Rhode Island's 10 Biggest Stories of the Decade - Part One

Pension Reform

In May of 2011, newly-elected Rhode Island General Treasurer Gina Raimondo pleaded for comprehensive pension reform, warning that inaction would soon cause the annual cost of the pension fund to skyrocket to $1 billion a year—threatening vital public services.

Raimondo claimed at the time that the then-current liability was at least $6.8 billion, but could be as high as $9 billion, in a press conference at Crossroads. Within a few years, she said, the annual cost would double from $312 million in 2010 to $615 million in 2013.

“Each day that the state avoids comprehensive reform, the liability grows. It is unfair to ask taxpayers to pay for the growing level of required contributions and it is dishonest to let state employees, teachers and retirees believe that full benefits will be there for their retirement,” Raimondo said.

By November of 2011, the General Assembly overwhelmingly approved a sweeping overhaul of the state’s pension system.

The Senate voted 34-2 in favor of the bill, with only Senators Frank Ciccone and John Tassoni voting in opposition. The House was in session for just under six hours and passed the bill 57-15.

Governor Lincoln Chafee signed the reform legislation and Raimondo was held up nationally as a hero by conservative watchdog groups.

Her shift of pension investment funds into more risky and higher fee hedge funds drew the criticism of former SEC investigator and Forbes columnist Ted Siedle and investigative reporter Matt Taibbi, who zeroed in on Raimondo’s investment strategy.

Rhode Island pension reform came under national attention in 2013, when Siedle first wrote in Forbes column entitled "Rhode Island's Public Pension Reform Looks More like a Feeding Frenzy" for the financial publication -- which was then followed up by "RI Pensioners 3% COLAs will go to pay Wall Street 4%+ Fees." Soon Rhode Island's pension reform -- and Raimondo -- faced intense scrutiny in both the national and local press.

The heat was turned up even further when Rolling Stone star reporter Taibbi, who'd written such articles as "How Wall Street Killed Pension Reform" and "Bank of America: Too Crooked to Fail," turned his critical eye on Rhode Island when he wrote "Looting the Pension Funds."

Taibbi wrote, "The rap 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.'" A back and forth ensued between Raimondo and Taibbi following the article, with both sides digging in their heels on the issue.  

In October of 2013, Siedle released the results of his investigation into the Rhode Island pension fund in a 100 plus page report. "Rhode Island Pension Reform: License to Steal" where Sieldle called for a federal investigation regarding a number of issues relating the "withholding of material information and misrepresentations regarding state pension costs, as opposed to a lack of knowledge about the exponential growth and magnitude of the fees (tied to Wall Street hedge funds)."

Amidst the glare, the General Treasurer stayed strong, garnering support from Institutional Investor Magazine in way of winning their Small Public Plan of the Year and posting the highest fundraising totals ever by a candidate in a quarter. 

By 2019, a new study gave Rhode Island’s teacher’s pensions an “F." It is not where Rhode Island was supposed to be seven years later after adopting comprehensive pension reform.

The grade was given by Teacherpensions.org, a project of Bellwether Education Partners, a national nonprofit which says it is “focused on dramatically changing education and life outcomes for underserved children.”

However, that poor grade is not the only measure of RI’s pension system. The not-for-profit Pew Research -- one of the leading research organizations in America -- continues to rank RI’s pension system poorly.  According to the 2019 report released by Pew earlier this summer, RI’s pension system is only 54 percent funded and the fees the state pays are considered the 4th highest in the country.

“While I’m not surprised at the ranking of ‘F’ for the pension system, I am frustrated with yet an additional layer of stress, angst and anxiety added to teacher morale that is already stressed to the max,” said Maribeth Calabro, President of the Providence Teachers Union.

The Fall of the Rhode Island State Police

From 1962 until 2001, the Rhode Island State Police had two superintendents — Walter Stone and Edmond Culhane, but in the past three-plus years the agency has had three leaders.

Historically, Rhode Island State Police have been considered one of the best and most respected law enforcement agencies across the country.

Stone was a leading law enforcement figure against organized crime. Stone was the foil to La Cosa Nostra, battling the head of the New England crime family Raymond Patriarca.

The agency was featured on Late Night with David Letterman for having the best uniform. The Trooper who appeared on the show in 1986 was Brendan Doherty who two decades later became Superintendent of the State Police.

But, over the past few years, the agency has been hit with near-constant leadership turnover and an ever-growing number of lawsuits, discrimination claims, and investigations into the agency.

The former chief legal counsel of the Rhode Island State Police warned a top law enforcement consultant -- hired by the State of Rhode Island -- of specific examples of improper payments, misuse of federal funds, and the hazing of recruits resulting in an adverse impact on minority recruits in the Rhode Island State Police.

Consultant Terry Gainer was hired by the administration of Governor Gina Raimondo to do an assessment of the Rhode Island State Police. The no-bid contract paid Gainer and his team of top law enforcement experts $225,000 in 2017, according to state records.

According to an email sent by Gainer to top officials at the Rhode Island State Police, he conducted a phone interview with former State Police Chief Legal Counsel Lisa Holley, who volunteered facts indicating malfeasance and potentially criminal behavior by State Police officials. Gainer wrote that his report was the “essence but not verbatim” of Holley’s statements.

"In the Trooper Sean McCarthy case, Colonel O’Donnell interfered in the outcome of the investigation, ordering Ms. [sic] Holly to draw an agreement allowing Trooper to ‘remain on the books’ until he can retire notwithstanding the Trooper took thousands of dollars in overtime in violation of federal grants. Questions remain about RISP practices concerning federal overtime abuse, but Colonel [O’Donnell] did not want to explore it. The McCarthy files are later purged so the Trooper can get a federal position. She [Holley] learned this from Ms. Danika, Colonel O’Donnell’s new General Counsel,” stated the Gainer email.

In the past few months, Connecticut State Police have been called in to conduct an investigation of the agency— those findings have been referred to the U.S. Attorney and the Rhode Island Attorney General’s office. The McCarthy case has been referred to the RI Attorney General for review.  A growing number of Troopers have left the RISP to join the Massachusetts State Police or federal law enforcement agencies.

Benny’s Closing

No story affected the psyche of Rhode Islanders more than the closing of Benny's.

In 2017, the Bromberg family announced the closure of Benny’s chain.

It marked the death of a Rhode Island institution. It was the local realization that retail shopping as we knew it was forever changed.

In 2018 a record number of retail chains closed -- more than 8,000 stores. In 2019, the number is expected to swell to more than 10,000.

The demise of Benny’s was the end of a Rhode Island institution —  Benny’s stores were closing all stores and laying-off more than 700 full and part-time workers.

For 93 years the family-owned chain had stores in Rhode Island, Connecticut and Southeastern Massachusetts -- before ceasing operations at all locations.

According to the company, part of the motivation was the desire of the Bromberg family ownership to retire from the operation of the retail chain.

“As proud owners of Benny’s this is an emotional time for us,” said Arnold Bromberg. “Benny’s has been something the Bromberg family has invested enormous amounts of capital, time and energy in for nearly a century in this region. We take great pride in what our retail stores have meant to our employees and many loyal customers for so long."

"But it is simply time. Our current ownership is all at the age where we would like to retire from the business and spend more time with our families, and we have collectively judged that the always competitive retail landscape has shifted in a way that makes it almost impossible for small, family-owned chains like ours to reasonably compete moving forward," he added.

Benny’s is no more. While their retail locations are being reinvigorated, the local, family-owned retailer is gone, forever.

RI's Largest Pension Fund Collapse

In August 2017, the pension fund of St. Joseph Hospital was thrust into receivership, and is the largest pension fund collapse in Rhode Island history.

Today, the fund is underfunded by approximately $110 million.

The collapse has been heartbreaking for retirees -- mostly women who served as nurses, clerks and administrative staff who were committed to helping others and serving the Catholic Church through their work at St. Joseph’s.

Those that were supposed to protect their pension — Bishop Thomas Tobin of the Diocese of Providence and Rhode Island Attorney General Peter Kilmartin are directly tied to the fund’s collapse.

In approving the sale of St. Joseph to Prospect of California, Kilmartin said in 2014, “The transacting parties have worked diligently to provide regulators with the necessary documentation and information throughout this review process to make this decision, a decision I believe is in the best interest of Rhode Island’s healthcare marketplace, the community, the employees, and most importantly, the patients.”

In 2014, Kilmartin said in his statement, “Conducting a hospital conversion review requires the commitment of a substantial amount of resources for the Office of Attorney General. I commend my staff for the time and careful consideration put into this review process.”

A federal lawsuit filed by the receiver states, "Saint Joseph Health Services of RI, the Prospect Entities, and other Defendants violated ERISA, committed fraud, breached their contractual obligations, violated their duty of good faith and fair dealing, and otherwise acted wrongfully. As a result, they must be required to compensate losses to the Plan and remedy such violations, including returning all assets improperly diverted to the Plan, and to otherwise fully fund the plan."

On August 14, 2013, key hospital officials met with the leadership of the Diocese of Providence’s office to get sign off on the sale to Prospect.

According to documents, a meeting was convened which was attended by Bishop Tobin, Rev. Timothy Reilly and Msgr. Paul Theroux. At that meeting, the top Diocese officials signed off on the deal which cast the pension off as an orphaned plan. The deal also asserted certain promises critical to the leadership of the Diocese specifically that Roger Williams Medical Center would not engage in prohibited activities of the Diocese and specifically listed abortion, euthanasia, and physician-assisted suicide.

The suit asserts that there was a “quid pro quo for freeing New Fatima Hospital from the unfunded liabilities of the plan, and granting these extensive and perpetual ‘Catholic identity covenants’ for New Fatima Hospital and New Roger Williams Hospital.”

The Demise of the Providence Journal

For more than 100 years, the Providence Journal was a near monopoly for producing news content, setting opinion, and being the go-to media for advertisers.

Entering the decade, the newspaper was in decline but still had a newsroom of more than 150.

Now, a decade later, it has seen three owners -- and realized the brutal realities of a failing industry and corporate cuts.

The newspaper’s owners have had dozens of rounds of layoffs and early retirement buyouts over the decade. The paper, which once claimed a weekday paid circulation of more than 200,000, has shrunk to about 30,000 — less than 3% penetration.

The future for the once-proud paper is grim. The new corporate owner Gannett has announced far more cuts -- Gannett is poised to lay off upwards 3,500 workers nationally in the next two months.

The company needs to cut $300 to $400 million in costs according to the company and reports. "With $400 million or more in cost reductions to deliver, it was clear that the company would be cutting more than 2,500 jobs — likely 3,500 or more. Reports also indicate that much of Old Gannett leadership in high-ranking sales position was surprised to get the quick axe this week," writes Ken Doctor, a leading media analyst.

This round of cuts at the Providence Journal and Newport Daily News has not been announced yet.

According to Poynter, Micheal Reed, CEO of Gannett, said that he did not know yet exactly how many there will ultimately be. But he expects an initial round to get “90% done...by the first half of February.” Company-wide, Reed has set a savings target of 8%, he continued, and “about 50% of our cost structure is people.”

For the newspaper that in its Pawtucket office around 1989 once had a staff of nine reporters including Dean Starkman, Dan Barry, and Helene Cooper — all who would later in their careers go on to win Pulitzer Prizes, the paper is just a sad shadow of itself.

38 Studios -- 2010 to Present

It all started when Rhode Island Governor Don Carcieri and the other members of the state's Economic Development Corporation (except one) voted to approve a loan guarantee to a video gaming company founded by Red Sox pitching great Curt Schilling.

The approval of the $75 million loan deal was signed off on by top executives at Hasbro, CVS, Gilbane, and others in their role on the EDC Board.

An Insiders Game

The first story about the beginning of RI's introduction to 38 Studios was that Carcieri went to a fundraiser for a WWII Veteran’s event at Schilling’s home and that served as the spark to a meeting between Keith Stokes and the 38 Studios officials to try and lure the company from Massachusetts to Rhode Island.

Then, it was disclosed that Speaker Gordon Fox had meetings earlier in the spring through his relationship with his close friend developer Mike Corso.

In the documents released years later, Bill Murphy attested to how he sat in on a meeting with Corso, Fox and Curt Schilling while he was still Speaker.

But now, emails starting in July 2009 between Corso and 38 Studios’ Tom Zaccagnino show the wheels were put in motion even earlier.

The company failed in just over 2 plus years and Rhode Island taxpayers were left to pay off the loans.

The failure of 38 Studios -- and the state's role -- destroyed Rhode Islanders' trust of government.

The investigation by the Rhode Island State Police was questioned externally and internally.

After legal fees -- a total of $11.34 million to state attorney Max Wistow -- Rhode Island will recover $49.66 million in settlements in the 38 Studios litigation. 

In a legal strategy developed under Governor Lincoln Chafee, the state will realize more than half of the approximately $88 million state moral obligation on the 38 Studios bonds for both past and future appropriations. 

Gina Raimondo Dominated the Decade

Rhodes Scholar Gina Raimondo burst onto the political scene in 2009 when she announced she was running for General Treasurer for the 2010 election.

She swept to victory and then took on the state's biggest challenge -- pension reform.

The pension reform was widely praised nationally -- but highly criticized both by local unions and the SEC's largest whistleblower. 

Raimondo received national attention -- and built a Wall Street network that she leveraged to win the governorship in 2014. With a strong economy, Raimondo easily won reelection in 2018.

Her accomplishments include a building boom funded, in part, by state incentives, as well as pushing for free college education at the Community College of Rhode Island, funded by taxpayers.

Despite her efforts, Rhode Island ranks last in CNBC's state ranking for best places to do business.

She continues to enjoy a national glow from the NewYork Times, although the Wall Street Journal has turned against her more left-leaning policies.

In February 2019, the Wall Street Journal called out Raimondo in an editorial, “Nickel and Diming Democrats,” after Connecticut Governor Ned Lamont introduced truck tolls to address the state’s fiscal issues. 

“From coast to coast, they’re taxing anything that moves,” wrote the WSJ Editorial Board.

The WSJ went on to write: Mr. Lamont drew his toll inspiration from Rhode Island Gov. Gina Raimondo, who has lately been scrounging for cash to finance “free college,” universal preschool and Medicaid. Last month she proposed extending the state 7% sales tax to Netflix, e-books, iTunes, interior decorating, landscaping, shooting ranges, beach parking and more.

In Rhode Island, her popularity has collapsed.  She is the least popular governor in America.

Despite her falling popularity in 2019, Raimondo is the most dominant politician of the decade in Rhode Island. 

The Rise of Latino Politicians

At the beginning of the decade, there was a smattering of Latino politicians elected across Rhode Island in the General Assembly and on the Providence City Council.

Today, Nellie Gorbea serves as New England's first Latina woman elected statewide in New England.

Providence has elected a Latino Mayor in the last three elections -- Angel Taveras in 2010 and Jorge Elorza in 2014 and again in 2018.

Taveras beat two well-known long-time Italian-American politicians -- John Lombardi and Steven Costantino -- handily.

Elorza handed iconic and two-time convicted felon Vincent "Buddy" Cianci his first Mayoral defeat in 2014, and then cruised to victory again in 2018.

Central Falls has a Latino mayor -- James Diossa. Dozens of city and town council members and General Assembly seats were claimed by Latino candidates.

It was the decade of the rise of the Latino politician.

The Election That Will Never End -- 2016

In 2016, District 15 in the House of Representatives became the biggest battleground in Rhode Island as Republican national committeeman Steve Frias challenged Speaker of the House Nick Mattiello.

Frias won on the machine count, but on election night, Mattiello stood up at the Cranston Grange and announced that he had won the race because he knew he had more paper ballot votes to put him over the top.

The controversial election sparked investigations by the Board of Elections and the Rhode Island Attorney General's office.

The investigations languished for years.

In October 2019 with the statute of limitations running out, Rhode Island Attorney General Peter Neronha announced at a press conference that Mattiello's political consultant Jeffrey Britt has been indicted by a State Grand Jury on two charges -- felony money laundering and a misdemeanor charge of making a prohibited campaign contribution.

The felony money laundering charge carries a sentence of up to 20 years.

These charges are tied to a mailer sent in the coordination of the Mattiello campaign by a third party funded by Britt.

Britt's attorney former U.S. Attorney - Bob Corrente fired back, "We think it will become apparent that these charges should not have been brought -- and certainly not against Mr. Britt. Obviously, in the sometimes sordid history of Rhode Island politics, participating with others in raising $2100 for a campaign mailer, three years ago, is a pretty underwhelming offense. That's probably why the Board of Elections closed its investigation into the matter in April 2018, with just a warning to the Mattiello campaign. It certainly does not justify the State's overcharging this petty episode as money laundering when -- at most -- it might be a misdemeanor under Rhode Island law."

Now, Britt awaits trial in 2020 -- four years after the election.

Mattiello, who beat Frias in 2018, could very well face him again in 2020.

Rhode Island -- First in Offshore Wind in America

In 2009, the effort to build an offshore wind farm began in earnest.

In 2010, Attorney General Patrick Lynch took his opposition to the proposed wind farm off Block Island to the next level, announcing he was challenging the constitutionality of a new law that allowed the project to move forward.

“We continue to fight against this special-interest measure and inside deal tailored to put only one entity, Deepwater Wind, on the fast track to develop a costly demonstration project that isn’t needed and will create only six full-time jobs,” said Lynch, who was a Democratic candidate for governor.

Lynch was just one of the opponents. The groups opposed included the Rhode Island Tea Party, Operation Clean Government, and several taxpayer advocates. One described the wind farm into Rhode Island's version of the "Big Dig."

Over the years the staff changed, funding was in doubt, and regulatory hurdles mounted, but Jefferey Grybowski took over leading the effort and systematically maneuvered between pitfalls to lead the successful effort to complete America's first offshore wind farm.