gina raimondo

Brown U. Poll: Raimondo leads Taveras in Dem gov primary

October 9th, 2013 at 9:20 am by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Treasurer Gina Raimondo has the early advantage over Providence Mayor Angel Taveras in next year’s Democratic primary for governor, but Taveras is a stronger candidate against Cranston Mayor Allan Fung, according to a new poll released Wednesday by Brown University.

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Top Raimondo aide floats a full review of RI pension portfolio

October 7th, 2013 at 6:16 pm by under Nesi's Notes, On the Main Site

Treasurer Gina Raimondo wasn’t a big fan of Matt Taibbi’s headline-grabbing Rolling Stone article about Rhode Island and other states that have reduced pension benefits while investing assets in hedge funds. But that doesn’t mean her office disagrees with everything the crusading journalist had to say.

Taibbi “makes some salient points, with which the treasurer agrees,” Anne-Marie Fink, the state’s chief investment officer, wrote last week in an email to members of the State Investment Commission.

“Specifically, public employees are not to blame and should not shoulder a disproportionate share of the economic burden required to fix the problem,” she wrote. “And he has every right to take issue with overly generous Wall Street compensation, manipulation of the financial markets and corporate greed. The economic collapse in 2008 hurt many people.”

Notably, Fink floated the possibility that Raimondo and the commissioners may want to revisit the controversial new portfolio they put in place after Raimondo took office, which involved moving more than $1 billion into hedge funds. The new portfolio’s returns underperformed the median large public plan last year.


Rolling Stone’s Taibbi, liberal think-tank take aim at Raimondo

September 26th, 2013 at 12:40 pm by under Nesi's Notes, On the Main Site

It’s safe to say this isn’t the most pleasant day in Treasurer Gina Raimondo’s office.

Teachers and possibly other government employees are planning a protest Thursday evening outside a Raimondo fundraiser at Roger Williams Park Casino, a reminder that the treasurer is likely to face constant opposition from public-sector labor if she enters the Democratic primary for governor next year.

And now Matt Taibbi – the slash-and-burn anti-finance Rolling Stone writer who famously labeled Goldman Sachs “a great vampire squid” – is out with a lengthy new article called “Looting the Pension Funds” that unflattering describes Raimondo as an “ostentatiously ambitious” politician who bought into a Wall Street-driven push to reduce workers’ pension benefits and then handed $1 billion to large hedge funds:

What few people knew at the time was that Raimondo’s “tool kit” wasn’t just meant for local consumption. The dynamic young Rhodes scholar was allowing her state to be used as a test case for the rest of the country, at the behest of powerful out-of-state financiers with dreams of pushing pension reform down the throats of taxpayers and public workers from coast to coast. One of her key supporters was billionaire former Enron executive John Arnold – a … ubiquitous young right-wing kingmaker with clear designs on becoming the next generation’s Koch brothers, and who for years had been funding a nationwide campaign to slash benefits for public workers.

Nor did anyone know that part of Raimondo’s strategy for saving money involved handing more than $1 billion – 14 percent of the state fund – to hedge funds, including a trio of well-known New York-based funds: Dan Loeb’s Third Point Capital was given $66 million, Ken Garschina’s Mason Capital got $64 million and $70 million went to Paul Singer’s Elliott Management. … Felicitously, Loeb, Garschina and Singer serve on the board of the Manhattan Institute, a prominent conservative think tank with a history of supporting benefit-slashing reforms. The institute named Raimondo its 2011 “Urban Innovator” of the year.


Taveras poll shows him beating Raimondo in Dem gov primary

September 18th, 2013 at 5:06 pm by under Nesi's Notes, On the Main Site

taveras_NM_5-11-2012_smallA new poll commissioned and released by Providence Mayor Angel Taveras shows the first-term Democrat would start with a lead over Treasurer Gina Raimondo, his main rival for the party’s 2014 gubernatorial nomination, in a primary race.

The survey by Garin-Hart-Yang Research Group shows Taveras at 49% and Raimondo at 30% among likely Democratic primary voters, with 21% undecided, according to a polling memo released to by Peter Baptista, the mayor’s campaign operative.

“Our survey findings show that Providence Mayor Angel Taveras is extremely well-regarded by Rhode Island Democrats, and that he would enter a potential primary election for governor with a healthy lead over [General] Treasurer Gina Raimondo,” pollster Frederick Yang wrote in the memo.

The Taveras campaign did not release the full results of the poll.


Joe Paolino throwing $500-a-head fundraiser for Mayor Taveras

September 17th, 2013 at 6:53 pm by under Nesi's Notes

By Dan McGowan

A former mayor of Providence who ran unsuccessfully for governor is raising money for Mayor Angel Taveras as he gears up to run for the state’s top job in 2014.

No, not Buddy.

Joseph Paolino, who ran Rhode Island’s capital city from 1984 until 1990 before losing a Democratic primary for governor to Bruce Sundlun, is hosting a $500-a-head fundraiser for Taveras at Circe, the popular downtown restaurant located two blocks from Paolino’s real estate business. (more…)

Taveras has teachers’ union, ed reform support as he eyes bid for governor

September 17th, 2013 at 1:31 am by under Nesi's Notes

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Just three years after a national labor leader accused Providence Mayor Angel Taveras of trying to “crush unions,” political analysts say the first-term Democrat’s hopes of becoming governor may hinge on how much support he wins from organized labor.

Taveras, who succeeded David Cicilline as mayor in 2011, is widely expected to jump into next year’s race for governor, where he’s likely to square off against General Treasurer Gina Raimondo in the Democratic primary. Incumbent Gov. Lincoln Chafee, who recently became a Democrat, announced earlier this month he won’t seek re-election.

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Raimondo joins Taveras in using WSJ to knock hedge funds

September 13th, 2013 at 5:00 am by under Nesi's Notes, On the Main Site

WSJ_pg1_9-9-2011Providence Mayor Angel Taveras made some news in June when he told a Wall Street Journal reporter he was concerned about whether the city was getting enough bank for its buck by investing roughly 15% of its pension assets in hedge funds. “To me, it’s a question of whether we can get the same performance for less risk and fewer fees,” the mayor told the newspaper.

Three months later, Treasurer Gina Raimondo – the mayor’s likely rival for the 2014 Democratic gubernatorial nomination – has offered her own criticism of hedge fund fees to a Wall Street Journal reporter in a front-page story Monday headlined: “Hedge Funds Cut Back On Fees.”

Raimondo’s comments don’t come in a vacuum, of course; she has come under heavy criticism from a contributor and local union leaders for shifting more than $1 billion of pension assets into hedge funds, which last year left the state with subpar investment returns.

“Hedge funds could make the case for charging a 2% management fee when they were managing much less money,” Raimondo told the paper. “But do they still need to charge that much when they are now managing billions, not millions?”

Investment fees can quickly add up. Rhode Island’s pension fund spent nearly $46 million on fees in 2011-12, while Providence’s much smaller fund spent more than $2 million, city documents show.

But the WSJ noted that not all hedge funds are created equal in Raimondo’s eyes (emphasis added):

Even some of those at the vanguard of pushing for better investor terms seem willing to pay high fees for certain big-name funds, an indication of why the shift to lower fees has been gradual. Rhode Island, for example, pays management fees of 1.5% or less for most of the funds it invests in. But it continues to pay performance fees of 25% to invest with funds run by Brevan Howard Asset Management LP and the D.E. Shaw Group, two of the best-known firms in the hedge-fund world.

“The State Investment Commission always tries to negotiate better fees whenever possible, but fees are not the only consideration,” the treasurer’s spokeswoman said in a statement. It “also looks for the best expected risk and return and value for money.”

• Related: Taveras’s 13.4% pension investment return beats Raimondo’s 11.1% (Aug. 13)

Raimondo removing ‘for RI Treasurer’ from her Facebook page

September 10th, 2013 at 9:41 pm by under Nesi's Notes, On the Main Site

Here’s another tea leaf for you to read.

Facebook users who’ve “liked” the Gina Raimondo for RI Treasurer page received the following notification tonight:


Basically, the message says Raimondo’s campaign Facebook page will remove the “for RI Treasurer” slogan from its headline on Sept. 23. As it happens, that’s just a few days before the treasurer’s much-anticipated women-focused fundraiser, where it’s possible she could reveal more about her future plans.

Raimondo’s Facebook tweak comes the same day Cranston Mayor Allan Fung formed an exploratory committee studded with Republican luminaries to signal his seriousness about seeking the governor’s office.

• Related: Analysis: Chafee scrambles the 2014 campaign – once again (Sept. 4)

SEC is investigating 38 Studios deal; EDC won’t provide details

September 10th, 2013 at 6:00 pm by under Nesi's Notes

By Ted Nesi and Tim White

PROVIDENCE, R.I. (WPRI) – The U.S. Securities and Exchange Commission is investigating the $75-million taxpayer-backed loan that the R.I. Economic Development Corporation gave to Curt Schilling’s failed video-game startup 38 Studios, has learned.

The SEC’s 38 Studios probe, which has not been previously reported, is the latest twist in the ongoing saga of how former Gov. Don Carcieri’s expensive bet on the one-time Red Sox ace ended with the company’s spectacular public collapse in May 2012.

The EDC hired attorneys from the law firm Cohen & Gresser LLP to help respond to the SEC’s staff over a five-month period last fall and winter, according to documents obtained by filing a request under the Access to Public Records Act.

EDC spokeswoman Melissa Czerwein confirmed that lawyers from Cohen & Gresser “were retained based on their expertise in relation to an inquiry from the SEC.”


Watch Newsmakers: Political roundtable on Chafee and 2014

September 8th, 2013 at 5:00 am by under Nesi's Notes, On the Main Site

Analysis: Chafee scrambles the 2014 campaign – once again

September 4th, 2013 at 7:54 pm by under Nesi's Notes, On the Main Site


Angel Taveras has always liked Lincoln Chafee. But he’s probably never liked him more than he does today.

Chafee’s surprise announcement that he won’t seek re-election – made outside the DMV, no less – sets up the 2014 Democratic primary for governor as a clear choice between two formidable candidates: Treasurer Gina Raimondo and Providence Mayor Angel Taveras, each a first-termer with a high approval rating.

That’s good news for Taveras. Raimondo isn’t going to win over the state’s politically powerful public-sector unions, and she’s going to face at least some resistance from those liberal Democrats who are skeptical of her ties to the financial sector. Taveras, on the other hand, is viewed more warmly by labor for negotiating his pension cuts – an oft-heard talking point these days.

The big challenge for Taveras was going to be competing with Chafee for the same slice of the electorate – Latinos, liberals and labor. Chafee was unlikely to win the primary, but it’s conceivable he could have taken enough votes from Taveras to hand victory to Raimondo – an ironic possibility considering Chafee has a much warmer relationship with the mayor than he does with the treasurer.


RI pension fund again lags its peers with return of 11.1%

August 27th, 2013 at 1:36 pm by under Nesi's Notes, On the Main Site

By Ted Nesi

The investment performance of Rhode Island’s pension fund continues to lag behind its peers under the new mix of assets adopted at Treasurer Gina Raimondo’s urging that relies more heavily on hedge funds.

Rhode Island’s $7.6-billion pension fund earned 11.07% during the 12 months ended June 30, according to Bank of New York Mellon Corp., the state’s custodial bank. The median public-sector pension plan with assets of at least $5 billion earned 12.43% over the same period, Wilshire Associates Inc. reported this month.

Rhode Island’s pension investments also grew more slowly over the three years and five years ended June 30 compared with the median plan of at least $5 billion, according to Wilshire and BNY Mellon. But Rhode Island’s return over the 10-year period ended June 30 was 7.42%, better than the median plan’s 7.23%.


20 facts of life in politics show why Raimondo’s money matters

August 26th, 2013 at 4:04 pm by under Nesi's Notes, On the Main Site

Friend’s-of-Nesi’s-Notes Chris “The Fix” Cillizza and Nathan Gonzales of Rothenberg Political Report have come up with, respectively, 10 immutable rules of politics and 10 things losing candidates say. Both posts are well worth a read, but with Rhode Island heading into a big political year, I thought I’d summarize them:

1. Money is most things … but not everything.

2. No swing voter cares about campaign finance reform.

3. Candidates matter.

4. No politician goes to Iowa by accident. NONE.

5. Saying “no” to a race doesn’t mean you aren’t running.

6. Endorsements (almost) never matter.

7. Negative ads work.

8. All successful candidates use polling.

9. Running for random downballot office ≠ running for major statewide office.

10. Geography matters. A lot.

… and the things losing candidates say …

11. “I’m running a grass-roots campaign.”

12. “The only poll that matters is the poll on Election Day.”

13. “I’m the next [insert big-name politician here].”

14. “I’m not going to run any negative ads.”

15. “I’m not going to accept PAC money.”

16. “My son is running my campaign.”

17. “Money doesn’t win elections, ideas do.”

18. “I’m going to win this race the same way I did when I got elected to the State House.”

19. “People know me.”

20. “My district is different.”

One big takeaway here: don’t listen to anyone who says Gina Raimondo’s money isn’t a big deal. It is. With $2 million in the bank, she can bury Angel Taveras and Lincoln Chafee in negative ads long before the fall campaign draws near – just like Barack Obama did to Mitt Romney. She can also respond to attacks.

People often point out that Frank Caprio spent $2.7 million but came in third in 2010, which is true – if Raimondo runs a terrible campaign, she can spend a lot of money and lose, too. But Chafee spent nearly as much as Caprio ($2.5 million) and won – while a little more money might have won it for John Robitaille. Again, Raimondo’s money does not mean she will win – it just gives her an important advantage in the race.

Or, as former Bruce Sundlun adviser David Preston put it on Twitter recently: “Never heard of ‘too much money’ cited as a campaign problem.”

Taveras’s 13.4% pension return beats Raimondo’s 11.1%

August 13th, 2013 at 2:48 pm by under Nesi's Notes, On the Main Site

Providence is significantly outpacing the state of Rhode Island in the battle of the pension plans.

Providence’s $247-million pension fund, the second-largest in Rhode Island, earned a return of 13.4% during the 12 months ended June 30 – more than two percentage points better than the 11.1% earned by the $7.55-billion state fund over the same period, according to data obtained from the city by

In fact, Providence’s pension investments have consistently performed better than Rhode Island’s over the last decade, a period during which Providence’s Board of Investment Commissioners has been chaired by Mayors Angel Taveras and David Cicilline, as this chart comparing their returns shows:



New study by ALEC praises Raimondo for pension changes

August 13th, 2013 at 12:01 am by under Nesi's Notes, On the Main Site

A new study out Tuesday offers more praise for Treasurer Gina Raimondo’s approach to pension changes, though it may also offer new fodder for her political opponents.

The study by Dan Liljenquist, a former Utah state senator who unsuccessfully challenged Orrin Hatch for the Republican U.S. Senate nomination last year, was released by the American Legislative Exchange Council (ALEC), a right-leaning group which has drawn criticism from Rhode Island liberals in the past.

The study, “Keeping the Promise: State Solutions for Government Pension Reform,” paints a bleak picture of pension systems’ current funding levels nationwide, and argues lawmakers should look to Rhode Island as one example of how they can reduce the costs to taxpayers.

“Rhode Island has gained both notoriety and praise for its pension reforms,” Liljenquist writes. “Although some legislators launch study groups or hold hearings but do not change anything, Rhode Island made some significant changes in just 11 months.”

Liljenquist writes that “Raimondo was rewarded for her work” reaching out to unions and workers. But he also says lawmakers could “easily and quietly” boost benefits in the future, and suggests that failing to eliminate defined-benefit plans for all retirees “means maintaining some further exposure to bankruptcy risk.”

The full study is available on ALEC’s website. Its praise for Raimondo contrasts with the criticism the pension law received in June in a study released by the left-leaning Economic Policy Institute, another national group.

Lawyers ask judge for more time in pension mediation

August 6th, 2013 at 1:44 pm by under Nesi's Notes, On the Main Site

By Dan McGowan

Lawyers for the state and public-sectors unions have asked a judge for more time to discuss a potential settlement of a lawsuit challenging Rhode Island’s 2011 landmark pension law before it heads to trial.

The lawyers provided R.I. Superior Court Judge Sarah Taft-Carter with their sixth update on the mediation talks since February, according to court spokesman Craig Berke. Taft-Carter ordered the two sides to the table in December, six months after the law took effect.

General Treasurer Gina Raimondo, the key architect of the pension overhaul, has said suspending retirees’ cost-of-living adjustments (COLAs) until the pension system is 80% funded and moving most current employees into a hybrid pension plan will strengthen to retirement system and save the states billions of dollars.

Berke said attorneys on both sides will provide Taft-Carter with another update on Sept. 5 at Kent County Superior Court, which is where the judge is assigned this fall.

Republican Robitaille eyeing 2014 governor’s race

August 5th, 2013 at 2:53 pm by under Nesi's Notes

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Just when you thought he was out, the Republican runner-up in the 2010 governor’s race on Monday said he is considering running for the state’s top job again in 2014.

John Robitaille, who finished two percentage points behind Gov. Lincoln Chafee in a four-way race in 2010, said Chafee’s decision to join the Democratic Party and Moderate Party standard bearer Ken Block’s flirtation with the Republican Party have prompted him to reassess his options.

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Special-interest groups spend big during legislative session

August 2nd, 2013 at 6:31 am by under Nesi's Notes

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Political action committees operated by some of Rhode Island’s most powerful special-interest groups spent more than $728,000 during the legislative session, according to a review of campaign finance reports filed Wednesday.

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Raimondo, McKee, de Ramel, Caprio lead political money race

August 1st, 2013 at 1:00 pm by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – The latest quarterly finance reports from Rhode Island’s state and local politicians were due to the R.I. Board of Elections by midnight last night, and the results offer a glimpse at who’s got an early advantage heading into next year’s campaign.

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• Related: DreamWorks CEO, Facebook executive among Raimondo donors (July 31)

Raimondo’s campaign war chest jumps to $2M; gov bid looms

July 31st, 2013 at 6:02 pm by under Nesi's Notes, On the Main Site

Chafee_Raimondo_TaverasTreasurer Gina Raimondo’s campaign war chest now tops $2 million, about three times more than her second-closest rival in the 2014 governor’s race, as the first-term Democrat continues to be a fundraising juggernaut.

Raimondo raised $399,420 from April 1 to June 30, finishing the second quarter with $2.06 million on hand, her campaign disclosed Wednesday in a filing with the R.I. Board of Elections. She had $1.7 million on March 31.

As a comparison, former Treasurer Frank Caprio, who was a prodigious fundraiser in his own right ahead of his 2010 gubernatorial bid, had $1.4 million on hand at the same point in the last election cycle.

Providence Mayor Angel Taveras, Raimondo’s fellow Democrat and another potential candidate for governor next year, raised $157,705 during the second quarter to finish with $692,590 on hand, his campaign disclosed in its Board of Elections filing. Taveras had $560,779 on March 31.


RI pension fund earned 11% last year as market rebounds

July 24th, 2013 at 11:20 am by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Rhode Island’s state pension fund earned 11.1% in the 2012-13 fiscal year, a big improvement over its 1.4% rise the prior year as a worldwide market rebound boosted returns, Treasurer Gina Raimondo’s office announced Wednesday. The fund’s assets totaled $7.55 billion as of June 30.

The 11.1% return came in below the 11.3% return of the fund’s benchmark over the same period. It was also less than the Massachusetts fund’s 12.7% return or CalPERS’ 12.5% increase. Meanwhile, a status conference on progress in mediating the union lawsuit challenging the state’s 2011 pension law is set for Aug. 6.

Read the rest of this story »

• Related: Chart: How Raimondo has changed RI’s pension investments (April 4)

Raimondo ally forms Super PAC for female gov candidates

July 12th, 2013 at 5:09 pm by under Nesi's Notes

By Dan McGowan

Veteran activist and former congressional candidate Kate Coyne McCoy has launched a Super PAC aimed at helping to elect Democratic female governors that could spend plenty of money in Rhode Island next year.

McCoy, a political consultant who previously served as regional director for EMILY’s List, told the American LeadHERship PAC hasn’t selected the states it will focus on, but acknowledged she considers General Treasurer Gina Raimondo a personal friend.

“It is grossly apparent to me that there is only one Democratic pro-choice woman in the governor’s office in the country, and that to me is appalling,” McCoy said Friday.


Democrat Seth Magaziner files to run for RI treasurer in 2014

July 12th, 2013 at 4:49 pm by under Nesi's Notes, On the Main Site

Seth_Magaziner_Trillium-Asset-ManagementThe son of longtime Bill and Hillary Clinton confidante Ira Magaziner has taken a major step toward running for Rhode Island general treasurer next year, has confirmed.

Seth Magaziner, 29, filed an official notice July 3 with the R.I. Board of Elections declaring his intention to run for treasurer as a Democrat, which will allow him to raise money for a campaign.

Magaziner said he hasn’t made up his mind yet about whether to run.

“I’m still exploring a run for General Treasurer, and filing for candidacy will allow me some additional flexibility as I continue the decision making process,” he told in an email.


RI pension plan honored with Hedge Fund Industry Award

July 9th, 2013 at 1:04 pm by under Nesi's Notes, On the Main Site

Treasurer Gina Raimondo’s hedge fund-heavy investment strategy for the state pension fund may be controversial in Rhode Island, but it’s winning plaudits in New York City.

The Employees’ Retirement System of Rhode Island won Small Public Plan of the Year in Institutional Investor magazine’s 11th Annual Hedge Fund Industry Awards, given last month at the Mandarin Oriental in Manhattan. New York City won Large Public Plan of the Year, with $15 billion in assets the dividing line.

The awards “recognized the hedge funds, funds of hedge funds, investment consultants, endowments, foundations, family offices, corporate funds, public funds and sovereign funds that stood out for their performance innovation, achievements and contributions to the industry in the past year,” the magazine said.

As of May 31, Rhode Island’s $7.7-billion pension fund had earned a 16.5% return over one year and a 7.8% return over 10 years. The state beat out Delaware, New Mexico and San Bernardino, Calif., for its award.

“Given the important role alternative investments play in the pension portfolio to reduce risk and generate strong performance for our members, we must continue to push for transparency to build public trust,” Raimondo said in a statement. “Fee structures should be lowered and evolve to better balance risk and reward.”

• Related: Gina Raimondo is this month’s Institutional Investor cover girl (Jan. 9)

Raimondo: SEC ends pension probe without charging RI

July 9th, 2013 at 10:57 am by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – The Securities and Exchange Commission has closed its investigation into Rhode Island’s pension disclosures and won’t pursue charges against the state for failing to provide accurate information to investors, Treasurer Gina Raimondo office announced Tuesday.

Read the rest of this story »

• Related: SEC settles with Illinois over pensions as RI probe continues (March 13)

Chafee signs RI budget, 10-cent Sakonnet toll into law

July 3rd, 2013 at 4:13 pm by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Gov. Lincoln Chafee on Wednesday signed into law a 2013-14 state budget after a contentious debate over 38 Studios bond payments and tolls, although he expressed concerns about changes lawmakers made to his original proposal – and took a swipe at Treasurer Gina Raimondo.

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Chicago Mayor Emanuel hosts fundraiser for Gina Raimondo

June 27th, 2013 at 9:43 pm by under Nesi's Notes, On the Main Site

At this rate, soon Treasurer Gina Raimondo will be able to start a “Mayors for Gina” organization.

Chicago Mayor Rahm Emanuel hosted a fundraiser for the first-term treasurer, who is widely expected to run for governor in 2014, on Thursday evening from 6 to 7:30 p.m. at the Chase Tower in the Windy City, a Raimondo aide told Emanuel, a Democrat, was President Obama’s first chief of staff and previously served as a U.S. congressman.

It’s the second major fundraiser this month that a big-city mayor has hosted for Raimondo, coming exactly a week after New York City Mayor Michael Bloomberg threw a campaign event for her at his Manhattan townhouse. The wealth of the two cities combined with the wide networks of Emanuel and Bloomberg should give a significant boost to Raimondo’s campaign war chest for this fundraising quarter, which ends Sunday.

Raimondo left Rhode Island on Thursday morning for the Chicago event and returns tonight, the aide said.

Emanuel suggested last year that Illinois should look at the pension changes spearheaded by Raimondo in Rhode Island as his state seeks to fix its own underfunded retirement system.

• Related: Chicago Tribune meets ‘rock star’ Raimondo, praises EngageRI (April 6)

Budget sent to Senate with 38 Studios, pension payments

June 26th, 2013 at 10:18 pm by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Rhode Island lawmakers approved an $8.2-billion state budget for 2013-14 on Wednesday night that includes $2.5 million to pay the 38 Studios bonds and a $12.9 million pension payment. It passed less than 24 hours after House Speaker Gordon Fox’s initial tax-and-spending plan got torpedoed.

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• Related: Fox forced to postpone budget debate after pension rebellion (June 26)

Fox forced to postpone budget debate after pension rebellion

June 26th, 2013 at 2:33 am by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – House Speaker Gordon Fox abruptly suspended Rhode Island lawmakers’ biggest debate of the year at 1:30 a.m. Wednesday after rank-and-file legislators rebelled and rejected his team’s plan to cancel a bonus payment into the state pension fund.

Fox was forced to recess the House in the early hours of Wednesday morning to determine how to deal with the sudden budget shortfall of nearly $13 million; lawmakers may be asked to reconsider the issue when they reconvene Wednesday at 2 p.m.

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Taveras in WSJ story about pension funds wary of Wall St.

June 21st, 2013 at 2:14 pm by under Nesi's Notes, On the Main Site

The Wall Street Journal is pouring more fuel on the fire as Rhode Island continues to debate whether Treasurer Gina Raimondo is making the right move by investing more than $1 billion of the state’s pension assets in hedge funds, this time with an article today by Michael Corkery, a former Projo scribe, and Kristen Grind.

The WSJ discusses how Montgomery County, Pa., is moving almost all of its $470 million in pension assets into low-cost index funds run by Vanguard Group – mainly on the advice of John C. “Jack” Bogle, Vanguard’s legendary 84-year-old founder, who is an impassioned opponent of high investment fees.

As Corkery and Grind note, Montgomery County’s leaders aren’t alone:

Providence, R.I., Mayor Angel Taveras is similarly concerned, and asked a consultant to explore alternatives to his city pension’s 15% allocation to hedge funds. “To me, it’s a question of whether we can get the same performance for less risk and fewer fees,” says Mr. Taveras, who heads the pension investment board.

Most pensions aren’t ready to forsake Wall Street entirely. Desperate to hit high annual-return targets, but worried about big swings in the stock market, pensions have sought so-called alternative investments to reduce volatility.

Officials in Montgomery County and other experts admit that the index-fund approach increases the risk of volatility. …

For his part, Mr. Bogle says he has talked to other pension funds about the benefits of moving into indexing but says he waits for the funds to contact him first. “I will always see them,” he says.

That second-to-last paragraph captures the crux of Raimondo’s argument in favor of adding hedge funds: it’s a way to reduce the year-to-year swings in the value of the pension fund, which is still paying out more in annual benefits than it’s getting in contributions. Still, perhaps she should give Bogle a call.

• Related: Taveras invests 20% in hedge funds, more than Raimondo (May 8)