gina raimondo

Raimondo puts 14% in hedge funds, 10 times US median

April 29th, 2013 at 11:02 am by under Nesi's Notes, On the Main Site

RI_pension_allocation_2006_2010_2012Treasurer Gina Raimondo has invested 10 times more pension money in hedge funds than the median state-government retirement system does, a WPRI.com review of financial records shows.

Raimondo, as chair of the State Investment Commission, won unanimous approval in June 2011 of a new allocation strategy for the pension fund’s $7.7 billion in assets that added hedge funds to the portfolio for the first time. As of June 30, 13.9% of Rhode Island’s pension assets were invested in hedge funds.

By comparison, the median state pension plan in the U.S. allocates just 1.4% of its assets to hedge funds, according to a February study of 134 state retirement systems by Wilshire Associates, a Santa Monica-based investment adviser.

However, that number masks wide variation among different plans, with the share of the individual systems invested in hedge funds ranging from zero to as much as 26.5%, according to Wilshire.

Hedge funds are privately managed alternative investments that are only open to sophisticated investors. The Hedge Fund Association says they “can use one or more alternative investment strategies, including hedging against market downturns, investing in asset classes such as currencies or distressed securities, and utilizing return-enhancing tools such as leverage, derivatives, and arbitrage.”

(more…)


Rohatyn: Governments, unions should negotiate pension fixes

April 25th, 2013 at 12:40 pm by under Nesi's Notes, On the Main Site

Felix Rohatyn, the banker who famously helped save New York City from bankruptcy in 1975 as chairman of New York’s Municipal Assistance Corporation, has an interesting op-ed in today’s FT arguing political and labor leaders should negotiate solutions to thorny fiscal problems, notably underfunded pension plans – a timely take in light of Rhode Island’s debate over the Raimondo and Taveras approaches:

Once again, business and labour share a huge stake in our cities’ fortunes, and the consequences for both if we fail to stabilise our finances and set a course for growth will be devastating. Yet amid the solutions proposed, no one argues that the two sides must work together to restructure the finances of troubled states and cities. …

If the nation is to enter a new era of opportunity and growth, our government, company executives, labour leaders and employees have to co-operate on matters of common interest. They need not abandon their principles, but they must create a climate where dialogue and compromise are possible, and mutual sacrifice may be negotiated. One thing is certain: the path of stalemate leads nowhere. We need to take a new direction now.


Read Mike Stanton on Treasurer Raimondo and hedge funds

April 25th, 2013 at 12:26 pm by under Nesi's Notes, On the Main Site

I’ll have my own story on all this soon, but for now check out Mike Stanton’s piece in today’s Projo about yesterday’s fight at the State Investment Commission over Treasurer Raimondo’s use of hedge funds:

Rhode Island has moved about $1 billion of its $7.6-billion state pension fund into hedge funds over the past 18 months, a move that General Treasurer Gina M. Raimondo defended against critics Wednesday during a meeting of the state Investment Commission. …

On Tuesday, Raimondo’s office provided The Providence Journal with records showing that the state paid $15.8 million in fees to 19 hedge funds for the eight months ending June 30, 2012. But the office could not immediately produce how much has been paid since then, given how the records are kept. Those fees aren’t in the detailed monthly investment reports produced for Investment Commission meetings, because they are not directly billed to the state. …

Raimondo, in an interview, said that hedges in such investments as currencies, agricultural commodities and precious metals are designed to move against the stock market, and provide a better alternative to lower-yielding Treasury notes that reaped more years ago. Noting that the pension fund lost $2 billion in the ’08 crash, Raimondo said an analysis showed the loss would have been $1.5 billion with hedge funds in the portfolio.

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


My Bloomberg View op-ed: Can Raimondo win a governor race?

April 22nd, 2013 at 10:38 pm by under Nesi's Notes, On the Main Site

The fine folks over at Bloomberg View asked me to write a short op-ed for them about the outlook for Rhode Island’s 2014 gubernatorial race, focusing on Treasurer Gina Raimondo’s high profile after the pension fight and how it will impact the campaign. Here’s how I kicked off the piece:

Rhode Island General Treasurer Gina Raimondo has experienced a meteoric rise to fame that most politicians can only envy.

Raimondo, a 41-year-old former venture capitalist, was virtually unknown in 2010 when she coasted to victory as a Democratic candidate in a deep-blue state. Soon the new treasurer surprised almost everyone by engineering the most sweeping overhaul of a public-pension system ever enacted. By the time her reforms became law in November 2011 she was one of the most popular politicians in Rhode Island, and the subject of adulatory coverage in both the New York Times and the Wall Street Journal.

Even before the pension process was over, there was growing speculation that Raimondo might run for governor in 2014, in no small part because the incumbent who signed the pension law — independent ex-Republican Lincoln Chafee — has had an approval rating in the 20s for most of his term in office. It has become clear in recent months that the treasurer is likely to throw her hat into the ring.

Read the rest on Bloomberg.com.


Keep municipal bonds tax-exempt, Raimondo urges Congress

April 22nd, 2013 at 9:57 am by under Nesi's Notes, On the Main Site

Treasurer Gina Raimondo has a message for members of Congress: don’t tax municipal bonds.

Raimondo and 41 of her fellow state treasurers sent a letter [pdf] last week to the top Republican and Democrat on the U.S. House Ways and Means Committee, emphasizing “the importance of maintaining the current tax exemption for municipal bond interest” as they consider plans to overhaul the U.S. tax code.

The letter was organized by the National Association of State Treasurers, which describes itself as “a bipartisan organization of state treasurers and other finance officials with similar duties.” The group said tax-free municipal bonds save states and municipalities an average of 25% to 30% on interest costs.

“The tax-exempt bond market has worked effectively for over a century,” Virginia State Treasurer Manju Ganeriwala, the association’s president, said in a statement. “Let’s not dismantle something that works.”

Raimondo, a Democrat, is considering a run for governor in 2014. Here’s her signature on the letter:

Raimondo_signature_4-2013_NAST_letter


Cranston’s Fung hires consultant for likely governor’s campaign

April 16th, 2013 at 12:30 pm by under Nesi's Notes, On the Main Site

By Dan McGowan

Cranston, R.I. (WPRI) – Cranston Mayor Allan Fung has hired a veteran Republican political operative to help craft a likely campaign for governor in 2014, WPRI.com has confirmed.

Patrick Sweeney, who ran Republican Barry Hinckley’s unsuccessful bid for U.S. Senate in 2012 and previously served as executive director of the Rhode Island GOP, was brought in on Apr. 1 as a consultant for the mayor of Rhode Island’s third-largest city.

Read the rest of this story »


Mayor Angel Taveras grows campaign war chest over $560K

April 12th, 2013 at 1:22 pm by under Nesi's Notes, On the Main Site

By Dan McGowan

Providence Mayor Angel Taveras raised nearly $177,000 in the first quarter of 2013 as he gears up for a likely run for governor next year, WPRI.com has learned.

The first-term Democrat posted his second-best fundraising period since taking office in 2011 and now has more than $560,000 cash on hand. Only General Treasurer Gina Raimondo, who may challenge Taveras in a Democratic primary in 2014, has more in her campaign war chest (Raimondo has not released her first quarter figure, but she had $1.36 million in the bank as of Dec. 31).

“The mayor is excited about the momentum and all the support he has received,” campaign finance director Peter Baptista told WPRI.com. Baptista said Taveras will be meeting with high profile Democrats around the country in the coming months.

Taveras’ new fundraising tally was announced in the same week that California Congresswoman Loretta Sanchez hosted a Los Angeles fundraiser for the mayor. Sanchez told the Orange County Register she is “glad to support him as he seeks higher office.”

(more…)


Big-name gay-marriage backers hosting fundraiser Wednesday

April 9th, 2013 at 5:05 pm by under Nesi's Notes, On the Main Site

Same-sex marriage supporters are predicting a heavy turnout Wednesday night at a fundraiser on Providence’s wealthy East Side that will benefit the advocacy group Rhode Islanders United for Marriage.

More than 90 people have RSVP’d to say they’re planning to attend the event at the Firglade Avenue home of Maryellen Butke, the prominent education activist and 2012 state Senate candidate, and her partner, Jo O’Connell. Suggested contributions start at $50.

The host committee for the event includes Democratic Congressman David Cicilline, Treasurer Gina Raimondo, House Speaker Gordon Fox and Pawtucket Sen. Donna Nesselbush, a lead sponsor of the marriage bill. Also on the list are real-estate developer Buff Chace and Xay Khamsyvoravong, who was former Treasurer Frank Caprio’s campaign manager.

(more…)


Frank Caprio helping Gina Raimondo raise cash for campaign

April 9th, 2013 at 9:55 am by under Nesi's Notes, On the Main Site

Apparently Democratic treasurers stick together.

Former General Treasurer Frank Caprio is helping to raise money for the campaign of his successor, Gina Raimondo, as she prepares for a possible run for governor in 2014, WPRI.com has confirmed.

Asked in an interview Friday whether Caprio is helping her with fundraising, Raimondo replied: “Is he helping me with fundraising?” After pausing, she said: “He’s … yes.”

Caprio, who placed third when he was the Democratic nominee for governor in 2010, declined to comment when reached by phone on Friday. The former treasurer and state lawmaker is no longer a registered Democrat, WPRI.com revealed last fall.

(more…)


Senator Maryellen Goodwin tapped to lead Providence Dems

April 9th, 2013 at 5:34 am by under Nesi's Notes, On the Main Site

maryellen_goodwinBy Dan McGowan

Senate Majority Whip Maryellen Goodwin on Thursday is expected to be named the Providence Democratic City Committee’s fourth chairperson in 28 months, WPRI.com has learned.

Goodwin, one of the most well-respected lawmakers on Smith Hill, will replace Lauren Nocera, a progressive Democrat who served as Mayor Angel Taveras’ campaign manager in 2010. Nocera, who is departing less than halfway into her four-year term, said she plans to continue working on “issues about which I care deeply, including improving the lives of transgender people, urban agriculture, and policy issues related to recovery from addiction.”

“I am delighted that Senator Goodwin has agreed to serve as the chairwoman of the city committee,” Nocera told WPRI.com. “Senator Goodwin has a proven track record of leadership and understands the importance of bringing people together to move our party and our city forward. She has my full confidence and support as she assumes her term as chair; I wish her the best of luck and look forward to working with her.”

(more…)


Calif. congresswoman headlining LA fundraiser for Taveras

April 8th, 2013 at 3:22 pm by under Nesi's Notes, On the Main Site

By Dan McGowan

He may not be ready to confirm that he’s running for governor in 2014, but Providence Mayor Angel Taveras certainly appears to be putting the pieces together for a statewide campaign.

Taveras is in Los Angeles today where Congresswoman Loretta Sanchez is hosting a fundraising for the first-term mayor, according to campaign finance director Peter Baptista. Records show Sanchez previously contributed $1,000 to Taveras’s mayoral campaign in 2010.

In addition to the fundraiser, Baptista said Taveras plans to meet with “major Democratic donors” while he’s in California.

Taveras had just over $413,000 in his campaign account as of Dec. 31, trailing only General Treasurer and likely Democratic primary opponent Gina Raimondo among those considering a run for governor. Raimondo had $1.36 million in her war chest by the end of 2012.

The fundraising trip out west comes a week after the Providence City Council unanimously approved a pension settlement with the city’s police and fire unions and retirees that Taveras says will save the city $18 million. If they do run against each either, Taveras will likely tout his pension changes efforts over Raimondo’s statewide reforms, which are currently tied up in court.

Aside from Taveras and Raimondo, Cranston Mayor Allen Fung, former Congressional candidate Brendan Doherty, former Congressman Bob Weygand and Moderate Party Chairman Ken Block are considering a run for the state’s top job. Gov. Lincoln Chafee has indicated he intends to seek re-election.

Chafee on Monday was named the most vulnerable governor in country for 2014 by the New York Times’ FiveThirtyEight blog.

Dan McGowan ( dmcgowan@wpri.com ) covers politics and the city of Providence for WPRI.com. Follow him on Twitter: @danmcgowan


Q&A: Raimondo fires back after Forbes contributor attacks her

April 5th, 2013 at 6:02 pm by under Nesi's Notes, On the Main Site

Raimondo_NM_10-21-2011Edward “Ted” Siedle launched a blistering attack on Treasurer Gina Raimondo in a Forbes.com post Thursday that suggested her changes to Rhode Island’s $7 billion pension system are leading to a “Wall Street feeding frenzy.” Raimondo’s critics seized on Siedle’s broadside immediately, while others wanted to know more about his charges.

Raimondo responded to the Forbes piece Friday in an interview with WPRI.com, defending the State Investment Commission she chairs for moving aggressively to create and expand a portfolio of hedge funds. This transcript has been lightly edited for length and clarity.

Let’s jump right to it. Did you read the article, and what was your reaction?

I did read it. It’s not an article – it’s an opinion blog, and obviously there’s a number of inaccuracies, and I disagree with the overall tone of the blog.

Did the author ever reach out to you or your office, do you know?

No.

So there was no effort to discuss it?

No.

Looking for a thesis in the article, Siedle writes: “There’s no prudent, disciplined investment program at work here – just a blatant Wall Street gorging, while simultaneously pruning state workers’ pension benefits.” I know you’ll disagree with that, but what’s your response?

(more…)


Chart: How Raimondo has changed RI’s pension investments

April 4th, 2013 at 11:08 pm by under Nesi's Notes, On the Main Site

• Update: Raimondo fires back after Forbes.com attack – read the Q&A (April 5)


Rhode Island’s political Twittersphere lit up late Thursday after Forbes.com posted a blistering attack on Treasurer Gina Raimondo by Edward “Ted” Siedle, an outside contributor to the site, entitled “Rhode Island Public Pension ‘Reform’ Looks More Like Wall Street Feeding Frenzy.” Siedle isn’t a novice: he’s been quoted about pension management by outlets including The Wall Street Journal and The New York Times.

There’s much to dissect in Siedle’s tough critique, and Raimondo’s office will undoubtedly need to respond in the coming days. One of his points isn’t up for debate, however: the treasurer has significantly restructured the pension fund’s investment portfolio, as Raimondo herself discussed in the recent Institutional Investor cover story about her that apparently attracted Siedle’s attention.

Raimondo has continued the pension fund’s move out of domestic and international equity investments, which began under her predecessor Frank Caprio, with a corresponding 16% jump in the share of the fund invested in alternatives – private equity, real return and hedge funds. Here’s a chart showing the change:

RI_pension_allocation_2006_2010_2012

The chart looks at 2006, before Caprio took office; 2010, Caprio’s final full year in charge; and 2012, Raimondo’s first. To put the percentages in perspective, in dollar terms the pension fund’s alternative investments jumped from $393 million on June 30, 2010, to $1.6 billion two years later.

Raimondo has said in the past that the move to an arguably more aggressive investment strategy is necessary because of the pension fund’s significant shortfall – it was about 60% funded after the 2011 overhaul, and only 48% before the new law passed. She thinks big returns are needed to fill the gap.

“In government there is a view that the status quo is safe,” Raimondo told Institutional Investor. “But when it comes to investing, doing nothing is making a decision to do something.”


What’s behind the Raimondo-Fox plan to fix roads and bridges

March 21st, 2013 at 10:21 am by under Nesi's Notes, On the Main Site

RICWFA_logo• Update: Fox, Raimondo pitch $70M loan fund for repairs (March 21)


The Rhode Island Clean Water Finance Agency’s motto declares, “Clean Water for Rhode Island is Our Only Business.” But that won’t be true for much longer if Treasurer Gina Raimondo and House Speaker Gordon Fox have their way.

Raimondo and Fox will hold a press conference Thursday morning where they’ll propose adding a new Municipal Road and Bridge Revolving Fund to the water agency’s portfolio of programs. They’ll be joined by Senate President Teresa Paiva Weed and municipal leaders, making this as close to a sure thing as any new legislative proposal can be.

So, you ask, what is the R.I. Clean Water Finance Agency?

The short answer: RICWFA is a quasi-public state agency, similar to better-known entities like the R.I. Economic Development Corporation and the R.I. Airport Corporation. While the Clean Water Finance Agency has a relatively low profile, it plays a key part in financing the maintenance of Rhode Island’s water system. Its basic role is to provide subsidized and low-interest loans to local governments that they use to fund water-infrastructure projects of all sizes.

(more…)


EngageRI offers the legal case for the state pension overhaul

March 18th, 2013 at 11:45 am by under Nesi's Notes, On the Main Site

Engage Rhode Island, the deep-pocketed advocacy group closely tied to Treasurer Gina Raimondo, released an unsigned three-page document [pdf] on Monday that makes the case for the legality of the 2011 pension law. Here’s the core of the argument:

If the Rhode Island Supreme Court affirms Judge Taft-Carter’s Decision, it will reverse its own precedent on the unmistakability doctrine, and create new constitutional law which will differ from federal court precedent and the precedent of the majority of state courts in this country. … If the judiciary can require a legislature to bind itself forever through one legislative act, which can never be revisited, the judiciary is thereby given too much power. Thus, it is important to hold from a separation of powers perspective that, unless the legislature’s intent to create contractual rights against the state is unmistakably clear, it should be free to amend its own legislation in the future.

Read the entire PDF here. For an alternative view, check out this from RWU Law’s Michael Yelnosky.

• Related: Mediation to continue in RI pension suit after judge gets update (Feb. 28)


SEC settles with Illinois over pensions as RI probe continues

March 13th, 2013 at 11:38 am by under Nesi's Notes, On the Main Site

The U.S. Securities and Exchange Commission is still investigating Rhode Island’s pension disclosures to bond investors, Treasurer Gina Raimondo’s office confirmed Tuesday after the agency settled a similar case.

Raimondo spokeswoman Joy Fox told WPRI.com the SEC probe, which the treasurer disclosed shortly after she took office in early 2011, isn’t complete despite the passage of more than two years. The treasurer’s office has said it’s barred from discussing details about the investigation.

On Monday, Illinois agreed to a settlement with the SEC over allegations the state misled investors about the health of its underfunded pension system. Illinois admitted no wrongdoing and was not fined or penalized. A similar outcome was reached in a 2010 SEC case against New Jersey.

In Illinois’ case, the SEC praised steps the state’s government has taken in recent years to improve the way it discloses its pension liabilities – suggesting Rhode Island could benefit from the dramatic actions local leaders have taken on pensions since 2011, as well.

Governor Chafee’s 2012-13 budget request estimated the entire cost of the SEC investigation to Rhode Island at $276,000, shared between the treasurer’s and governor’s offices.


Watch Executive Suite Bruce Katz Why law school is broken

March 4th, 2013 at 5:00 am by under Nesi's Notes, On the Main Site


New Brown poll: 60% back gay marraige; Taveras most popular

February 28th, 2013 at 9:44 am by under Nesi's Notes, On the Main Site

​By Ted Nesi

PROVIDENCE, R.I. (WPRI) – More than half of Rhode Island voters support allowing same-sex marriage in the state, while most opponents of the idea say it conflicts with their religious beliefs, according to a new poll released Thursday by Brown University.

The poll also found Gov. Lincoln Chafee’s approval rating is a dismal 26%. ”Lincoln Chafee still has not been able to move his numbers after over two years as governor,” WPRI 12 political analyst Joe Fleming said.

Read the rest of this story »


Block blasts Raimondo for hiring campaign operative as chief of staff

February 21st, 2013 at 2:20 pm by under Nesi's Notes, On the Main Site

By Dan McGowan

The sparring ahead of the 2014 governor’s race has begun.

A day after Rhode Island Public Radio reported that likely gubernatorial candidate General Treasurer Gina Raimondo is bringing in veteran political operative Andrew Roos as her chief of staff, Moderate Party Chairman Ken Block accused Raimondo of hiring a campaign manager on the state’s dime.

“If this person has no relevant experience for running the treasurer’s office and is there mainly as a campaign manager then that person’s salary should not be at taxpayer expense,” Block, a potential candidate for governor himself, told WPRI.com.

Roos, who managed Myrth York’s unsuccessful campaign for governor in 2002, is leaving a Google’s elections and issue advocacy division in Washington D.C. to join Raimondo’s staff. Joseph Pratt, Raimondo’s current chief of staff, has been moved to deputy treasurer/chief of administration.

But Block said campaign managers should be paid out of campaign finance accounts.

“It would be absurd for taxpayers to have to pay a large salary for a campaign operative with no relevant executive experience for one of our statewide elected officials,” Block said. “Last I knew the treasurer had plenty of campaign cash to pay for these services.”

Raimondo spokeswoman Joy Fox did not respond directly to Block’s comments, but said the treasurer is ”committed to having the strongest, most diverse team possible to help deliver results for Rhode Islanders.”

Although she has deflected questions about her political future, Raimondo has established herself as the early favorite in the governor’s race, ahead of Providence Mayor Angel Taveras and current Gov. Lincoln Chafee. The Democrat had more than $1.3 million in her campaign account as of Dec. 31, more than Chafee, Taveras and Block combined.


Watch Newsmakers with Treasurer Gina Raimondo

February 10th, 2013 at 5:00 am by under Nesi's Notes, On the Main Site


If pension boards are fiduciaries, then the buck stops with them

February 6th, 2013 at 11:36 am by under Nesi's Notes, On the Main Site

One of the big questions that Tim White and I had while reporting out our Scituate pension investigation was who exactly has fiduciary responsibility for the police pension plan there. The answer, as we suspected, was the Scituate Police Pension Board, which met only once from mid-1999 to mid-2011.

Why does that matter? Because, legally, the pension buck stops with the entity that has fiduciary responsibility for the plan. Credit Treasurer Raimondo with driving this point home in recent years: pension boards, whether at the state or local level, are obligated to make prudent decisions based solely on the best interests of the pension system’s members, even if doing so causes larger budget challenges.

The former chairman of Scituate’s pension board, Ted Pryzbyla, tried to deflect the question of whether the board should have been meeting regularly by saying the town council was in charge of the pension plan. But while the council undoubtedly bears significant responsibility for the situation in Scituate, it’s the pension board that had responsibility to look out for the plan’s financial health no matter the consequences.

The Financial Times’ John Kay, writing about the banking sector, made this point a few days ago:

Fiduciary standards describe how people should behave when they manage the affairs of others. The key elements of the concept are loyalty – put your responsibilities to others ahead of your own interests – and prudence – discharge your responsibilities with care and skill.

Statutes define the fiduciary duties of company directors. The common law imposes demanding fiduciary obligations on other agents, such as the trustees of pension funds. In 1984, a landmark legal ruling on this matter was made in the UK. A case had been brought by Arthur Scargill, the leader of Britain’s main mining union. He sought the end of coal board investments in overseas businesses. The judge rejected Mr Scargill’s claim, on the basis that it is the duty of trustees to increase the fund’s value for its beneficiaries, regardless of their moral or political views.

If you live in one of the 24 cities and towns with a locally run pension plan, it’s worth asking who has fiduciary responsibility for your local pensions and checking whether that entity is carrying out its duties properly.

• Related: Pension board met once in 12 years as shortfall soared by $8M (Feb. 4)


Raimondo raises over $316K; Chafee, Taveras trail

February 1st, 2013 at 10:13 am by under Nesi's Notes, On the Main Site

​By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The 2014 governor’s race is still over 21 months away, but Gov. Lincoln Chafee and prospective candidates General Treasurer Gina Raimondo and Providence Mayor Angel Taveras all finished 2012 with more than $300,000 in their campaign war chests, according to reports filed with the R.I. Board of Elections Thursday.

Read the rest of this story »


Poll: Raimondo is favorite for gov; Chafee does best as a Dem

January 31st, 2013 at 9:22 am by under Nesi's Notes, On the Main Site

Democrat Gina Raimondo is the early favorite to win the 2014 governor’s race, according to a new poll released Thursday morning to WPRI.com.

The Public Policy Polling survey [pdf] shows Raimondo would win anywhere from 32% to 46% of the vote depending on which hypothetical opponents she faces. She is the only candidate to crack 40% support in any of 10 ballot tests conducted by PPP.

If Raimondo is out of the picture, however, there’s no clear frontrunner: the leading candidates in non-Raimondo scenarios shift between Republican Brendan Doherty, Republican Allan Fung and Democrat Angel Taveras depending on the match-up. Moderate Party founder Ken Block starts out with double-digit support in most scenarios, suggesting his presence could have a major impact on the outcome.

Independent Gov. Lincoln Chafee faces an unsurprisingly uphill battle to win a second term, with more than half of voters saying they don’t want him to run again. His strongest shot at re-election comes if he runs as a Democrat: running under the party banner, Chafee starts out trailing Republicans Doherty and Fung by just four points. Among voters who do want Chafee to run again, 20% say he should run as an independent and 18% say he should run as a Democrat.

(more…)


Raimondo to headline Bond Buyer municipal conference in RI

January 23rd, 2013 at 10:33 am by under Nesi's Notes, On the Main Site

Raimondo speaks at a Bond Buyer dinner

Here’s a rare silver lining to Rhode Island municipalities’ financial troubles: it’s made so much news that a two-day conference on distressed communities is coming to the capital city.

The financial newspaper The Bond Buyer will hold its 2nd Annual Distressed Municipalities Conference on March 18 and 19 at the Omni Providence Hotel (formerly the Westin). Treasurer Gina Raimondo, who received an award at a Bond Buyer dinner in December, is one of the headliners.

Bond Buyer publisher Michael Stanton told WPRI.com its major events are usually held within the Northeast Corridor, where institutional investors are concentrated, and in places that are geographically accessible to government leaders.

(more…)


A roundup of RI leaders’ reactions to Chafee’s budget speech

January 17th, 2013 at 5:00 am by under Nesi's Notes, On the Main Site

​By Dan McGowan and Ted Nesi

PROVIDENCE, R.I. (WPRI) – The reaction to Gov. Lincoln Chafee’s budget proposal Wednesday night was very different from the response to his first two. Here’s a roundup of reactions from Fox, Paiva Weed, Raimondo, Taveras, Fung, Melo, DaPonte, Newberry and Tanzi.

Read the rest of this story »

• Related: Chafee seeks lower corporate tax rate, more school funding (Jan. 16)


RI pension fund’s assets dropped by $200M in 2011-12

January 11th, 2013 at 1:03 pm by under Nesi's Notes, On the Main Site

​By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Rhode Island’s pension system lost $200 million during the 2011-12 fiscal year, as the amount of money paid out to retirees continued to outpace the amount of money put into the fund, the auditor general’s office said Friday.

Read the rest of this story »

• Related: RI ignored 1974 pension warning (Dec. 20) | Problem worsened in ’80s (Dec. 19)


Gina Raimondo is this month’s Institutional Investor cover girl

January 9th, 2013 at 12:36 pm by under Nesi's Notes, On the Main Site

Treasurer Gina Raimondo’s star just keeps rising in the world of high finance.

The new issue of Institutional Investor, a monthly magazine with a wide readership among financial types, features a long cover story about Raimondo. The front caption says “Solving the Retirement Dilemma” and the Web headline is “Rhode Island Treasurer Defies Conventional Pension Wisdom.”

The article by Institutional Investor senior writer Imogen Rose-Smith is a favorable but thorough retelling of the now familiar story about how Raimondo – described as “slight and personable” but “quietly ambitious” – pushed the pension law through. It links the treasurer with her friend Newark Mayor Cory Booker, New Jersey Gov. Chris Christie, and the mayors of San Diego and San Jose, Calif.

“With focus and determination, a sure command of finance and a gift for forging consensus, Raimondo took up the challenge,” the article declares, and notes the 41-year-old will likely run for governor in 2014.

(more…)


Politico: 2014 may launch Gina Raimondo on the national stage

January 7th, 2013 at 5:00 am by under Nesi's Notes, On the Main Site

Alexander Burns and Maggie Haberman report for Politico:

Prominent Democratic activists and women’s groups are determined to ensure the party fields a powerful female presidential candidate in 2016 ….

Privately, Democratic strategists acknowledge if [Hillary] Clinton chooses not run, the list of women who could plausibly run for president next time is relatively short. Several top Democrats mentioned Sens. Amy Klobuchar of Minnesota and Kirsten Gillibrand of New York as potential candidates. Many liberal Democrats would like to see Warren run, but she has emphatically ruled out a campaign only a few years into her first Senate term.

What’s more, the 2014 cycle has the potential to vault more than a few Democratic women onto the national stage. National Democrats pointed to women attorneys general in California, Pennsylvania, Nevada and Illinois as potential breakout stars, as well as Rhode Island Treasurer Gina Raimondo.

Without a doubt, this is a big achievement on Raimondo’s part: getting her name included in elite speculation about the future leaders of the national Democratic Party from a perch that often barely gets noticed here in Rhode Island, let alone across the country. That sort of talent (and luck) is the stuff that national careers are made of; there’s a reason somebody like Josh Brumberger, who was previously a John Edwards aide, is now working for Raimondo.

That said, newspaper archives are filled with the names of future political stars who never made it big, and Raimondo faces plenty of risks. “Huge Question,” Dante Ramos, The Boston Globe’s deputy editorial editor, tweeted in response, “Will pension reform go over well with national Dems?” And even before that there’s the question of whether it will go over well with Rhode Island Dems in next year’s gubernatorial primary.

Indeed, one of the oddest things about Raimondo’s political strategy is how little she’s done to shore up her left flank since pension reform passed. If the pension law was her Sister Souljah moment – a time when she broke with her party’s orthodoxy and established her independent credentials – it would behoove her to start balancing it with some moments that play up her affinity for Democratic and progressive priorities. So far she hasn’t done much of that (payday lending being an exception), though there’s still plenty of time.

• Related: Gina Raimondo’s campaign war chest passes $1 million mark (Nov. 1)


‘Pension law may be unconstitutional,’ RI law professor warns

December 24th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

Roger Williams University law professor Michael Yelnosky had an important op-ed in Sunday’s Projo about the state pension law, warning Rhode Islanders that they shouldn’t take the public confidence of the law’s supporters as a sign that it will be upheld by the courts.

Here’s Yelnosky:

A reader of these pages could be excused for concluding that the state will no doubt prevail in the lawsuits brought by the thousands of current and retired public employees affected by the 2011 Rhode Island Retirement Security Act. …

But these opinions gloss over some real legal issues. …

The “Contract Clause” of the Rhode Island Constitution (in the same language as the U.S. Constitution) prohibits the state from passing “any law impairing the obligation of contracts.” The retirees assert that the pension law does just that by reducing the annual pension benefits they earned during a career of state employment — benefits set forth in Rhode Island law. …

I am not predicting that the plaintiffs will win their cases. I write because the commentary on these pages does not take the plaintiffs’ arguments seriously. Some might wish it were not so, but judicial review of the pension reform law is the next step unless these cases are settled. If we are going to have an informed public debate about the desirability of settlement talks, a more balanced description of the legal landscape seems in order.

Yelnosky’s points reinforce others published here in the past – NEARI’s Robert Walsh made the union’s case at length when the suit was filed, and pension-law expert Amy Monahan of the University of Minnesota warned a year ago that this was a major legal gamble by Treasurer Raimondo and other Rhode Island leaders.

As Tim White has emphasized in his reporting, the key players here almost certainly will be the five justices of the Rhode Island Supreme Court: Suttell, Goldberg, Flaherty, Robinson and Indeglia. Are they willing to risk a “judicial backlash,” as Harvard Law’s Noah Feldman put it, by striking down a law backed by large majorities in the General Assembly, and in doing so place a major burden on strained state and local budgets?

Of course, as one smart legal observer reminded me recently, the justices also have the option of throwing out only part of the law and keeping the rest. The fiscal impacts of a mixed verdict will all depend on how the justices carve up the law’s provisions. Either way, taxpayers and their elected representatives should at least be contemplating what they’d do the day after the justices strike down the law.

• Related: Study: RI pension bill ‘a good approach’ – and it may be legal (Nov. 4, 2011)


RI ignored stark warning about poor pension funding – in 1974

December 20th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

A.A. Weinberg

Treasurer Gina Raimondo was just three years old and President Nixon had only recently resigned on Oct. 15, 1974, the day Rhode Island leaders got a stark warning: the state pension system was in serious trouble.

The alarm bell was rung by A.A. Weinberg, an actuarial consultant from Chicago who by then had been watching over the Rhode Island pension system for a quarter-century. The pension system’s liabilities were mounting fast, he said, but lawmakers and workers didn’t seem to care.

“A change of attitude and remedial and corrective measures are imperative if the retirement system is to survive and fulfill its functions and stated objectives for present employees as well as future participants,” Weinberg wrote in his 1974 report on the pension fund [pdf].

Among those Weinberg was trying to influence that day were two powerful Democrats: then-House Speaker Joseph Bevilacqua, who later resigned as chief justice of the R.I. Supreme Court because of his Mafia ties, and then-Gov. Philip Noel, who won a second term the following month.

(more…)