NEW: Siedle Blasts Raimondo for Withholding Hedge Fund Info
Thursday, August 08, 2013
Read Statement from Siedle
"In their letter released today four open-government groups - Common Cause Rhode Island, the state's chapter of the American Civil Liberties Union, the Rhode Island Press Association and the League of Women Voters of Rhode Island have voiced legitimate concerns regarding Rhode Island treasurer Gina M. Raimondo’s strategy of withholding hedge fund records from the Providence Journal.
These groups may be surprised to learn that the Journal was neither the first nor the only party to request reports detailing hedge fund operations and fees. The American Federation of State County and Municipal Employees and I, as well as others (including individual participants in the pension), have been requesting information regarding hedge fund and other alternative managers at least since the beginning of 2013. We’ve all been provided even less information than the Providence Journal. Further, we’ve been told that we would have to pay—which the Journal did not—for the information the treasurer provided to the Journal for free. Further, we were warned that there was no assurance, even if we did pay thousands of dollars, that we would receive any of the details (documents without redactions) we sought.
Refusing to disclose to the public, including participants in the state pensions, material information regarding high-cost, high-risk speculative investment schemes is bad enough.
Even more indefensible is Raimondo’s claim that the state is contractually obliged to defer to the hedge fund and alternative manages on the release of so-called proprietary information. Delegating to private entities the decision as to what records are available under the open-records law would, obviously, effectively nullify it.
While Raimondo claims that the state’s hedge fund managers oppose release of material information about their operations to any party, in my professional experience that’s unlikely. If she wanted their information made public, they would comply—in a heartbeat.
I routinely review such hedge fund documents on behalf of pensions and participants in plans. Hedge fund managers know better than to object when pension sponsors instruct them to submit to an independent, expert outside review. In fact, I already have the supposedly secret documents related to many of the state pension’s hedge fund managers.
What’s most disturbing to me, and may involve further violations of law, is the treasurer’s practice of intentionally disclosing to the public incomplete information about the pension, its managers, performance and fees-- information which is misleading. Providing misleading information about investments is, in my opinion, far more damaging to investors, indeed investors globally, than simply withholding information.
The real danger is that the world comes to believe, as a result of Raimondo’s advocacy efforts, that hedge funds are lower cost and better performing than they, in reality, are."
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