m a little late to the party on this one – and it was on a rival network – but tonight I finally watched last week’s “30 Rock.” For those who haven’t heard, the episode featured Queen Latifah as U.S. Rep. Regina Bookman, who represents Rhode Island’s 1st Congressional District – which includes, as she puts it, everyone “from the hard-working moms and dads of Smithfield, to the spoiled jags at Brown, to the thriving, flourishing Italian criminal community in Providence.”

That’s right, folks – even a fictional version of the 1st Congressional District is making national news this year. Bookman would certainly add some color to the Cicilline-Loughlin race. You can watch the full episode right here:

the LG's bearded nemesis

Like Dave Scharfenberg, I was struck by how tight the race for lieutenant governor was in the new Quest/WJAR poll out yesterday.

The survey showed incumbent Democrat Elizabeth Roberts just five points ahead of independent Robert Healey Jr., who wants the office abolished and now has the tacit support of the Rhode Island Republican Party. Roberts had 48% to Healey’s 43%, with 9% of voters undecided.

Last month’s Brown poll – which, unlike Profughi’s, included independent Bob Venturini – had Roberts at 36%, Healey at 23% and Venturini at 7%, with a third of voters still undecided.

Quest’s Victor Profughi sent me the crosstabs from his poll, and those showed Healey beating Roberts in the Blackstone Valley, Washington County and Cranston – Roberts’ hometown – as well as among men, Republicans and independents.

I’ve been thinking that if there was ever a year when Healey’s rebellious anti-establishment message could win the day, it’s 2010 – particularly as Roberts and her allies find it difficult to make a strong argument for the office’s continued usefulness. Dave’s take on the race sounds right to me:

… though you’d never know it from the article on WJAR’s website.

Quest Research’s Victor Profughi is out with his first new survey for WJAR since the much-criticized poll he did last month showing Frank Caprio with a huge 12-point lead over Lincoln Chafee. Though conducted just three weeks apart, the results are strikingly different.

what a difference 3 weeks makes

Caprio’s big lead, unseen in any other poll, has vaporized into a statistical tie that puts him just four points ahead of Chafee, 37%-33%. John Robitaille’s support has grown from 13% to 22%. And the number of undecided voters has collapsed from 23% to just 6%. None of this is mentioned in WJAR’s write-up.

Snark aside, the new results belatedly put WJAR/Quest right in line with what we’ve seen in both Rasmussen’s polls and our own WPRI/Fleming one. This race is close, and it’s staying that way.

I also find it intriguing that even as other candidates saw huge shifts between the two Profughi polls, Caprio’s rating barely budged from 36% to 37% – meaning almost all the newly “decideds” went to Chafee and Robitaille. What does that tell us?

Profughi polled the 492 likely voters early last week, Oct. 4-6. Without seeing the crosstabs – which I presume will be released after the Cicilline-Loughlin results come out – it’s hard to say what changed Profughi’s findings so drastically in just three weeks.

In an e-mail to me last month, though, Profughi mentioned that he wished he’d pushed harder to see whether self-described undecided voters actually had a preference. And in an online chat last night, he said he used three screening questions to determine whether respondents were likely to vote next month.

Profughi also noted that doing a good poll is expensive, saying “the fact of the matter is that someone has to cover the costs. [WJAR partner Rhode Island College] contributes nothing to these polls, a lot of it is donated costs coming out of my hide, and the balance is being picked up by WJAR.” He also said he plans to conduct one more poll around Halloween – around the same time our final WPRI/Fleming poll will be released.

Update: Weird. The Projo released WJAR’s results for the Cicilline-Loughlin race this morning – even though the station still hasn’t done so, as far as I can tell. Profughi’s new poll has Cicilline with 47% to Loughlin’s 36%, with 13% still undecided, according to The Journal. [Scratch that; Profughi had said the Cicilline-Loughlin results wouldn't be out until today, but it turns out they were buried in the governor's race write-up last night.]

The paper didn’t say how many 1st Congressional District voters Profughi polled. Last month, our WPRI/Fleming poll of 250 likely voters showed Cicilline at 48%, Loughlin at 29% and 22% still undecided.

Update #2: The Cicilline-Loughlin results are already on Profughi’s site, too. He also lists the three screening questions he used to figure out who is a “likely voter”: are you registered to vote; do you vote in elections “always, almost always, or most of the time”; and will you “very likely” or “probably” vote in the Nov. 2 election. Since all the results are now out, I’ve e-mailed Profughi to request the crosstabs.

Justin Katz

Stick another feather in the cap of Justin Katz, the Portsmouth Tiverton carpenter-pundit who runs the blog Anchor Rising.

Katz is one of 22 writers whose essays are included in “Proud To Be Right: Voices of the Next Conservative Generation,” a new HarperCollins book put together by National Review columnist (and liberal bête noire) Jonah Goldberg. The book is described as an “informal manifesto of the future of conservatism,” and a reminder that not everyone under the age of 40 is an Obama supporter.

Justin was nice enough to send me over a review copy of the book, which came out last week. His contribution is a seven-page essay titled “A Nonconforming Reconstruction” that recounts his experience as a Gen X conservative and his belief that “the peculiarity of our time is that one must … be conservative to be contrarian.” It’s not a particularly political piece, though, at least in a narrowly partisan sense; it’s more philosophical.

(more…)

no party, no problems?

With polls basically tied and no fireworks at last week’s debate, it looks like the four-way race for governor is going to wind up being a squeaker. A number of political observers I’ve spoken with expect the victor to win with only around 38% of the vote.

If the contest does wind up being that close, it’s going to be all the more important for the various campaigns to get their supporters to the polls on Nov. 2. A small advantage in a candidate’s get-out-the-vote operation could be the difference between winning with 38% and losing with 36%.

That, in turn, would seem to put Lincoln Chafee at a disadvantage come Election Day. His main rival, Frank Caprio, is backed by the full apparatus of the Democratic Party – which has other candidates to support, too, like David Cicilline – and even Republican John Robitaille has an organized party machine to help him out.

As an independent, Chafee is now a man without a party. How does he make up for that? I put that question to Chafee’s spokesman, Mike Trainor, in an e-mail.

Trainor wrote back and said the Chafee campaign will rely on “a very small but enthusiastic field operation” – fewer than 1,000 volunteers – who will be dropping leaflets and knocking on doors between now and polling day. The campaign’s phone bank has also called more than 10,000 people to see who they are backing, and that information will be used to turn out supporters, he said.

“We will also benefit,” Trainor added, “from the considerable field operations and [get-out-the-vote] capabilities of the various unions that have endorsed us; however, I have no specific information on what those activities will be and when they will happen.”

Among the unions backing Chafee is the Rhode Island Federation of Teachers & Health Professionals, a 10,000-member organization known for its superior ground game. Maureen Martin, the union’s director of political activities, told me her organization is already knocking on members’ doors a few nights a week, making phone calls on Chafee’s behalf, and preparing mailers that will go out soon. All 10,000 members will be reached at least once, “and generally twice,” she said.

Martin also acknowledged the difficulties caused by having organized labor divided between Chafee and Caprio. (The AFL-CIO is staying neutral in the governor’s race.) “We’d be working equally hard either way, but certainly it’s more of a challenge because our members are split,” she said. “Some folks will be canceling us out by working for the other side.”

Will the efforts of Martin and others be enough to put Chafee to over the top if the race goes down to the wire? We’ll find out.

(image credit: Chafee for Governor/Flickr)

With polls continuing to show a tight race between Frank Caprio and Lincoln Chafee for governor, there is at least way one of slicing the electorate that gives each man a slight advantage: geography.

Caprio is ahead in the 1st Congressional District, with 34% of voters backing him, compared with 25% who support Chafee, our WPRI poll of likely voters showed late last month.

The 1st is seen as the more Democratic of the two districts, stretching from Woonsocket and Central Falls through Providence’s liberal East Side and down to Newport, Eyewitness News political analyst Joe Fleming told me. (Retiring U.S. Rep. Patrick Kennedy is the 1st’s congressman right now.)

Chafee is on top in the 2nd Congressional District, with 34% of voters there backing him. The 2nd includes – along with the bulk of Rhode Island’s actual land – the City of Warwick, where Chafee used to be mayor. (U.S. Rep. Jim Langevin represents it currently.)

That said, Caprio is running stronger in the 2nd – at 31% – than Chafee is in the 1st.

Republican John Robitaille is winning 20% in the 1st District and 17% in the 2nd, while Ken Block is at 4% in each. Slightly more voters are undecided in the 1st, at 16%, than in the 2nd, at 13%.

Looking through the poll’s crosstabs, there is little difference in voters’ opinions between the 1st and 2nd Districts. One exception, though, is how people feel about President Barack Obama’s health reform law, which is a bit more popular in the 1st.

Among 1st District voters, 32% said they would be more likely to support a candidate who backed health reform, compared with only 24% in the 2nd District who said so.

If anything, though, 2nd District voters just don’t care that much either way; 35% said support for health reform would have no impact on their choice of candidate, compared with 29% who said that in the 1st. In both places, just over a third of voters said it would make them less likely to support a candidate.

(image credit: NationalAtlas.gov)

It’s Friday – as good a day as any to shake out the old reporter’s notebook and see what we find.

- I’d meant to post this Wednesday when Rasmussen Reports released its latest poll, but better late than never. Here’s an updated chart tracking what the Rasmussen polls have shown since the first one in February; not much has changed, and even less lately:

- All the other campaigns believe Democrat Frank Caprio’s change of heart on the Curt Schilling deal came after his internal polling showed the agreement to be deeply unpopular statewide. (Our poll backed that up.) But Caprio himself and his aides adamantly deny that was the case, saying it came after he spent a month examining and discussing the structure of the deal, which left him concerned. (On a separate note, Caprio’s potential successor as treasurer, Democrat Gina Raimondo, is against the deal, too.)

- The Deepwater Wind deal, on the other hand, seems to be the dog that didn’t bark in this campaign. Attorney General Patrick Lynch tried to make it an issue when he was still running for the Democratic nomination for governor – and he is still fighting it as AG – but Moderate Ken Block, Lincoln Chafee and Caprio all support it. John Robitaille said he supported the original proposal, but was disturbed by the way Gov. Donald Carcieri (his old boss, as it happens) and the General Assembly forced the R.I. Public Utilities Commission to reconsider its initial rejection of the agreement.

- If you did a shot every time Frank Caprio uttered the phrase “kitchen table,” you’d risk getting alcohol poisoning.

(more…)

Hasbro, the venerable Pawtucket-based company, has been undergoing a transformation in recent years that has changed it from a traditional toy maker into – to use the company’s phrase – “a branded play company.”

The most visible manifestation of that has been a series of hit movies based on Hasbro toys, like “Transformers” and “G.I. Joe.” The company will take another step down that road on Sunday, when it launches a new cable station called The Hub in partnership with Discovery Communications.

The investor magazine Barron’s took a look at the new Hasbro back in March:

But Hasbro [shares] could well have more upside, as it morphs from a U.S.-focused toy maker into a global outfit that reaches consumers via stores, TV, the Web, movies, electronic games and even iPhones. “People don’t appreciate the business-model transformation that’s going on,” says analyst Byron Penstock of RS Investments, which has a Hasbro stake.

All very interesting. In my opinion, though, even more interesting is one of the perks Hasbro provides its roughly 1,000 employees here in Rhode Island: half days every Friday, all year.

Yes, you read that right. At Hasbro, last Friday was a half day. Today was a half day. Next Friday will be a half day. And the Friday after that. And the Friday after that, too. It’s right there in black and white on the company’s list of employee benefits.

I called up Gary Serby, Hasbro’s spokesman, to make sure my eyes hadn’t deceived me, and indeed he confirmed that the company has offered employees half-day Fridays for several years. Is it a popular policy? He laughed. “What do you think?” (Now I understand why Gary’s been with Hasbro for 18 years.)

Gary also took the opportunity to crow a bit about his employer. “Hasbro is all about flexibility,” he said. “People here work very, very hard. This is a way of thanking our employees. Receiving that flexibility is something people want and deserve, and it’s worked quite well for us.”

(For the record, Hasbro did not pay me to write this post; I was planning to write about The Hub anyway, and found the Friday thing so astonishing that I couldn’t pass it up.)

The Center on Budget and Policy Priorities in Washington is out with its latest assessment of state revenue shortfalls for 2010-11 and 2011-12, and it’s a doozy. This chart comparing state revenue losses during the last four recessions kind of says it all:

In Rhode Island’s case, the CBPP puts our shortfall for next year (2011-12) at $330 million, which is right around the figure state officials have been using. That amounts to 11.6% of the state’s $3 billion or so in yearly tax revenue. (The actual state budget is much larger – $7.8 billion – because it includes other revenue sources such as federal assistance.)

Though $330 million is a big hole to fill, it’s less than the average national shortfall of 18.5% – and nothing like the whopping 34.8% shortfall ($990 million) we had to fill for this fiscal year, according to the CBPP.

In addition, for the first time in years there may be room for at least a little bit of optimism heading into budget season. State tax revenue has been coming in above expectations so far this year, and if that keeps up it could take care of a substantial part of the $330 million shortfall. (New revenue estimates will be put together next month.)

An unexpected tax revenue windfall would be a big gift to the next governor, whoever he is, since he wouldn’t have to kick off his term with another heavy round of spending cuts and tax and fee increases. Officials inside state government remain very cautious about whether this trend will continue, considering how bad things have been in recent years. But there is at least a glimmer of hope.

Update: The Tax Foundation has some doubts about the CBPP’s methodology.

Update #2: A day later, the Projo confirms what I suspected – Rhode Island’s total tax revenue topped forecasts by 10%, or $54 million, in the first quarter. Will it last?

Nicholas Lovell

Yikes. Nicholas Lovell, a well-known game consultant out of London, has a new post up on Games Brief that puts EDC-backed 38 Studios on a list of 10 game businesses or projects the he thinks “are in trouble without some radical changes.”

He adds: “Not all of these will fail: I’ll be wrong about some; others will change course. What I am saying is that I have concerns about the strategy, opportunity or market for these companies.” Here’s his take on 38 Studios:

Regular readers will know that I believe that governments should not be giving tax breaks to risky commercial enterprises such as game developers. They certainly shouldn’t be giving them to business investing in highly-speculative, unlikely-to-succeed activities like creating a World-of-Warcraft-beating MMO.

To compound my scepticism, 38 Studios is the baby of Curt Schilling, a celebrated Red Sox baseball player. Could the kudos of rubbing shoulders with a famous sportsman have influenced the Rhode Island bureaucrats?

(To be fair to Mr Schilling, he is clearly a committed MMO player who loves the market; I nevertheless fear that, like Trion above, 38 Studios is pursing an old model, with taxpayer’s money).

In the end, launching a new MMO is a massive bet. I’m pretty safe in betting that it will fail. A very few new MMOs succeed massively (only World of Warcraft leaps to mind). A few fail spectacularly (Tabula Rasa, APB). Others just drift along (Age of Conan, Champions Online, Star Trek Online).

The odds of being a success in launching a traditional MMO are stacked against you. Far more likely is that you will lose your shirt.

This is just one man’s take, and I don’t claim to be an industry expert. His analysis comes the same week OnLive, a top gaming product, announced it is dropping subscription fees (which is 38 Studios’ revenue stream for the MMO) and World of Warcraft, the top MMO, said its subscriber base has reached 12 million.

If you’re confused about what an MMO is, check out this August WPRI.com story I wrote about the two games 38 Studios has in development.

(It’s like 38 Studios Day here at Nesi’s Notes, huh?)

One basic fact I always like to know about a company is how many employees it has. For 38 Studios, the headcount I’ve been reporting is 175 full-time workers – specifically, 94 people at its studio in Maynard, Mass., and another 81 at its Big Huge Games subsidiary’s studio outside of Baltimore. That number came from a draft bond document I obtained.

Two weeks ago, I got a very nice e-mail from a 38 Studios marketing rep telling me the number was wrong. “38 Studios actually has not publicly announced a total employee headcount, and this number is inaccurate, so if we could have that removed it would be great,” he said.

I wrote back explaining that the number came from an official document, but that I would be glad to use an updated figure if they could provide it. I never got a response. (The company has been declining to answer almost all press inquiries while it waits for the $75 million loan transaction to close.)

Lo and behold, while reading the Moody’s rating document on the 38 Studios deal – which is dated four days after the e-mail I received disputing the headcount of 175 – I came across this paragraph:

[38 Studios] is currently operating two video game production studios: one in Baltimore, Maryland with 81 staff members working on a single-player multi-platform game, and a second studio in Maynard, Massachusetts, with 94 staff members which will move to Providence, Rhode Island in order to leverage and retain talent from nearby higher education institutions such as Rhode Island School of Design, the University of Rhode Island, Brown University and the New England Institute of Technology.

Without going to the two studios and counting each employee myself, I can’t vouch for whether that 175 number is correct or not. But if it’s wrong, someone’s been giving bad information to Moody’s and the EDC, too.

Update: I should add that 38 Studios has nearly 40 job openings listed on its website, though I don’t know what the mix is between newly created positions and replacements for people who have left the company.

It’s been a busy two weeks here at WPRI – with investigations, exclusive polls and last night’s debate – but I’ve been doing my best to stay on top of what’s happening with the 38 Studios deal.

It’s also been two weeks since the video game company picked its new location in Providence and the EDC got two favorable bond ratings for the $75 million loan guarantee. That cleared the way for underwriters Barclays and Wells Fargo to close the transaction by selling the bonds to private investors.

The formal signal that the process is coming to a close will be when the EDC sends the investors what’s known as the “private placement memorandum,” or PPM – the official document with all the legal fine print about the loan. That had been expected to be done by late last week, but EDC spokesman Michael Blazek told me today the document hasn’t been finalized and mailed yet.

Although I don’t know what the holdup is, I don’t have any reason to think things have gone awry – though originally the deal was supposed to close back in August.

(more…)

The overnight ratings are in for last night’s gubernatorial debate here on WPRI, and the numbers are – as they say in the trade – “boffo.”

The 60-minute televised portion of the debate was the #1 program in the Providence market from 7 to 8 p.m., drawing in more than 50,000 viewers, according to Nielsen. That made it the most-watched debate on any station so far this year. We also saw a huge surge in the number of people streaming the debate live on WPRI.com.

Thanks for watching. Mark your calendars, too – we’ll have 1st Congressional District candidates David Cicilline and John Loughlin facing off on Oct. 19 from PPAC, and another gubernatorial debate on Oct. 26, just a week before the election.

Ralph Mollis

Catherine Taylor

The hotly contested battle for governor is getting most of the attention among the political class here in Rhode Island, but one race further down the ballot that I’m keeping an eye on is the contest for secretary of state between incumbent Democrat Ralph Mollis and Republican Catherine Taylor.

The low-profile secretary of state’s office is actually Rhode Island’s third-highest-ranking, behind only the governor and the lieutenant governor, with responsibilities including election oversight and business record-keeping. It also can be a stepping stone to bigger and better things; U.S. Rep. Jim Langevin was secretary of state for six years before his election to Congress.

Mollis, who was mayor of North Providence for 10 years, is finishing his first term as secretary of state. His priorities have included easing red-tape for businesses and registering more voters. He defeated Republican Sue Stenhouse, now a Carcieri aide, by eight points in the 2006 election.

Taylor is a first-time candidate who spent two decades as a Senate aide to John and then Lincoln Chafee. (Her logo’s blue-green-white color scheme is a bit reminiscent of a “Trust Chafee” sign.) Taylor told the Warwick Beacon she wants to make the secretary of state an “activist position” that emphasizes government transparency.

This is Rhode Island, so the Democrat is always the favorite. Mollis also just fought off a spirited primary challenge from state Sen. Leonidas Raptakis, so his campaign should be ready. He’ll also benefit from the Democratic Party’s broader get-out-the-vote efforts on behalf of other candidates further up the ballot like Frank Caprio and David Cicilline.

But Taylor is running a serious, energetic campaign aimed squarely at Rhode Island’s many independent voters.

Her campaign has hired Chris Mottola, a respected Republican media consultant, and the polling firm McLaughlin & Associates. As of Monday, Taylor had $185,089 in campaign funds – less than Mollis’ $222,913, but an impressive figure for a down-ballot Republican.

And yesterday’s Brown University poll put Taylor just 11 points behind Mollis, with 33% of voters still undecided. The same survey also showed only 31% of registered voters rate Mollis’ job performance as “excellent” or “good” (though 26% had no opinion).

The secretary of state campaign isn’t likely to get a lot of attention, and I doubt most voters will go into their polling booths with a lot of knowledge about the office (let alone the differences between the two candidates). But if 2010 has taught us anything about politics, it’s that you just never know.

If you missed tonight’s WPRI/Providence Journal debate between the four candidates for governor, you can read my recap or watch the full video here on WPRI.com.

I was surprised by how low-key the whole thing was – no real fireworks, relatively half-hearted attempts by Caprio and Chafee to draw blood from each other – especially considering how close the race is. Is the dynamic of this race going to change between now and Nov. 2, or are we looking at it?

Anyway, here are a few thoughts about each candidate.

Lincoln Chafee: Rhode Island is a state where politicians always run for office bashing it, but that’s not Chafee’s tack. He acknowledges problems, but presents himself as an optimist about the state’s future who sees opportunities here. But he is clearly worried that his sales tax plan is falling flat with voters; over and over, he repeated that it would be “a 1% tax” – a tax of 1% on items currently exempt from sales tax, rather than the full 7% sales tax.

Frank Caprio: An incredibly disciplined candidate, Caprio relentlessly hammers home his campaign themes – more jobs, help for small businesses, no new taxes – which speak directly to the No. 1 issue here, the economy. Voters who are just starting to pay attention to the race won’t miss his message, or his critique of Chafee. But will he be able to get through another month without getting more specific on how he plans to shave $150 million from the budget?

John Robitaille: The Republican took steps to introduce himself to voters, discussing his background (Central Falls birthplace, military service) and family. He portrayed himself as a realist but not an ideologue, extending a rhetorical olive branch to the public-sector unions. He also had my favorite quote of the night: “I’m making no promises at all.” He also made little effort to distance himself from Gov. Carcieri, which surprised me.

Ken Block: The Moderate Party founder was the outsider, the pragmatist, almost the ombudsman of the debate. He was the most aggressive in picking apart his opponents’ positions – telling Chafee he was wrong to call property taxes the biggest burden on small businesses, for example. But what can he do between now and Nov. 2 to make up the 30-point gap separating him from Chafee and Caprio?

All in all, a surprisingly mild evening for a race that still looks like it’s anybody’s to win. The candidates will meet again for another televised WPRI debate on Oct. 26, one week before voters go to the polls.

Meredith Whitney

And now I’d lick to kick off a new series of posts on Nesi’s Notes noting people in the news who have ties to Rhode Island.

Today’s winner is … Meredith Whitney.

Whitney, a Wall Street analyst, rocketed to overnight fame in the financial world in April 2009 when she correctly predicted Citigroup would have to cut its dividend because of its growing losses from sour mortgages. But she’s not doing as well as an independent analyst, Bloomberg reports:

Since Whitney founded her own firm last year, about two- thirds of her picks have fared worse than market indexes. Missed calls include Visa Inc., the payments network that fell 14 percent after Whitney called it her “single best buy,” and credit-card issuer Capital One Financial Corp., which tripled after she urged clients to sell.

Whitney’s recommendation to sell bank stocks propelled her to fame during the financial crisis. Time magazine dubbed her one of the world’s most influential people and Fortune put her on its list of the 50 Most Powerful Women. Michael Lewis’s best-seller “The Big Short” chronicled how Whitney’s prediction on Oct. 31, 2007, that Citigroup would lower its dividend helped erase $390 billion of value from U.S. stocks.

Whitney’s Rhode Island connection? She graduated from Brown in 1992 – the same year that Louisiana Gov. Bobby Jindal did, actually. An alumni magazine profile called her “The Prophet.”

Do you know about a newsmaker’s little-known Rhode Island connection? Send nominees to tnesi (at) wpri (dot) com.

(image credit: Brown Alumni Magazine)

Pensions pensions pensions.

I could probably spend all my time writing stories about the arcane ins and outs of the state’s public pension system and never run out of stories. (Whether I’d run out of readers is a separate question.) But a document released this week contained a small bombshell I wanted to point out.

When it comes to the pension system, the problem everyone usually talks about is the “unfunded liability” – basically, the amount of money the state has promised to pay out in pensions over the next couple decades for which it hasn’t set assets aside to cover. And each time we write a story about the unfunded liability, we cite the same dollar amount: $4.4 billion.

That number is based on a host of technical assumptions made by the state’s actuaries, from how soon retirees will go to their reward to how much they’ll be making at retirement. But one of the most important of those assumptions is the state’s future investment return.

Right now, Rhode Island assumes its investments will grow 8.25 percent a year before inflation. But from 1999 to 2009, the average annual return was actually 2.02% – only a quarter of what we expected.

No doubt, that’s an especially gloomy time period to use for comparison purposes, since it starts amid the dot-com bubble and ends just months after the worst of the financial crisis. And I’m not suggesting we should switch to a 2.02% assumption.

Still, Frank Caprio suggested in March the state should consider revising expectations downward, especially since our 8.25% is even higher than the estimates used elsewhere in the country. But if we assume a poorer investment return, that means we need to shovel more money into the pension system now to make sure it has enough assets in the future. In these tight fiscal times, that’s an unappetizing prospect to say the least.

An indication of just how much money we’d owe was buried in a June 1 memo to the treasury by Gary Bayer, an actuary at the big broker Aon, that Caprio’s office released this week. Aon was asked to estimate how much larger the unfunded liability would be if we assumed a 6% return instead of an 8.25% one, and here’s what Bayer came up with:

If liabilities were valued based on a 6% rate instead of the current 8.25% rate, we estimate that the unfunded liability would increase from $1.7 billion to $2.7 billion for the state employees and from $2.7 billion to $4.6 billion for the Teachers.

For the mathematically challenged, that’s an increase in the unfunded liability from $4.4 billion to $7.3 billion $6.5 billion, or nearly 48%. Just something to keep in mind as the candidates discuss their pension plans during our televised gubernatorial debate tonight at 7.

Update: As you can see from that correction, the “mathematically challenged” clearly includes yours truly. Mea culpa.

Rasmussen is out with a new survey of 750 likely voters about the Rhode Island governor’s race, conducted on Monday. Margin of error is plus or minus 4 points. The results look a lot like those in Rasmussen’s last poll a little less than a month ago:

• Lincoln Chafee: 33%
• Frank Caprio: 30%
• John Robitaille: 22%
• Ken Block: 4%
• undecided: 10%

This is the fifth poll done in the last five weeks. For an overview of how things look across the various surveys, check out this post I did yesterday.

(h/t: Ian Donnis)

Not a lot of time tonight, but I wanted to post the latest campaign finance numbers, which state candidates are reporting today.

Here’s how much cash the candidates for governor had on hand as of Monday:

• Frank Caprio: $1.01 million
• John Robitaille: $266,526
• Lincoln Chafee: $172,368
• Ken Block: $97,837

Those stark figures probably overstate Caprio’s advantage, since Chafee’s family fortune is estimated to be in the tens of millions. If he wants to invest in this race, he can match Caprio dollar for dollar.

Indeed, the two campaigns’ finances are closer to parity based on a different metric – how much they’re spending. Between July 1 and Oct. 4, Caprio spent $1.2 million while Chafee spent $969,430. That’s still $200,000 more on Caprio’s side, but it’s nothing like the stark disparity you’d expect from the basic cash-on-hand figures posted above.

Lt. Gov. Elizabeth Roberts is also set up well as she fights to hold onto her office (and keep it from getting abolished). She had $238,378 on hand as of Oct. 4, while her independent opponent Bob Healey had $0.

Update: Something weird is going on with the R.I. Board of Elections’ website, but I dug in and found Robitaille’s cash-on-hand figure. Lo and behold, he has more money available than Chafee – $266,526 – but only about a quarter of what Caprio has.

To the obvious delight of Dave Scharfenberg and myself, over the last three weeks there have been four separate polls conducted on the Rhode Island governor’s race: Rasmussen, WJAR/Quest, WPRI/Fleming and now Brown University. Here’s an updated version of the chart I posted last week showing how the top three candidates fared, as well as the percentage of undecideds, in the surveys:

Except in Democrat Frank Caprio’s case – he consistently wins about a third of voters – these polls are all over the map, with a 10-point spread between the highest and lower results for both independent Lincoln Chafee and John Robitaille, the Republican.

And when it comes to undecided voters, the divergence is even starker – Brown found a whopping 30% of voters haven’t mind up their minds, whereas Rasmussen said just 9% haven’t.

Anything’s possible, but it’s hard to believe the share of undecided voters more than tripled in the week and a half between those two surveys. Digging in a little deeper, one factor I see is that in both Rasmussen’s and our own WPRI/Fleming poll, more effort was made to probe whether self-described undecideds actually had a preferred candidate.

Marion Orr

Marion Orr, who oversees the Brown poll, told me most of the calls for his poll were made by Brown students trained and paid for their work, although sometimes he supplements them with outsiders. Orr also said they are specifically dissuaded from probing voters further.

“They’re trained not to sway the respondents,” he told me. “If they say they’re undecided, that’s what we put them down for.”

Brown’s methodology often leads to a high undecided figure – the Taubman Center had 19% of Rhode Islanders undecided between Obama and McCain two months before the last presidential election [pdf].

The problem there is that winding up with such a large share of undecided voters can limit what the poll tells us. It’s fine if those voters are truly undecided – but as the other poll results showed, it’s possible that further questioning could find a large number of them leaning one way or another, which is what we really want to know. Indeed, Victor Profughi, who did the controversial WJAR/Quest poll, told me last week he regretted not doing more to see whether undecided voters were actually leaning one way or another.

Another question is, who are we polling?

Brown surveyed 565 registered voters, while the other three polls all talked with likely voters, defined different ways. Although Rhode Island has around 700,000 registered voters, only about half of them are expected to show up at the polls next month – and what we really want to know is which way the half that votes is leaning. That’s why Joe Fleming limits our WPRI polls to likely voters as we get close to an election.

For the record, Orr said he did screen his respondents to see which ones were likely to vote, but he wound up deciding to release the results for registered voters instead. “We wanted to include a broader sample,” he said.

“People are still making up their minds,” Orr added. “It’s still a close race, in the sense that there are so many people who are undecided.” About half of those undecided voters uncovered by the Brown poll described themselves as independents, he noted. “I suspect these last few weeks will be decisive.”

Update #2: Here’s my analysis of why the four polls done over the last three weeks wound up with such divergent results.

Brown University’s Taubman Center just released a new poll of 565 registered voters in Rhode Island. Survey conducted Sept. 27-29; MoE plus or minus 4.1 percent. Here are some headlines:

• Caprio: 30%
• Chafee: 23%
• Robitaille: 14%
• Block: 2%
• undecided: 30%

First impression – that’s an astonishingly high number of undecided voters, and this poll’s results are closer to the infamous Profughi survey than ours or Rasmussen’s. This shows Caprio pulling away from Chafee compared with Brown’s last poll in August, which had Caprio at 28% and Chafee at 27%, a statistical tie.

Update #1: I just got off the phone with Joe Fleming, our Eyewitness News political analyst. He’s too much of a gentleman to critique his fellow pollsters’ work, but overall he said his take on the state of the campaign has not changed since last week. “I still think the governor’s race is too close to call,” he said. Brown is “showing a 7-point margin, but they’re also showing 30% undecided, which makes it really difficult to say what’s happening.”

In the 1st Congressional District, Brown polled 289 respondents, giving this part of the survey a margin of error of plus or minus 6%. Results:

• Cicilline: 39%
• Loughlin: 21%
• Raposa: 6%
• undecided: 31%

Other races:

• Lieutenant Governor: Roberts 36%, Healey 23%, Venturini 7%, undecided 34%
• Secretary of State: Mollis 39%, Taylor 28%, undecided 33%
• AG: Kilmartin 26%, Wallin 14%, McKenna 10%, Little 7%, Rainville 2%, undecided 41%
• Treasurer: Raimondo 38%, King 20%, undecided 42%

In the 2nd Congressional District, Brown polled 276 voters, so there’s an MoE of plus or minus 6.1%. They have Langevin at 47%, Zaccaria at 13%, and undecideds at 34%.

Ronald Machtley

Bryant University President Ronald Machtley is a man with a past.

From 1989 to 1995, Machtley represented Rhode Island’s 1st Congressional District in the U.S. House as a Republican. (He stepped down to make an unsuccessful bid for governor, and was succeeded by Patrick Kennedy.)

I spoke with Machtley briefly on Monday after he introduced Ben Bernanke at the Fed chairman’s town hall with local college students, an event that was Machtley’s idea.

Seeing as he was the last Republican to represent the 1st District, I asked whether Machtley thought state Rep. John Loughlin could defeat David Cicilline to win the seat. Ever the politician, he replied: “If I can win, anybody can.”

Recalling his days as a congressman, Machtley also told me a story I hadn’t heard before.

On a visit to New Orleans about a year ago, Machtley met up with Louisiana Gov. Bobby Jindal, the up-and-coming young Republican – and Jindal thanked Machtley for giving him his start in politics.

It turns out Jindal went to college in Providence, graduating from Brown in 1992 with a degree in biology, and he told Machtley he got some of his earliest political experience working on one of Machtley’s re-election campaigns. I wonder which future governors are working phone banks in the races we’re following today?

P.S. A quick perusal of the Brown website shows Jindal is sometimes listed as “Jindal ’91.5.” I guess he must have graduated midway through the 1991-92 school year.

(image credit: Bryant University)

Federal Reserve Chairman Ben Bernanke’s town hall meeting with students in Providence today didn’t make any big news, although he did make a number of interesting comments. But if he had said anything earth-shattering, you can be sure you’d know about it by now.

Although Bernanke spoke about the importance of “clarity” and “transparency” at the Fed, the central bank remains inscrutable enough – and powerful enough – that a pack of reporters follow him just in case he drops a hint about its future actions. I spoke briefly with Bloomberg News’ Fed writer, Josh Zumbrun – who has already filed a short story from upstairs – and he spends his days following Bernanke around in case news happens.

I believe CNN is here, too – I overheard a photographer or cameraman say this was the most visual Bernanke event he has ever attended – and heard at least one reporter speaking what I think was German. And of course, the local press was here – or at least a few of us. I saw Projo’s Paul Grimaldi, the AP’s Eric Tucker, and my WPRI colleague Kathryn Sotnik, who will have a report from the event on tonight’s newscasts.

ProvEquity's Jonathan Nelson

Jonathan Nelson, founder of the powerhouse leveraged-buyout firm Providence Equity Partners, is #306 on this year’s Forbes list of the 400 richest Americans. Nelson and Hope Hill van Beuren, the 76-year-old Campbell Soup Co. heiress who lives in Middletown, were the only two Rhode Islanders on it. (She was #365.)

A quick check of campaign finance records shows Nelson has given $1,000 – the maximum annual contribution allowed on the state level – to two candidates during this election cycle: Lincoln Chafee, who is running for governor as an independent, and Angel Taveras, who won the Democratic nomination for mayor of Providence last month.

Nelson donated $1,000 to Chafee in May 2009 and another $1,000 in January. He and his wife, Judy, also gave Taveras $1,000 each in August. Previous local recipients of Nelson’s largesse include Republican Gov. Donald Carcieri and former Democratic Secretary of State Matt Brown.

One candidate who didn’t wind up winning Nelson’s financial support was Providence Mayor David Cicilline, now the Democratic candidate to succeed U.S. Rep. Patrick Kennedy in Congress.

Nelson gave Cicilline $1,000 in January 2009, but Cicilline refunded the money early this year when he became a candidate for Congress, asking his supporters to give to his congressional campaign instead.

Thanks but no thanks, Nelson appears to have said. Instead, he opted to donate $2,400 – the maximum allowed on the federal level – to Cicilline’s Republican opponent, state Rep. John Loughlin.

Outside Rhode Island, though, Nelson’s federal donations have been bipartisan, with recent recipients including Senate Majority Leader Harry Reid, D-Nev.; U.S. Rep. Xavier Becerra, D-Calif.; U.S. Sen. Mike Crapo, R-Idaho; Kendrick Meek, a Democrat and U.S. Senate candidate in Florida; and U.S. Sen. Bob Bennett, R-Utah, who lost his party’s nomination over the summer. He also gave to two Republican political action committees.

As for Hope Hill van Beuren, she and her family do not appear to have made any recent political donations on the state level, but her husband John gave Loughlin $1,000 in June. In the past the family has given frequently to U.S. Sen. Sheldon Whitehouse.

Hope van Beuren also gave $2,000 to Hillary Clinton’s Republican U.S. Senate opponent in New York, Rick Lazio, back in 2000, and she has supported the Republican National Committee, as well.

Update: Honorary Nesi’s Notes editor Bill Hamilton, who covers Providence Equity for PBN, writes in to point out that the firm’s top executives have given to both Cicilline and Loughlin, though the Republican still has the edge.

Nelson and two others have given a combined $7,200 to Loughlin, while Cicilline has received $5,500 from a pair of executives there. ProvEq partner Paul Salem hedged his bets, giving Cicilline $2,400 for the primary and another $2,400 for the general election, while sending $2,400 to Loughlin for the general, too.

(image credit: CharlieRose.com)

Rhode Island’s political class has been waiting with bated breath since last month’s primary to see whether the National Republican Congressional Committee would come to the assistance of state Rep. John Loughlin in his bid to put retiring U.S. Rep. Patrick Kennedy’s seat into the Republican column this year.

So far it hasn’t happened – and The New York Times had an intriguing article on Sunday that helps explain why:

Republicans carry substantial advantages as they move into the final month of the fall campaign, but the resilience of vulnerable Democrats is complicating Republican efforts to lock down enough seats to capture the House and take control of the unsettled electoral battleground.

By now, Republicans had hoped to put away a first layer of Democrats and set their sights on a second tier of incumbents. But the fight for control of Congress is more fluid than it seemed at Labor Day, with Democrats mounting strong resistance in some parts of the country as they try to hold off a potential Republican wave in November.

Loughlin is frequently described as the Republicans’ strongest 1st District candidate since 1994, but the Achilles’ heel of his campaign is money. If Republicans had been able to nail down races in other parts of the country by now, they could have begun training their attention – and resources – on candidates in more marginal districts like Loughlin. But judging by The Times’ report, that hasn’t been the case.

Loughlin was trailing Democrat David Cicilline by 19 points in our WPRI poll last week, but the margin among independents was just three points, and the Cook Political Report downgraded Cicilline’s chances a week and a half ago. With one month left before voters go to the polls, Loughlin will need to show he is closing the gap in order to attract additional funding and give Cicilline a real run for his money. (It can happen; see “Brown, Scott.”)

“The problem [Loughlin] has is the margin between him and David Cicilline is still 19 points,” Eyewitness News political analyst Joe Fleming told Tim White and me last week. “When the National Republican Congressional Committee looks at other races, they may find other races around the country that are closer than 19 points where they feel they can invest their money in and get a bigger impact in it. He has to convince them, with the right message, he can close this gap and make this a very competitive race.”

Federal Reserve Chairman Ben Bernanke will spend the second half of Monday right here in Providence as a guest of RIPEC, the Rhode Island Public Expenditure Council.

Bernanke will take questions at a town hall made up of students at 3 p.m., followed by a 6:30 p.m. speech at RIPEC’s annual dinner. Both events will take place at the Rhode Island Convention Center. Bernanke was invited by Sen. Jack Reed, D-R.I., who knows the Fed chief well thanks to his service on the Senate Banking Committee amid the financial crisis.

Considering that all of Bernanke’s speeches are parsed for the slightest sign of the central bank’s future intentions, both events (and particularly the speech) are likely to be closely watched far from Rhode Island.

I’m planning to attend both, and will be curious to hear whether Bernanke addresses growing concerns that the recovery is slowing down and the Fed is failing to take steps to boost demand. I’m also wondering what (if anything) he’ll say specifically about Rhode Island’s situation, considering our unemployment rate is the nation’s fourth-highest, and has been among the worst since 2008.

The visit comes one month before the next meeting of the Fed’s Open Market Committee, the panel that guides the nation’s interest rates.

(image credit: Wikipedia)

CobbCorp LLC, a media brokerage firm in New York City, says it’s been “exclusively retained” to sell ABC 6 and its half-ownership of Newschannel 5, a cable channel carried by Cox Communications that airs some WLNE content. My full story is over on WPRI.com.

A sale is definitely looking like the probably outcome of ABC 6′s sojourn in receivership. “It looks like that’s the option that makes the most sense,” receiver Matthew McGowan told the Projo in August. He would know, since he’s the man in charge (other than the judge, of course). Although WLNE has long trailed both us and WJAR in the ratings, in this time of rapid media change who knows what will happen next?

Update: In other ABC 6 news, B.J. Finnell, who has been its news director since 2008, left the station Thursday to take a job with the PR firm Regan Communications, WRNI’s Ian Donnis reports. Although I didn’t know B.J. well, my interactions with him were all positive. ABC 6 GM Steve Doerr told Ian a temporary replacement is handling the news director job for now.

Democrat Frank Caprio and Republican John Robitaille are both calling for the elimination of Rhode Island’s taxes on capital gains and estates, Projo reports:

Frank T. Caprio, Democratic candidate for governor, said he favors phasing out the taxes when the economy rebounds.

John F. Robitaille, Republican candidate for governor, said he, too, wants to eliminate the capital gains and estate taxes over time.

Neither candidate offered a schedule for eliminating the taxes, or explained how the tax revenue would be replaced.

The capital gains tax is a tax on profit from the sale of certain assets held for investment, such as mutual fund shares, stock and land. As of Jan. 1, 2010, it has been taxed at the same rate as any other income.

Estate taxes, also as of Jan. 1, only apply if the net value of the estate exceeds $850,000.

There’s a lot of wiggle room in the timelines put forward by Caprio and Robitaille – “when the economy rebounds” and “over time,” in The Journal’s words. Still, I thought I’d take a look at how Rhode Island’s version of those two taxes compares with other states’.

(more…)

The Projo’s new PolitiFact Rhode Island site started up only three months ago – a blink of the eye in the history of a newspaper founded in 1829. But the site (and its patented Truth-O-Meter) have already made an outsize impression on the state’s political class.

For the uninitiated, PolitiFact is a fact-checking initiative started by the St. Petersburg (Fla.) Times in 2008, during the heat of the presidential campaign. The site’s reporters examine the veracity of statements, claims and allegations made by candidates and officeholders, then rate them on a scale of “True” to “Pants on Fire!” The project won a Pulitzer Prize last year, and there are now local PolitiFacts up and running in seven states.

For a newspaper that has been struggling to find its footing in the Internet era, licensing PolitiFact and giving it a staff of three represented, as top editor Tom Heslin put it, an effort by The Journal to embrace “new journalistic forms that have value in the 21st century.”

We got the first taste of candidates’ wariness about the site during our WPRI congressional debate in July, when Democrat Anthony Gemma referenced PolitiFact on stage as he tried to answer one of Tim White’s questions. (Full disclosure: The Journal and WPRI are news partners, and sometimes we run segments based on PolitiFact articles.)

Since then, I’ve noticed PolitiFact referenced more and more in conversations, usually on background, with candidates and their campaign aides. “Don’t PolitiFact me!” a number of them have said to me, only half-jokingly, after I questioned a budget figure or some other statistic – not as an admission of lying, but just an acknowledgment that they weren’t 100% certain about the topic under discussion.

Those in the political arena also have honest concerns about the PolitiFact model – that some assertions aren’t black-and-white, and that candidates should not be held accountable if they cite an errant figure in off-the-cuff remarks. (PolitiFact says it only tackles statements made multiple times.) And it’s hard to judge whether the site is having any impact on the actual actions of candidates and campaigns.

Still, there’s no doubt PolitiFact’s impact is being felt after only three months on the scene. It will be interesting to see how it develops over time.