Former SEC attorney Ted Siedle (currently formerly Putnam Investments’ compliance director), has issued a new investigative report that blasts Rhode Island Treasurer Gina Raimondo about her lack of transparency over the state’s pension investments. The report was commissioned by the Rhode Island chapter of the American Federation of State, County and Municipal Employees (AFSCME).
Raimondo says that Siedle’s allegations are entirely driven by politics, but four Rhode Island public interest groups have nevertheless encouraged the treasurer to release the pension information. From Siedle’s report (page 5):
Recently, four open-government groups – Common Cause Rhode Island, the state’s chapter of the American Civil Liberties Union, the Rhode Island Press Association and the League of Women Voters of Rhode Island released a letter to the Treasurer voicing their concerns regarding the Treasurer’s strategy of withholding hedge fund records. These groups believe that since the financial reports are paid for with public funds and detail how the state is investing the public’s money, they should be made public in their entirety; further they found ‘troubling’ the Treasurer’s decision to allow the hedge funds to decide what information to release.
Rhode lsland eliminated cost-of-living adjustments (COLAs) for public pensions and moved all new employees out of traditional pensions and into defined contribution plans. These changes have been challenged in state court.
Perhaps the most anti-union move made by the state was a law that required local government bondholders to be repaid in full in a municipal bankruptcy. During the bankruptcy proceeding of Central Falls, Rhode Island, bondholders were repaid 100 cents on the dollar, while pension holders in the city took haircuts of up to 45 percent. Rhode Island is the only state with this type of law. Public unions have a right to question information about their pensions.