Michael Riley: Rhode Island Treasurer is About Integrity and Experience

Tuesday, September 02, 2014

Michael G. Riley, GoLocalProv MINDSETTER™

As the Democratic Primary for General Treasurer in Rhode Island approaches, Seth Magaziner has a large lead in the polling data. Given recent events in the Caprio family, it was not surprising to see Magaziner gain ground, but I was shocked about how large the gains were.

Maybe I shouldn’t have been. After all, Seth presents himself very well. He has a good presence and is a very good speaker. He is clearly smart, has critical thinking skills, and even some investment experience. His description of the issues is generally sound and though I disagree with some of his ideas, other prescribed courses of action are on point.

Seth Invites Clinton Comparison

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Seth Magaziner will never be Bill Clinton, who was and is a very smart guy albeit with deep character flaws. Magaziner went to the right schools and got his MBA at Yale; just like President Clinton and Mrs. Clinton who got their JD’s at Yale. Maybe it says something about Yale, but all three have huge integrity issues. Bill’s are many and are infamous and extend well beyond the liberal fantasy standard of “sexual perjury” to include an innate ability to smile and lie to your face about anything. Magaziner, without the credentials or experience of the Clintons, has credibility issues already and he’s just 30.

When President Clinton turned 31, he had already had three years as law school professor at University of Arkansas and lost an attempt at State Representative. He won the position of Attorney General at age 31. Seth‘s experience is far less impressive especially when you consider Clinton didn’t lie about being a professor. Magaziner’s behavior is similar to his close family friend Bill Clinton in that both people appear to need to be proven liars before they can admit to lying. Clinton’s lies would have survived and remained “his little secret” had not someone kept the stained dress. Mr. Clinton was subsequently disbarred and impeached. Being disbarred is exactly equivalent to what should happen to Trillium Asset Management and Matthew Patsky as well as Seth Magaziner. Suspending their CFA designation is appropriate. The CFA designation is a premier accreditation in the investment profession. Trillium Asset Management proudly proclaims this accomplishment and CEO Mr. Patsy holds the CFA designation, I assume proudly. It takes three years to pass each level plus years of experience and includes annually signing the codes and standard of conduct throughout your career. Patsky, Trillium Asset Management and candidate Seth Magaziner have shredded this code and have done so repeatedly and knowingly.

Lies Were Premeditated and Part of the Strategy

As I have outlined before, Seth and his team carefully crafted his opening and closing statements for the July Treasurer debate. They thought long and hard about what he would say and how he would position himself. He chose to lie. Not only did he choose to lie about his record, he lied about his resume and job function. There is no blurred line here. It is not a question of semantics. It is clearly spelled out in the CFA code of Asset Management. He chose not only to lie but brag about some things he never accomplished. He and his team chose to lie and violate the very Charter he was studying to obtain. Given close friend Bill Clinton’s experience with lying to the nation, now it was Seth's turn. Would he walk it back? Would he be humble and clarify? Nope.

When he made a mistake and violated CFA code and several tenets of the investment profession he was caught red-handed in a lie. It was a pretty big lie on a pretty big stage, his first televised Trerasurer debate. According to the Asset Managers Code his firm, Trillium, should have pulled him aside and made him correct any false impressions about the firm or himself and any other outright falsehoods. The last thing they should have done is exactly what they did. Patsky not only backed up Magaziner he did it publicly in print while angrily parsing words and ideas in a truly Clintonesque manner.

“The implication that I would have hired somebody who isn’t qualified annoys me,” Patsky said. “The implication that Seth actually didn’t play a role in our investment returns is annoying, because of course he did – he was a very critical part of our investment team.”

You are Caught, Now What?

The problem for the Magaziner team is that their lawyers pressed on with a lie and didn’t understand the clarity here. There is no parsing to be done. Patsky, Trillium and Magaziner have all violated the code and should be suspended. Not suspending them would drastically cheapen the standards for which CFA institute is known. But this knee jerk Magaziner and Trillium response wasn’t about doing the right thing – it never was - this was about launching a political career.

Many campaign strategists count on clouding issues and double-talking. Magaziner may just get away with this in the Primary but have a much harder time against Almonte. To describe Magaziner and his behavior in golfer parlance, I would have given Seth a “mulligan” on the debate lies if he had fessed up, but after seeing his behavior once caught cheating, I’d rather not play in the same foursome.

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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: RI Treasurer Candidates: Tale of the Tape

Below are GoLocalProv MINDSETTER™ Michael Riley's notes comparing and contrasting Ernie Almonte, Frank Caprio, and Seh Magaziner, candidates for State Treasurer.