RI State Report: Block v. Raimondo, RI Goes Green + Gun Violence

Saturday, October 26, 2013

Anthony Faccenda, GoLocalProv News Contributor

 

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This week’s State Report centers on gubernatorial candidate Ken Block’s ongoing criticism of General Treasurer Gina Raimondo’s handling of the state’s pension investments. Additionally, we’ll examine Rhode Island’s big push to “go green,” and take a look at several grants that the state received this week and whom they will help the most.

Block v. Raimondo

This week, Gubernatorial candidate Ken Block called out State Treasurer and likely 2014 opponent Gina Raimondo over the state’s pension investments.

Lack of transparency

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On Monday, Block critiqued the Treasurer over a lack of transparency surrounding the state’s pension investments.

“There needs to be greater transparency around Treasurer Raimondo’s shift towards alternative investments,” Block told GoLocal.

“I am concerned that the retirement system is not getting good value for the fees it is paying to these asset managers,” added Block. “Our investment performance has been lackluster since these changes were made while the fees have increased substantially, and Rhode Islanders deserve to know why.”

Gun Divestment

On Wednesday, Block released a statement in response to Raimondo's plan to divest the pension fund from investments with stakes in the gun company United Sporting Companies.

"This is an irresponsible and misguided decision by the Treasurer, who is now politicizing the investment decisions of our retirement system. She is using pension assets to score political points and pander to certain constituencies.

"Whatever you think about gun control, this is the wrong approach. The Rhode Island Treasurer's office is getting involved in a public policy decision for which it has absolutely no responsibility."

Block also requested that prior to any new divestment policies being adopted, the S.I.C. should review the existing divestment policies on the books, including Rhode Island's Sudan divestment law enacted in 2007.

"Before the Treasurer starts punishing law-abiding American companies, she should verify that the retirement system is in compliance with existing requirements to divest from foreign companies involved in the conflict in Sudan," Block said.

Block called on the S.I.C. to reject the Treasurer's proposal.

"Investment decisions should be based on what is in the financial interest of the retirement system," Block said. "Treasurer Raimondo should stopping using the pension fund as a political football."

GoLocal Investigates

On Thursday, GoLocal reported that Raimondo’s push to divest from the aforementioned gun distributor was not in compliance with an existing state law, which was enacted by the General Assembly in 2007. As part of the law—entitled the 2007 Sudan divestiture law—the Treasurer is required to file annual reports with the state’s Attorney General and General Assembly, which GoLocal found that Raimondo failed to comply with.

Wall Street’s License to Steal Report

Last Friday’s report entitled, "Rhode Island Public Pension Reform: Wall Street's License to Steal” also criticized the Treasurer for an apparent lack of transparency.

According to the report, “There has been a sinister pall of secrecy regarding fundamental investment information orchestrated by state officials and aided by key investment services providers."

The study, which was written by investment attorney and Forbes.com contributor Ted Siedle, goes on to argue that Raimondo “ has intentionally withheld information about soaring investment fees which is material in assessing both whether ERSRI should invest in costly alternative investments and whether benefit cuts are necessary to improve pension funding."

The Office of the General Treasurer responded to the report in a press release stating: "This is clearly another political propaganda piece aimed at discrediting the Treasurer and the state's pension reforms. None of this innuendo-filled report presented today seems new or different from the claims made in the past by Ted Siedle, who is being paid by AFSCME.”

The report was commissioned by Rhode Island Council 94, which is suing the state over pension changes pushed by Raimondo. Council 94 paid Siedle $20,000 to write the 104-page report.

Council 94 is Rhode Island's largest public employee union representing more than 10,000 State, City, Town, and School Department employees, Quasi-public, private sector and retirees.

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