EXCLUSIVE: Siedle Announces Political Plans for 2018

Friday, June 01, 2018


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SEC Whistleblower Ted Siedle

Ted Siedle, who has won record whistleblower settlements with the Securities and Exchange Commission has issued a letter telling Rhode Islanders his intention for seeking elected office in 2018. Siedle, a columnist for Forbes and a former SEC attorney, has been exploring a run for Rhode Island Attorney General.

Siedle writes in the message sent to GoLocal:


Last summer when news of a record $48 million whistleblower award from the U.S. Securities and Exchange Commission was reported in GoLocal and again early this year when I was awarded a record $30 million by the U.S. Commodity Futures Trading Commission, hundreds of Rhode Islanders reached out to me and asked whether I might run for Attorney General.

In the eyes of many in the state, these awards were final vindication of my views regarding mismanagement of the state pension.

Also, whether we like it or not—and I don’t like it one bit—having millions, at a minimum vastly increases the odds that you can win an election in America today.

I enthusiastically agreed to consider a political campaign. I can’t tell you how bizarre it has been to embrace the new reality that I can actually become a politician instead of critiquing the financial messes they create.

It was pension fraud that brought me to Rhode Island five years ago and pension fraud has kept me coming back.

It was obvious to me sitting fourteen hundred miles away in Florida in 2013 that the people of Rhode Island were being misled and duped by the newly elected General Treasurer, her political pals and Wall Street backers, including Enron’s John Arnold, a hedgefund manager who donated a half a million dollars to her campaign.

Tricked, scammed, conned, deceived, ripped off. Pick any word sufficiently malicious for the cowardly scheme they had painstakingly planned.

Gina Raimondo’s so-called “pension reform”—a plan to slash state workers retirement benefits to supposedly shore up the state pension—would spectacularly fail. It was obvious to the trained eye.

Worse still, the plan was designed to fail.

And not only would it fail in Rhode Island, Wall Street’s “fix” to public pensions—which Raimondo rolled-out in Rhode Island and then hastily promoted across the country—would cost the nation’s state and local government workers over $1 trillion in retirement savings by 2018.

Thank you, Gina.

Ask yourself: Why was Raimondo frantically jetting from coast-to-coast selling her Wall Street pension “solution,” long before it had been proven to work—even as investment legends like Warren Buffett and John Bogle were publicly warning against it?

Because within 5 years, it would crash and burn.

Time was of the essence in peddling her house of cards.      

You don’t gamble your way out of a crisis.

Gambling is a sure prescription for financial ruin—but never the cure.

Raimondo’s scheme, well-financed by Wall Street hedge fund billionaires, was never about solving pension underfunding in Rhode Island or anywhere else.

It was a wealth transfer, pure and simple.

Cut worker’s benefits by 3%, increase pay to Wall Street by 4%.

And it was called this the RI Retirement Security Act ( RIRSA -2011) which was written, signed and passed by the RI General Assembly

The one sure outcome was that Wall Street would get vastly richer, with workers paying the price.

That’s no austerity plan.

It wasn’t prudent.

It wasn’t disciplined.

It wasn’t disclosed.

That is, the true intent behind the plan was never disclosed to pension stakeholders—taxpayers and workers.

The cost to the state pension to date was, last I looked, over $500 million in five years.

I call it the greatest theft in the history of the state of Rhode Island because that’s exactly what it was.

And pension thievery is still going on….

Current Treasurer, Seth Magaziner’s so-called “back to basics” plan might more aptly be referred to as “more of the SOS.”   

I was fortunate when I first came to Rhode Island with nothing more than well-founded suspicions regarding the proposed “pension reform,” to be listened to and eventually financially backed by Rhode Island Council 94 of the American Federation of State, County and Municipal Employees to conduct a forensic investigation—to dig deeper.

It took guts for the leaders of Council 94 to spend even a dime of workers’ money on an investigation that might go nowhere.  

The findings of that investigation titled Rhode Island Public Pension Reform: Wall Street’s License to Steal, were devastating to Raimondo and her fellow scammers.

I concluded that the pension had secretly agreed to permit hedge fund managers to keep it in the dark regarding how its assets were 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.

To make matters worse for Raimondo, the New York Times and Rolling Stone magazine swiftly supported my findings.

Raimondo was forced to disclose on the pension’s website that fees paid to Wall Street had skyrocketed from $10 million to almost $90 million.

I was also fortunate to have the financial support of nearly 500 Rhode Islanders for two subsequent “crowdfunded” forensic investigations of the state pension.

Double Trouble: Wall Street Secrecy Conceals Preventable Pension Losses in Rhode Island in 2015 was America’s first-ever internet funded forensic investigation of a state pension.  The key finding of the investigation was that redesign of the pension system that was supposed to save taxpayers $4 billion over 25 years, had already—in the first four years— cost the pension $1.4 billion.

Rhode Islanders can be proud of having successfully used the internet to challenge mismanagement of their state pension.

The second crowdfunded investigation focused on mismanagement of real estate.

Beyond Bad: A Generation Of Real Estate Mismanagement At Rhode Island State Pension revealed that targeting local development and paying rich disclosed and hidden fees of over 4 percent a year to real estate managers netted the pension a mere .69 percent over 27 years.

By way of comparison, Treasury Bills over same period had provided an annualized return of 3 percent—incurring zero risk.

Most recently, I have been working with the Rhode Island Retired Teachers Association to continue to press for answers to their questions from the current Treasurer—answers which will expose the ongoing mismanagement of the pension.

If you remember nothing more from my efforts in the state, remember this:

There would never have been a pension shortfall and the state economy would have been far more prosperous over the past thirty years, had the pension been professionally, as opposed to politically, managed.

The health of the pension is key to the wealth of the state and its citizens.  

I do want to mention that I have not always been focused on pension mismanagement in Rhode Island.

In 2014, I submitted a proposal to the Department of Administration of the state, to undertake an analysis of the 38 Studios matter which was rejected without notice, or an opportunity to be heard. Instead, the contract was awarded to another firm with a 50 percent premium.

Not surprising, it seems that no one in state government wanted me to investigate 38 Studios—even if I was willing to do the work for far less. Why? Because they believed, rightly, that my conclusions would be damning.

Pay for a cover-up or pay to uncover? That’s an easy choice for culpable politicians.

To this day, no one in Rhode Island has given the 38 Studios debacle the forensic investigation it deserves.

Pension fraud… 38 Studios…. these are the greatest crimes ever perpetrated in the history of the state.

These crimes should be the key focus of your next Attorney General.

Your next AG should have the skills and the will to “boldly go where no man has gone before.”

This is a political minefield- investigating financial crimes perpetrated by elected politicians. Any AG candidate who is unwilling to commit to these investigations is worthless; a waste of time.

I would love to be the AG of Rhode Island because, in my opinion, a single state AG willing to take on Wall Street could change the world. I am confident that as AG, I would be able to improve the lives of Rhode Islanders, and that would be precisely the benchmark I would ask citizens to judge me by.

With much deliberation and discussion with my family and children, the conclusion is that I cannot uproot my family to come to Rhode Island at this time. But the door remains open in the future. And I am still actively pursuing working with lawyers, media and others around the country who understand the magnitude of the wrongdoing in Rhode Island and I’m actively searching for opportunities to hold those responsible accountable.

I wish to thank all those who have encouraged me in this political endeavor. I thank all of you for considering my candidacy. You will be hearing more from me in the future. It’s most unfortunate I can’t, at this time, come to RI, but you can’t take RI out of my thoughts.


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