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Riley: Close, But No Cigar for Providence

Tuesday, August 02, 2016

 

Providence has just stunned me by its actions and Mayor Elorza has almost fulfilled a promise to pay contributions to the pension plan in the same fiscal year that he allocated contributions to the pension plan. This is the first time this has happened in at least a decade and probably 20 years. How did he do it? Where did the money come from? So now the assets in the pension plan are real and at year end assets totaled $246 million dollars. An additional $47 million was deposited on July 25.  After the July 25 deposit flash assets are $295 million. The adviser, Wainwright Investment Counsel LLC, has taken the extra step of showing the actual cash flows to and from the fund. The chart below shows the enormous inflow of funds to the plan in the last few weeks of June and July 2016.

 

 

 

I am waiting to see where the money came from and whether the city books will still show a liability to the pension plan. Why has this never happened before? Clearly SOMETHING has happened in city hall and an enormous effort to improve accounting is underway. Perhaps the regulators are already there in Providence. After watching the recent worsening spectacle of 38 studios and the massive abuse of power in Rhode Island government, it wouldn’t surprise me if the State and the Mayor have suppressed news of an investigation into the city. 

New Revenue Director Mr. Robert Hull was on TV this weekend and I got the sense that Mr. Hull  is on the case and that Providence will receive real scrutiny. 

While this appears to be progress, there are still large looming questions about the earnings that should have accrued to pension investors for the last 20 years. There is the very real question of purposely misleading municipal bond investors about the health of the pension plan and the reported level of assets. If those assets were diverted illegally, what is owed to the pension plan? Once these facts are acknowledged, it follows that from 2005 to 2016 Providence mayors and finance directors and other appointed and elected officials have purposely deceived municipal bond investors about the true health of Providence finances. 

I will take credit for the improvements made as virtually no one in oversight seemed to have a clue that money was diverted. The unions were oblivious and the State Auditor Generals as well as the pension Crisis Commission should have caught the wild discrepancies in Providence reporting of pension assets. I first noticed in Fall of 2013. No amount of questioning produced a response until Segal ruling released in Spring 2014 that Providence was falsely overstating pension assets. Providence continues to overstate pension assets to this day adding to years of understated funding ratios that were used to calculate ARC and thus purposely understated the contributions necessary by cash strapped Providence. The result was a constantly deteriorating funded ratio placing beneficiaries and taxpayers in danger of huge costs and take backs.

This is just one more reason to create the Office of Inspector General. Current office holders are not to be trusted. 

Other States have an OIG. Here’s why:

Reasons cited by different states for having an Inspector General include:    

•    maintain public confidence
•     need for entity to prevent fraud
•     created in the wake of a scandal    
•     root out fraud, corruption and inefficiency is state government, and cut down waste of taxpayer money

Rhode Island needs and OIG -- ASAP.

Michael G. Riley is vice chair at Rhode Island Center for Freedom and Prosperity, and is managing member and founder of Coastal Management Group, LLC. Riley has 35 years of experience in the financial industry, having managed divisions of PaineWebber, LETCO, and TD Securities (TD Bank). He has been quoted in Barron’s, Wall Street Transcript, NY Post, and various other print media and also appeared on NBC News, Yahoo TV, and CNBC.

 

Related Slideshow: Top Providence Pensions

Prev Next

#49

Name- Daniel Guertin

Annual Earning- $95,050.92

Postition- Police-5

City- Providence   

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19,1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#48

Name- Carmine Vallante

Annual Earning- $95,140.20

Postition- Fire-4

City- Johnston

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19,1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#47

Name- Alfred Millard

Annual Earning- $95,368.32

Postition- Fire-4

City- Warwick

State- RI

Retirement Type- Accidental Disability

Retirement Date- March 24, 1994

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#46

Name- James Rattigan

Annual Earning- $95,983.44

Postition- Fire-4

City- North Providence   

State- RI

Retirement Type- Service

Retirement Date- June 30, 2003

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#45

Name- Frank Deangelis

Annual Earning- $95,986.80

Postition- Fire-4

City- North Providence   

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#44

Name- Stephen Lowe

Annual Earning- $96,156.36

Postition- Fire-4

City- Bristol   

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 17, 1992

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#43

Name- Mary Gonsalves

Annual Earning- $97,463.04

Postition- Police-5

City- Warwick

State- RI

Retirement Type- Beneficiary

Retirement Date- December 1, 1993

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#42

Name- William O'Neill

Annual Earning- $98,160.96

Postition- Fire-4

City- Cumberland   

State- RI

Retirement Type- Accidental Disability

Retirement Date- August 22, 1990

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#41

Name- Paul Healy

Annual Earning- $98,183.28

Postition- Fire-4

City- Cranston  

State- RI

Retirement Type- Service

Retirement Date- October 20, 1993

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#40

Name- James Molloy

Annual Earning- $98,711.16

Postition- Fire-4

City- Providence   

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 18, 1987

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#39

Name- Livia Miller

Annual Earning- $99,193.80

Postition- Fire-4

City- Warwick 

State- RI

Retirement Type- Beneficiary

Retirement Date- May 1, 1997

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#38

Name- Joseph Battista

Annual Earning- $99,271.08

Postition- Fire-4

City- Johnston

State- RI

Retirement Type- Accidental Disability

Retirement Date- April 29, 2004

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#37

Name- Robert Kerfoot

Annual Earning- $100,140.36

Postition- Fire-4

City- Cranston

State- RI

Retirement Type- Accidental Disability

Retirement Date- March 24, 1994

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#36

Name- Ralph Ricci

Annual Earning- $100,357.44

Postition- Fire-4

City- Providence

State- RI

Retirement Type- Accidental Disability

Retirement Date- April 28, 1994

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#35

Name- Henry Latek

Annual Earning- $100,502.52

Postition- Fire-4

City- Providence

State- RI

Retirement Type- Service

Retirement Date- June 30, 1995

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#34

Name- Joseph Bradley

Annual Earning- $100,898.52

Postition- Fire-4

City- Whitefield

State- NH

Retirement Type- Accidental Disability

Retirement Date- November 20, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#33

Name- Ronald Johnson

Annual Earning- $102,098.64

Postition- Fire-4

City- North Scituate

State- RI

Retirement Type- Accidental Disability

Retirement Date- May 1, 2003

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#32

Name- Gloria Pisaturo

Annual Earning- $103,385.76

Postition- Police-5

City- Warwick

State- RI

Retirement Type- Beneficiary

Retirement Date- December 1, 2002

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#31

Name- Edmond Malloy

Annual Earning- $103,575.72

Postition- Police-5

City- Chepachet

State- RI

Retirement Type- Accidental Disability

Retirement Date- September 5, 1990

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#30

Name- John Reposa

Annual Earning- $104,665.44

Postition- Fire-4

City- Jamestown

State- RI

Retirement Type- Accidental Disability

Retirement Date- June 21, 1995

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#29

Name- Pasquale Rocchio

Annual Earning- $105,238.32

Postition- Police-5

City- North Providence

State- RI

Retirement Type- Service

Retirement Date- August 22, 1989

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#28

Name- David Deignan

Annual Earning- $105,609.36

Postition- Police-5

City- Providence

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#27

Name- Lee Podedworny

Annual Earning- $106,838.16

Postition- Fire-4

City- South Kingstown

State- RI

Retirement Type- Accidental Disability

Retirement Date- July 23, 1992

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#26

Name- Nancy Donahue

Annual Earning- $107,757.24

Postition- Fire-4

City- Warwick

State- RI

Retirement Type- Beneficiary

Retirement Date- July 1, 2005

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#25

Name- Domenic Pono

Annual Earning- $107,850.72

Postition- Fire-4

City- Cranston

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#24

Name- John Murphy

Annual Earning- $107,892.84

Postition- Fire-4

City- Providence

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#23

Name- Robert Carlson

Annual Earning- $108,555.36

Postition- Fire-4

City- Greenville

State- RI

Retirement Type- Accidental Disability

Retirement Date- April 24, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#22

Name- Robert Emmett

Annual Earning- $109,256.16

Postition- Police-5

City- Cranston

State- RI

Retirement Type- Service

Retirement Date- November 13, 1990

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#21

Name- Thomas Doyle

Annual Earning- $109,329.24

Postition- Fire-4

City- West Warwick

State- RI

Retirement Type- Accidental Disability

Retirement Date- August 26, 1988

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#20

Name- Joseph Errico

Annual Earning- $109,611.60

Postition- Fire-4

City- Warwick

State- RI

Retirement Type- Service

Retirement Date- June 30, 1995

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#19

Name- Edward MacDonald

Annual Earning- $110,225.64

Postition- Fire-4

City- Johnston

State- RI

Retirement Type- Accidental Disability

Retirement Date- May 26, 1994

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#18

Name- Alfred Lamothe

Annual Earning- $110,505.96

Postition- Fire-4

City- Warwick

State- RI

Retirement Type- Accidental Disability

Retirement Date- September 6, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#17

Name- Ernest Silva

Annual Earning- $112,796.28

Postition- Fire-4

City- Ft. Myers

State- FL

Retirement Type- Accidental Disability

Retirement Date- April 24, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#16

Name- Edward Dolan

Annual Earning- $113,126.04

Postition- Fire-4

City- North Kingstown

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#15

Name- Paul Marianetti

Annual Earning- $113,331.60

Postition- Fire-4

City- Ormond Beach

State- FL

Retirement Type- Accidental Disability

Retirement Date- November 17, 1994

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#14

Name- Rosemary Clark

Annual Earning- $114,725.64

Postition- Police-5

City- Chepachet

State- RI

Retirement Type- Beneficiary

Retirement Date- August 1, 2004

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#13

Name- John Gannon

Annual Earning- $117,318.60

Postition-Police-5

City- Coventry

State- RI

Retirement Type- Accidental Disability

Retirement Date- January 24, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#12

Name- Marcia Moise

Annual Earning- $119,791.20

Postition- Fire-4

City- Jupiter

State- FL

Retirement Type- Beneficiary

Retirement Date- April 1, 1997

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#11

Name- Robert Read

Annual Earning- $123,105.00

Postition- Fire-4

City- Cranston

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#10

Name- Alfred Bertoncini

Annual Earning- $123,599.16

Postition- Fire-4

City- Smithfield

State- RI

Retirement Type- Service

Retirement Date- December 19,1994

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#9

Name- Victor Dichiara

Annual Earning- $126,845.28

Postition- Fire-4

City- East Greenwich

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 17, 1992

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#8

Name- Edmund Calcagni

Annual Earning- $135,702.72

Postition- Police-5

City- North Providence

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 29, 1990

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#7

Name- James Kelly

Annual Earning- $137,336.04

Postition- Fire-4

City- Greenville

State- RI

Retirement Type- Accidental Disability

Retirement Date- September 28, 1988

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#6

Name- Vincent Delisi

Annual Earning- $145,520.88

Postition- Fire-4

City- North Providence

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 17, 1992

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#5

Name- William Manchester

Annual Earning- $148,839.84

Postition- Fire-4

City- Warwick

State- RI

Retirement Type- Accidental Disability

Retirement Date- December 19, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#4

Name- William D'Iorio

Annual Earning- $156,870.60

Postition- Fire-4

City- Smithfield

State- RI

Retirement Type- Accidental Disability

Retirement Date- Novemver 29, 1990

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#3

Name- Anthony Sauro

Annual Earning- $161,487.24

Postition- Fire-4

City- Johnston

State- RI

Retirement Type- Accidental Disability

Retirement Date- July 5, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#2

Name- Robert Anthony

Annual Earning- $162,944.04

Postition- Fire-4

City- Smithfield

State- RI

Retirement Type- Accidental Disability

Retirement Date- September 25, 1991

Source: This information was secured through a FOIA request from the city of Providence.

Prev Next

#1

Name- Gilbert McLaughlin

Annual Earning- $196,813.08

Postition- Fire-4

City- Warwick

State- RI

Retirement Type- Accidental Disability

Retirement Date- October 24, 1991

Source: This information was secured through a FOIA request from the city of Providence.

 
 

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