seth magaziner – RI Future

September 28, 2016September 28, 2016

Back to basics: RI will switch from costly, risky hedge funds

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

When Seth Magaziner ran for General Treasurer in 2014, he promised that his top priority would be putting Rhode Island’s ailing pension funds in a better position by securing higher returns on investment at the lowest practical risk.

I spoke to Seth this afternoon about his new plan for the pension funds which was unanimously approved today by the State Investment Commission.

The state’s public pension funds currently hold around $7.6 billion of which about $1.1 billion has been invested in so-called “hedge funds” that were originally intended to provide investors with good returns and security.

However, as numerous reports have shown, hedge fund performance hasn’t matched hedge fund promises, except perhaps for their managers who have become billionaires while handling other people’s money.

Searching for alternatives, the Treasurer’s office conducted months of research and consultation with financial experts. They also ran “thousands of models and projections” to come up with a better way to get better returns on investment without undue risk.

The result was announced by Seth today – a “Back to Basics” plan to move about half of the money the state has invested in hedge funds – around half a billion dollars – into safer, better investments such as low-fee index funds.

This will take place over the next two years.

I asked Seth to talk about the challenges of coming up with such a plan, such as public impatience with the pace of change.

“When you’re moving this much money,” he said, “You have to do it in an orderly fashion.” He said making such changes was “like steering an aircraft carrier – you can’t turn on a dime.”

Then there is the matter of exit fees involved when leaving investment vehicles such as hedge funds. “We wanted to make sure we avoided early redemption fees” which in some cases could be significant.

The other factor requiring a careful, deliberate approach is the need to find solid investment alternatives.

I told Seth that the dream of many people, me included, is to see pension fund money used to create local jobs and businesses. But I acknowledged the fact that pension law doesn’t really allow that to be a major pension fund priority.

Seth pointed out that the first duty of any pension trustee is to secure the best rate of return for beneficiaries with the least risk.

That said, among the alternatives they’ve explored are funds that invest in infrastructure. He noted the infrastructure investment market is very “hot” at the moment so the cost of buying in is high. Of course, the basic rule of investing is “buy low, sell high” not vice versa, so timing is a key issue.

Rhode Island has used its pension funds’ proxy voting rights to join with other public pension funds around the country to support shareholder resolutions against excessive executive pay and other abusive corporate practices. These pension funds control millions of shares so they carry some weight at corporate annual shareholder meetings.

The state pension fund is no longer in crisis as it was six years ago. Since Seth took office two years ago, the fund has run in the black for the two years, earning more than $390 million and beating the fund’s goal.
Rather than give back so much to hedge funds, the “Back to Basics” plan should reduce costs while boosting earnings while taking a cautious, prudent approach to risk.

September 16, 2016

RI says ‘no’ to excessive executive pay

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

In 2016, Treasurer Seth Magaziner has voted “no” on executive compensation plans at 75 companies, including Facebook, eBay, and the parent company of Google, “due to a misalignment between CEO pay and company performance or because the compensation plans were deemed excessive or otherwise inappropriate.”

“My job as Treasurer is to deliver strong financial performance for the state’s pension fund. When the companies we invest in award excessive pay packages to executives, it comes at the expense of the pension fund and the public employees we serve,” Magaziner said. “Our say-on-pay effort reflects our position that executive compensation should be transparent and based on performance.”

Earlier this year Magaziner announced that he will use the power of the Treasurer’s office to “vote against appointing white men to corporate boards of directors that are already comprised of mostly white men.” This latest announcement can be seen as a continuation of Magaziner’s belief that corporate reform can come through ethical voting from progressive investors.

Magaziner says that since the 1970s, inflation-adjusted CEO pay in the U.S. increased by almost 1,000 percent, according to a study last year from the Economic Policy Institute. Six of the highest paid U.S. CEOs make more than 300 times the salary of their typical employee, according to the compensation analysis firm PayScale.

Facing increasing shareholder advocacy amid a volatile market and slower growth rates, many of America’s biggest corporations are under an intense spotlight to link chief executive pay to company performance, according to the Korn Ferry Hay Group 2015 CEO Compensation Study.

Magaziner has sent a letter to all companies that received “no” votes to inform them of Rhode Island’s opposition to their executive pay packages, and offer to open a dialogue about how they can make progress on this important issue.

June 23, 2016June 23, 2016

Labor concerns over RI’s GEM Realty investment

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

The RI State Investment Commission voted to invest $20 million with GEM Realty Capital, despite the company’s claim that the health and safety of employees at the Sofitel Los Angeles Hotel in Los Angeles, one of the many properties owned by the company, is not something they can have any affect on.

GEM Realty describes itself as a real estate investment company that invests in “private-market real estate assets and publicly traded real estate securities”. At the meeting on Wednesday morning, two GEM Realty representatives admitted that there were problems at the Sofitel Los Angeles Hotel, but said that as they are not the majority investor in the enterprise or involved in the day-to-day management of the business, there is little they can do to effect positive change in the way workers are being treated at the properties they invest in.

Treasurer Seth Magaziner lead the questioning of the company reps about the allegations of unsafe and un-sanitary labor conditions at the hotel and Commission member Marcia Reback asked about the use of a firm known for union busting to prevent workers from unionizing. The GEM Realty reps assured the Commission that the union-busting firm was no longer employed by the hotel and that the health and safety issues were in the process of being resolved via the National Labor Relations Board (NLRB).

On April 25 employees filed a complaint with the CA Division of Occupational Safety and Health complaining about the hotel’s failure to provide safety equipment to employees charged with cleaning medical waste from Sofitel Los Angeles Hotel rooms. Many guests receive treatment at a nearby hospital and leave medical waste behind. Though management shows an instructional video every year about the proper disposal of needles and bloodied linens, employees say “the hotel does not provide the safety equipment shown in the video”.

The Sofitel LA Hotel has also drawn “multiple Unfair Labor Practice charges that are currently being investigated by the regional office of the NLRB alleging that since employees raised the health and safety issues, hotel management has responded by threatening and surveilling employees and in one case illegally firing one of the employee leaders,” says Jim Baker coordinator for Unite Here. These case can be accessed here.

Then there’s the class action lawsuit seven employees have brought against the hotel alleging wage theft. Business Wire reports, “Six of the plaintiffs allege being paid less than the minimum wage while working at the Sofitel Los Angeles at Beverly Hills. A former barback, as well as three housekeeping workers, a banquet worker, and a restaurant server, allege that management underpaid or have been underpaying them by up to $5.37 per hour.”

Aside from the allegations of deplorable labor practices, there may be sound financial reasons to avoid investing in GEM Realty, says Sam Bell, executive director of the Rhode Island Progressive Democrats of America, has concerns about the very idea of private equity investments for our pension funds.

“With their high fees, private equity investments are a bad deal for our pension fund,” says Bell, “As Treasurer, Gina Raimondo, who made her fortune in this controversial industry, made a big move into high-fee funds, and that decision continues to drive our pension fund’s poor performance. Seth Magaziner campaigned on a new kind of politics. Expanding private equity investments, while other funds are pulling out of high fee options, would represent a move back to the aggressively pro-Wall St. policies of the previous Treasurer.

“Real estate private equity funds are especially poor choices, given their distinctive record of pushing policies that hurt American families,” says Bell, ” In the case of GEM Realty Capital, it is aggressive violations of workers’ rights that stand out, but across the real estate investment industry in general there is a serious and pervasive culture of immorality.”

Though the GEM Realty reps were asking for a $30 million investment from the state, the board seemed to feel that a $20 million investment was more in line with their investment strategy.

May 9, 2016

New York and California divested pensions from hedge funds, can RI?

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

California, the state Gov. Gina Raimondo was visiting for a fundraiser to promote her pension policies, and New York have recently divested from high-risk, high-cost hedge funds like those the Rhode Island fund invests in.

One New York City official in an April 14 Reuters story said of hedge fund managers, “Let them sell their summer homes and jets, and return those fees to their investors.”

The board of the New York City Employees Retirement System (NYCERS) voted to leave blue chip firms such as Brevan Howard and D.E. Shaw after their consultants said they can reach their targeted investment returns with less risky funds. The move by the fund, which had $51.2 billion in assets as of Jan. 31, follows a similar actions by the California Public Employees’ Retirement System (Calpers), the nation’s largest public pension fund, and public pensions in Illinois. “Hedges have underperformed, costing us millions,” New York City’s Public Advocate Letitia James told board members in prepared remarks… NYCERS had $1.7 billion invested in hedge funds at the end of the second quarter 2015, according to its financial report. That amounted to 2.8 percent of total assets and was the smallest portion of its ‘alternative investments’ portfolio, which included $8.1 billion in private equity.

This begs the question: when will General Treasurer Seth Magaziner do likewise?

To help me parse through this further, Ted Siedle, who is now working on his third forensic audit of the pension, this time dealing with the real estate investment portfolio, sat down with me for an interview. He compared the pension scheme to “nothing Buddy Cianci would have ever dreamed of.”

Click the player below to listen to my full interview with Siedle

“My sense is that, from some some comments I have seen attributed to Seth Magaziner, is that he is preparing to distance himself from at least the Governor’s hedge fund gamble with pension assets. So it appears that he is moving from a ‘stay-the-course and incrementally fire poor performing hedge fund managers and replace them with promising hedge fund managers and make the case that the good outweighs the bad’, moving to an approach where he says either he will abandon the hedge fund strategy altogether or, going forward, or he will jettison perhaps half of the hedge funds and keep the remaining.

Siedle added, “But I think he’s making noises like he may make a bolder move to distance himself from the investment strategies that the Governor implemented. I think that Magaziner is heading in a better direction. I am not hearing a clear indication that his predecessor was wrong about anything and his predecessor was wrong… The massive benefit cuts and the massive investment in speculative hedge funds, high-risk high-cost hedge funds and private equity funds, was a foreseeable disaster, it was foreseen by me, I wrote about it before the strategy had been even fully implemented. Warren Buffett warned this was something that should not be done.”

Projected savings from pension cuts could soon be evaporated by poorly performing hedge funds, Siedle said.

“The benefits were cut to save $2 billion over the next twenty years. Within four or five years … the pension’s lost probably about $2 billion. So all of the projected savings have been, I suspect … will have been eliminated by foreseeable losses. So this has been probably the most disastrous investment decision ever made in the history of Rhode Island.”

He said, “So what I would submit a responsible, courageous State Treasurer would do would to be to call out that this was a horrific mistake, but I’m not hearing that. I’m hearing a distancing but not a mature, responsible response.”

To further clarify what Siedle feels about Magaziner’s time on the job, just look to his recent writings for Forbes:

At 31, Magaziner—lacking any meaningful investment experience—somehow convinced voters in 2014 that he could competently oversee the massively underfunded, embattled $7 billion state pension. Talk about chutzpah—a kid whose personal income the year before assuming office was reportedly approximately $5,183 (yet he somehow loaned his campaign $550,000)… Not only has Magaziner failed to follow through on his transparency promises, despite five years of dismal hedge fund performance at the pension he oversees, he remains committed to Governor Raimondo’s secretive, costly deal with Wall Street.

April 27, 2016April 27, 2016

Bernie Sanders delivers progressive mandate for RI Democrats

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

It’s morning again in Rhode Island. At least that’s what it feels like to the progressive left the day after Bernie Sanders beat Hillary Clinton in the Ocean State’s presidential primary poll.

The socialist-leaning senator from Vermont all but conceded the nomination to the more conservative Clinton after losing four other states in the so-called Acela Primary. Last night even Bernie Sanders admitted he probably won’t be the next president. It was not a good night for those holding out hope he might pull closer in pledged delegates.

But by pulling off a convincing victory in Rhode Island, a state dominated by neoliberal leadership, Sanders sent a strong message that Rhode Islanders want progressive change. He won 55 to 43 percent.

He won 66,720 votes, Clinton got 52,493, Donald Trump got 39,059 and John Kasich took 14,929. The difference between Sanders and Clinton was greater than the difference between Clinton and Trump. The two Democrats got well more than twice as many votes as all three Republicans. Rhode Island seems very open to the idea of a progressive political revolution.

“I hear all the time, ‘…that is too liberal, we’ll get voted out if we do that,’” said progressive Providence Rep. Aaron Regunberg at the Sanders victory party last night. “That argument no longer holds any water.”

Sanders won 35 of 39 municipalities in Rhode Island. Clinton took Barrington and East Greenwich, the two most affluent suburbs in the state, and Central Falls and Pawtucket, very close to her campaign headquarters. Sanders took the rest rather convincingly.

Providence was close, with 51 to 47 percent for Sanders. But he won cities like Warwick, Cranston and Woonsocket by substantial margins. His key to victory was the rural vote – the Swamp Yankee Progressives. Sanders won in affluent liberal enclaves like South Kingstown (62%-37%) by similar margins that he won working class communities like Coventry (61%-36%).

Burrillville backed Sanders over Clinton 64 to 34 percent, but only 1,337 people voted in the Democratic primary compared to 2,167 in 2008. In the Republican primary, which Trump won with 73 percent of the vote, 1,261 people voted compared to 399 in 2008. More Burrillville residents voted for Clinton in 2008 than voted for a Democratic in 2016. There were three polling places open this year compared to four in 2008.

Burrillville was an important bellwether because of a controversial proposal for a fossil fuel power plant there. The Invenergy methane gas facility is backed by Governor Gina Raimondo and organized labor but opposed by residents and grassroots activists. Congressional climate champion Sheldon Whitehouse has tried to avoid taking a position.

This is a lot like the Clinton/Sanders divide in Rhode Island. Raimondo was a regular on the campaign trail for Clinton while Whitehouse called Clinton’s position on climate change “adequate” and didn’t really publicly stump for her. Whitehouse and Raimondo probably represent the range of local elected officials who backed Clinton, which also included Secretary of State Nellie Gorbea, General Treasurer Seth Magaziner and the entire congressional delegation.

I strongly suspect there’s a high correlation between Bernie voters and Burrillville power plant opposers. For liberal Democrats like Whitehouse, Sanders big win is an invitation to tack left on issues ranging like climate, economic and social justice. For neoliberal Democrats like Raimondo, who would rather reinvent Medicare than the energy grid, it’s a cautionary tale. Bernie Sanders beat Hillary Clinton 55 to 43 percent. Raimondo did even worse than Clinton when she ran in the 2014 Democratic primary, winning only 42 percent of the vote.

April 20, 2016April 20, 2016

RI to corporations: more diversity on boards of directors

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Treasurer Seth Magaziner has a plan to make corporate board rooms more diverse. Rhode Island’s pension fund will vote against appointing white men to corporate boards of directors that are already comprised of mostly white men.

“Research has shown that diversity leads to better performance. It’s true in government, it’s true in education and its true in the business world as well,” Magaziner said at a news conference today. “Study after study has shown that when you have diverse management teams in corporations those companies perform better, they perform better financially and their stocks perform better. Despite this many corporations are not doing enough to diversify their leadership and it starts at the board level.”

Noting that less than 20 percent of the boards of directors for the S&P index corporations are female and less than 15 percent are people of color, Magaziner said, “This lack of diverse viewpoints hurts these companies, and hurts our pension fund.”

So the state Pension Board approved a new policy to use its proxy votes in the corporations we invests in to vote against appointing white men to boards of directors that have fewer than 30 percent women or racial minorities represented on the boards.

“I believe this will improve our performance and help us financially for the members we serve,” Magaziner said.

The state plans to vote against Hess, Hersheys, ConocoPhillips, Phillips 66 and EMC Corporation, a Massachusetts company, to start. Because it invests in hundreds of companies, there will be hundreds of opportunities to vote against appointing more white men to corporate boards.

“We anticipate that we will be voting against the board slates at a number of large companies because a number of large companies aren’t taking this seriously enough,” Magaziner said. There are no Rhode Island-based companies that the state is voting against yet, but that situation will arise.

Rhode Island doesn’t have large stakes in these businesses, so it can’t block any appointments. But Magaziner said it will send a message.

“There are a number of other large institutional investors who are progressive and who would care about this from an opportunity-building point of view, there are other large state pension funds, there are union funds out there,” he said. “But ideology aside, everyone cares about making good returns. So what we need to do is keep taking about the fact that the research shows that stronger diversity is good for performance. We’re going to keep evangalizing and beating this drum.”

He said Rhode Island won’t divest from companies for appointing too many white men.

“If we were to divest from these companies then the only voting members that would be left would be the ones that don’t care,” he said. “My philosophy is you stay engaged, you keep voting the right way and you recruit other investors to start voting the right way too.”

Jim Vincent, the executive director of the Providence chapter of the NAACP, and Dariah Kreher, chairwoman of the Women’s Fund of Rhode Island, both applauded the move.

“It’s so important to have inclusion on the part of all Americans, not just the precious few that have always been a part of these boards,” Vincent said. “We feel that it is a very important step for Rhode Island to make. To say that you can’t find talented people of color to be on boards and commissions is not only insulting but it is counter-productive to having the best pension fund we can have. So it’s a win, win in the state of Rhode Island today. I look forward to seeing how the companies respond to this bold initiative.”

Kreher said the trend in Europe is for the government to impose quotas on corporate boards of directors. Germany, she said, recently mandated corporate boards become at least 30 percent female, and that similar laws have been passed in Norway, Spain, France, Belgium and Italy and Iceland “The EU is considering a mandate to bring the numbers to 40 percent,” she said.

“Businesses in the United States don’t like mandates,” Kreher said. “But they might not be providing optimum returns for their investments based on the limited talent and the myopic vision of their decision-making bodies. Changes are necessary if the US is to keep up with world economy.”

April 18, 2016

Sanders’ Wall Street plan is ‘incoherent’ says Barney Frank

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

2016-04-18 Barney Frank 01 — Barney Frank

Former Massachusetts Representative Barney Frank was in Providence Monday morning campaigning for Hillary Clinton in the form of an interview with RI Treasurer Seth Magaziner. The Congressperson was the chairman of the House Financial Services Committee from 2007-2011 and the Frank half of the Dodd-Frank Act, a major reform of the financial industry signed into law under Obama.

Frank says that the United States is trapped in a vicious cycle: People have lost confidence in a government that responds to their needs, so they elect anti-government candidates who produce a government that is even worse than before. Frank believes that the only way out of this is to elect Hillary Clinton as president.

Bernie Sanders, says Frank, is being too critical of anything that falls short of his own lofty ideals. Frank thinks this is a mistake and strongly disagrees with this way of thinking.

“Almost every representative committed to progressive change is for Hillary Clinton,” says Frank, including the entire congressional LGBT caucus and every member of the Black caucus, save one. This isn’t because they are part of the “establishment” says Frank, but because they are committed to progressive change.

2016-04-18 Barney Frank 02 — Seth Magaziner and Barney Frank

“If you tell people it’s either revolution or nothing worth fighting for,” says Frank, “you open up the not-voting behavior.”

As for taking money from Wall Street, Franks says that Sander’s idea that politicians taking money from businesses they want to change cannot be counted on “goes against every person I’ve ever served with.”

Frank then went into his experiences passing Dodd-Frank, which reversed 12 years of a Republican-controlled Congress loosening the regulations that controlled Wall Street. He noted Rhode Island Senator Jack Reed’s contributions to that process.

Sander’s promise to break up the big banks makes no sense to Frank. The problem “isn’t that institutions are too big, it’s that they had more debt than they could handle.”

Frank says that he helped pass legislation to prevent too much indebtedness. “AIG couldn’t happen today,” he says. He helped to outlaw sub-prime loans and increased the companies on-hand capitol.

“General Electric got out of the financial business because of these laws,” says Frank.

Under Frank’s legislation, regulators can look at a company’s holdings and in the event that it looks dangerous, can order divestment. Clinton’s plan to regulate Wall St would lower the bar for divestment, giving her enhanced authority to order divestment.

In contrast, says Frank, Sanders isn’t coherent on this issue. “How can you say something is too big if you don’t know what size it should be?” asks Frank.

“Hillary,” says Frank, “understands how it all works.”

Clinton’s tax policy was also touched upon. As President she wants to tax high frequency stock trades and tax hedge funds as income. Frank objects to Sander’s “McCarthy-ite suggestion that she’s soft on these issues because of the money she accepts.”

Clinton will increase taxes on people making more than $1 million and especially those who make more than $5 million, says Frank.

When asked about health care, Frank was not in favor of introducing single-payer system, at least not quickly. “People need to be shown how this can be done,” said Frank. “I think Sanders will be a disaster [on health care],” says Frank, “People are not ready to have a tax increase to pay for universal health care.”

Clinton will crack down on big pharma pricing, prevent tax dodging of companies incorporating overseas and expand health care, says Frank.

Frank, who was among the first openly gay members of Congress, ended with some words on LGBT rights. “Though Sanders has always voted the right way on LGBT issues there is near unanimous support in the LGBT community for Hillary,” he said.

Clinton’s Supreme Court picks, Frank said, will help reverse the Hobby Lobby decision and uphold legislation, like the kind being worked on by RI Representative David Cicilline, to prevent private action discrimination against LGBT people.

One final note: Frank did say that if Sanders wins the nomination, “Of course I’ll campaign for him.”

January 18, 2016January 17, 2016

Operation Clean Government calls for independent investigation of 38 Studios

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Recent testimony by Steven Costantino before the House Oversight Committee was a long-overdue step in the right direction.

While newsworthy, the appearance by the former House Finance Chair falls seriously short of the full investigation that clean-government groups have been demanding.

Margaret Kane, president of Operation Clean Government (OCG), said, “State House leaders want to move past 38 Studios, but they want to do so by sweeping it under the rug. The public deserves to know how this disaster occurred, and without an independent investigation it is unlikely that Rhode Islanders will ever learn the truth.”

OCG is also concerned that little effort has apparently gone into preventing similar disasters from happening in the future. “Even Mr. Constantino testified that he was generally opposed to moral obligation bonds,” Kane points out.

She added that Treasurer [Seth] Magaziner’s plan to strengthen a finance board which he largely appoints isn’t exactly the independent oversight that is needed.

Operation Clean Government is a member of the Investigate38StudiosNow.org coalition, which has been calling for the 38 Studios scandal to be investigated not only by the legislative oversight committees, but also by an independent investigator hired outside the legislative branch. Since the coalition called for these investigations, the Oversight Committee has for the first time been allowed to issue 38 Studios subpoenas. However, Governor [Gina] Raimondo has still refused to appoint a truly independent investigator.

The 38 Studios scandal, which has already cost the state many millions of dollars, shows no sign of going away.

[From a press release]

You watch the full testimony in the videos below:

January 8, 2016

Business leaders decide issues elected officials will pursue at economic summit

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

2016-01-08 Stefan Pryor RI Small Business Economic Summit — Stefan Pryor

“Today is about you putting your issues on the table and [about] how you can influence the decision making process that we have in this great state,” Mark Hayward, District Director of the Rhode Island Small Business Association (SBA) told an eager gathering of business owners, lobbyists and politicians, “Your participation at this Summit will essentially decide… the direction of [economic and business] issues that are going to be critical to you over the next year.”

The 2016 Rhode Island Small Business Economic Summit (Summit) is held at Bryant University and sponsored by the SBA and the Center for Women and Enterprise. A long list of state senators, representatives and gubernatorial staff come out to this event every year. Big names include Speaker Nicholas Mattiello, General Treasurer Seth Magaziner and Governor Gina Raimondo. It took Hayward two minutes to list the the government reps appearing, and he didn’t get them all. It’s the kind of political access social justice groups cannot imagine.

The point, says Hayward, “is to provide an opportunity for members of the small business community to have a discussion with members of the General Assembly and the [Governor’s] administration and,” he says, “over the years, we have succeeded because many of the issues that are being taken up today, derive from the Summit.”

2016-01-08 Economic Summit — The sold old Summit

Hayward introduced speaker Stefan Pryor, Rhode Island’s Secretary of Commerce. Pryor painted a rosy picture of Rhode Island’s economic future, saying, “We’re beginning to see the optimism lift, we’re beginning to see the unemployment drop, we are starting to see the new projects start, and we are starting to see the pessimism dissipate.”

Pryor did not mention the cruel poverty that affects nearly 1 in 5 children in our state, but he did mention that the state is “still suffering from unemployment. We still compete for the worst unemployment rate in New England.”

Pryor did not draw a connection between the high unemployment, high poverty and what he called a “favorable tax climate” for business. “We have the lowest corporate tax rate in the northeast, a hard-earned distinction at 7 percent. In the recent session we completely eliminated the sales tax on energy, the Business Energy Tax. It’s not an easy tax to eliminate a tax entirely but it’s gone. Gone forever.”

Pryor assured those in attendance that Rhode Island will not be raising taxes on business owners. “We have not raised a major tax, corporate, income or sales, in twenty years,” said the Secretary with pride, “Think about that relative to tax stability and at the same time we’re axing taxes.

“Why do we think we can maintain that kind of stability going forward? In this past session we put the final touches on and solidified pension reform that then General Treasurer Raimondo had begun. With all your help, Medicaid reform, in a substantial way, was undertaken.

“These structural reforms will save Rhode Islanders over $4 billion dollars over the next 20 years” and “this will ensure future retirement security and future budgetary stability, said Pryor, “That’s the platform we’re building. The hybrid of generations of discipline and not raising taxes, even when times were tough.

“These are the signs of responsible budgeting and sensible fiscal stewardship.”

You can watch all of Pryor’s remark Here:

December 10, 2015December 10, 2015

Banking for Equality

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

As of January 1, the Rhode Island minimum wage will be raised to $9.60. Although a good step towards financial equality, it cannot compensate for the nation’s polarizing wealth divide. We need banks to do that.

In 2013, 63 million Americans spent a combined $455 billion nationwide on alternative financial services, as reported by the Federal Deposit Insurance Company. This includes scams such as payday loans, pawnshops, and check-cashing services. Pay day loans offer immediate loans with steep interest and short payback, pawn shops take expensive collateral with hefty fees for small cash loans, and check-cashing services charge significant flat-rates, often around $40 per paycheck. United For A Fair Economy believes alternative financial services outnumber McDonald’s and Starbucks franchises combined in America today. Alternative financial services set up in areas they believe densely impoverished to prey on the financially disadvantaged. Institutionally, they operate to widen the wealth gap.

In his 2014 campaign, Rhode Island General Treasurer Seth Magaziner highlighted that one in four Rhode Islanders are underbanked. In Magaziner’s words, underbanked citizens “don’t have a bank account at all, or they have a bank account and they’re still relying on high-cost financial services like payday loans, pawn shop check cashing and so on.” Of the 63 million consumers that are underbanked in America, 24 million of them have no bank account at all. The families with limited bank account usage spend an average of $3,000 a year working while the average underbanked family spends $43,000 in their careers on check-cashing services. For these 63 million underbanked Americans, the vision of banks is a dark one. Among the most common reasons for using alternative financial services instead of banks, the top responses were “lack of money”, “I don’t like dealing with or trust banks”, “inconvenient hours or location.” These responses show a fundamental misunderstanding of the comparably greater convenience, affordability, and security of banks.

Communicating this is one of the smaller barriers banks have traditionally held, like extensive documentation, high minimums and maintenance fees, and new account screenings. Others responded “account fees are too high or unpredictable.” Many of these individuals live paycheck to paycheck and do not earn enough to meet minimum balance or direct deposit requirements for free checking. What should they do?

Put money in the bank. Bank accounts provide the financial security needed to build wealth. While accumulating interest, your money is protected from fires, burglary, misplacement, or other damage. With a bank account you build a credit history, critical for loans for cars, for home mortgage, and for higher education. And bank accounts are cheaper and more convenient than alternative financial services, from free bill pay, to free check cashing, to free ATM withdrawal.

As of 2015, nine banks or credit unions in Rhode Island have little to no minimum balance requirement nor require direct deposit for free checking. Many have no minimum balance and free checking. Almost all have free online statements, credit building opportunities, mobile banking, and free ATM access. Looking to the future, financial literacy is on the rise in Rhode Island’s schools, and a new state backed program College Bound incentivizes saving for the higher education of Rhode Island’s next generation.

Banks still need lower entry barriers for Rhode Islander’s looking to open checking accounts. New account screenings must offer forgiveness for previous debts. With financial guidance banks could aid in paying off the prior institution to which their new customer is indebted. It is equally as crucial that banks and credit unions offer an entry-level checking account with no minimal fees and balances.

Some banks would object to the operating cost they incur for maintaining an account with little immediate return. These banks need to look forward. The short term loss in revenue will be returned manifold as Rhode Island’s poor accumulate the wealth they then reinvest in said bank. Banks understand the delayed but greater return of a bond. Banks need to bond with Rhode Island’s consumer, for delayed but greater returns for both.

America today resembles a plutocracy. The assets of the top 1 percent is now approaching 45 percent of the nation’s wealth, having steadily risen toward levels unseen since the Great Depression. The wealth of the bottom 90 percent continues to hover between 10-20 percent of the nation’s wealth for the last century. The stagnant trend makes clear that growth in national income has not yielded a more equitable distribution of wealth.

Expert on urban and racial inequality and poverty, Melvin Oliver says, “Income feeds your stomach, but assets feed your head.” Many Rhode Island stomachs will be fuller by sixty cents an hour come January 1st. But will their heads will still be hungry? Wealth breaks the cycle of living day to day. Alternative financial services drain wealth while banks can nurture it. Rhode Island and Rhode Island’s banks: stop living day to day on pennies, and bond.

September 14, 2015

AIDS Walk RI remembers the past, challenges the future

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Participants and observers of the AIDS Walk RI opening ceremonies were given a treat when Ronald Lewis, activist poet and actor, spoke about the forgotten transgender, women of color origins of the Stonewall Uprising, the birth of the LGBTQ liberation movement. Marsha P. Johnson and Sylvia Rivera are only recently being given the recognition they deserve by history, they are true heroines in the ongoing struggle for full rights for all persons, and to be reminded of their contributions ahead of an important walk to raise money to combat the scourge of HIV and AIDS was invigorating.

Do yourself a favor and watch this video.

This year’s theme for AIDS Walk RI was “Keeping Hope Alive” and despite the reality of nearly 100 new cases of HIV being diagnosed in our state every year, there is hope that one day HIV will be eradicated. Dr. Philip Chan, MD, from the Miriam Hospital’s Immunology Center said that giving a positive HIV diagnosis to a patient is the worst part of his job. He talked about the virtues of a new drug, PrEP, a pre-exposure prophylaxis that prevents the transmission of HIV.

Dr. Nicole Alexander-Scott, MD, MPH spoke of three foci at the RI Department of Health, where she is the director. “We want to continue to enhance partner services, making sure that people know how to stop their partners from getting infected by raising awareness. getting tested and letting them know about PEP ad PREP. We also want to highlight our ‘men who have sex with men communities’ that are disproportionately affected by HIV and syphilis and some of the other STDs… our third priority is also highlighting our youth and our communities of color, where there are higher rates of STDs as well as HIV.”

Members of Hope Harris‘ family gathered on stage to present the “Hope Harris Award.” Harris was a member of the AIDS Project RI board for the last part of her life. She was also a longtime receptionist for the late Senator John Chafee and also served in Senator Lincoln Chafee‘s office. She was known as a kind and deeply religious person who recognized the value of person, without regard to race, orientation or gender identity.

The award was presented to the amazing Paul Fitzgerald, president and CEO of AIDS Care Ocean State. He was the founding executive director of “Family AIDS Center for Treatment and Support” (FACTS) for children with HIV. FACTS was one of the first 13 pediatric AIDS demonstration projects in 1988. FACTS grew into a full-service AIDS organization, and merged with “Sunrise House” to become AIDS Care Ocean State.

Entertainment was provided by the Providence Gay Men’s Chorus, and other speakers included by Mayor Jorge Elorza, RI State Treasurer Seth Magaziner and US Representative David Cicilline. Cicilline lead the event in a moment of silence for Guy Abelson, well-known local philanthropist, who passed away recently and was deeply involved in the fight against HIV/AIDS.

AIDS Walk RI 2015 was conducted by AIDS Project Rhode Island, a division of Family Service of Rhode Island, and AIDS Care Ocean State.

July 30, 2015July 30, 2015

ABLE Act gives disabled children funds for their future

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Only a few days after the 25^th anniversary of the Americans with Disabilities Act, Rhode Island instituted a new law that will allow families of children with disabilities to create a tax-free investment account to help financially support them when they reach adulthood. Governor Gina Raimondo signed the “Achieving a Better Life Experience,” or ABLE Act, into law on Wednesday afternoon at the Cornerstone School in Cranston.

Representative Robert Nardolillo, an Republican from District 28, and Senator Adam Satchell, a Democrat from District 9, sponsored the bipartisan act. Both legislators said that they decided to take on the bill because of their experiences with disabled children and their families. Satchell, who is a guidance teacher in the West Warwick, said that he works with disabled children all day, and has done so for years, even before he started teaching.

“I grew up next to a little boy who was disabled, and I learned a lot from him and from his family about the struggles that they go through,” he said. “I have friends who have a disabled child. So, working with the disabled has been something that I really wanted to do from the second I got elected.”

Satchell said that in West Warwick, schools are trying to bring the disabled population back in from outside placement. This move has given him the opportunity to work with both disabled and non-disabled students in the same room, in character education activities, teaching children how to respect and be kind to everyone.

“We have disabled individuals in the classroom, and its awesome to see the little kids helping their friend who can’t speak. They come up to me and say “Oh can I help this one, can I work with that one,” and it’s just awesome to see,” he said.

Having spoken with parents of these children, Satchell said that one of their biggest worries is what will happen when their children are not in school anymore. The ABLE program will hopefully quell that concern, and give parents the funds to send their children to adult daycare, or obtain job training.

While on his campaign trail, Nardolillo also spoke with parents of disabled children in his district, and decided to take on the act to help them.

“When I thought about what would be important to me to be important to me, to begin my session with, I concentrated on why I’m campaigning to be a legislator, and that’s public service,” he said. “You reflect on all the stories you heard going door to door. I’m a huge supporter of small business and trying to find jobs, but I’m a family man too.”

Nardolillo said that while speaking with these families, he realized that their children are their sole concern. When he began the session, he was looking for legislation that would have a positive and lasting impact on these families. While there is still more work to be done, and regulations that must be implemented, Nardolillo believes that this is a positive first step in the right direction.

The ABLE Act allows familes to put in $14,000 in state sanctioned accounts each year, with a $100,000 cap. This money is not taxed, and can be put towards a disabled child’s future, when they age out of the school system. Nardolillo added that these funds become even more important when a disabled individual wants to begin working.

Gov. Raimondo shaking hands with Cornerstone students

“They want to work. They enjoy being out there, and socializing, and we all do,” he said. “We all love our jobs and like to socialize and everything, and this is a nice gateway. It opens the door to that, and that’s a special thing too.”

Both Satchell and Nardolillo also remarked that they anticipate no negative effects on the economy once the act is implemented, only positive ones.

“I can’t imagine what the negative impact of something like this would cause,” Nardolillo said. “Any time you offer someone opportunity, and you offer them a protection with an account like this, that allows them to put assets aside to protect their future, it’s hard for me to find a negative in that, it really is.”

“It wouldn’t have a negative effect on the economy, because a lot of these people basically have no assets to receive some of these services,” Satchell added. “If these people had any money, they weren’t using it, because if they have that money, and they have those assets, they run the risk of losing their programming.”

Before signing the act, Governor Raimondo gave her own remarks, saying that the ABLE accounts give Rhode Islanders the agency they deserve.

“This is about allowing people to have opportunity and independence, and fulfillment in their lives,” she said. “With these ABLE accounts, it will allow everybody to have some measure of independence, which is what people deserve.”

General Treasurer Seth Magaziner was also involved in the crafting of the bill, and said that he took a personal interest because his girlfriend’s brother was born with Down syndrome. Magaziner mentioned that he has seen the difficulties that their family has encountered trying to transition his girlfriend’s brother, named Peter, into adult life.

“Children who suffer from disabilities are just as deserving of a rich and fulfilling life than those children who are fortunate enough to pursue higher education,” he said. “Under this new law, our state will provide an affordable, tax-efficient savings plan to help families save for the costs of helping a child with disabilities make the transition into adulthood.”

June 27, 2015June 27, 2015

SCOTUS marriage equality decision celebrated in RI

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

C Kelly Smith’s last Marriage Equality sign

Rhode Island’s celebration of the Supreme Court‘s historic decision allowing same-sex couples to marry across the United States was also a history lesson about the long battle for full LGBTQ acceptance in our state. Organizer Kate Monteiro spoke eloquently and introduced a steady stream of speakers, but more importantly she paused to remember those who didn’t live long enough to see this day, those who are only spoken of “in the echoes of the wind.”

We live in a better world because of their work and sacrifice.

The celebration was held at the Roger Williams National Memorial, because, explained Monteiro, this is where “religious freedom in the United States was born” and where Belle Pelegrino and the ’76ers first met to demand the right to march in Providence with a sign saying ‘I am gay.'”

“We stand at the top of a very, very high hill,” said Monteiro, “we have carried that pack and we have wanted for water and struggled and slipped and we stand at the top of a hill. And the view is beautiful. It is absolutely splendid. And just a little bit further is the next big hill. Because we are not at the top of the mountain, never mind the other side of the mountain.”

“Tomorrow, in 29 states, someone can be fired for being gay or lesbian, let alone transgender. (That, thank you, is 32 states)… That’s wrong, we need to change it, that is the mountain.”

“Can you imagine if we could go in time and bring Roger Williams here today?” asked Rodney Davis to laughs, “but when you boil it down and get to its purest sense, Freedom, Liberty and Justice was the reason why he came here…”

January 27, 2015January 28, 2015

RI Hospital employees and community allies speak out

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

More than 500 people crowded into the meeting room of Our Lady of the Rosary Church on Benefit St in Providence for the Worker & Community Speakout for Good Jobs and Quality Care on January 17. At issue was the contract negotiation between Lifespan/Rhode Island Hospital and General Teamsters Local 251 representing some 2,500 hospital employees.

According to Local 251, “As a non-profit entity, Lifespan and RI Hospital are supposed to put the healthcare needs of the community first. Unfortunately, management has taken cost cutting measures, causing shortages in equipment and staff that undermine patient care.”

Literature at the Speakout quoted a nurse, Aliss Collins, saying, “When we are understaffed, I cover 56 patients in three units. It’s not right for the patients or the employees.” There was a story at the Speakout of another nurse who was forced to buy her own equipment for measuring oxygen levels, because the hospital did not provide it.

Obamacare has allowed Lifespan/RI Hospital to take in an additional $33 million in net revenue last year, because so many Rhode Islanders are now covered under Medicaid. Yet rather than invest this money in patient care, Lifespan pays its “ten highest paid executives” more than $16.6 million in its last fiscal year, an average of $1 million more in compensation “than the average earned by CEOs of nonprofit hospitals nationally,” according to the union.

At the same time, hospital employees such as single mom Nuch Keller make $12.46 an hour with no healthcare coverage. Keller’s pay does not even cover her rent. She regularly works 40 hours or more per week, yet Lifespan continues to pay her as a part-time employee. And in case you missed it, Keller works at a non-profit hospital, and receives no healthcare.

The Speakout was intended to show community support for the workers of RI Hospital, and was attended by Representatives David Cicilline and Jim Langevin, as well as General treasurer Seth Magaziner. There were also representatives from many other unions and community groups such as Jobs with Justice, Unite Here! and Fuerza Laboral. Many religious leaders, including Father Joseph Escobar and Rev Duane Clinker, were on hand to show support.

It was hard not to feel that something new was happening at the Speakout. The level of community support and solidarity made one feel as if a union resurgence were imminent, which many feel is necessary if obscene inequality is to be combated.

It was Duane Clinker who helped put the event into perspective for me. He said that unions have often limited their negotiations to wages, hours and benefits, and health-care unions have long argued staffing levels, but “when/if organized workers really make alliance with the community around access to jobs and improved patient care – if that happens in such a large union and a key employer in the state, then we enter new territory.”

This struggle continues on Thursday, January 29, from 2-6pm, with an Informational Picket at Rhode Island Hospital. “The picket line on Thursday is for informational purposes. It is is not a request that anyone cease working or refuse to make deliveries.”

Full video from the Speakout is below.

Speak-Out for Good Jobs & Quality Care at RI Hospital 002 — Mirjaam Parada

Speak-Out for Good Jobs & Quality Care at RI Hospital 033 — Duane Clinker

Speak-Out for Good Jobs & Quality Care at RI Hospital 080 — James Langevin

Speak-Out for Good Jobs & Quality Care at RI Hospital 172 — Seth Magaziner

Speak-Out for Good Jobs & Quality Care at RI Hospital 087 — Aaron Regunberg

Speak-Out for Good Jobs & Quality Care at RI Hospital 098 — Carmen Castillo

January 14, 2015

General officers tour Harrington Hall, affirm value of social safety net

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Four of the five newly elected general officers – Governor Gina Raimondo, Lt. Governor Dan McKee, Secretary of State Nellie Gorbea and General Treasurer Seth Magaziner – toured Harrington Hall, a homeless shelter in Cranston, on Tuesday to garner the support needed to end homelessness in Rhode Island.

There are over 1,000 people in Rhode Island experiencing homelessness, a crisis for any society, but a moral crisis for a country as rich as ours.

Rhode Island has been chosen to participate in Zero: 2016, a national campaign to end homelessness among veterans and the chronically homeless by the end on 2016. Union leaders Lynn Loveday, George Nee and J. Michael Downey have pledged to support Zero: 2016. Now they are looking to elected officials for their support.

Jim Ryczek, executive director of the Rhode Island Coalition for the Homeless, opened the press conference at Harrington Hall reading off some of the sobering results of last December’s homeless census, in which 500 volunteers asked 855 homeless men and women about their lives in order to construct a Vulnerability Index for all homeless Rhode Islanders.

In Rhode Island, homeless adults range in age from 19 to 85, with the median age being 45 years old. 68% identify as male, 32% as female. About a third are sleeping outside, not in shelters. This means on the street, sidewalk or doorway, in a car, in a park, on the beach, in cemeteries, or in abandoned buildings. 58% have been homeless for more than two years. 7% are veterans.

The homeless cost us in terms of social services. 64% use emergency rooms for medical care. 39% have had interactions with the police. 4 in 10 have been transported by ambulance and about a third have received in-patient hospitalization. Being homeless is unsafe. 29% have been attacked while homeless. About half have admitted to needing psychiatric treatment and visited the ER for mental health reasons. A third have learning disabilities, and a quarter have brain injuries.

Governor Raimondo said, “I love the goal of ending homelessness, and we know how to. Build affordable housing and get people homes… and by the way, building affordable housing puts people to work in the process…”

“Some other public policy issues are a lot harder and take a lot more time,” said Secretary of State Nellie Gorbea, “affordable housing is a case of, there isn’t affordable housing, you build it, you build wrap-around supportive services around it and you save money in the end and save lives. What could be better than that?”

General Treasurer Seth Magaziner got to the heart of the issue when he refuted the fantasy of eliminating the social safety net. “No matter how many jobs we have, no matter how strong our economy is, there are always going to be people who need help. There are always going to be people, whether it’s a disability, mental or physical, or it’s just bad luck, who are going to need help and going to need support.”

George Nee put it simply when he said, “We know what to do. We know what works… it’s been demonstrated.”

Homelessness is a problem with a solution. Solving the problem is a moral choice we can make.

**Jean Johnson**, Ex. Dir. House of Hope Community Dev. Corp.

January 7, 2015January 7, 2015

Best wishes Tom Sgouros, new adviser to Seth Magaziner

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

It’s always gratifying when one of the best and most deserving folk actually get a position in government where they can make a powerful difference. We recently learned that RI Future contributor Tom Sgouros has been appointed as senior policy adviser to Seth Magaziner, the new treasurer of Rhode Island.

Tom was himself a candidate for the office of treasurer in 2010 but dropped out early in the race that Gina Raimondo would go on to win. He is known for his incisive, well-researched and often sarcastic insights into the economics and policies of Rhode Island.

In addition to writing for RI Future, Tom recently started — and will suspend — an excellent column in the Providence Journal. Which is a shame, but a fair tradeoff for honesty and transparency in government.

Tom’s most recent book, Checking the Banks is subtitled “The Nuts and Bolts of Banking for People Who Want to Fix It”, so it looks like they’ve picked the right person for the right job.

sgouros book ad — “This is a marvelous book! Well-written—even enjoyable to read—about local banking! ” — Gar Alperovitz, author of What Then Must We Do?

In the book, Tom goes into great detail about what’s wrong with the banking system, like the mortgage crisis, lack of loans to small businesses, and predatory practices. He also offers alternatives, solutions and possibilities for change.

We hope that Tom and Treasurer Magaziner will create bold initiatives to make banking more innovative. Maybe we can start our own state bank, and save taxpayers millions while priming the local economy’s pump…

At the beginning of the session everything is possible. Now the hard work begins.

(DISCLAIMER: As the editor and publisher of two of Tom’s best books, this article is 100% biased and slanted.)

November 5, 2014

Democrats party at the Biltmore

Raimondo 002 When Gina Raimondo took the stage as a newly minted governor elect, she pledge to build a government in Rhode Island that works for everyone, not just connected insiders. Was this mere rhetoric, or a shot across the bow of Speaker of the House Nicholas Mattiello, who presides over the Harwood/Murphy/Fox machine, the ultimate black box of Rhode Island politics?

There are things Raimondo and the other statewide office holders have said they want to do, such as repeal voter I.D., raise the minimum wage to $15, reform Rhode Island’s gun laws, tackle the issue of racial profiling and restrict the interest on usurious payday loans, (to name only a few) but tackling these issues in an even more conservative General Assembly seems an uphill climb.

Gorbea 001 The Grand Ballroom of the Providence Biltmore was the wrong place for these kind of thoughts last night as the Rhode Island Democratic Party rocketed to victory in all the big races. Last night was a celebration. Representative David Cicilline, stepping off stage after delivering his victory speech, rushed back to the podium, a huge smile on his face, to announce Nellie Gorbea’s Secretary of State win to a cheering crowd. Treasurer elect Seth Magaziner’s victory speech was short and sweet and Lt. Governor elect Dan McKee’s speech went on way too long, but the best speeches came from Gorbea and Raimondo.

The night was not without suspense. There was a collective sigh of relief when channels 10 and 12 called the Providence mayoral race for Jorge Elorza, preventing the embarrassment and inevitable scandals of a third Cianci administration (for the next four years anyway, will a 77 year old Buddy try again in 2018?) Elorza was obviously pleased: I’ve never seen him so relaxed and at ease. He has a tough four years ahead of him, and he’ll be working with a City Council with more than a few new faces and a new, yet to be determined Council President.

Elorza 003 Passing by almost unnoticed was the defeat of Proposition 3, which would have called for a Constitutional Convention. The measure failed despite a drumbeat of support from the Providence Journal. I credit the hard work and enormous talent of anti-ConCon campaign coordinator Jenny Norris, but I’ll throw a special shout out here to Mike Stenhouse, of the RI Center for Freedom and Prosperity, who helped tank the idea by inviting Grover Norquist to Rhode Island in support of the measure.

Perhaps voters intuited something about this election that both supporters and opponents of the ConCon missed: this election will have a big impact on state politics. We have a new Governor, Lt. Governor, Treasurer and Secretary of State. We have very different General Assembly, a new mayor of Providence and a different Providence City Council. As a state we just voted in a lot of change, (not all for the better in my opinion but change nonetheless) and the addition of a ConCon was just a step too far.

What is sure is that the future of this state depends as much on organization and advocacy from the public as it does on its shiny new political leaders. This state is only going to get better if we hold these new political leaders accountable.

October 24, 2014October 25, 2014

VIDEOS: Why would anyone vote for Ernie Almonte for General Treasurer?

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

Ernie Almonte can’t make up his mind.

Now he’s an “independent” running for general treasurer. But he began the 2014 campaign season as a Democrat running for governor. He was the first to announce, way back in November 2012 right after the last election. He soon realized that there was no way he would win the nomination for governor against Gina Raimondo and Angel Taveras (and later Clay Pell). So he switched to running for the Democratic nomination for general treasurer. But then he pulled the plug on that, too, when he realized he couldn’t beat Seth Magaziner and Frank Caprio.

That’s when he decided instead to go the independent route, though with the informal endorsement from the RI Republican Party.

But Almonte’s biggest problem and the cause of his vacillations is that he can’t keep his own story straight.

He claimed to be a Democrat, but he has repeatedly mouthed Republican positions such as mimicking Mitt Romney’s attack on the “47% of the public” whom Romney – and Almonte – consider to be deadbeats. He attacked Social Security and Medicare and even giving any consideration at all to raising taxes on the rich. It’s all on videotape that is linked here and here.

Almonte’s TV ads tout his credentials as an auditor, which I found to be pretty bold, given that Almonte – as Rhode Island’s Auditor General – failed to sound the alarm about our impending public pension crisis. The first warning from the Auditor General’s office about our pension problems came in the first audit report issued after Almonte resigned. We count on auditors to find problems like the one our pension funds faced, but Almonte blew it but now wants to claim credit for his experience as auditor.

At a recorded forum about a month ago, Almonte appeared on stage with his opponent Democrat Seth Magaziner. Seth very kindly gave Almonte an opportunity to recant, or at least revise, the remarks Almonte had made against the American middle-class, Medicare, Social Security and public pensions.

At first, it seemed as if Almonte was going to recant, saying that the remarks were actually written for him by the US Comptroller General who asked Ernie to take his place at a workshop and deliver the remarks. In an earlier meeting with the political action committee of one of the state’s labor unions, Almonte said that he was paid to make the remarks, as if that made it better.

In today’s video, you can see Almonte explain where the statement came from and see him say to Magaziner that he felt he couldn’t turn down the Comptroller General. Seth’s very droll answer was “I would have said NO.”

Rather than cut his losses, Almonte decided to ditch his good old boy persona to try to take Seth Magaziner to the wood shed. Almonte began lecturing him as if Seth was a school boy – “Listen to what I’m saying so you don’t get it wrong.” And Seth played right along, feeding him straight lines.

Almonte blew it again. He took the position that he doesn’t trust the government to invest people’s money, despite 80 years of successful administration. Seth said that Almonte’s attacks on Social Security were unwarranted, an “over-reaction,” and that “minor tweaks” (such as raising the current cap on the level of income is subject to Social Security – set too low and placing the burden on low-wage workers).

Almonte said that yes, “minor tweaks” could work – such as raising the retirement age. But fundamentally, he does not trust the government, even though he is running for a place in it. He calls this a “courageous conversations.”

Even though Almonte tried to gloss over his earlier remarks, he just couldn’t help himself but take a full header into the swamp. As much as he tried to pass the blame for the anti-Social Security remarks onto the Comptroller General, he ended up embracing privatizing Social Security. Period.

“I don’t trust the government to make the decisions.” Instead, he offered his “vision” of using a “financial literacy program” to teach the elderly how to cope with a new private system where they have to invest the money themselves “so people don’t have to rely on the government.” If that’s not a full-throated call for privatized Social Security, I don’t know what is.

Here’s the new video (you can also click here to see it):

Was Almonte asleep during 2008 – 2009 when those private retirement accounts – 401(k)s and IRAs – crashed and, in many cases, ended up being used to cover mortgage payments?

Actually, Almonte was asleep, because if you look at the reports he issued for the state’s pension funds for those two years (his last before he resigned to run for state office), you’ll see nary a hint of alarm. Click here and here to see what I’m talking about.

But worse than that, it was Almonte’s job in the years leading up to the market crash and Rhode Island’s subsequent pension crisis to point out that the state was failing to make the promised deposits into state workers’ pension funds even though those state workers consistently paid their fair share.

Where was RI Auditor General Almonte while all this happening? Well, then he was part of the government apparatus that he now doesn’t trust. With his record, and his recorded radical views on pensions, Social Security and the middle-class, he wants us to trust him to be General Treasurer?

August 28, 2014August 29, 2014

Bill Clinton loves RI, policy-wonking, Seth Magaziner

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

clinton magaziner — This is as close as I got to Bill Clinton.

Bill Clinton knows how to play the room. So when the 42nd president of the United States took the podium at the Convention Center in Providence yesterday, he opened with: “I love Rhode Island.”

The former leader of the free world also has a fondness for Seth Magaziner, for whom he was here campaigning.

“He represents hope,” Clinton said, invoking both our state motto and his famous 1991 campaign slogan, when it was he coming from nowhere to best a political insider during an economic downturn.

Magaziner was just eight-years-old then, but he was already a Clinton supporter. He wrote a letter to the editor in the Bristol Phoenix extolling the virtues of the 32-year-old Arkansas governor. “I think that’s what put him over the top,” Magaziner joked. His father, Ira Magaziner, is a longtime friend and adviser of Clinton’s, who worked in the White House and now heads the Clinton Global Initiative.

“He’s a total policy wonk, and that’s why I love talking to him,” Seth said when I asked him about the behind-the-scenes Bill Clinton.

Clinton did have a good sense of Magaziner’s policy proposals, speaking at length about his so-called “blueprint” that would create an infrastructure bank, a clean energy fund and investing a greater portion of the pension fund in emerging local businesses.

“You’ve been through a really rough time since this financial crash,’’ Clinton said. ‘‘You deserve as many good jobs as quickly as you can get them, and Seth Magaziner will help you get them.’’ He said Rhode Island’s treasurer’s office has more constitutional authority than many other states, and that Magaziner’s so-called “blueprint” will help improve Rhode Island’s economy.

“He really did read the whole thing,” Magaziner told me afterwards. “Of course I was nervous when I knew he was reading it but I was excited when I heard that he liked it.”

Magaziner said he first mentioned the Clinton last summer that he was considering running for general treasurer. I asked him if Clinton offered any advice.

“He won his campaign based on promoting ideas and his advice to me was to do the same here,” Magaziner said. “Anyone who is running for treasurer right now has to be talking about those core economic issues. He understood, especially given everything Rhode Island is going through, that’s what people would want to hear.”

August 25, 2014

Magaziner surge against Caprio hardly a surprise

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387

IMG_2521-300x199 — Seth understands the importance of reaching out to voters where they live and work. By contrast, Frank Caprio knows out to reach out to the Republican State Committee.

The clock is ticking down rapidly to the September 9 primary where Democrats will have to choose between Seth Magaziner and Frank Caprio as the Democratic candidate for General Treasurer. Polling shows Seth’s public support has jetted ahead to take a 12 point lead over Frank Caprio in the final days. This is a huge shift from the 18 point lead Caprio held over Magaziner in June – a 30-point swing!

It’s pretty easy to understand why this surge happened. One factor was the decision by the third contender, Ernie Almonte, to run not as a Democrat, but rather as an independent with the Republican Party’s tacit endorsement. That was probably a wise move for Almonte, after video emerged showing him promoting right-wing views on issues like Social Security, Medicare and tax cuts for the rich.

It looks like Magaziner picked up all of Almonte’s supporters and then some. Frank Caprio is stuck with his core constituency of very conservative Democrats and party regulars loyal to his father, Judge Frank Caprio.

David Caprio

It also didn’t help that his brother David, a former Narragansett/South Kingstown state Representative, to be revealed as a player and partner with Rep. Peter Palumbo in a sleazy deal to get the state’s big beach concession contract. In what looks like blatant bid-rigging, David Caprio filed the second best bid behind Rep. Palumbo to run the concessions at state beaches.

Once Palumbo won the bid, he withdrew, so the state awarded the contract to David Caprio. Then, Caprio hires Palumbo to actually perform the contract, but at a loss of $250,000 to the taxpayers. The State Police are investigating and the state Ethics Commission is going after Rep. Palumbo because, as a state legislator, he is forbidden from bidding for, or carrying out, state contracts. David Caprio, for his part, resigned as Democratic State Party Chair. He has apparently not resigned from the RI Judiciary Disciplinary Board where he oversees the conduct of all Rhode Island lawyers, including his father and his brother Frank.

As a Democratic State Committee member over the past several election cycles, I saw David Caprio’s only achievement as state party chair was to grease the wheels and whip the vote to get the state party regulars to endorse his brother Frank.

Other than that, David Caprio was practically invisible. Statements by Republicans, no matter how outrageous, remained unanswered. Former state party chair Ed Pacheco had us spoiled – he never let the GOP get away with attacks without a fast and furious response.

The excuse given for David Caprio’s very rare appearances was that he was too busy doing party fund-raising. At least that was the excuse when party members would ask why they never saw him around. However, the campaign finance reports filed by the state party show that Caprio raised virtually no money. The party’s primary sources of funds were contributions of $3500 from most of the candidates for state office. The party reports show that even with a depleted staff, they were running close to the bone.

This unseemliness was enough to shake the faith of even the most loyal party regulars, questioning where the Caprio family was leading them this time.

No resume, no second chance

Lacking any message other than ‘give me another chance,’ Frank Caprio has rolled out negative TV ads challenging Seth Magaziner’s résumé. Caprio’s attacks twisted the facts beyond recognition, as Magaziner’s former boss made clear, Caprio’s attacks on Seth’s résumé only make you want to take another look at Frank Caprio’s own résumé:

When Frank Caprio served as General Treasurer from 2006-2010, he failed to take action to prevent the underfunding of public workers’ pension funds.
As a candidate for Governor in 2010, Caprio pretended he had nothing to do with the pension crisis and instead blamed public workers and ran on the position that he would slash their pension benefits.
In 2010, Caprio actually had private talks with the Republicans about running for Governor as a Republican but, after beating Patrick Lynch, he went on to run one of the worst Democratic campaigns in Rhode Island history.
It was so bad that, when hearing that President Obama would not endorse him, he publicly said the President could take his endorsement and “shove it.”
After coming in third in the 2010 Governor’s race, he dropped his Democratic Party membership and in 2012, rooted for Mitt Romney to defeat President Obama.
When Caprio decided to run again for his old seat as Treasurer, he first discussed running as a Republican with the GOP State Party chair, just as he did in 2010.
Finally, he decided to run as a Democrat after his brother David was installed as the new state Party Chair.

Accepting the state party convention’s endorsement, Frank Caprio’s acceptance speech can be easily summed up as ‘I won’t screw up as much as I did last time.’

Seth Magaziner

After all that, you would think that Rhode Island Democrats would support a yellow dog rather than Caprio, provided the yellow dog had an untarnished reputation. Fortunately for RI Democratic voters, they already have an alternative with great qualifications and an unblemished reputation in Seth Magaziner.

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

Life-long Democrat
Backed by state and national democrats such as Bill Clinton, Deval Patrick, Patrick Kennedy, Liz Roberts, 13 Democratic city and town committees, RI Progressive Democrats, organized labor, RI-NOW and a host of others.
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 who testified at the state and federal level about the dangers of predatory financial services such as payday lending and pawn shop check cashing.
In addition, Seth has published a detailed plan to make the Treasurer’s office an economic engine, including launching an RI green bank and (this is one of my favorites) investing more of the Treasury’s dollars locally.

And if you want to read more about Seth and what he plans to do on behalf of the people of Rhode Island, click here.

Deprecated: Function get_magic_quotes_gpc() is deprecated in /hermes/bosnacweb08/bosnacweb08bf/b1577/ipg.rifuturecom/RIFutureNew/wp-includes/formatting.php on line 4387