gina raimondo

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 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, 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?


So there was no effort to discuss it?


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?


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 attack – read the Q&A (April 5)

Rhode Island’s political Twittersphere lit up late Thursday after 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:


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.


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 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

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

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.


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 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.


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.


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.


RI pension defense lawyer: Equity and fairness ‘doesn’t matter’

December 19th, 2012 at 6:58 pm by under Nesi's Notes, On the Main Site

Remapping Debate, a nonprofit startup news site, is out with a lengthy and skeptical article about the chances that Rhode Island – and, implicitly, Treasurer Gina Raimondo – will manage to convince the state’s judges to uphold last year’s pension law.

“We’re at an inflection point,” Paul Secunda, an associate professor at Marquette University Law School, told the website’s Mike Alberti. “We’re poised between these two possibilities: will the court uphold the contract model and find that public pensions are entitled to legal protections, or will they move back toward the gratuity model, where the legislature can change benefits on a whim?”

However, the most interesting and potentially inflammatory comments in the article may be the ones made by John Tarantino, the lawyer who is Rhode Island’s lead counsel in defense of the pension law:

When asked whether he believed it was reasonable for the workers, when they were hired, to expect and rely on the benefits that were outlined to them, however, Tarantino said, “Absolutely.”

And doesn’t that promise make the law different from other legislation that can be changed at any time?

“Listen, I take promises very seriously,” Tarantino said. “I’m a man of my word. But just because I make a promise to you, that doesn’t mean that we have a contract.”

But wouldn’t breaking that promise violate basic notions of equity and fairness?

“That stuff doesn’t matter,” Tarantino responded. “All I’m going to try to prove is that it’s legal. What’s legal isn’t necessarily fair.”

More broadly, Alberti’s article suggests that a lot may depend on whether judges agree with the General Assembly’s suggestion that Rhode Island is in such dire economic condition that paying out the pension benefits as promised is beyond what the government can pay while remaining solvent.

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

Tough morning for Gina Raimondo in the Projo

December 13th, 2012 at 10:39 am by under Nesi's Notes, On the Main Site

The Providence Journal ran two big stories above the fold Thursday that have to be causing Treasurer Gina Raimondo’s staff members some heartburn this morning.

The first is “Texas billionaire gave to advocacy group” by investigative reporter Mike Stanton, who adds more detail to The Wall Street Journal’s revelation and my follow-up post on Tuesday about the Texas billionaire tied to Engage Rhode Island.

The second is “Raimondo says travel part of treasurer’s job” by State House bureau chief Katherine Gregg, which reports Raimondo has spent 53 days out of state since taking office and suggests she’s being less transparent about her travels than her predecessor.

Also on the pension beat, today is a big day for the city of Providence – the police union will vote this afternoon on whether to accept the pension settlement with Mayor Taveras, a key test of his decision to negotiate a deal.

Texas Enron trader’s fortune helped fund Engage Rhode Island

December 11th, 2012 at 10:59 pm by under Nesi's Notes, On the Main Site

Some of the secrecy surrounding Engage Rhode Island has been pierced.

The deep-pocketed advocacy group, which provided crucial support to Treasurer Gina Raimondo last year in her push to pass the landmark state pension overhaul, received between $100,000 and $500,000 from a Houston billionaire who was a trader for the ill-fated energy company Enron, The Wall Street Journal revealed Tuesday night.

A spokesman for John Arnold, 38, and his wife, Laura, confirmed their donations to the paper. Arnold founded Centaurus Advisors LLC, a Houston-based hedge fund, with $8 million of his own money in 2002. He closed the fund earlier this year. Arnold’s net worth is estimated at $3 billion by Forbes magazine.

Reached late Tuesday night, EngageRI spokesman John Duffy declined to discuss the Arnold’s financial support. “We respect the privacy of our donors and we continue to do so,” he said. The group is organized as a 501(c)4 and is not required to disclose its donors.

Duffy said EngageRI has received almost $1 million since it was created in the summer of 2011, suggesting the Arnolds provided between one-tenth and half the money EngageRI has raised so far. The group has spent about $740,000 lobbying for the pension changes.

A review by shows the Arnolds also donated directly to Raimondo on May 18.


Raimondo to Cranston firefighters: I respect union contracts

December 10th, 2012 at 6:01 pm by under Nesi's Notes, On the Main Site

Hours before firefighters planned to picket her fundraiser, Treasurer Gina Raimondo reminded them that she opposed efforts last year by Governor Chafee, Providence Mayor Angel Taveras and others to pass legislation suspending pension cost-of-living adjustments in their contracts.

“I do think it’s important to point out I was a staunch advocate in support of protecting and respecting collectively bargained-for agreements for those firefighters, and I still stand by that,” Raimondo told WPRI 12′s Nicole Estaphan on Monday at the State House.

Raimondo also took the opportunity to defend “the long process” that led to the pension law, and suggested Chafee is going the wrong way by holding closed-door talks with union leaders to discuss a possible settlement to end their lawsuit against it.

“Before the General Assembly passed this historic legislation they had dozens of hours of hearings and give and take and a lot of back and forth and negotiation at the time that led to the final passage of the bill,” she said. “Having said that, at some point as part of this process if the courts asks the parties to sit down and mediate we will do that in good faith.”

“I don’t know if [lawmakers] have ever spent more time on any other piece of legislation,” Raimondo added. “They held a special session. They looked at every possible scenario. The labor leaders were present for every part of the discussion.”

• Related: Firefighters organizing pension protest at Raimondo fundraiser (Dec. 10)

Firefighters organizing pension protest at Raimondo fundraiser

December 10th, 2012 at 10:31 am by under Nesi's Notes, On the Main Site

• Update: Raimondo says she respects union pacts

Treasurer Gina Raimondo will have some uninvited guests at her fundraiser in Providence tonight.

Paul Valletta, president of the Cranston firefighters union, confirmed to WPRI 12′s Tim White that his members will be picketing outside a campaign fundraiser Raimondo is holding Monday night at Rick’s Roadhouse to coincide with the Patriots’ appearance on Monday Night Football.

“It’s just our way to say that we haven’t forgotten what the general treasurer did to many state workers, police officers, teachers and firefighters,” Valletta told White on Monday. “It hasn’t been forgotten that people’s lives have been changed negatively when they didn’t have to be.”

Valletta famously argued during last fall’s debate over the new pension law that Raimondo had “cooked the books” by getting the Retirement Board to change investment and actuarial forecasts in ways that worsened the pension fund’s finances. Raimondo said the new numbers were more accurate.

The R.I. State Association of Fire Fighters has asked all off-duty members to join the protest, writing in an email that it’s “very likely that she will be making a run for the governor’s seat next election.” Valletta said some police officers may show up, as well, but they don’t want to cause “a mess on the street.”

“One of the issues we are focusing on is the age issue: with the change to the pension you are going to have firefighters stay into their 60s and 70s to get a full pension,” he said.

Echoing an argument gaining steam of late, Valletta said Raimondo should have negotiated changes to the pension system at the bargaining table with organized labor rather than having state lawmakers approve the changes unilaterally.


Q&A: Bush vs. Gore lawyer Boies on the RI pension lawsuit

December 6th, 2012 at 8:21 pm by under Nesi's Notes, On the Main Site

Super-lawyer David Boies has been at the center of some of the biggest legal battles in recent American history, including ​Bush vs. Gore, U.S. vs. Microsoft and the fight about California’s Proposition 8 and gay marriage.

Now Treasurer Gina Raimondo has lured Boies to Rhode Island to join the legal team defending the state’s landmark pension overhaul; he’s even cut his fee from $1,250 an hour to just $50. The first major hearing before R.I. Superior Court Judge Sarah Taft-Carter is scheduled for Friday morning.

​Boies is chairman of the law firm Boies, Schiller and Flexner LLP. He sat down Thursday with to discuss the reason he took the case, how he views the legal arguments, and why he thinks liberal Democrats should support the pension law. The transcript has been lightly edited for clarity.

Let’s dive right in on the legal issues. Judge Taft-Carter says employees and retirees have an implied contract right to their promised pension benefits. You think she’s wrong.

Yes. I think there’s a difference between a statute and a contract. But obviously my view doesn’t control; I’m just an advocate for one particular party. What matters is what the courts ultimately decide. And so what we’ll be doing in the course of the proceeding is each side will have an opportunity to set forth their arguments for why this is or is not a contract.

Do you think it’s already too far gone at the Superior Court level because of Taft-Carter’s decision about the implied contract, and it will have to go to a higher court?


Harvard’s Feldman: ‘Disastrous move’ to toss RI pension law

December 6th, 2012 at 10:55 am by under Nesi's Notes, On the Main Site

The prominent Harvard Law School professor Noah Feldman is weighing in on the side of Treasurer Gina Raimondo and super-lawyer David Boies, urging Superior Court Judge Sarah Taft-Carter to uphold the constitutionality of last year’s landmark pension law.

“The Rhode Island courts should respect the law, restrain themselves, and make sure that their state continues to be seen as a leader in fiscal reform, not in judicial backlash,” Feldman wrote Thursday in a Bloomberg View column. It’s the second major national press the pension suit has gotten this week following Wednesday’s front-page New York Times story.

Feldman and Raimondo have nearly identical academic pedigrees: Harvard College, Rhodes Scholars at Oxford University, and Yale Law School. Raimondo’s office confirms the pair know each other from school, though Feldman was a year ahead of her.

Feldman’s legal reasoning, though, doesn’t rest on personal friendship. Instead he argues that Raimondo and her allies are correct that the state can cut pensions legally to serve the broader public interest:

Striking down reform would be a disastrous move — not only for budgets but also for constitutional governance itself. …

[T]he equation of benefits with inviolable contractual rights is too hasty, both legally and morally. As a legal matter, many public-pension plans are in fact created by statute, and it is well established that what a legislature may do by law, it may also undo. …

Even when benefits are created by contract, the states’ obligation to respect those contracts has long been interpreted to allow for them to be altered or even eliminated when public necessity demands it and the modification is deemed reasonable. The looming fiscal crisis in Rhode Island – and in many other states and cities – certainly satisfies the condition of necessity. …

In a pinch, the government may curtail some property rights to preserve the health of the whole system. No one ever likes it – and everyone, regardless of political preferences, makes the same conservative property argument against it.

Read Feldman’s full op-ed here. And speaking of pension arguments, to get a sense of what sort of deal the unions might try to drive in negotiations, read NEARI chief Bob Walsh’s comments from last year.

EngageRI, Raimondo, Fox criticize Chafee over pension talks

December 5th, 2012 at 2:38 pm by under Nesi's Notes, On the Main Site

Gina Raimondo is out of town, but her allies are still here to defend the pension law.

Engage Rhode Island, the deep-pocketed advocacy group that helped Raimondo pass the pension changes, issued a statement Wednesday afternoon criticizing Governor Chafee for talking with union leaders Tuesday about a potential settlement of their lawsuit challenging the law.

The unsigned statement said EngageRI is “concerned” by Chafee’s “apparent change of heart” on “a bill he signed into law just a year ago,” and is “saddened to hear of his desire to give away the retirement security of thousands of Rhode Islanders behind closed doors.”

EngageRI’s statement pushed back at the idea that unions weren’t given a chance to influence the process, and said it’s “unfortunate that Governor Chafee would want to subvert this open and public process by talking with union leadership behind closed doors.”

Raimondo released a statement shortly afterwards that, unlike EngageRI’s, only referenced the governor indirectly. “It is not the time for closed-door meetings. This is not a time for politics,” she said.

“If at some point the court asks the state to sit down to try and reach a settlement, we will do so in good faith,” Raimondo said. “In the meantime, Treasury will continue to work diligently to defend the important work done by the General Assembly.”

House Speaker Gordon Fox also weighed in against Chafee’s initiative. “It is not appropriate for me to negotiate legislation that was passed by the General Assembly and signed by the governor,” he said. “The time to negotiate was during the 30 hours of public hearings that were conducted by the legislature.”

In response, Chafee issued a statement of his own: “I have confidence in the state’s legal case. But a strong case does not guarantee a win.” The governor also said, “I have been disappointed that state leaders in a position to engage in reasonable discussions have chosen not to do so.”

Senate President M. Teresa Paiva Weed, the last of the four principals in the pension drama, opted to stay out of the fray on Wednesday. “She is going to decline comment at this point in time,” Senate spokesman Greg Pare told

Full statements from all parties after the jump.

• Related: Barro: RI came closer than most but didn’t fix pension problem (Dec. 4)

This post has been updated.


Raimondo to speak in Chicago, receive award in NYC tomorrow

December 4th, 2012 at 3:42 pm by under Nesi's Notes, On the Main Site

Treasurer Gina Raimondo is piling up frequent-flier miles this week.

On Wednesday morning, Raimondo will be the guest of honor at a breakfast event at the Union League Club of Chicago, a 133-year-old private membership club in the Windy City. The $25-a-person event, called “Making State Government Work Again,” is co-hosted by the Institute for Truth in Accounting. Here’s their preview:

Treasurer Raimondo has become a nationally-recognized leader in reforming state government, having been described by The Wall Street Journal as “The Democrat Who Took on the Unions.” Treasurer Raimondo will discuss how she persuaded the voting public, labor rank-and-file, and Rhode Island’s Democratic-controlled General Assembly to put state pensions back on sound financial footing.

A former venture capitalist, Treasurer Raimondo was a Rhodes Scholar at Oxford and has a bachelor’s degree from Harvard and a law degree from Yale. The mother of two children, she embarked on a political career after learning about the closing of local library branches and decided “enough was enough.”

(Organized labor in Rhode Island disputes that Raimondo persuaded them.)

Hours later, Raimondo is scheduled to be in New York City, where she’ll receive the Freda Johnson Award from the Northeast Women in Public Finance during The Bond Buyer’s Deal of the Year Awards, a black-tie affair at the Waldorf-Astoria Hotel on Park Avenue.

And on Monday Raimondo was in Washington, D.C., her office confirmed after requested an interview with her about the pension lawsuit. The last time Raimondo traveled to Chicago, it earned her a glowing editorial in the Chicago Tribune.

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

Tim White contributed to this report.

How the pension law’s automatic provisions mirror Obamacare

December 4th, 2012 at 1:25 pm by under Nesi's Notes, On the Main Site

A little-discussed part of last year’s landmark pension law was a section called the Rhode Island Pension Protection Act, which aimed to tackle the concerns highlighted by defined-benefit critics such as Josh Barro, and which won praise from Rhode Island AFL-CIO President George Nee.

The Pension Protection Act says the state Retirement Board or its actuary cannot “change actuarial methods for the sole purpose of achieving a more favorable funding or fiscal result” – as happened in 1990, when former House Speaker Joseph DeAngelis pressured the Retirement Board into raising its investment return forecast so lawmakers could balance the budget with a smaller pension contribution.

“Politics hasn’t been good for the pension fund,” Treasurer Raimondo said at a RIPEC forum in October 2011. “I can’t redo the past. I can make it better going forward. The bill we provide fundamentally restructures it. It puts self-correcting mechanisms into the plan.”

In an effort to prevent future lawmakers from allowing a funding gap to grow, the act says that if a pension plan’s funding level falls below 50.1% or declines for five years in a row the actuary must provide the Retirement Board with five to 10 options for getting it back on track. The General Assembly must choose one of them by June 30; if lawmakers don’t act, the default option will take effect automatically.


Barro: RI came closer than most but didn’t fix pension problem

December 4th, 2012 at 5:00 am by under Nesi's Notes, On the Main Site

There’s been a lot of pension triumphalism in Rhode Island since the overhaul of the state system masterminded by Treasurer Gina Raimondo was enacted by Governor Chafee and the General Assembly.

Josh Barro, a policy analyst at Bloomberg View, acknowledges that Rhode Island’s pension law is “the most aggressive reform of recent years.” But in a recent National Affairs article, he argues that even its “bold” changes “will not do enough to place the state’s pension system on sound financial footing.”

“Rhode Island still hasn’t been able to overcome the fundamental problems plaguing its pension system,” Barro writes, arguing that the Ocean State “came closer than any other state to success, and yet still couldn’t quite manage it.”

The heart of Barro’s critique is this: by keeping part of the pension plan as a defined benefit – a fixed annuity that’s paid regardless of actual investment returns – the new law still leaves taxpayers facing a significant risk if lawmakers don’t fund the system.

That critique would apply not only to Raimondo’s hybrid system but also to Providence Mayor Angel Taveras’s settlement, which keeps the traditional defined-benefit system in full and counts on future mayors and city councils to act responsibly if the city is to avoid another solvency crisis someday.