Rhode Island’s Woman of the Year
Tuesday, December 31, 2013
She Saved the Pension System and/or Rewarded Wall Street
The 2011 pension reform that Gina Raimondo orchestrated and championed was revolutionary. Make no mistake about it, pension reform was widely supported by business, Governor Lincoln Chafee, Speaker of the House Gordon Fox, Senate President Teresa Paiva Weed and the overwhelming majority of the legislature.
The rap (Raimondo’s argument for pension reform) was so convincing at first that the overwhelmed local burghers of her little petri-dish state didn't even know how to react. "She's Yale, Harvard, Oxford – she worked on Wall Street," says Paul Doughty, the current president of the Providence firefighters union. "Nobody wanted to be the first to raise his hand and admit he didn't know what the f--k she was talking about."
According to some, Raimondo has properly diversified Rhode Island’s pension fund by shifting a significant portion of the fund into alternative investments. GoLocal’s MINDSETTER™ John Hazen White vehemently defends her actions.
Correspondingly, GoLocal MINDSETTERS™ like Russ Moore and even conservative Republican Don Roach have raised questions about Raimondo’s motivation. While shifting dollars to hedge funds, from her standpoint, balances the funds, there has been a lack of transparency about fees being charged to the state’s retirement system. Her predecessor, State Treasurer Frank Caprio, has roundly criticized her investment strategy of moving dollars into hedge funds.
Will Raimondo be Rhode Island’s first woman Governor?
Going into the 2014 race for Governor, Raimondo has a number of advantages over the other candidates. She will lead the race in cash on hand with two-to-three times as much money as her opponents. She will have more than $2 million in her coffers. She is the second most popular elected official with 54% approval rate, second only to Providence Mayor Angel Taveras.
Prior to Raimondo, only two women in Rhode Island have won the nomination of a major party to run for Governor. The first was Republican Elizabeth Leonard in 1992, she was beaten soundly Bruce Sundlun. Democrat Myrth York lost her bids for Governor in 1994, 1998 and 2002.
Rhode Island born; educated at Harvard, Yale and Oxford; and champion of one of the most important political battles in Rhode Island history – she now faces the biggest political battle any woman in RI has ever faced.
Gina Raimondo is our selection as Woman of the Year, and our first two-time winner -- she was also selected in 2011.
Related Slideshow: 10 Questions Gina Raimondo Has to Answer When Running for Governor
Can she explain the amount of out of state money?
Most of the candidates for Governor need to answer the question, can they raise enough to be competitive? That is not a problem for Raimondo. She has proven to be the most skilled fundraiser, but her issue is justifying that the vast majority of the money is coming from out-of-state.
Raimondo will face a number of questions regarding who is really behind her campaign - the amount of out-of-state dollars is just one of the questions.
9. Pension Reform
Did she only reform certain pensions?
Raimondo rose to celebrity status because of her leadership on pension reform. Her efforts helped to stabilize the pension system, but the reform was hardly democratic.
Teachers took the vast majority of the hit, while major groups of pensioners escaped reform including the judges, state police and disability pensioners. Raimondo has some explaining to do.
8. Lack of Transparency
If she lacks transparency as Treasurer, what will it be like as Governor?
From her deepest critics to the media and even members of the retirement board, many have questioned her and her office's willingness to share information and provide the public insights into her management of the investment commission and the performance of the fund under her leadership.
Data which historically was easily accessed by the public and media is now locked behind the Raimondo wall. Often this raises serious questions and forces the media to seek the simplest information via FOIA requests.
7. Wall Street
Why is Wall Street spending so much money supporting Raimondo?
Raimondo is the queen of fundraising and so much of it derives from the major players on Wall Street.
Has Raimondo managed the pension fund competently?
The most important job of the General Treasurer might be the management of the state's retirement fund. The blockbuster investigative piece by Stephen Beale unveiled that the pension system under Raimondo lost $200 million.
While she may be able to blitz the airwaves with positive messages about her bio and her leadership in pension reform, her Democratic primary competitors and/or her GOP opponent in the General Election may be able to destroy her credibility by playing up her "mismanagement of the pension system."
5. Hedge Funds
Will Raimondo pay the price for shifting so much of the assets into Hedge Funds?
For the past six months, Raimondo has been under constant critique for shifting more than 20% of the State's retirement dollars into unregulated Hedge Funds. The critics has included forensic auditor/Forbes contributor Ted Siedle, Rolling Stones magazine's star reporter Matt Taibbi, former General Treasurer and candidate again, Frank Caprio, as well as many of the public unions. The combination of where she gets her campaign dollars, coupled with the shift in investment strategy and the under performance of the fund may all build into a snowball effect.
4. Connect to RIers
Educated at Yale and Harvard, a Rhode Scholar and a millionaire, can she connect to the average RIer?
Raimondo is a born and bred Rhode Islander, but for her adult life she has been educated at the best colleges in the world and living a professional life aligned with many of America's super rich associated with Wall Street. In her announcement she mentioned a number of times she was a mother, but did not mention that her husband is a partner at Mckinsey - and according to Forbes magazine probably takes home $2 million or so per year.
Raimondo talks a lot about her father losing his job when she was a child, but she has come a long way since then. She could come across as the ultimate RI success story or be perceived as an out of touch venture capitalist.
3. Siedle and Taibbi
Neither Ted Siedle or Matt Taibbi are going away - can she deflect their questions and charges?
In the past two months, both forensic auditor/Forbes columnist Ted Siedle and Rolling Stone's star reporter Matt Taibbi have raised serious issues about Raimondo's motivation and judgment.
As Taibbi wrote, "The dynamic young Rhodes scholar was allowing her state to be used as a test case for the rest of the country, at the behest of powerful out-of-state financiers with dreams of pushing pension reform down the throats of taxpayers and public workers from coast to coast."
2. Is she a Democrat?
Will Taveras and Pell paint her to be too conservative?
Raimondo is simply hated by the teachers unions and others - big blocks of voters in the Democratic primary. Both Clay Pell and Providence Mayor Angel Taveras will tack to the left and may compete for the same voters allowing her to sneak through to the general. However, progressives and unions may decide to pick Pell over Taveras (who is struggling to raise money and whose track record in Providence may come under fire) and then Pell can take the left leaning primary.
1. SEC Investigation
Can Raimondo survive an SEC investigation?
Both Siedle and a state senator have written to the SEC calling for an investigation into the investment practices of Raimondo. A federal investigation would be at a minimum a black eye to the General Treasurer and an enforcement action might end a credible campaign. Timing may prove to be everything.
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