john arnold – RI Future

July 6, 2016July 13, 2016

Meet RIRTA, the folks at the forefront of advocating for pension solvency and security

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The following is sponsored content published in collaboration with the Rhode Island Retired Teachers Association.

Are you an Employees Retirement System of Rhode Island (ERSRI) pensioner, someone who is paying into the pension, or do you know someone who is either of these? We wanted to introduce you to some of the people who are at the forefront of advocating for the solvency and security of the fund.

The Rhode Island Retired Teachers Association (RIRTA), a retiree advocacy group and not a union, founded in 1954, was created to advocate for the needs and well-being of former educators. But through a chain of events deceptively called “pension reform” by a venture capitalist-turned-General Treasurer named Gina Raimondo, they have ended up becoming something much more than this.

Over the last few years, they have been working alongside Edward Siedle’s Benchmark Financial Services and a few other key groups in the state to see what exactly is going on with the pension and specifically the pension fund. The results have been impressive, to say the least.

When Raimondo took over the Treasury, that was in reality a major achievement for one of her rich campaign benefactors, a former Enron trader named Jon Arnold. Apparently Arnold has serious complaints about the social contract that emerged from the New Deal, including the idea of him being taxed to finance public pensions. So, Arnold has invested big money into a cunning and deceptive bipartisan campaign that first engineered a false narrative of a nationwide “pension crisis” and then put into office politicians, including Raimondo, who would “reform” the various systems by investing them in high-risk, high-fee hedge funds to help out friends of Raimondo and Arnold. In other words, the pension is being raided by Wall Street, pure and simple.

But some people just refuse to tolerate such things and resistance comes from the most surprising places.

“It is like living in limbo and the future is scary,” says one member. Another says, “There are over 20,000 of us suffering our own recession.”

Perhaps these are words that describe your own situation as a retiree. Or perhaps it describes your fears for your own future or that of someone you care about. Either way, the folks at RIRTA are smart enough to know there is a problem and are working hard to advance and protect the solvency and secure the pension fund.

They have been financing a series of forensic audits by Benchmark that name the names and tell the truth about who is winning and losing on the pension. They have also amended their membership rules to include Associate member, a retired person who is receiving a pension from ERSRI fund. This means that those people you have been thinking about who put their money into the pension can now join up with one of the hardest-working groups in the state that wants to make sure the fund remains solvent and secure.

Click Here To Download Their Membership Enrollment Form!

And even if you are not involved with the fund, you still can donate to this group and help fund their efforts. Donations (checks preferred, made out to RIRTA- memo line LDF) can be mailed to PO Box 7631, Warwick, RI 02887 or sent via PayPal (see below).

We will be bringing you, in the coming weeks and months, a series of articles that explain to you both how the pension policies continue to impact people while also helping readers develop a better grasp of these concepts so that we all understand what it all means and what to expect from our elected leaders in maintaining the solvency and security of the fund.

If you like my reporting, please consider contributing to my Patreon!

January 22, 2016January 23, 2016

“Zero-emission” cars running on fracked gas

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In an editorial this week in the ProJo, Janet Coit and Marion Gold come to the rescue of embattled Governor Gina Raimondo. Janet Coit is Director of Rhode Island’s Department of Environmental Management and Marion Gold is Commissioner of the Rhode Island Office of Energy Resources. Both serve at the pleasure of the governor and whatever strengths, independence is not one of them.

Governor Raimondo has troubling connections to Wall Street going back to her days as Rhode Island treasurer. Here are just two of a recent flurry of publications questioning the pension fund reforms that she pushed through in those days:

One of Governor Raimondo’s key supporters is John Arnold, a former Enron trader who went on to found a profitable hedge fund.

The irony of the Coit-Gold ProJo editorial is that it’s based on Enron-style accounting, used in this case to hyper-inflate Governor Raimondo’s “visionary” contributions to the climate change battle.

In their editorial Coit and Gold mention that RI ranks number four on the State Energy Efficiency Scorecard put out by ACEEE. You do not have to know how this ranking is produced to understand that it is pure bunk. Just look at what the Energy Information Adminstration web site has to say about Rhode Island:

Natural gas fueled 95% of Rhode Island’s net electricity generation in 2014.
Rhode Island is the second-lowest emitter of carbon dioxide among all states. Like the lowest emitter, Vermont, Rhode Island does not have any coal-fired electricity generation.

Natural gas is mostly methane. It is a greenhouse gas that is about 100 times as potent as CO₂. Methane is burned and escapes unburnt to generate Rhode Island electricity, but we put all of those climate threatening emissions on our neighbors’ tabs.

There is more about the ACEEE rating of Rhode Island as fourth in the nation that is disconcerting. Scan the ACEEE web site and you quickly discover that they mention EPA’s Clean Power Plan again and again. There are some minor problems with this plan:

Obama’s “Clean Power Plan” is a huge gift to the methane (“Clean Energy”) industry — we’ll show you how in a minute. And guess who’s big in methane? Big oil, of course […]

The plan fits perfectly with Obama’s general practice of saying one thing and doing the opposite.

Director Coit is one of the members of the Energy Facility Siting Board that is currently deliberating the fate of the new fracked-gas power plant with the Orwellian name Clear River Energy Center, Invenergy’s plan to sacrifice Burrillville to unfettered greed.

Coit is publicly on record with her support of methane:

With her so-called pragmatism, doesn’t Director Coit not sound remarkably like House Speaker Mattiello?

In the Coit-Gold editorial there is not a word about Clear River, nor about the natural gas that already produces 95% of RI’s electrical power. There is no mention that Governor Gina Ms Wall Street Raimondo is on record supporting fracked gas. That silence must be “because there is a fire wall,” as Director Coit said in the preliminary hearing of the siting board last week. How convenient!

As the Clear River theater of the siting board progresses, we might hear about the CO₂ emissions the power plant will produce in Rhode Island. What we will not hear from the Governor and her allies on the board is to whom we will charge the fugitive methane. Most of that escapes at the wellheads in Pennsylvania and along the pipelines and from the compressor stations. Nor will we hear about the suffering it causes to the people on the frontlines in Burrillville and across the globe. None of that, but we’ll follow the statutes, because we are a nation of laws.

Indeed, all of the Enron-style accounting is perfectly legal, but, dear reader, you surely do not believe any more than I do, that Mother Nature is impressed.

There is yet another accounting trick buried in the Coit-Gold editorial: the Zero-Emission Vehicle Action Plan. True, we need electric cars and they have no tail pipes that emits CO₂. Still, the electric energy such cars use has to be generated somewhere. If it comes from renewables we win; if we generate it with fracked gas, we loose. The latter is of course exactly what will happen if we let Invenergy build the Clear River Energy Center.

We are constructing a 30 megawatt wind farm off Block Island and are talking about a frack-gas facility with 30 times that capacity in Burrillville. Accounting gimmicks devoid of physics may fool the people, the editor of the the ProJo and our hapless leaders, but none of that will change the laws of nature.

Update after the original post: Senator Sheldon Whitehouse from National Grid has finally made up his mind and now supports the Clear River Energy Center. He uses his same old arguments about choke points and price spikes. That was none of that last winter is but an irrelevant detail: As New England freezes, natural gas stays cheap.

April 13, 2015April 13, 2015

Pro PARCC post in Gist memo is propaganda piece

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In her recent field memo of April 3, 2015 Commissioner Gist took the unusual step of quoting an entire blog post.

“I’m a mom,” it begins. “And the happiness of my children, now and in the future as they go on to start careers and families of their own, is on my mind all the time.”

The post was written by a mother from Florida who is in support of the Common Core State Standards and the accompanying testing. She is also an attorney and president & CEO of the Multicultural Education Alliance.

The blog on which it appeared is put out by the Foundation for Excellence in Education, a Jeb Bush creation, which states on its website: “The 21st century economy is the most competitive in world history. It is an economy that requires a growing number of educated and skilled workers. Yet, on international assessments, American students rank 21st in science and 26th in math, behind their peers in countries like Singapore, Japan and Canada. We need to reverse this trend if America is to continue its dominant role.”

In other words, the goal of education is to provide a workforce with the skills to meet the needs of the global corporate economy and maintain America in a dominant world position. Does this goal resonate with most parents of preK-12 students?

The website for the EdFly blog has as its web address ExcelinEd.org. According to the 2014 donor page for ExcelinEd, those at the top of the donor list include (no surprises here):

Greater than $1,000,000:

Leona M. and Harry B. Helmsley Charitable Trust

Walton Family Foundation

Between $500,001 and $1,000,000:

Bill & Melinda Gates Foundation

GE Foundation

News Corporation

Charles & Helen Schwab Foundation

Between $250,0001 and $500,000:

Laura and John Arnold Foundation

Bloomberg Philanthropies

Between $100,001 and $250,000:

Eli & Edythe Broad Foundatio

Jeb Bush & Associates

It is no coincidence that Commissioner Gist herself as a Chief for Change, a group also created by Jeb Bush, would choose this particular blog post to send to all RI superintendents. That she has used her position of authority to single out this one blog post, which can reasonably be assumed to be propaganda for the position she has espoused since assuming the role of commissioner, is very unfortunate and does a disservice to the hundreds of RI parents and other concerned citizens who have researched the Common Core and PARCC testing in depth and decided they are not in the best interests of our children.

While it is true that many prominent civil rights groups, including the National Council of La Raza, do support the allegedly “rigorous” Common Core Standards and testing for accountability of students, teachers, and schools, one can only wonder whether the members of these groups have confronted the reality of the harm this agenda is actually having on traditionally under-served children and youth. It is understandable that those concerned about children of color, children from diverse ethnic and linguistic backgrounds, children with special learning needs, and children living in poverty, should be alarmed by the very real lack of advancement of many of these children in the public schools.

This is a complex issue and needs to be addressed comprehensively. The starving of financial resources to the schools that serve these children is one culprit. The steady diet of reading and math test prep for the past dozen years of NCLB is another. For an excellent and thorough explanation of why civil rights advocates should reject market-based (i.e. corporate pushed) reforms, please read “Why People of Color Must Reject Market- oriented Education Reforms: A Compilation of the Evidence” by United Opt Out National.

Commissioner Gist continues to defend her stance on the Common Core Standards and PARCC testing, and chooses not to truly listen to the voluminous concerns that have been raised by parents, teachers, and administrators both here in RI and across the country.

Even so, the Opt Out movement is growing. Parents who have become aware of the big picture of the ramifications of the full corporate agenda for public education in America will continue to stand up for their children and their children’s future by rejecting the scripted learning of the Common Core and the meaningless accountability of the PARCC testing that drain public funds and jeopardize children’s full flowering as unique members of a diverse society.

America does not need cohorts of test-takers to march into corporate slots for the sake of global competitiveness. America needs self-actualized adults with civic-mindedness and the knowledge and ingenuity to tackle the very real challenges we all face. The Common Core rhetoric of fostering critical thinking and problem-solving is Orwellian double-speak, not reality.

Hopefully the general public will wake up to this before it is too late. Will the Commissioner take the time from her double duties in RI and in Tulsa to respond?

February 22, 2014March 27, 2014

Why the pension settlement was a good deal for future taxpayers

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Future generations studying Rhode Island at the turn of the 21st Century will be embarrassed when they get to the part on pension politics.

Those were the days, they will note, when economic growth hit a bump in the road and some of the richest people in society launched a very expensive, targeted and secretive campaign to take from the people who work for the people.

Those future historians will see that the ultimate losers in this “landmark reform” were the only ones who played by the rules and paid their fair share. There’s just so much inherently wrong with that, and history never judges such circumstances kindly – even though they probably all seemed to be the best course of action in the present tense.

And, of course they will see a Wall Street millionaire who made her foray into politics to accomplish this taking. And they will see that she used a Wall Street billionaire’s dark money to do it. And they will see, in the short term at least, that the taking didn’t end up as savings but rather a transfer of wealth to other Wall Street millionaires and billionaires.

But those future historians studying Rhode Island will also see a society that tied itself in all sorts of logical knots to pull this off.

They will see that we calculated the costs of pensions much differently than any other public spending item. Imagine what the “unfunded liability” would be for even a single school or for corporate tax subsidies to CVS alone!

They will see that the same labor leaders who were fighting against pension cuts were also begging to repeal the tax cuts given to Rhode Island’s richest residents while pensions were being underfunded. They will see that as we were cutting pensions, we were also ensuring that Wall Street bondholders would always get paid before said pensioners.

And those future historians will see that the biggest newspaper and radio station in the state engaged in a borderline misinformation campaign through their wildly one-sided opinion and analysis of the situation.

And those future historians will see that a “haircut or a beheading” was a mantra in Rhode Island.

And to that end I am glad the state workers, public school teachers and retirees – who were so clearly treated like an oppressed class of people throughout the era of pension political football (even if they did manage to swing a decent deal for themselves back when everyone thought growth was infinite) -took back even just a small slice of their dignity when they state shied away from being taken to court for its “landmark pension reforms.”

To my mind, $230 million is small price to pay for Rhode Island’s reputation as a decent society. It means for the rest of history we get to answer, “Not us, we settled out of court instead” when asked: “Hey isn’t Rhode Island the state the ruthlessly screwed over its teachers and plow drivers like a bunch of fist-wagging Wall Street barbarians searching for public sector blood?”

October 16, 2013

Report: Pew, Arnold working together to slash pensions

A new report singles out Rhode Island for favoring pension cuts over eliminating tax expenditures. It also suggests John Arnold, the former Enron investor who largely bankrolled Engage RI, and the Pew Charitable Trust, the supposedly non-partisan organization the General Assembly and Gina Raimondo had explain pension math and actuarial science to elected officials and members of the public and press, are working together to convince governments to transfer wealth from pensioners to Wall Street.

David Sirota wrote a report for the liberal think tank Institute for America’s Future called “The Plot Against Pensions: The Pew-Arnold campaign to undermine America’s retirement security – and leave taxpayers with the bill.” You can also read his synopsis published earlier this week here.

“Pew’s Public Sector Retirement Systems Project and the Laura and John Arnold Foundation are working in tandem on public pension policy to manufacture the perception of crisis and press for cuts to guaranteed retirement income,” the report says. It largely echoes the perspective exposed by Matt Taibbi and Ted Seidle – that pension cuts were driven by Wall Street interests – Governing magazine offers a somewhat favorable analysis of the report.

Sirota also adds to the debate the allegation that Arnold and the Pew Center are working together. This is significant to Rhode Island because both Arnold and the Pew Center were central players in Rhode Island’s pension legislation. Arnold funded the Engage RI, a 501c4 that refused to name its donors and spent millions lobbying for pension cuts. The Pew Center was brought in by the General Assembly and Gina Raimondo in a non-partisan capacity to educate law makers and the public.

According to Sirota:

…at the same time one branch of Pew was rightly sounding this moderate non-ideological alarm to shore up retirement security, and Pew’s Economic Development Tax Incentives Project was warning of states’ wasteful tax subsidies, a more political branch of the organization was working in tandem with controversial Enron billionaire John Arnold to begin championing an ideologically driven plan to make the retirement problem far worse.

This Pew-Arnold partnership began informally in 2011 and 2012 when both organizations marshaled resources to try to set the stage for retirement benefit cuts in California, Florida, Rhode Island and Kansas. With legislative success in three of those four states, Pew and Arnold created a formal partnership in late 2012 that targeted another three states, Arizona, Kentucky and Montana. This formal partnership continues today, with the organizations issuing joint reports and conducting joint legislative briefings advocating cuts to guaranteed retirement income.

Sirota also alleges that pension cuts served a political interest beyond just pension politics. He writes that pension cuts are being offered up to distract emphasis from tax expenditures, or tax breaks generally given to powerful companies and other corporate interests.

The goals of the plot against pensions are both straightforward and deceptive. On the surface, the primary objective is to convert traditional defined-benefit pension funds that guarantee retirement income into riskier, costlier schemes that reduce benefits and income guarantees, and subject taxpayers and millions of workers’ retirement funds to Enron’s casino-style economics.

At the same time, waging a high-profile fight for such an objective also simultaneously helps achieve the conservative movement’s larger goal of protecting profligate corporate subsidies.

Perhaps the most famous illustration of the pervasiveness of this deceptive argument comes from Detroit, Michigan. When the city recently declared bankruptcy, much of the media and political narrative around the fiasco simply assumed that public pension liabilities are the problem. Few noted that both Detroit and the state of Michigan have for years been spending hundreds of millions of dollars on wasteful corporate subsidies.

But as outrageous as the blame-the-pensioners mythology from Detroit is, it is the same misleading mythology that is now driving public policy in states across America. In Rhode Island, the state government slashed guaranteed pension benefits while handing $75 million to a retired professional baseball player for his failed video game scheme.

The report contains a special section on Rhode Island, and how it ignored tax expenditures while focusing on pension cuts.

Though Rhode Island faces a $7 billion pension shortfall over 30 years, that’s nothing compared to what it gives away to corporations and the wealthy.

As The New York Times reports, the state spends $300 million in annual tax expenditures – or more than $9 billion over 30 years. Those include the infamous expenditure that gave Boston Red Sox pitcher Curt Schilling a whopping $75 million worth of taxpayer monies to finance his failed video game scheme.

Additionally, Rhode Island’s tax system is famously regressive, allowing the wealthiest 1 percent of its population to pay a tax rate half that of the poorest 20 percent. So the state clearly has plenty of ways to reform tax rates and end subsidies as a way to raise the revenue it owes to its public pension funds.

Here’s the New York Times article Sirota references that says Rhode Island gives away “$356 million per year on incentive programs.” This is more than most nearby states, I wrote when the Times piece was published. According to the Economic Progress Institute in Rhode Island, the state gave away $1.7 billion in tax expenditures in 2009. The state’s annual pension contribution has been slashed “from roughly $400 million to $242 million, according to Raimondo’s office,” WPRI reported this week.

August 5, 2013August 5, 2013

Hedge fund investment good, but for who?

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There is a difference between a thing having a good effect and a thing being a net good.

Take hedge funds, for example. They do produce a good outcome, in that they manage against investment risk. But that doesn’t mean that investing in hedge funds is a net good for the state’s pension fund. Mike Stanton’s Sunday blockbuster on Rhode Island’s hedge fund gamble points out that there are lots of competing goods going on here.

Hedge funds do manage investment risk, there’s no doubt about that. But this management strategy has required a massive divestment from our workforce and a transfer of that wealth to Wall Street.

Ted Seidle writes, “paying huge pension fees to Wall Street hasn’t hurt the Treasurer’s campaign fundraising efforts.”

It’s reasonable to assume hedge fund managers would be willing to underwrite pension reform if reform means they make tons of money on the deal. Billionaire hedge fund manager John Arnold underwrote pension reform in Rhode Island with massive donations to Engage RI and now he is investing in pension reform in California, Reuters reports.