Russell Moore: Under Taveras, Providence Goes Lawsuit Crazy
Monday, August 18, 2014
So this is what it’s come down to under Mayor Angel Taveras in our capital city?
The city's pension system has a funded ratio of just 30 percent (meaning its assets only cover roughly 30 percent of the plan's liabilities), the roads look like the city was just attacked by a foreign super power with holes that resemble craters, and a violent crime has wreaked havoc on the capital and dominated the news over the last month.
And what is Taveras doing to address these catastrophic problems? Sue everybody! Then hope for a massive settlement that will drastically improve the city's finances.
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Yes, you've read that correctly. Providence is now the guy sitting on Beverage Hill in Pawtucket wearing the tank top and jean shorts and waiting to hear from his lawyer that the insurance company has agreed to settle his case.
GoLocalProv's Stephen Beale reported last week that the city of Providence, over the last several months and weeks, has filed separate lawsuits against General Motors, Santander bank, and a series of Wall Street money management firms. Who knows what else they might have in store for us going forward?
It irked me when Providence sued Buck Consultants a few years ago, claiming that the highly respected company gave them bad advice on their pension plan, which caused the city to balance its books incorrectly. There's nothing like blaming someone else for your own mistakes and then suing them in the process.
Desperation
But at least, in the Buck case, the city was suing a company with which it had a direct business relationship. In the case of Santander, General Motors, and these Wall Street firms, the city is suing organizations with only ancillary ties to Providence. It reeks of desperation.
And you could see it in Beale's article. Some of the Providence Councilmen he interviewed for the story made the city seem like a busted out gambler betting on long shot horses in order to make his rent money that month.
"If we hit the jackpot in one of them, I think that would be great", said city Councilman Sam Zurier, sounding like every single Twin River patron.
The lawsuit against the Wall Street firms also seems like a politically motivated ploy, taking aim at General Treasurer and Gubernatorial candidate Gina Raimondo's cozy Wall Street connections.
Taveras spokesman David Ortiz said that the lawsuit against the Wall Street firms is also intended to "reform Wall Street". The city of Providence should be more concerned with paving roads and keeping crime in check--not reforming Wall Street.
Playing Politics
Look, with the exception of Forbes Columnist Ted Siedle, I'm not sure there's been anyone more critical of the high fees the pension fund has been paying to Wall Street money managers under Raimondo's stewardship of the pension fund than me. When her predecessor, Frank Caprio, the former Treasurer who is seeking the office again this year, was in charge, the state paid just a fraction of the fees, about 25 percent, of what we're paying the Wall Street Fat Cats and Hedge Fund Cowboys now.
But that doesn't mean Taveras has the right to use the city's law department for political expediency and to make a point about Wall Street greed. That reeks of desperation from a candidate who was once considered by some to be the overwhelming favorite in the Governor's race.
The city is suing Santander over what it claims were discriminatory lending practices. Let me clue Taveras in on something here. Santander bank loans money to people that it believes it will make a profit off of. The only discrimination is whether they believe someone will pay back the loan. That's the name of the game.
With respect to GM, they're suing them due to a nationwide recall of millions of vehicles over faulty ignitions. What that has to do with the City of Providence is beyond comprehension.
The city claims that Rhode Island's Tobacco Settlement money it received over the lawsuits against the big tobacco companies was somewhat of an inspiration for these lawsuits. The city has even retained the same firms that prosecuted those cases.
Same mistake twice
How lovely and ironic considering a report in GoLocalProv last week that detailed the fact that the tobacco settlement monies, instead of being used for tobacco abatement programs, has now become toxic debt for the state of Rhode Island! What an act to try and emulate.
It's sad to see Angel Taveras, who became mayor with such promise and high expectations, executing such jayvee player moves as of late. A city should be funded by sound fiscal practices and prudent spending decisions. The way to fund a city is not be spending more than you can afford and then hoping to win a big settlement against some national firm to bail yourself out. Providence should be better than making wild, desperate moves.
If this is how Taveras plans to run the state of Rhode Island--is it really any wonder why his campaign is struggling so mightily as of late?
A native Rhode Islander, Russell J. Moore is a graduate of Providence College and St. Raphael Academy. He worked as a news reporter for 7 years (2004-2010), 5 of which with The Warwick Beacon, focusing on government. He continues to keep a close eye on the inner workings of Rhode Islands state and local governments.
Related Slideshow: 10 Questions Taveras Has to Answer When Running for Gov of RI
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