Riley: Let the Rhode Island Treasurer’s Race Begin with Facts
Tuesday, July 15, 2014
I think people have become used to me breaking news here through my financial analysis. Not today, although there is much more to come. I have exposed the following items:
- Mayer Taveras has been lying about the Pension Liability and the financial condition of the town all 4 years he has been in office.
- Mayer Taveras was caught lying about Pension Assets and his auditor has disallowed it.
- The RI pension Commission is a complete sham...producing nothing but shelter for Mayor Taveras , Mayor Polisena, and struggling municipalities. Taveras doesn’t even attend and Polisena has been one of the biggest offenders regarding funding.
- Commissioner Gallogly gave fraudulent numbers to voters in West Warwick…she knowingly understated costs by nearly $90 Million dollars in her false 5-year plan.
- There was a high likelihood of an ILLEGAL insider trade in Rhode Island Issued 38 Studios bonds May 23, 2012…I asked Rhode Island officials- as did Mayor Fung- to bring the SEC in to look at it. Governor Chafee, AG Kilmartin, and Treasurer Raimondo all have a responsibility to maintain a fair market in RI securities and refused to ask authorities to look at trade.
The Treasurer Race
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe General Treasurer’s race in Rhode Island has added importance in times of financial stress. Rhode Island has been mismanaged for decades, both at the State level and municipal level. In 2010, after four years of Frank Caprio as treasurer, Rhode Island’s pension fund was the worst funded plan in America.
I make that statement to set the record straight. I may have been the only person in Rhode Island glued to my TV set as Tim White and Ted Nesi had a one hour debate-style broadcast featuring the three candidates for General Treasurer. The Treasurer over the next several years is going to immersed in huge titanic shifts. GASB 68 is on its way, and judging from responses in the debate, both Magiziner and Caprio are virtually clueless about GASB 68. Caprio is particularly misinformed, amazingly stating he would raise the discount rate to 7.75%. My goal in this series of articles is to remove the spin that filled this format and instead focus on the big issues the Treasurer will likely face over the next four years, and how we can expect each candidate to react. As inputs I will use public statements, observable track records, and how they responded this past weekend.
When I ran for Congress in 2012, I calculated that I would likely have only 30-60 minutes of free, live TV interview time over a 9 month period. I way overestimated that number. For example ,the sponsor of this debate, WPRI, never had me on. Never asked…never cared. They did have me in an “on air” debate with Langevin. One of two debates I had with Langevin. The point is that the media in Rhode Island has, in my experience, done a terrible job, especially with new candidates clarifying their positions. Both Magaziner and Almonte are new candidates, while Frank Caprio is a far more well-known figure in Rhode Island. I intend to provide voters with information necessary to differentiate because they are significantly different.
The other issue that I hope to address is overcoming the fact that relatively few Rhode Islanders have the financial knowledge, background, or analytical skills to know when one of these candidates is spewing untruths. I know when they are and will not hesitate to call them out on it. So candidates be warned.
So the White/Nesi focus list was as follows
- RIRSA- what now? The issue of the State reforms
- Court Challenge –What now?
- Discount rate vs Unfunded Liabilities’- how is that determined what’s right?
- Status of Municipal Pensions liability- How big? What can/will the state treasurer do?
- Hedge Funds & Fees-Should we take lots of risk or less risk? Fees? Transparency?
I think they missed a few.
- It’s very likely towns like Providence will be bankrupt during their term. Do they support State taxpayer bailout as the legislature recently approved in Central Falls?
- Does the candidate agree with the 2011 law that gives bondholders first lien on tax revenue and places bondholders above other creditors, including retirees and public workers? If not, what should be done? If so, why?
- The SEC and GASB have been very focused on the issue of misleading bondholders, often through fudged or outright phony data and assumptions. GASB 68 goes into effect now, explain what that means for Rhode Islanders and the unfunded Liability at the State and Local Levels. How will that effect funding for both the State and Towns through the MERs system?
These are extremely important issues that are immediately relevant, unlike the “who did you vote for President “question which I personally found offensive. I will do my best to see where the candidates stand on each issue and provide some real data. Each of these candidates has strengths and weaknesses. I assume voters are looking for the candidate who tells the truth, answers questions, has real and relevant experience, and is keenly aware of the issues that are ahead of them.
As a teaser quiz, which candidate said…
I saw where the top 4 Hedge fund managers made more money last year than all the Kindergarten Teachers in America. What is wrong with us as a country?”
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.
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