The survey of the Rhode Island Retired Teachers’ Association was sent to 603 members and 247 members responded. This cohort was from age 58 to 96 and had 36 respondents living out of state.
6 questions were asked. We have eliminated question 2 and 3 as they were poorly worded.
Question 4 asked how they keep current with local and state news (Newspaper, Radio, Television)
Two remaining questions were:
Are you in favor of more open information from the RI State Treasurer about pension investments and fees? Yes or No
All 247 responded yes
Has the loss of the yearly COLA had a negative impact on your standard of living? Yes or No
230 responded yes
Is it important the RIRTA continue to investigate the RI Public Pension Fund for possible criminal mismanagement? Yes or No
Again, all 247 responded yes
Finally we asked “In a few sentences, please tell us how the new pension law (loss of COLA) has impacted your life.” Following are some of the comments:
Believed the COLA/pension was a guarantee-thought it would be wisely invested.
A sad ending (COLA loss) to a job I loved.
Rent goes up! Healthcare goes up! Check does not.
I am chipping at my savings to keep pace with rising taxes, insurance, goods, fees etc.
I have no hope that my pension alone (no COLA) will keep me financially viable.
Mentally for sure. Am I going to have enough money till the end? How long will I be able to stay in my house? All the same concerns I heard from my Mothers’ generation.
It is like living in Limbo and the future is scary.
I cannot be a consumer anymore. The bottom line is there is no expendable income to support out local businesses, charities and nothing for political contributions.
Have discussed with my wife the advantage of moving out of RI to a state that will not tax my pension.
I made my decision to retire based on the 3% COLA…..I don’t have the funds I thought I could count on.
The comfort level we anticipated for us through our elder years has been stolen from us.
There are over 20,000 of us suffering our own recession.
]]>One of the figures that appears in this whole fracas is a man familiar to those who have paid attention to the less-publicized elements of that political machine unto itself known as the Clintons, one Marvin Rosen. Ted Seidle wrote in his letter to the federal authorities the following:
As noted in my first report, when asked by the SEC in 2009, ERSRI admitted that Fenway Partners Capital Fund III paid an influential intermediary, Marvin Rosen, of Diamond Edge Capital Partners $262,500 related to this investment and paid the firm a total of approximately $1 million related to four private equity investments. Mr. Rosen was a Democratic fundraiser linked to former President Bill Clinton whose firm earned millions in New York pension fund deals in 2005 and 2006 when Alan Hevesi was state controller. Fenway and Mr. Rosen were also was involved in a pay-to-play controversy related to the New Mexico state pension.
To delve into the history of Mr. Rosen is to journey into the dark underbelly of the Democratic Party, a party that has been co-opted and compromised by Wall Street since the days of Bill Clinton’s gubernatorial campaigns, if not earlier. Since the mid-1980’s, a brand of “New Democrats” has used the once-progressive mantle of the party to justify the adoption of neoliberal policies that a Reagan or Bush would only dream of trying to foist on the American public, be it “the era of Big Government is over” hollowing out of Welfare and other social safety net programs or “Tough on Crime” minimum mandatory sentencing guidelines. This cuts to the core of your standard DINO (Democrat In Name Only), be it Bill and Hillary Clinton or Gina Raimondo.
When one writes about Marvin Rosen, they must be cautious because of his tendency to sue over bad press. As such, what follows is copy from sources that have previously withstood the Rosen wrath. The first comes from the book Kentucky Fried Pensions by Chris Tobe, who kindly shared his materials with us to complete these stories. Tobe has been covering a similar pension scheme in the Bluegrass State and says the following:
The most colorful placement agent firm, hands down, is a small operation called Diamond Edge Capital Partners LLC led by Marvin Rosen. Eileen Kotecki, who was Al Gore’s and John Edwards’ main Presidential fundraiser, worked there for a time. [i] Glen Sergeon, a Diamond Edge partner and a former trustee of the New York Teachers’ Retirement Fund, collected around $5 million from private equity firms and hedge funds doing business with the Kentucky Retirement Systems (KRS). Sergeon used the money to buy a lavish Fifth Avenue condo. [ii] Forbes reported that, in addition to Kentucky, Diamond Edge was involved in the New York pay for play scandal: “Diamond Edge Capital Partners is another firm that was paid–$6.8 million–by money managers for lining up work with New York. In 2008 Sergeon joined Diamond Edge, where he teamed up with Marvin Rosen, a company partner and the former Bill Clinton fundraiser who arranged Lincoln Bedroom sleepovers for big donors. Later that year Sergeon landed Diamond Edge its first business with Kentucky.” [iii] Rosen and another Diamond Edge partner, Marc Correra, are being sued for their role as placement agents in New Mexico. [iv] Marvin Rosen as late as 2013 has been disclosed as a placement agent in Rhode Island. Pro Football Hall of Famer Lynn Swann has also worked for Diamond Edge.
But the most colorful Diamond Edge partner was Kenneth Ira Starr, known as Hollywood’s Madoff. [v] Currently serving a seven-year prison term, Starr managed the money of celebrities like Al Pacino, Uma Thurman and Lauren Bacall. Starr engineered a $33 million Ponzi scheme to swindle his clients and to impress his much younger, ex-stripper wife, Diane Passage. [vi] He was featured on the CNBC television show “American Greed” which focused on his rip-off of Sylvester Stallone and his obsession with, and subsequent marriage to, a pole dancer. [vii]
[i] http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atwTqj6OjY7U How Pension Placement Agent Exploited Political Ties, Martin Braun & Gillian Wee: May 18, 2009
[ii] http://observer.com/2011/07/secret-agent-glen-sergeon-sells-in-the-village-buys-in-harlem/
[iii] http://www.forbes.com/forbes/2011/0523/features-pensions-glen-sergeon-auditors-secret-agent_3.html
[iv] http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atwTqj6OjY7U
[v] http://www.huffingtonpost.com/2011/03/03/ken-starr-hollywoods-mado_n_830918.html
[vi] http://www.huffingtonpost.com/2011/03/03/ken-starr-hollywoods-mado_n_830918.html
[vii] http://www.cnbc.com/id/45554694
Of course, this begs the question what exactly is a placement agent?
Investopedia defines the term as “An intermediary who raises capital for investment funds. A placement agent can range in size from a small one-person independent firm to a large division of a global investment bank. Professional placement agents are required to be registered with the securities regulatory agency in their jurisdiction, such as the U.S. Securities and Exchange Commission. A placement agent operating in the U.S. must be registered as a broker or dealer.” When I discussed this with Tobe, he explained it as a job that has almost totally ceased to exist in the post-Citizens United era, but before then a placement agent functioned as a middle-man for big capital.
But that is only scratching the surface of Rosen’s history. Jeffrey St. Clair and the late Alexander Cockburn of CounterPunch! also have covered Rosen in their multi-decade stories about the Clintons. Their story, titled Clinton and the Cuban Fixer, is an impressive read worth the time. They write:
Marvin Rosen cut his teeth in Democratic Party politics back in 1980 when he was the Florida coordinator of Sen. Ted Kennedy’s doomed effort to wrest the Democratic Party nomination from Jimmy Carter. Though Kennedy did badly, Rosen proved himself a whiz at beating the bushes for money. By 1984 he was the leading fundraiser for Fritz Mondale. In 1988 Rosen served as finance chairman of the Dukakis campaign and, during the cash-strapped days of Clinton’s 1992 bid, was personally solicited by Gov. Bill himself to raise money, and celebrated the inaugural victory in the company of the Clintons and the Gores. Seeking to capitalize on such a long investment in time and effort, Rosen opened a D.C. office for his law firm in 1993 and immediately hired Ron Brown’s son Michael to be his director of legislative affairs. He also recruited Ted Kennedy’s new wife, Victoria.
They go on to explore Rosen’s connections to the infamous Cuban exile community located around Miami and other parts of Florida. For those readers who are unfamiliar, this bunch has a rather checkered past, including hair-brained anti-Castro efforts that date back to the darker days of the Cold War along with a bevvy of good-old-fashioned corruption and pollution of the Florida Everglades.
Another Cockburn/St. Clair piece featuring Rosen, excerpted from their book Dime’s Worth of Difference: Beyond the Lesser of Two Evils and titled All for Oil, Oil for One, explains the connections between Rosen and major fossil fuel corporations that have been looking to drill for oil in the Arctic National Wildlife Refuge and build a variety of pipelines across America, giving a great insight into why the Democrats are all in favor of the Burrillville natural gas plant despite sound science proving it would be a calamity.
ARCO [Atlantic Richfield Company]– the prime beneficiary of the new Alaskan oil bonanza–is one of the preeminent sponsors of the American political system. The oil giant maintains a hefty federal political action committee. In the 1996 election cycle, the ARCO PAC handed out more than $357,000. But this was only the beginning. Over the same period, ARCO pumped $1.25 million of soft money into the tanks of the Republican and Democratic national committees. The company contributed at least another $500,000 in state elections, where corporations can often give directly to candidates. At the time, Robert Healy was ARCO’s vice-president for governmental affairs. On October 25, 1995, Healy attended a White House coffee “klatsch” with Vice-President Al Gore and Marvin Rosen, finance chairman of the Democratic National Committee. A few days before the session, Healy himself contributed $1,000 to the Clinton/Gore re-election campaign. But from July through December of 1995, largely under Healy’s direction, ARCO poured $125,000 into the coffers of the DNC. [Emphasis added]
Need more be said?
The late Christopher Hitchens, for all his drunken sliminess and apologias for the Bush presidencies, did have a moment in his career where he contributed something useful by publishing his pamphlet No One Left To Lie To. In that slim volume, issued in the midst of the Clinton impeachment fiasco, he laid out an explanation for the Clinton strategy of triangulation, a term coined by the right wing political consultant Dick Morris. Hitchens defined it as such in a Book TV interview on C-SPAN 2: “Triangulation is three-card monte… You steal the Republican Party’s program, adopt it for the Democratic Party, hope you can bring the Republican Party’s donors along with you, which you often can, then you are faced with the task of shoring up or reassuring your own constituency, and that is done by means of a sort of cheap and superficial political correctness.” It can be said without much argument that this can very well sum up the Raimondo ideology very well, a miasma of reactionary ideals covered up by a clever game of neoliberal identity politics that passes doing the bare minimum for women’s rights as feminism. This also goes for her pension policies that benefit Wall Street while robbing Main Street.
Of course, all these points also can be applied with no modification or rejoinder to Hillary Clinton.
Several weeks ago the Washington Post ran a story about the glories of Governor Gina Raimondo’s pension policy, a matter I wrote about for CounterPunch.
Since then, sources have shared with RI Future a 13-page letter dated December 8, 2015 sent by Edward “Ted” Seidle, President of Benchmark Financial Services to Elizabeth Rosato of the FBI’s White Collar and Complex Financial Crimes unit, LeeAnn Ghazil Gaunt of the SEC’s Municipal Securities and Public Pensions unit, and Stephen Dambruch of the U.S. Attorney’s Office – District of Rhode Island’s Criminal Division. The U.S. Attorney’s Office and the FBI said that they do not comment on potential or current investigations. The SEC has yet to get back.
[Editorial note: On the phone Seidle told RI Future editor Steve Ahlquist that he spoke to the agencies before sending the letter and that his concerns were met with a “good deal of interest.”]
Mr. Seidle has previously written about the Raimondo pension policy in Forbes:
Theres no prudent, disciplined investment program at work herejust a blatant Wall Street gorging, while simultaneously pruning state workers pension benefits. Its no surprise that some of Wall Streets wildest gamblers have backed her so-called pension reform efforts in the state legislature. Former Enron energy trader emerges as a leading advocate for prudent management of state worker pensions? Thats more than a little ironic.
Here’s the letter with all emphasis contained in the original and only minor formatting adjustments:
Re: Rhode Island Retired Teachers Association Request for Further Investigation and Prosecution of Potential Civil and Criminal Violations Related to the Employees Retirement System of Rhode Island
Dear Ladies and Gentleman,
Why have 40 percent of the assets of the tax-exempt Rhode Island state pension been invested offshore in high-cost, high-risk hedge and private equity funds that permit billionaire fund managers to avoid U.S. taxes and mystery investors to profit at the expense of the state pensionall in secrecy? Rhode Islanders want to know.
The Rhode Island Retired Teachers Association (RIRTA) has retained me to bring potential civil and criminal malfeasance related to the Employees Retirement System of Rhode Island (ERSRI) that I have investigated to your attention for both further investigation and prosecution and I am writing to you on RIRTA’s behalf. While RIRTA works to safeguard retirement benefits for Rhode Island educators, the potential violations of law discussed in this letter impact all stakeholders in ERSRI, including participants and taxpayers.
I am a former SEC attorney and the nations leading expert on pension forensics, having investigated over $1 trillion in retirement assets. Prior investigations include the pensions of the states of North Carolina, Kentucky and Alabama; the cities of Nashville, Jacksonville and Chattanooga; Shelby County, Tennessee and Town of Longboat Key, Florida; retirement plans of major corporations such as Wal-Mart, Caterpillar, Boeing, Edison, Lockheed, Northrop Grumman, Deere, Bechtel, ABB, Edison and US Airways; and asset managers handling retirement assets such as Fidelity, JP Morgan, Sanford Bernstein, and Banco Santander. [1] I train U.S. Department of Labor pension investigators around the country; have testified before the Senate Banking Committee regarding the mutual fund scandals and was a testifying expert in various Madoff litigations.
I write about my investigations for Forbes.com and was named as one of the 40 most influential people in the U.S. pension debate by Institutional Investor for both 2014 and 2015.
By way of background, I have completed two extensive investigations of the $7.4 billion ERSRI.
The first, entitled Rhode Island Pension Reform: Wall Streets License to Steal [2] was commissioned by the American Federation of State, County and Municipal Employees, Council 94 (Rhode Islands largest public employee union representing more than 10,000 state, city, town and school department employees) and completed October 17, 2013.
The second, entitled Double Trouble: Wall Street Secrecy Conceals Preventable Pension Losses in Rhode Island [3] was made possible through donations by 350 individual crowdfunderswith no contribution by organized labor and completed June 5, 2015. A petition to have the U.S. Securities and Exchange Commission investigate the potential violations of law related to ERSRI identified in the Double Trouble report posted on change.org by Concerned RI Taxpayers has been signed by 375 individuals to date. [4]
Each of these forensic investigations includes details regarding certain apparent civil and criminal violations of law by Wall Street investment managers and advisers managing or overseeing ERSRIs assetswrongdoing which I will discuss further below.
If I am correct in my analysisand I am confident that I amthe potential violations of law by asset managers and advisers handling the assets of the already seriously underfunded state pension identified in these reports likely represent the greatest threat to the financial well-being of Rhode Islanders in the states history.
At the outset it is paramount to note the following alarming facts:
In summary, at this pivotal moment when $1 trillion in public pension assets are at risk, it is crucial for taxpayers, public employees, regulators and law enforcement to pierce the veil of secrecy, examine the myriad forms of commonplace alternative industry wrongdoing, and craft an effective response to protect retirement funds set aside for government workers.
It is time to address whether alternative industry malfeasance may be criminally, as well as civilly actionable when public pensions, such as ERSRI, are harmed.
Bear in mind that ERSRI stakeholders are, at this time, five years into a ten year looting (since alternatives typically involve a ten-year commitment) and already an estimated $2 billion has been lost in Rhode Island.
Below are specific examples of potential violations of law which were identified in the two forensic investigations of ERSRI.
In conclusion, the evidence of pervasive wrongdoing involving alternative investments held in the portfolios of pensions established for state and local government workers nationally, including ERSRI, is overwhelming. The malfeasance evident in ERSRIs alternative investments is harmful to the already severely underfunded pension.
The so-called reform of ERSRI involving heavy use of alternative investment funds engaged in practices unsuitable or illegal for the pension is doomed to continue to fail. Five years into a ten-year looting, already an estimated $2 billion has been lost in Rhode Island. It is not too late to act to protect the retirement savings of state and local government workers of modest means.
At this pivotal moment when $1 trillion in public pension assets are at risk nationally, regulators and law enforcement must pierce the veil of secrecy, examine the myriad forms of commonplace alternative industry wrongdoing, and craft an effective response to protect government workers retirement securitybefore the ten-year looting cycle has been completed.
It is time to address whether alternative industry malfeasance may be criminally, as well as civilly actionable when public pensions, such as ERSRI, are harmed.
I am available to answer any questions you may have and provide any assistance. Please do not hesitate to call me.
Edward Ted Siedle
President
[1] Findings of certain of these forensic investigations have been made public and can be viewed at my company website, www.investigatemyretirementplan.com.
[2] http://www.scribd.com/doc/176896709/Rhode-Island-Public-Pension-Reform-Wall-Street-s-License-to-Steal
[3] http://files.golocalprov.com.s3.amazonaws.com/Double%20Trouble%20FINAL.pdf
[4] https://www.change.org/p/u-s-securities-and-exchange-commission-investigate-potential-violations-of-the-rhode-island-8-billion-state-pension-fund
[5] http://www.forbes.com/sites/edwardsiedle/2015/11/20/rhode-island-retired-teachers-association-turning-up- the-heat-on-pension-looting/
[6] Page 51.
[7] http://www.bloomberg.com/news/articles/2014-04-07/bogus-private-equity-fees-said-found-at-200-firms-by-sec
[8] How Fair are the Valuations of Private Equity Funds? http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547
[9] http://www.pionline.com/article/20150330/ONLINE/150339990/sec-charges-private-equity-firm-patriarch-ceo- with-improper-valuation
[10] https://people.hofstra.edu/Daniel_J_Greenwood/pdf/Looting.pdf
[11] http://www.providencejournal.com/article/20140224/NEWS/302249995
[12] http://wpri.com/2014/10/15/arnold-donates-another-100k-to-pro-raimondo-super-pac/
[13] http://www.forbes.com/sites/trangho/2015/05/09/why-hedge-funds-love-to-go-offshore/
[14] http://www.reuters.com/article/us-sec-fenway-idUSKCN0SS22620151103#GZTKQVh88ckmZo8f.97
[15] http://www.scmp.com/business/banking-finance/article/1673090/blackstone-tpg-capital-disclosefees-under-
pressure-us-sec
[16] http://www.wsj.com/articles/fees-get-leaner-on-private-equity-1419809350?cb=logged0.46937971841543913
[17] http://www.nydailynews.com/news/bill-clinton-pal-earned-huge-pension-fees-marvin-rosen-firm-millions- hevesi-reign-article-1.361953
[18] http://watchdog.org/15168/nm-gary-bland-trouble-for-the-sics-pay-to-play-lawsuit/
[19] http://www.nytimes.com/2009/05/15/nyregion/15carlyle.html
[20] http://www.nytimes.com/2014/10/19/business/retirement/behind-private-equityscurtain.html?_r=0