gina raimondo

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 WPRI.com. 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.

Read the rest of this story »

• 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.

Read the rest of this story »


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)


Raimondo to lawmakers: Don’t skip $12.9M pension deposit

June 20th, 2013 at 5:34 pm by under Nesi's Notes, On the Main Site

Governor Chafee and Democratic legislative leaders have ignored Treasurer Gina Raimondo’s argument that they should make a $12.9 million payment into the state pension system as part of the 2013-14 state budget.

The House Finance Committee voted Tuesday to repeal a provision of state law that requires Rhode Island to put surplus tax revenue into the underfunded pension system for state employees and teachers. By repealing the law as part of the budget, taxpayers can put $12.9 million less toward pensions next year alone.

In a Feb. 6 letter to House Finance Chairman Helio Melo, Raimondo said she opposed ending the requirement that surplus tax revenue goes to the pension fund “because providing retirement security is a top priority for me.” Raimondo’s office said Thursday her position on the issue hasn’t changed.

(more…)


Bloomberg backs Raimondo in ’14, criticizes Chafee on K-12

June 17th, 2013 at 3:43 pm by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – New York City Mayor Michael Bloomberg is swinging his support behind Treasurer Gina Raimondo as she prepares to run for governor, three years after the big-city billionaire backed incumbent Gov. Lincoln Chafee.

Bloomberg will host a fundraiser for Raimondo this Thursday at 5:30 p.m. at his townhouse in Manhattan, aides to both politicians confirmed Monday in response to inquiries from WPRI.com. The treasurer will travel to New York on Wednesday and return Thursday night.

“Gina is one of the most impressive public officials in America today in the mayor’s opinion,” Howard Wolfson, a senior counsel to Bloomberg and deputy mayor, told WPRI.com. “She has done a phenomenal job and she will do an even better job as governor.”

“We have followed her performance from New York, especially around the issue of pension reform,” he said. “She is a serious, committed, policy-driven public official. You only have to meet her once to know how impressive she is. He really thinks she’s a superstar.”

In a statement to WPRI.com, Raimondo said: “As I’ve said many times, I am seriously considering running for governor and will make that decision this year. I am humbled by the support of Mayor Bloomberg and by everyone here in Rhode Island that has been encouraging me to run.”

Raimondo had $1.7 million in her campaign war chest as of March 31, far more than any other Rhode Island politician. “We need the resources to run a great campaign and this fundraiser hosted by Mayor Bloomberg is a great help in the process,” she said.

The decision by Bloomberg, a three-term independent now in his final year as mayor, to harvest campaign cash for Raimondo is a blow to Governor Chafee, who was Bloomberg’s fellow independent until last month, when Chafee joined the Democratic Party with President Obama’s blessing.

Wolfson, who was a top strategist on Hillary Clinton’s 2008 presidential campaign, acknowledged Governor Chafee and the mayor haven’t always seen eye to eye.

“Look, I think there’s some things that the governor has done that we haven’t been pleased with, especially around the issue of education,” he said. “But in many respects this is really an affirmation of Gina Raimondo. We get opportunities to meet with public officials from all 50 states, and she really, really is in a class by herself.”

Bloomberg actively supported Chafee’s bid for governor, traveling to Rhode Island twice in the final months of the 2010 campaign to burnish the former U.S. senator’s credentials as a post-partisan and pragmatic candidate. “Like me, Linc has a strong commitment to being independent,” the mayor said at the time.

Chafee repaid the compliment, calling Bloomberg “a great man and a great leader,” and used his endorsement in a campaign TV ad. As governor he later traveled to New York to meet with “my fellow independent” Bloomberg and discuss the economy.

Now, however, Chafee is a Democrat – and he’s facing a potentially tough primary against Raimondo and Providence Mayor Angel Taveras next year to win the party’s nomination. Despite that, Chafee spokeswoman Christine Hunsinger brushed off Bloomberg’s decision.

“Obviously the treasurer believes that she has sufficient time to travel out of state and raise money,” Hunsinger told WPRI.com. “The governor, however, is focused on things that matter to Rhode Islanders and doing the business of being governor.” She noted that the revised state budget is set to be unveiled Tuesday.

Asked whether Chafee is disappointed that Bloomberg is helping his rival, Hunsinger replied: “He’s not playing politics right now. He’s focused on doing the work of the people.”

Taveras, too, can claim a Bloomberg connection.

In March, Providence beat out 304 other cities to win a $5 million grand-prize awarded by Bloomberg’s foundation for the most innovative municipal policy ideas, with a plan to record low-income children’s conversations and use the data to boost their vocabularies. Taveras traveled to New York to receive the award and appeared on “CBS This Morning” with Bloomberg to discuss Providence’s big win.

Taveras has “come up with something that … addresses one of the fundamental problems: too many of our kids are coming from families where they don’t have exposure to broad vocabularies, to literature, and that’s going to hurt them all their lives unless you do something about it,” Bloomberg said on CBS.

“And rather than ring his hands and say, ‘Yes, this is a big problem,’ he and his staff have come up with an innovative idea which we think will work, which is also transferrable to other places,” Bloomberg said. “That was one of the requirements to win the challenge – he had to have a great idea but it also had to be applicable elsewhere.”

Bloomberg donated $1,000 last fall to two candidates for General Assembly: Sen. Donna Nesselbush, D-Pawtucket, and former Rep. Mary Ann Shallcross-Smith, who lost her comeback bid, according to R.I. Board of Elections filings. His daughter, Emma Bloomberg, donated $1,000 to Raimondo last August. Bloomberg also gave $160,500 to an outside education-reform group that spent on legislative races.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi


Audit finds state overpaid disabled retirees $559K

June 12th, 2013 at 1:02 pm by under Nesi's Notes

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – The organization that oversees the state’s pension system is considering seeking criminal or civil action against six disabled retirees that were overpaid $559,000 by the state, General Treasurer Gina Raimondo said Tuesday.

Read the rest of this story »


Education board votes to extend Deborah Gist’s contract

June 7th, 2013 at 5:02 am by under Nesi's Notes

By Dan McGowan

WARWICK, R.I. (WPRI) – It will be two more years for embattled R.I. Education Commissioner Deborah Gist.

The R.I. Board of Education voted Thursday to allow Gist to continue guiding the state’s public schools until 2015, a deal that will throw her square into the middle of a Democratic primary for governor next year that is expected to be contentious.

Read the rest of this story »


Analysis: Chafee scrambles 2014 race with Dem Party switch

May 29th, 2013 at 3:16 pm by under Nesi's Notes, On the Main Site

It’s nearly official: Lincoln Chafee will be a Democratic candidate for governor in 2014.

Chafee spokesman Christian Varieka told WPRI.com the governor will make his announcement at 10:30 a.m. Thursday at Warwick City Hall. (Yes, Varieka made the call on personal time.) The news – first broken hundreds of miles south of Rhode Island by Politico and The Washington Post – struck the state’s political class like a thunderbolt Wednesday, despite the fact that Chafee has long indicated he was open to the possibility and amid rising speculation the move was coming.

Ideologically speaking, the switch makes perfect sense: Chafee is more aligned with the national Democratic Party than many of its nominal officeholders in Rhode Island. Think about it: this is a governor elected with the support of the state’s teachers’ unions on a platform of raising taxes to fund social services who just signed a law legalizing same-sex marriage in the nation’s most Catholic state.

Politically, Chafee has been a Democrat in all but name for a long time now – in 2012 he not only co-chaired President Obama’s re-election campaign and spoke at the Democratic National Convention, he even endorsed Sheldon Whitehouse’s bid for the very U.S. Senate seat he took from Chafee in 2006.

Clearly, Chafee and his savvy chief of staff, former Patrick Kennedy aide George Zainyeh, decided the approval-challenged governor’s best bet for a second term was in the Democratic Party. (Indeed, Chafee’s 2011 decision to replace the more Republican-friendly Pat Rogers with Zainyeh now seems telling.) But what’s the path? And are they right? Here are a few initial thoughts.

(more…)


Contract length, politics, key issues in Gist renewal

May 23rd, 2013 at 5:51 am by under Nesi's Notes

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – R.I. Gov. Lincoln Chafee on Wednesday reaffirmed his support for Education Commissioner Deborah Gist, but stopped short of fully endorsing the school chief’s request for a three-year extension when her contract ends next month.

Read the rest of this story »


Upgraded site lets you dig into Raimondo’s pension data

May 22nd, 2013 at 11:21 pm by under Nesi's Notes, On the Main Site

They didn’t put out a press release, but Treasurer Gina Raimondo’s staff added more information about Rhode Island’s pension investments and expenses to the state government’s website on Wednesday.

The new Pension Investments site includes the portfolio’s investment returns over multiple time periods, its current asset allocation, its total hedge-fund fees in 2011-12 and the State Investment Commission’s monthly meeting reports, as well as an FAQ about expenses.

The information on hedge-fund fees will be closely scrutinized after Raimondo came under harsh criticism from a Forbes.com blogger for her decision to use the alternative investment vehicles. The data shows the pension fund spend $16 million on investment expenses in 2011-12, an amount that will presumably rise significantly this fiscal year because many of the hedge funds weren’t part of the portfolio for all of 2011-12, limiting fees.

In 2011-12, the costliest hedge funds were Och-Ziff Capital Management Group’s OZ Domestic Fund II LP, which got $1.9 million in fees, and the D.E. Shaw Group’s D.E. Shaw Composite International Fund, which got $1.81 million. All of the pension fund’s initial commitments to 20 hedge funds totaled between $20 million and $75 million, with the two largest commitments going to OZ Domestic and Brevan Howard LP.

The hedge-fund portfolio earned a 9.36% return during the year ended April 30, beating its benchmark but trailing the entire pension fund’s 13.38% return over the same period, according to Treasury data compiled by Bank of New York Mellon, its custodial bank, and Cliffwater LLC, its hedge-fund advisor.

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


Analysis: Field of RI governor candidates coming into focus

May 21st, 2013 at 12:36 pm by under Nesi's Notes, On the Main Site

That escalated quickly.

The field of likely 2014 candidates for governor of Rhode Island has come sharply into focus over the last week thanks to three key announcements: Democrat Ernie Almonte’s switch to the treasurer’s race on Thursday, Republican Brendan Doherty’s decision to sit out the race on Friday, and Moderate Party founder Ken Block’s announcement this morning that he’s running again.

Almonte’s exit leaves Treasurer Gina Raimondo and Providence Mayor Angel Taveras as the two potential heavyweights in the Democratic primary, setting up a head-to-head clash between the two. Almonte’s absence could boost Raimondo, since both of them have reputations for pension truth-telling and fiscal responsibility, issues that appeal to moderates and conservatives; Taveras has a more wide-ranging portfolio.

That assumes, of course, both Raimondo and Taveras actually jump into the gubernatorial race. While the two Democrats are taking the steps necessary to mount campaigns, until there’s an official announcement the possibility remains that one of them won’t pull the trigger. Raimondo has $1.7 million already and her fundraising shows no sign of slowing, while Taveras has $560,779 and can tap the deep-pocketed network of former DSCC chief J.B. Poersch; a lengthy primary fight could be expensive and bruising.

(more…)


Ken Block to run for governor again in 2014

May 21st, 2013 at 10:34 am by under Nesi's Notes

By Tim White

PROVIDENCE, R.I. (WPRI) – Moderate Party founder Ken Block will once again be the face of his party’s 2014 gubernatorial run, according to a website that went live this morning.

Read the rest of this story »


A closer look at the Texas billionaire who backed EngageRI

May 20th, 2013 at 9:34 am by under Nesi's Notes, On the Main Site

laura_john_arnoldHouston hedge-fund billionaire and former Enron trader John Arnold has become a surprisingly famous figure in Rhode Island politics since it emerged that he donated more than $100,000 to Engage Rhode Island, the advocacy group that helped Gina Raimondo pass the pension law. Her opponents have seized on Arnold’s ties to high finance and the ill-fated energy firm to cast doubt on EngageRI’s motivations.

But Arnold’s actual story is actually more interesting than that, according to the summer issue of WSJ.Money magazine.

Arnold, 39, closed his hedge fund last year and retired to begin giving away his $2.8-billion fortune, mainly through the Laura and John Arnold Foundation he and his wife founded:

Arnold and his wife, Laura, have a somewhat unique approach to giving. Most billionaires tend to write checks to good causes they’re part of, hospitals where they were treated or universities they attended. … Or there are donors who make sizable gifts to meet an obvious need in a community, such as hunger or education. But at a time when charitable giving in the U.S. is still down from its peak in 2007, the Arnolds want to try something new and somewhat grander. John says the goal is to make “transformational” changes to society.

The Arnolds want to see if they can use their money to solve some of the country’s biggest problems through data analysis and science, with an unsentimental focus on results and an aversion to feel-good projects — the success of which can’t be quantified. No topic is too ambitious: Along with obesity, the Arnolds plan to dig into criminal justice and pension reform, among others.

(more…)


Doherty: No plans to run for RI governor in 2014

May 17th, 2013 at 12:53 pm by under Nesi's Notes

By Dan McGowan

PROVIDENCE, R.I. (WPRI) – Former State Police superintendent and congressional candidate Brendan Doherty on Friday said he has no plans to run for statewide office in 2014, likely clearing a path for Cranston Mayor Allan Fung to run unopposed in a Republican primary for governor next year.

“While I appreciate the outpouring of support and willingness of many to support me in a potential campaign for governor, after a long race for Congress and a longer career serving Rhode Island in the State Police, I am looking forward to spending time with my family, while continuing to make Rhode Island a better place through my work with charitable organizations, youth outreach, and other non-political endeavors,” Doherty said in prepared statement.

Doherty was handily defeated by incumbent Democratic Congressman David Cicilline last November after a contentious race that saw the Republican go from holding a double-digit lead in the polls to a 12-point loss on Election Night.

Despite the loss, Doherty posted a 45% favorability rating among Rhode Island voters, according to Public Policy Polling data released in January. The same poll showed the Republican trailing Democratic Treasurer Gina Raimondo by four percentage points and leading Providence Mayor Angel Taveras, another Democrat, by five percentage points in a hypothetical governor’s race. Every scenario polled showed Doherty in front of incumbent Independent Gov. Lincoln Chafee.

In his statement, Doherty said he plans to remain in the private sector as a consultant for the Asset Protection Group, a New Jersey-based security firm founded by David Kelly, a former Superintendent of the New Jersey State Police. The company has offices in Rhode Island and Connecticut.

Doherty’s decision to skip the race likely paves the way for Fung to avoid a costly Republican primary and focus on a general election race that will potentially include incumbent Chafee, Raimondo or Taveras and Moderate Party Chairman Ken Block.

Fung, who had $161,000 in his campaign account as March 31, has not officially announced his plans to run for governor, but the popular Cranston mayor has hired former Republican Party executive director Patrick Sweeney as a campaign consultant. He is expected to make a formal announcement later this year.

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


Almonte abandons gov campaign to run for RI treasurer

May 16th, 2013 at 8:42 am by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Former Auditor General Ernie Almonte announced Thursday that he’ll run for general treasurer in 2014, abandoning his long-shot bid for governor against Gina Raimondo and Angel Taveras.

Read the rest of this story »

• Related: Caprio calls ‘shove it’ remark ‘stupid,’ prepares comeback (May 14)


Caprio calls ‘shove it’ remark ‘stupid,’ prepares comeback

May 14th, 2013 at 5:57 pm by under Nesi's Notes

By Ted Nesi and Tim White

PROVIDENCE, R.I. (WPRI) - In his first TV interview since losing the 2010 governor’s race, former General Treasurer Frank Caprio told WPRI 12 he regrets his infamous comment that President Obama could take his endorsement and “shove it,” attributing the outburst to the frustrations of a losing campaign in its final weeks.

Read the rest of this story »

• Video: Watch the full Newsmakers with Frank Caprio (May 14)


EngageRI raised $900K in 2011 and 2012, tax returns show

May 13th, 2013 at 3:42 pm by under Nesi's Notes

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – Engage Rhode Island’s fundraising slowed significantly in 2012 compared with the prior year, when the advocacy group provided crucial support for the pension law pushed through by Treasurer Gina Raimondo, WPRI.com has confirmed. Its union opponents said they spent $80,000 in 2011.

Read the rest of this story »


Taveras invests 20% in hedge funds, more than Raimondo

May 8th, 2013 at 4:20 pm by under Nesi's Notes, On the Main Site

raimondo_taveras_common_cause_2011It turns out that the Democratic gubernatorial hopeful who has the biggest chunk of pension money invested in hedge funds isn’t Treasurer Gina Raimondo – it’s Providence Mayor Angel Taveras.

Providence has invested 19.75% of its total pension assets in hedge funds, the Taveras administration disclosed Tuesday after WPRI.com requested a breakdown of its investment portfolio.

Rhode Island’s state pension system has invested somewhat less in hedge funds – 14.6% of assets as of April – under a new investment strategy implemented by Treasurer Gina Raimondo soon after she took office in 2011.

Providence’s Board of Investment Commissioners, which is chaired by the mayor and oversees the city’s pension portfolio, started investing in hedge funds on the advice of its longtime financial consultant, Boston-based Wainwright Investment Counsel, Taveras spokesman David Ortiz told WPRI.com. The investment board meets roughly once a month.

(more…)


RI pension fund earns 9.8% return, but lags its peers

May 7th, 2013 at 4:52 pm by under Nesi's Notes, On the Main Site

The investment performance of Rhode Island’s pension fund is lagging behind its peers under the new mix of assets adopted by Treasurer Gina Raimondo and the State Investment Commission that relies more heavily on hedge funds, data released Tuesday suggests.

Rhode Island’s $7.7 billion pension fund earned 9.81% during the 12 months ended March 31, according to Bank of New York Mellon Corp., its custodial bank. By comparison, the median public-sector plan with assets of at least $5 billion earned 10.5% over the same period, Wilshire Associates Inc. reported Tuesday.

Raimondo has acknowledged her new investment strategy, approved unanimously by the investment commission in 2011, could reduce the state’s investment return somewhat, but argues it will benefit the state in the long run by reducing risk and volatility.

“The improvements made by the State Investment Commission to the investment portfolio were designed to deliver strong, long-term returns, while reducing risk to provide a secure retirement for public employees and retirees,” Raimondo spokeswoman Joy Fox told WPRI.com. “The SIC’s strategies should be evaluated against long-term returns, not against any particular immediate snapshot.”

Rhode Island’s pension investments also grew more slowly over the three years and five years ended March 31 compared with the median plan of at least $5 billion, according to Wilshire and BNY Mellon. However, Rhode Island’s return over the 10-year period ended March 31 was 8.78%, better than the median plan’s 8.59%. Rhode Island’s plan also beat the internal benchmark it uses for comparison purposes:

Pension_returns_3-31-2013

The median plan’s performance published by Santa Monica-based Wilshire comes from its Wilshire Trust Universe Comparison Service, which tracks more than 1,700 public and private investment plans that control more than $3.4 trillion in assets. A Wilshire spokeswoman declined to disclose how many of those are public plans with at least $5 billion worth of assets.

• Related: Raimondo puts 14% in hedge funds, 10 times US median (April 29)


Watch: RI politics Q&A on Eyewitness News This Morning

May 7th, 2013 at 9:23 am by under Nesi's Notes, On the Main Site


Raimondo’s war chest hits $1.7M; Taveras tops $500K

May 1st, 2013 at 10:35 am by under Nesi's Notes

By Ted Nesi and Tim White

PROVIDENCE, R.I. (WPRI) – Treasurer Gina Raimondo continued to raise campaign cash at a rip-roaring pace during the first three months of 2013, far outpacing the other leading candidates for the state’s top job.

Read the rest of this story »


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.

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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.”

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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.

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