[...] to be the public face of their local, as well as national campaign to supposedly “reform” public pensions by steering trillions of government workers’ retirement savings into high-cost, high-risk, illiquid alternative investments. [...]A new report by Benchmark Financial Services, commissioned by AFSCME, a union whose workers' pensions Raimondo has been relentlessly attacking, details some of the effects of her private equity, hedge fund-centric leadership. It's working out for Raimondo:Raimondo was also the perfect choice to lead the private equity assault on public funds because she has only limited knowledge of pensions and knows even less about private equity. For her private equity campaign supporters this means that she can be fed and will parrot any misinformation the industry feeds her to the electorate. Hedge funds safe? Private equity worth the hefty fees? You betcha.
[...] a significant portion of the Treasurer’s wealth and income relates to shares she owns in two illiquid, opaque venture capital partnerships she formerly managed at Point Judith Capital—one of which she convinced the state to invest in on different, less favorable terms.But it's actually hard to get the full picture of what's going on with the state's pensions, because Raimondo insists that it can't divulge anything about the investments that the money managers she hired don't want to divulge. It's not just unions crying foul at her lack of transparency:
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.In 2011, even an advocate of cutting worker pensions wrote, "the problems Raimondo addressed were not the biggest that the state faced. The main problem with Rhode Island’s pension system is that it has very poor investment returns on its $6.5 billion portfolio of assets."
Raimondo may well run for governor as a Democrat, backed by huge amounts of Wall Street money. But in this fight, she's not the only enemy of worker pensions we should be paying attention to. Former SEIU president Andy Stern recently dove in with an op-ed supporting Raimondo. The later years of Stern's SEIU presidency were contentious, with many in labor charging that he was cutting sweetheart deals on contracts with employers, among other things, while his defenders argued that it was better to have more people in unions—even if it meant relatively weak contracts to begin with. His defense of a hedge fund-backed anti-worker politician is just the latest in a string of post-SEIU moves making his critics look a whole lot more prescient than his defenders.
More of this week's news on labor and education below the fold.