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Magaziner Demanding $10K for Public Records Request from Forbes’ Siedle

Thursday, March 24, 2016

 

Rhode Island General Treasurer Seth Magaziner

Rhode Island General Treasurer Seth Magaziner's office is charging more than $10,000 for Forbes' columnist Edward Siedle's investigation into the Rhode Island pension system's real estate investments, which Siedle identified in December as the fund's "worst performing asset class by far."

Siedle, a former United State Securities and Exchange Commission (SEC) lawyer, who has conducted multiple investigations into Rhode Island's pension system, most notably looking into the fee structure to Wall Street under former Treasurer and now Governor Gina Raimondo, said he was "shocked" by the price tag. 

"I find it unbelievable that the prince of transparency would put such a high price tag on a public records request," said Siedle on Wednesday. "We're just looking at a sliver of real estate -- the most [Raimondo] ever wanted to charge $7,000 and that was a broader request."

Outsourcing Firm

Siedle noted that the records response did not come from the office, but rather the firm that the office has used to outsource requests. 

"Now [Magaziner's] got an outside firm he contracts with to handle request, called NextRequest," said Siedle. "I don't know anything about them, but I'd be willing to bet it's [private equity] related.  It appears to be a technology platform that asks to people to friend it on Facebook, that type of thing. It was probable created to provide a buffer to the office."

The Treasurer's office responded with the following on Wednesday:

"Treasurer Magaziner is deeply committed to transparency and has made Rhode Island’s pension system one of the most transparent in the nation. Pursuant to Treasurer Magaziner’s Transparent Treasury initiative, thousands of pages of documents requested by Mr. Siedle are available on Treasury’s Online Data Portal and Investment Information Center, including portfolio-level and fund-level real estate fees, monthly portfolio-level real estate fund performance, and other analyses, reports and summaries related to the pension fund’s  real estate investments," said Magaziner spokesperson David Ortiz. 

Edward Siedle

"Treasury staff has worked for the last two weeks at taxpayer expense, and no cost to Mr. Siedle, to provide 1,267 pages of documents in addition to the multitude of documents already available online. Additional records that may be responsive to Mr. Siedle’s request, particularly older documents produced prior to 2012, would require a search and retrieval of Treasury’s archive estimated to require more than 400 hours of additional staff time," said Ortiz. "Mr. Siedle has been notified that Treasury staff will continue to retrieve and review every document that may be responsive to his request provided that he reimburses Rhode Island’s taxpayers $15 per hour, pursuant to the state’s public records law. It is worth noting that although the statutory reimbursement rate is $15 per hour, the hourly cost to taxpayers for servicing Mr. Siedle’s request is $57.93 per hour."

Official Response:

The following are portions of the response sent to Siedle, who said that he is considering "next steps" following the more than $10,000 being asked of the office. 

We write in response to your request for information pursuant to the Rhode Island Access to Public Records Act (APRA).  Your specific request is noted below along with our corresponding response.

Records pertaining to fees prior to 2012 and analyses, reports, and summaries that have not already been provided would require a search and retrieval of our archive.

Due to the number of years requested and the number of investments that ERSRI holds, it is reasonably estimated that it will take approximately 72 hours to search, retrieve and review additional documents that may be responsive to your request.  Pursuant to Rhode Island General Laws §38-2-4, ERSRI may charge $15.00 per hour (with the first hour free) for search and retrieval. ERSRI has already expended in excess of fourteen (14) hours on your request, therefore a charge of $1080.00 (72 hours x $15) will be assessed in the event that you would like for us to undertake this analysis and review.  Kindly provide pre-payment in the amount of $1080.00 to our office. 

Please be advised that payment does not guarantee that the records you have requested constitute public records (in whole or in part, i.e. redacted), but only authorizes this office to conduct a search and retrieval to determine if responsive records exist.  Should actual fees exceed the pre-payment estimate this office will advise you and seek your authorization before continuing.  Should your pre-payment exceed actual search, retrieval, and copying, you will, of course, be reimbursed.  Please note the time in which our office has to respond to your request is tolled until payment is received.

* Copies of any prospectuses, offering memoranda, subscription agreements and any side letters or agreements related to these real estate investments.

Due to the voluminous nature of your request, the number of years that you seek, and the number of investments ERSRI holds in real estate, it is reasonably estimated that it will take approximately 180 hours to retrieve and review documents responsive to your request.  Additionally, the documents responsive to your request likely contain information that is exempt from public record pursuant to Rhode Island General Laws § 38-2-2(A)(II)(B) and would require redaction.

Pursuant to Rhode Island General Laws §38-2-4, ERSRI may charge $15.00 per hour (with the first hour free) for search and retrieval. ERSRI has already expended in excess of fourteen (14) hours on your request, therefore a charge of $2,700.00 (180 hours x $15) will be assessed in the event that you would like for us to undertake this analysis and review.  Kindly provide pre-payment in the amount of $2,700.00 to our office. 

Please be advised that payment does not guarantee that the records you have requested constitute public records (in whole or in part, i.e. redacted), but only authorizes this office to conduct a search and retrieval to determine if responsive records exist.  Should actual fees exceed the pre-payment estimate this office will advise you and seek your authorization before continuing.  Should your pre-payment exceed actual search, retrieval, and copying, you will, of course, be reimbursed.  Please note the time in which our office has to respond to your request is tolled until payment is received.

* Copies of any correspondence or communications related to these real estate investments.

We have identified approximately 113,813 email messages which may be responsive to your request. It is reasonably estimated that it would take approximately 474.22 hours to retrieve and review these communications.  Pursuant to Rhode Island General Laws §38-2-4, ERSRI may charge $15.00 per hour (with the first hour free) for search and retrieval. ERSRI has already expended in excess of fourteen (14) hours on your request, therefore a charge of $7,113.30 (474.22 hours x $15) will be assessed in the event that you would like for us to undertake this analysis and review.  Kindly provide pre-payment in the amount of $7,113.30 to our office. 

Please be advised that payment does not guarantee that the records you have requested constitute public records (in whole or in part, i.e. redacted), but only authorizes this office to conduct a search and retrieval to determine if responsive records exist.  Should actual fees exceed the pre-payment estimate this office will advise you and seek your authorization before continuing.  Should your pre-payment exceed actual search, retrieval, and copying, you will, of course, be reimbursed.  Please note the time in which our office has to respond to your request is tolled until the fees are paid.

 

Related Slideshow: RI Public Pension Reform: Wall Street’s License To Steal

See the key findings from Forbes' columnist Edward Siedle, who unveiled his investigative report into the RI pension system, "License to Steal," in October 2013.  

"The Employee Retirement System of Rhode Island has secretly agreed to permit hedge fund managers to keep the state pension in the dark regarding how its assets are being invested; to grant mystery hedge fund investors a license to steal, or profit at its expense using inside information; and to engage in potentially illegal nondisclosure practices," said Siedle.  

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