Magaziner wins RIPDA endorsement


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Seth MagazinerThe RI Progressive Democrats endorsed Seth Magaziner in the Democrat primary for general treasurer, the group said in a press release today.

“We trust that Seth will bring a progressive focus to the office of Treasurer,” the group said in a statement. “He has a strong commitment to the issues of workers’ rights, job security, livable wages, affordable banking services, and a relief from predatory lending practices. He wants to reopen negotiations on the pension mess and has a plan to bring Rhode Island investment dollars home for microloans to support small businesses and start-up companies. And he supports a more progressive tax system and other measures to address the growing issue of income inequality.”

Magaziner is a newcomer to Rhode Island politics and he’s worked for Trillium, a socially-responsible investment firm in Boston. He’s vying in the primary against Frank Caprio, the former state treasurer.

RIPDA said of Caprio “we believe that Rhode Island needs new faces and a fresh vision.”

You can read their full statement here.

New Seth Magaziner TV characters are Caprio-esque


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insider politicsOn the day his opponent’s brother is resigning amid scandal as chair of the state Democratic Party, general treasurer candidate Seth Magaziner comes out swinging against the status quo with his second TV ad of the campaign.

“Seth introduces ‘Insider Politics’ and ‘Mismanagement’, two consummate practitioners of the old politics that is ruining Rhode Island,” said campaign manager Evan England in an email. Here they are:

England didn’t exactly answer when I asked him if “Insider Politics” and “Mismanagement” were meant to be represent his primary opponent Frank Caprio.

“The characters represent the old politics that have brought Rhode Island the highest unemployment in the country,” England wrote. “Seth’s frustration with insider politics and mismanagement – a position many Rhode Islanders share – has been a consistent theme of his campaign.”

The commercials will be airing on TV as Rhode Islanders learn more about Frank’s brother David Caprio resigning as chairman of the state Democratic Party after an NBC10 Parker Gavigan scoop. Gavigan reported that David Caprio assumed the contracts for three state beach concession stands after the winning bidder, Cranston Rep. Peter Palumbo, dropped out and went to work for Caprio. The state police are investigating, reported Gavigan.

In the email from the Magaziner camp, England writes, “It’s time to kick ‘Insider Politics’ and ‘Mismanagement’ out and elect new leaders who will give Rhode Island a fresh start at creating jobs.”

Frank Caprio runs for redemption, just found a political party


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Turns out I was right when I said there’s only one true Democrat running for General Treasurer.

Recently, I angered some people by declaring in RI Future and Progressive Charlestown that, among the three contenders for the Democratic Party’s endorsement for General Treasurer, only one – Seth Magaziner – was really and truly a Democrat.

Frank Caprio tweet
In 2012, Caprio rooted for Mitt Romney to beat President Obama

declared the other two – Frank Caprio and Ernie Almonte – to be impostors who, at best, deserved to be called DINOs (“Democrats in Name Only).

I noted that both men failed the state by taking no effective action to stop the state public pension crisis before it reached the critical point. Both men – Caprio as General Treasurer and Almonte as Auditor General – not only could have acted, but had the duty to do so.

I also catalogued the words and deeds of Caprio and Almonte that betrayed core Democratic principles and, in some instances, were dishonorable.

More than a few people criticized me for being too harsh. But, as events have shown, I was right.

On June 22, for no good reason, the Democratic State Convention party regulars voted overwhelmingly to follow instructions and endorse Frank Caprio.

The Convention majority seemed ready to overlook his terrible 2010 campaign, capped by Caprio telling President Barack Obama to “take his endorsement and shove it.”

As his tweet shows, Caprio remained angry at the President two years later, and seemed to want President Obama to lose his 2012 bid for re-election. I wonder if Caprio voted for Romney instead of the President.

There was willingness to ignore Caprio’s 2012 disaffiliation from the party and long delay in deciding to run for redemption as a Democrat. Those delegates seemed ready to ignore just about everything other than the orders they received from the Party leadership.

Caprio himself admitted during his acceptance speech at the convention that he did indeed screw up royally in the 2010 election and promised not to let the Party down again. It was all about him and his quest for validation. All very nice if being a bad campaigner was Caprio’s only offense.

But, as the days went by, we learned that not only did Caprio actively consider running as a Republican in 2010 before finally deciding to run as a conservative Democrat, but that he did it again in 2014!

He actually met with Republican Party leadership to discuss running on the Republican ticket in 2014 as well. Only later, months after declaring his intention to run, he re-affiliated as a Democrat and publicly said he was running as a Democrat. This was after his brother David became the pick to become new state Democratic Chair, providing Frank Caprio with a path of least resistance and the inside track to the perception of institutional forgiveness.

What kind of Democrat does this? And what kind of Democrats can ignore all these facts and back a guy like Frank Caprio for such an important job as general treasurer.

Ernie Almonte, erstwhile Democratic contender for general treasurer, isn’t any better than Caprio.

I called out Almonte for his failure to sound the alarm on the state pension system when he was Auditor General and I noted the terrible things Almonte said in 2012 right after he declared his intention to run for Governor in 2014. He was caught on video parroting Mitt Romney’s anti-working people screed and calling for broad cuts in Social Security and Medicare while preserving tax breaks for the rich.

It turns out that Ernie Almonte was also being approached by the Republican Party to run on their ticket for General Treasurer in 2014 while he was campaigning for the Party’s endorsement.

GOP State Chair Mark Smiley said the party even went so far as to hold a slot for Almonte right up until the declaration deadline for candidates. He said that the Republicans were a much better fit for Almonte. This may be the first time Smiley and I are agreed on a political question.

When declaration day came, Almonte filed his declaration as neither a Republican nor a Democrat and will instead run as an independent.

There is no candidate officially representing the GOP, but I think either Caprio or Almonte still fits that bill. Indeed, Almonte attended the GOP state committee meeting and, while not formally endorsed, Chairman Mark Smiley has said that Almonte is their candidate in the race and has the backing of GOP party leadership.

Almonte has already won the approval of famed Tea Party Republican Representative Doreen Costa.

If Caprio does manage to convince Democrat voters in the September primary to pick him over the true Democrat Seth Magaziner, that would set up a November battle between him and “independent” Republican-except-in-name Ernie Almonte that could look alarmingly like 2010.

Actually, a Caprio-Almonte battle in November could be even worse because then we would have two candidates who are all about ambition and their own reinvented identities, devoid of real ideas or principles, but all about denying their pasts and painting themselves as “nice guys” who understand and care about working families, all evidence to the contrary.

But there’s an alternative, and that’s Seth Magaziner.

Here’s a short list of reasons why Seth is the clear choice:

  • Life-long Democrat
  • Backing of state and national democrats such as Bill Clinton, Deval Patrick, Patrick Kennedy, Liz Roberts, TEN democratic city and town committees, the majority of labor unions to endorse thus far, RI-NOW…
  • Activist investor who has proven he can beat the market while also standing up to big-banks to lower fees and fight predatory financial practices like systemic foreclosure.
  • Only candidate in the race to have testified at the state and federal level about the dangers of predatory financial services such as payday lending and pawn shop check cashing.

There’s plenty of time between now and primary day in September for Democrats to come to their senses.

Caprio: Ratings agencies hands weren’t clean in 38 Studios deal


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Frank_CaprioFormer Treasurer (and current candidate for Treasurer) Frank Caprio reached out to me concerning my stories about the deceptive ratings practices of the ratings agencies.

According to Caprio, the ratings agencies hands weren’t clean in the 38 Studios deal because they did in fact overrate the bonds. Furthermore, Caprio asserts that if he is re-elected as Treasurer, that he will dig into the ratings agencies.

As Ian Donnis reported in August 2010, Caprio visibly fought to prevent the 38 Studios deal from happening by going directly to the ratings agencies and investors. Unfortunately, his efforts were circumvented by the EDC, who had the discretionary power to issue the bonds. Some people have criticized Caprio for his initial support for 38 Studios and then changing his stance in opposition of the deal. In my opinion, it was courageous for Caprio to change his mind and he demonstrated leadership qualities by standing up for the taxpayers of Rhode Island.

To take action, Caprio said he would follow similar steps that he took in 2009 regarding the mismanagement scandal at the Central Landfill. Although he didn’t have an official oversight role as Treasurer, he pressured the State to take action. The result was that the right outside experts and attorneys were hired and without even having to file a lawsuit, his work led to a recovery against the Central Landfill board’s directors liability insurance of its policy limit of $5 million dollars.

Concerning the misdeeds by the ratings agencies, Caprio believes RI can look to the actions taken by the Obama administration and states such as CT and CA in seeing which law firms could be possible partners to work with RI against the ratings agencies.

Caprio also claims that the State can save substantial money by not voluntarily repaying the 38 Studios bonds. Instead, the State needs to call the bond insurer (Assured Guaranty) and the bond holders (large institutional investors) to the negotiating table to negotiate a settlement.  He thinks that under the threat of non-payment by the State the insurer (who faces an $80 million dollar payout) and the bondholders would entertain the following:

  1. Since the bondholders have received over $20 million in payments already and the fact they can agree to a waiver of default per the bonds, the state should get the waiver (holders of 50 percent of aggregate principal of bonds have to agree – which is USAA and Transamerica) and start a deliberate negotiation.  Caprio says, “I believe the bondholders will see it in their interest to take a haircut on future payments. The institutional holders of these bonds don’t want the national attention on this minimal investment they have in their multi-billion dollar portfolios.”
  2. The bond insurer should then be asked to be part of the solution with paying the new negotiated reduced amount to the bondholders and in return include them as leading the civil lawsuit currently being litigated against First Southwest, Wells Fargo, executives of EDC, etc. The bond insurer will then be in position to recover any payments it makes as part of this process.

All along this process the rating agencies will be briefed and updated by the State and it’s leaders. No default will happen since we will get time to negotiate per the waiver of default process allowed in the 38 Studio bonds (see page B-46: Waivers of Events of Default).

“I believe the State taxpayers will be relieved of having to make payments now for this failed deal. Remember that the RI taxpayers are not legally obligated to pay this bill per the bond nor by state law,” maintains Caprio.

Caprio has been outspoken on this issue for a while now. Last June, GoLocalProv reported:

Caprio says state, not Wall Street, has leverage

At a minimum, before making a decision on payment, Caprio said the state [needs to] convene a meeting of interested parties—including the bondholders and the insurer on the bonds—to attempt to negotiate a deal using the fact that it is not legally obligated to pay as leverage.

“I’m not going to lead the fight to defend multi-billion [dollar] insurance companies who are sophisticated investors to make sure they are made whole,” Caprio said, adding that the burden of paying back the bonds would fall on the average Rhode Island taxpayer. “If this money was coming out of every legislator’s personal pocket, would they be so quick to pay on debt which they have no legal obligation to pay?”

It seems to me that Caprio has a thorough understanding of the complexities of this issue and I commend him for that. I’ve been frustrated with a lot of other candidates and pundits who have simply been using Wall Street’s own talking points to bully Rhode Islander’s into thinking they have a bogus “moral obligation” to the 1%.

In my next feature, I’ll post candidate for Treasurer Seth Magaziner’s thoughts on how to deal with the ratings agencies.

Ratings agencies lose appeal but will RI stand up to them?


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This is a quick update to a couple of stories I’ve written about how ratings agencies should be held liable for their deceptive ratings practices. You can read them here and here.

An appeals court just rejected the ratings agencies claims that the opinions they expressed in a case involving the CA pension system were protected by free speech.

Kudos to Frank Caprio, who said that he asked the ratings agencies not to rate the 38 Studios bonds in order to stop the deal in 2010, for being vocal on this issue.

The question still remains – when will Rhode Island stand up to the ratings agencies? When will AG Kilmartin join the federal government and other states in suing the ratings agencies?

image courtesy of Rolling Stone
image courtesy of Rolling Stone

Caprio’s road back to office reasonably hazardous


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Frank_CaprioFrank Caprio is beginning what will be his second act in Rhode Island politics. It’s actually a reasonably admirable move; after a stinging defeat in the race for governor, Caprio readjusted his sights and aimed lower. In a political world which seems to be completely about climbing the ladder of positions, Caprio’s decision to stay level is an intriguing one.

RIPR’s Ian Donnis suggests that Caprio could be buoyed by a forgiving Rhode Island that’s for second chances. I don’t think this is particularly unique to Rhode Island; we don’t have to look very far to find examples of second chances. Former South Carolina governor Mark Sanford recently found his way into the U.S. House of Representatives despite resigning his previous office in disgrace. Louisiana senator David Vitter frequented prostitutes and not only stayed in his seat, but won reelection. And Abraham Lincoln and Richard Nixon both lost races before winning the presidency. Second acts tend to be the nature of most democratic systems.

Caprio shouldn’t depend on forgiveness. “Shove it” is one of a few liabilities. His disaffiliation from the Democratic Party last November, combined with a quick tweet insulting President Obama, demonstrates he has a massive problem with the Democratic Party. Beyond that, he also met with the Republican National Committee during 2010. If he rejoins the Democratic Party to contest the position of treasurer then it’ll be clear he’s doing it solely for the electoral boon being a Democrat adds in Rhode Island. Frank Caprio was a terrible Democrat. Apologizing for “shove it” won’t change that.

Should he pursue office as a Democrat, it might be wise if he stayed away from WPRO’s John DePetro. It’s unlikely his support collapsed among WPRO listeners following “shove it.” Where it seems more likely to have collapsed is among Democratic voters who were already weak on him to begin with and were dismayed to see him turn the Rhode Island Democratic Party into a national laughingstock while providing fodder for America’s conservatives. Should Caprio reaffiliate with the Democratic Party, any potential Democratic opponent has to point out what a piss-poor job Caprio has done in serving Democratic interests or even just being a Democrat.

The other issue hampering Caprio’s likelihood of retaking the treasurer’s office is that he has a record as a treasurer. In the years since he left, Gina Raimondo raised the twin issues of the pension crisis and then pension reform. The political reality is that pension reform has been extremely popular. And part of the pro-reform camp’s argument has been that successive politicians kicked the can down the road instead of dealing with the problem before Raimondo dealt with it. Caprio has the grave misfortune to be the last person caught kicking that can. Any potential opponent will skewer Caprio with that point.

It’ll take more than a forgiving electorate to overcome such hurdles; it’ll take a serious effort by Caprio and his allies to make theses issue irrelevant. Luckily for them, they have a year before election season takes off. That’s a lot of time to prepare counters to all of the above.

Before this was published, but after I finished writing it, it appears that the Caprio camp (or at least a former campaign employee) is piloting a strategy to deal with the Raimondo issue. It looks like they’ll talk about the hedge fund issue.

DePetro Courted CoWorker While Defending Christmas


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The first time WPRO’s John DePetro propositioned a co-worker who filed a sexual harassment suit against him was in a bus on the way to a rally to defend Christmas at the State House, according to an amended complaint filed today in Superior Court.

According to the complaint, the bus – like the Barrington vacation house that DePetro is said to have made unwanted sexual advances towards co-worker Dee DeQuattro – is owned by former state rep. David Caprio. Caprio could not be immediately reached for comment and did not return calls last week either.

According to the court filing:

In December of 2011, Mr. DePetro used a bus that he said was owned by his friend David Caprio, who was present on the bus, to transport listeners to a “Holiday Tree” religious protest at the Rhode Island State House. Mr. DePetro informed Plaintiff that he and his friend had “a lot of fun” on the bus, and that she and some of her girlfriends should join them on the bus some time. Plaintiff did not report the matter as she thought that her rebuff was sufficient.

DePetro had organized a rally at the State House to compel Gov. Chafee to stop using the term Holiday tree. He made national news on FOX for his assertion that calling it a holiday tree was an affront to those who believed in Christmas.

The amended complaint also contains new information about the alleged incident that took place at the house at 32 Lorraine St. in Barrington.

While discussing the house, DePetro casually stated that he and some friends have sexual parties at the house, as he had alluded to on prior occasions, and proceeded to put his hand on Plaintiff’s shoulder and pull her toward him. Plaintiff yelled at him to stop and pushed him back, whereupon DePetro attempted to pull her toward him again and was once more pushed back by Plaintiff, who became extremely upset and told him she just wanted to be brought back to work.

The complaint also says there was a witness at the house, identified as “John” with whom DePetro talked when he and DeQuattro were leaving the house.

The new complaint also adds a charge of defamation and slander because of statements he made to me that were published on this website.

According to the article, Mr. DePetro further falsely claimed that ‘There was never a mention of anything until she f—d up The Who story,'” according to the court filing. ”

“Plaintiff never went into a “tailspin” over her successful “Who” article, which was in fact approved by WPRO, and was certainly never in danger of being fired over it. Plaintiff furthermore had reported her problems with DePetro well before DePetro’s outlandish reaction to the “Who” article, as Defendants were aware.

According to company policy, Cumulus claims that it “strongly prohibits retaliation against any employee or applicant for reporting harassment.” Despite this policy, and despite DePetro’s acknowledgement and intentional disregard of this policy as stated in the RIFuture interview, and despite the fact that DePetro had engaged in obvious retaliatory slander of a co-worker which adversely affected her work environment, he was suspended for only two days.

The amended complaint also now names Lew Dickey, CEO of Cumulus, the parent company of WPRO, as a defendant.