NEW: Forbes’ Siedle Releases Latest Investigation into RI Pension System
Saturday, June 06, 2015
In his second investigation into the Rhode Island pension system, Forbes' columnist and former SEC attorney Edward Siedle has released his latest report, Double Trouble: Wall Street Secrecy Conceals Preventable Pension Losses in Rhode Island.
"The executive summary says it all," said Siedle on Friday. "Even the first page says basically what it comes down to. It says it [pension reform] was supposed to save $4 billion in 20 years, but it lost $2 billion in the first four years. The other big point is this was all preventable. These were wrong decisions, they were wrong from the inception. It's not 20/20 hindsight."
Read the Report HERE
Previously, Siedle had release his first report of the Rhode Island pension system, License to Steal, in the fall of 2013. Siedle announced this past spring that he would be crowdsourcing his second investigation, by ultimately raising over $20,000 in anonymous, online donations.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"This is also a crowfunding success story," said Siedle. "People want answers, they want transparency."
Fees Uncovered, Real Estate Findings
"This report is a lot about bringing Rhode Islanders up to speed on what's going on, when SEC has said half of private equity managers are breaking the law," said Siedle.
Siedle said in his investigation he uncovered fees to be higher than previously reported
"I found the [pension fund] fees in Rhode Island may be as high as $161 million. [Rhode Island General Treasurer Seth] Magaziner said it's $74 million. Remember, former Treasurer Gina Raimondo said they were $11 million, then by the end she admitted it was $70 million. Well, now it's well over $100 million. Nationally, it's been reported that private equity is being underreported, and here is a prime example."
Siedle noted that the performance of the state's real estate investments was a significant portion of his second investigation.
"The fact that that Rhode Island has the worst real estate performance in the country, there should be a full investigation," said Siedle. "How did it lose more money in real estate than any other fund in the country? Real estate isn't governed by the SEC, but someone should be held accountable. It's hard to be the worst in the country. When you have this performance, people deserve an explanation."
Related Slideshow: RI Public Pension Reform: Wall Street’s License To Steal
See the key findings from Forbes' columnist Edward Siedle, who unveiled his investigative report into the RI pension system, "License to Steal," in October 2013.
"The Employee Retirement System of Rhode Island has secretly agreed to permit hedge fund managers to keep the state pension in the dark regarding how its assets are 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," said Siedle.
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