Raimondo Donors’ Charity Gets Boost from Treasurer’s Office

Thursday, February 27, 2014

Stephen Beale, GoLocalProv News Contributor

General Treasurer Gina Raimondo has received an estimated $50,000 in campaign donations from board members and funders for a local nonprofit that her office has partnered with as part of her financial literacy initiative, a review of state campaign finance records and other documents shows.

In October 2010, Raimondo’s office announced a new partnership with the Capital Good Fund, a Providence-based nonprofit that offers financial services to low-income residents, to launch the Rhode Island Financial Coaching Corps, which offers financial advice and education.

Capital Good Fund does not have a contract with the state and it is not paid for its services, but it still benefits from the enhanced credibility it receives from its relationship with the Treasurer’s office. “When you’re looking to effect change you need to institutionalize your work,” said Capital Good Fund’s executive director and founder, Andy Posner. “We could do it by ourselves, but not as effectively.”

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At the time the partnership was announced, the Capital Good Fund—now its fifth year—had roughly a year’s worth of experience under its belt. Since then it has grown substantially: last year it helped 1,000 low-income individuals. This year it will aid 2,500, according to Posner.

State campaign finance records show that deep pockets directly tied to the Capital Good Fund have donated just over $48,000 to Raimondo’s campaign, with most donations made between 2010 and 2013. Among the donors are three of its board members, including Jacqueline G. Beshar, a scion of a highly connected family. Her parents, sister, and brother have also contributed an additional $6,200 to Raimondo. Beshar’s partner in her business, Groov-Pin, Scot Jones, has also made $4,000 in contributions.

A second board member, Lee Hower, is also an alum of Point Judith Capital, Raimondo’s former venture capital firm. Lee and his wife Heather have maxed out their contributions at $1,000 annually to Raimondo since 2009, state records show. In 2012, the Howers also donated $20,000 to the Capital Good Fund through a family charity, the Sunset Cove Foundation, according to the fund’s annual report.

At least 15 individuals or institutions that have financially backed the Capital Good Fund have done the same for Raimondo’s campaign, to the tune of about $34,000 between 2009 and 2013. They include former Hasbro chairman Alan Hassenfeld, employees at Providence College, the Rhode Island Foundation, Amica, and three banks—Bank RI, Citizens, Sovereign, and TD Bank.

Contracts and contributions

GoLocalProv has previously reported on a pattern of state contracts that were issued to institutions whose employees had been campaign donors. By summer 2012, the State Investment Commission, which is chaired by Raimondo, had invested a total of $30 million in Braemar Energy Ventures and Summit Partners Credit Fund. Officials at both firms had contributed a combined $3,000 to her campaign for state treasurer.

Early in her term, the commission selected Fidelity Investments to handle the Ocean State Investment Pool, which was anticipated to have $500 million in assets from local and state government sources. State records show that Fidelity employees had put $2,050 into Raimondo’s campaign.

A separate GoLocalProv report also found that Raimondo had helped steer potentially hundreds of thousands of dollars in work to EverFi, a financial literacy program for students that is associated with a former business partner who is also a campaign donor.

Part of a pattern?

The U.S. Securities and Exchange Commission has strict rules on donations from businesses that stand to gain financially from contracts issued by the government official who is the recipient of their campaign money. Specifically, the SEC bars investment advisers from working for a government agency for two years from the date the advisory firm has contributed to “certain elected officials or candidates.”

In addition, the SEC rule “prevents an adviser from soliciting from others, or coordinating, contributions to certain elected officials or candidates or payments to political parties where the adviser is providing or seeking government business.” However, those rules do not seem applicable to the Capital Good Fund, which does not qualify as an investment adviser for the state.

In a broader sense, however, there still is a question as to whether the nexus of campaign donors and the Treasurer’s partnership with their favored nonprofit, the Capital Good Fund, raises any ethical issues. Two experts in government and businesses ethics did not think so.

One type of donations that can raise ethical red flags is known as “pay to play.” Traditionally, the phrase is understood somewhat narrowly to mean donations that are made with the intent of receiving some future contract with a government agency run by the candidate receiving the donations, according to John Marion, executive director of Common Cause Rhode Island.

However, Marion did not see the possibility of such an ethical issue in this instance, since the Capital Good Fund is not a state contractor and is not being paid for its service. “It certainly doesn’t rise to what you would call ‘pay to play,’” Marion said.

Ed Mazze, business professor at the University of Rhode Island, agreed. “I don’t think it’s an ethical issue,” he said.

Spokeswoman defends partnership

Asked for comment, Raimondo spokeswoman Joy Fox emphasized the non-financial aspects of the Treasurer’s relationship with the Capital Good Fund.

“The Capital Good Fund and Jacqueline Beshar are not hired or paid by the state. The non-binding partnership between Treasury and the Capital Good Fund is rooted in our mutual belief that every Rhode Islander deserves access to financial coaching. Treasury is proud to work with local, likeminded non-profits to advance causes we care deeply about,” Fox said.

“Capital Good Fund is one of our many community partners working with us to move Rhode Island forward. Treasury is always to looking to expand its financial empowerment programs and would welcome more interest from the community,” she added.

When asked why so many funders and board members of the Capital Good Fund had also contributed to Raimondo’s campaign, Posner suggested that both his nonprofit and her campaign are dipping into the same pool of money—those in the financial services community in Rhode Island.

As for himself, Posner said his goal is to get board members who are well-respected, have financial experience, and can contribute financially to his nonprofit’s efforts. “I remain apolitical in my role as executive director of a nonprofit,” Posner said. “I am not in the business of endorsing candidates for office.”
 

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Related Slideshow: Gina Raimondo CGF Campaign Donations

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