Back in 2011, a group of law-enforcement officials in Rhode Island announced a huge $500-million settlement with Google to end a probe into the illegal use of its advertising platform to sell prescription drugs. With the help of the Chafee administration and Rhode Island’s two U.S. senators, North Providence and East Providence were allowed to use $70 million from the settlement to shore up their public-safety pension plans.
Wired magazine’s Jake Pearson is out with a big feature called “Drugstore Cowboy” that tells the behind-the-scenes story of the federal sting that led to Rhode Island’s Google windfall. Here’s a sample:
On February 25, 2009, a then 34-year-old career con man named David Anthony Whitaker left the Wyatt Detention Facility in Central Falls, Rhode Island, and slid into the backseat of an unmarked government car. … This was merely standard procedure when transporting a government cooperator. …
He had been bringing in obscene amounts of money by selling black-market steroids and human growth hormone online. …
That life ended on March 19, 2008, when a Mexican immigration agent nabbed Whitaker and brought him back to LAX, where the Secret Service promptly arrested him. …
At one point during a meeting with Whitaker and his lawyer, the Feds asked him how he had grown his online enterprise. Whitaker’s answer was immediate: He had used Google AdWords. In fact, he claimed, Google employees had actively helped him advertise his business, even though he had made no attempt to hide its illegal nature. It was reasonable to assume, Whitaker said, that Google was helping other rogue Internet pharmacies too.
The Wall Street Journal’s headline says it all: “Google’s $500M Penalty A Windfall For Rhode Island.” A whopping $230 million is coming to law enforcement agencies in the state for their work on the Google advertising investigation.
The U.S. Attorney’s office says $60 million is going to the East Providence Police Department, $60 million is going to the North Providence Police Department and $45 million is going to the Rhode Island State Police.
“It’s far from clear what the money will be used for,” The Journal’s Bruce Landis reports, “partly because there’s so much of it and partly because officials haven’t had much time to think.”
Here’s an easy answer: Put the money into the police departments’ pension funds.
East Providence’s pension fund for police officers and firefighters has a $65 million funding shortfall – the Google money could nearly wipe that out. North Providence’s pension fund for police officers has a $9.4 million funding shortfall – just a small share of the Google money could close the gap.
As for the state police, not a penny has been saved to pay the pensions of troopers hired before 1987, and Treasurer Raimondo’s staff never figured out how much the state owes them. This would be a good time to find out, and then make a down payment.
The Journal says there are restrictions on how the money can be used. Well, I say this is worth some negotiations – because putting less pressure on the municipal budgets in East Providence and North Providence, and ensuring a secure retirement for police officers, seem like policies that would help law enforcement in both places.
PROVIDENCE, R.I. (WPRI) – Firefighters packed the Statehouse on Thursday as lawmakers heard nearly five hours of public testimony on the pension overhaul proposed by Gov. Lincoln Chafee and Treasurer Gina Raimondo and its impact on law enforcement.
Kevin Grace, president of the Rhode Island Troopers Association, warned passage of the bill would damage the culture of the state police, and suggested troopers might be forced to sue to stop it.
Union officials from local police and fire departments whose communities are part of the state-managed system said their pension plans should not be included in the overhaul at all because many of them are adequately funded, while the Rhode Island League of Cities and Towns disagreed and said they should be.
The probability of the pension fund’s diversified investment portfolio earning the new expected average return of 7.5% over the next decade is only 42% because of the weak economic outlook, said Allan Emkin, who advises Rhode Island’s State Investment Commission and other pension funds on asset management.
Joe Baxter, the state court administrator, said the judiciary would oppose changing the bill to suspend COLAs for judges hired before 1990, whose pensions are unfunded and paid for annually out of the regular state budget.
“Those judges should be treated like other judges, not like state employees and teachers,” he said.
The second day of public testimony kicked off at 11 a.m., and is under way now. Wednesday’s hearing lasted for 11 hours, but right there’s only three pages of witnesses signed up to testify; there were 13 pages of witnesses on Wednesday (though many were no-shows).
Today’s agenda includes special groups such as state troopers, judges, local police and firefighters, and correctional officers. As for coverage, same drill here as yesterday – I’ll keep updating my main WPRI.com story over the course of the day, and live coverage will happen over on my Twitter feed.
The Rhode Island Troopers Association kicked it off by saying Treasurer Raimondo didn’t contact them about their section of the proposed pension overhaul until a week after the bill was published earlier this month. They say there is confusion on their side and the treasurer’s about what the bill would actually do to troopers’ pensions.
PROVIDENCE, R.I. (WPRI) – Retired judges and state police officers’ cost-of-living adjustments won’t be suspended under the Raimondo-Chafee bill because most were never forced into the regular state pension system.
That was just one of many details about the legislation that emerged Monday when the House and Senate finance committees kicked off their joint hearings on the pension overhaul proposed by Gov. Lincoln Chafee and Treasurer Gina Raimondo, who testified at the hearing.
The legislation would reduce the state’s pension shortfall from $7.3 billion to $4.1 billion, and 77% of that reduction comes from a proposed suspension of cost-of-living adjustments, or COLAs. Without changes, pension contributions would use up nearly 10% of state revenue by 2015-16.
The “comprehensive, one-time pension reform” proposed in the bill would share the sacrifice and steady the state’s finances, Chafee told the assembled lawmakers. “I think we’ve done that,” he said.
“I believe if you pass this bill it will be the last time you are here dealing with pensions,” Raimondo said, adding that her office has run hundreds of stress tests to check its design.
Rhode Island taxpayers continue to pick up a much larger share of the cost of pensions for judges and state police officers than they do for the rest of the state work force or teachers.
All the employees contribute a similar portion of their wages to the state pension fund: 8.75% of pay for state workers, judges and troopers, and 9.5% of pay for teachers. But the additional contribution that taxpayers have to make on top of that to fully fund each pension varies widely.
New teachers have the least lucrative deal. The pension contributions they make are enough to cover 80% of the future of cost their pensions, according to state actuaries Gabriel Roeder Smith & Co. State employees’ contributions pay for nearly as much as their educator colleagues, covering at 77% of the future cost.
It’s a different story for state police and judges.
The pension contributions a newly hired trooper makes from his paycheck are enough to cover just 29% of the pension he will eventually receive, Gabriel Roeder Smith’s projections show, leaving taxpayers to shoulder more than two-thirds of the cost.
And judges’ pension contributions are enough to cover only 35% of the pensions they will get after retirement, according to the projections.
Like most reporters, I spend a lot of time looking into tips and claims made in my email inbox, on my voicemail and now in the blog’s comment section. As you’d expect, often these come to nothing, or turn out to be less than what they seem when you do some research. I’ve already got two examples of that so far today.
The first is on state police pensions – a commenter recently told me Governor Chafee was now letting state troopers count their training time toward their benefits, but it turns out that’s not what happened. You can read what I found here.
The second is on state Rep. Daniel Gordon. There were rumors floating around the Statehouse that the Portsmouth lawmaker had a gun permit issued by the Portsmouth Police Department, but Chief Lance Hebert told me this morning that’s false; the police department has never issued a weapons permit for Gordon.
And this, children, is why we report before we write.
(Speaking of Gordon, a colleague tells me there is now a sign hanging by the Bank Newport branch in Portsmouth, right in front of CVS/pharmacy, saying he has to go.)
PROVIDENCE, R.I. (WPRI) – Despite months of research into Rhode Island’s $7 billion pension funding shortfall, state leaders still have no idea how much has been promised to hundreds of judges and state police officers.
State police hired before 1987 and judges hired before 1990 have never been integrated into the normal state pension system, which means no money has been set aside for their benefits and actuaries have never estimated the unfunded liability for them, according to interviews with officials and documents reviewed by WPRI.com.
Treasurer Gina Raimondo admitted she’s concerned about the unknown costs of the older state police and judicial pensions. ”We’re looking at it,” she told WPRI.com. “Everyone’s being analyzed the same way.” Asked if the two groups will be affected by the legislation she and Gov. Lincoln Chafee propose next month, she said: “Possibly.”
Joe Newton of Gabriel Roeder Smith, the state’s actuary, has said the unique demographics of state police and judges makes them harder to analyze. But union officials and rank-and-file retirees have warned they will fight to ensure the two groups share in any reductions forced on retired teachers, janitors and others.
This afternoon, Governor Chafee is set to introduce U.S. Marshal for Rhode Island Steven O’Donnell as his pick to be the next commander of the Rhode Island State Police. O’Donnell, who was appointed U.S. Marshal by President Obama in 2009, held the state police’s top job briefly on an interim basis back in 2007.
So who is Steven O’Donnell? Nobody knows the world of Rhode Island law enforcement better than my colleague Tim White, so I asked him for a primer. Here’s Tim’s take. –TN.
When news of Col. Brendan Doherty’s decision to step down as superintendent of the Rhode Island State Police swept across the state Thursday afternoon, one name was on everyone’s lips as his most likely replacement: Steven O’Donnell.
And for good reason – as WPRI reported over the weekend, O’Donnell is Gov. Lincoln Chafee’s pick to lead Rhode Island’s storied law enforcement agency. (While the colonel of the state police is a gubernatorial appointment, his role as public safety commissioner requires legislative approval.)
This was an important decision for the newly elected independent governor. If Chafee had failed to land someone for the job with past experience as a trooper, the perception would have taken hold that Chafee was already losing support from inside the ranks of the state police.
The choice of O’Donnell – who wore the state police uniform for 22 years before being selected in 2009 as U.S. Marshal for Rhode Island – helps squash that potential problem. But those with direct knowledge of talks between O’Donnell and Chafee said there were a few things O’Donnell needed to hear from the governor before signing on the dotted line.
Most importantly – in the wake of last month’s well-publicized immigration scuffle between Doherty and Chafee – O’Donnell wanted to make it clear that though he serves at the pleasure of the governor, the agency will be his to direct as he sees fit. In other words, no micromanaging from Smith Hill.
O’Donnell left the state police in 2009 as lieutenant colonel – Doherty’s right-hand man. Prior to that, he held the title of major and directed the agency’s day-to-day operations from state police headquarters in Scituate. But O’Donnell cut his teeth during the six years he spent working undercover as a mob associate, blending into Rhode Island’s underworld as a bookmaker.
Before becoming a trooper, O’Donnell spent years as a corrections officer at the Adult Correctional Institution, which proved to be a solid training ground – it turned him into a living, breathing Rolodex of Rhode Island’s most notorious thugs. In fact, he once told me his ACI-honed ability to drop the names of people who served time saved him from being exposed as an undercover detective – the mob wiseguys figured he’d done hard time, and that was A-OK with them.
In contrast to Doherty – who, at well over 6 feet, towers over just about everyone – O’Donnell is probably 5 feet 8 inches on a good day. But he’s about as tough as they come.
O’Donnell’s undercover work came to an end the day the state police raided a well-known gambling joint on Federal Hill. O’Donnell, decked out in his best bookie garb, was forced to blow his cover when one of the club’s owners looked ready to tackle a trooper. In one fluid motion, O’Donnell grabbed the man and turned him upside down, pinning his shoulders to the ground.
O’Donnell said word got back to him that the crook had told everyone in prison that the guy who tackled him was “huge, like 6-foot-5 or something.” It surely must have felt that way when he smacked into the pavement.
In accepting the superintendent’s job, O’Donnell is taking a hit of his own: his take-home pay will drop by six-figures. Right now he collects a paycheck as U.S Marshal in addition to his state pension, which will be frozen once he becomes a state employee again.
For those who know him, though, it’s easy to understand why he’s taking the job. Despite his present federal affiliation, O’Donnell is, and always will be, a “statie.”
Rhode Island State Police Col. Brendan Doherty announced this afternoon that he is resigning effective April 1. Doherty’s resignation comes as a surprise, though it does follow an awkward showdown last week between him and Governor Chafee over Secure Communities.
My colleague Tim White just got off the phone with Doherty. Here are some highlights from their conversation – including the possibility that the Carcieri confidante will run against Senator Whitehouse next year:
Why now?
“I’ve been thinking about this for some time. There have been rumors that I will have a future in other capacities. I do have a future plan to stay engaged in public service.”
Are you planning to run for Senate against Sheldon Whitehouse next year?
“I’ll make the decisions as to what I’m going to do at a later date and then I will make an announcement at the appropriate time.”
You have devoted your life to law enforcement; this couldn’t have been an easy decision.
“I do this with a heavy heart – I love this department and I love the people of the state of Rhode Island. I’ll look after this department until the day I die.”
Did the governor ask you to step down?
“No, the governor did not ask me to step down. In fact I met with the governor for about an hour today. It was a cordial meeting.”
Any thoughts on a replacement?
“I am confident the governor values the tradition of the department and will keep it in the hands of someone who has been with the State Police.”
The R.I. Senate reconfirmed Doherty, who was appointed by Gov. Don Carcieri in 2007, to another term without objection just last week.
Tim reports the short list of potential replacements for Doherty includes U.S. Marshal for Rhode Island Steven O’Donnell, who was formerly a deputy superintendent of the state police. Tim has a call in to O’Donnell; we’ll update if we hear more.
The AP’s Michelle Smith reports Doherty’s successor could be announced as soon as today, citing Chafee spokesman Mike Trainor.
Update: Col. Doherty says he will make a decision by the end of May on his future plans, which could include a run for political office, Tim White reports from the colonel’s press conference in Scituate, where Doherty was decked out in a blue suit and a red tie.
Notably, Doherty declined to say whether he’s leaning toward running for the U.S. Senate against Whitehouse or – as some have been speculating – for the U.S. House against David Cicilline. Doherty is a Cumberland resident who lives in the 1st Congressional District.
Tim asked Doherty what his party affiliation is – Republican? Democrat? Moderate? – but the colonel demurred, saying he’d rather not talk about politics in the State Police Headquarters building.
Update #2: Governor Chafee told my colleague John Villella, our ace investigative photographer, that he’s sorry to see his first pick for state police leader head out the door.
“Colonel Doherty was a terrific public servant for many years for Rhode Island and I respect his decision,” Chafee said. He described the colonel’s departure as a “big loss,” and said it was a “great experience working with him over these short few weeks, and I know he’s going to do very well.”
May 16th, 2013 at 11:53 am by Ted Nesi under Nesi's Notes, On the Main Site
