ARLENE VIOLET - Taveras' hedge fund hypocrisy

ARLENE VIOLET - Taveras' hedge fund hypocrisy

I love competitive political races so I was gratified by the entry of Providence Mayor Angel Taveras, and that of Ken Block into the gubernatorial contest. Mayor Taveras, however, took a cheap shot at Treasurer Gina Raimondo by intimating that she was beholden to Wall Street while he was only answerable to "Main Street." Here's why he has a heck of a nerve castigating her.

His obvious reference was to the flak that the general treasurer has been taking because of the state investments in hedge funds. Male journalists have been doing investigative reports about her investments in hedge funds. There has been nary a peep from these scribes about Mayor Taveras' own walk down Wall Street with the Providence Investment Commission, which totally overshadows her sally onto "The Street." In the May 23, 2013 report provided to Providence Investment Commission the retirement assets of Providence employees in hedge funds was 19.2 percent, which dwarfs the percentage that the State Investment Commission has put into hedge funds - approximately 12.5 percent. The Providence Investment folks have also allocated 1.3 percent in private equity including Point Judith Venture Equity. If the mere investment percentages mean one is beholden to Wall Street, Mr. Taveras would be the champ chump.

Apparently, anticipating that he was going to announce his candidacy for governor, he has tried to reduce this exposure so he could throw brickbats at Raimondo. On Sept. 30, 2013, hedge fund investments in Providence were at 16.6 percent, still higher than the state's allocation. On Oct. 22, right before his announcement, the commission dumped some investments to bring the total to 14 percent with private equity at 1 percent.

With the state firefighters endorsing Mr. Taveras despite his ties to Wall Street being well beyond Raimondo's, one can see that the real issue is actually about her drive for pension reform. The irony of this attack is that she should actually be thanked for making sure that public employees have a pot of gold at their end of the rainbow. Younger people in in the public sector system were going to find straw dust instead.

Hedge funds are a tool which some prudent investors use. These funds are supposed to stabilize investments since they may go up when the market goes down. All of us are familiar with the expression of "hedging a bet," which makes a lot of sense. Casting opprobrium on the use of one tool in the toolbox is just plain foolish.

I suspect something else is in play by these good old boys. They hate the thought of a successful and smart woman who doesn't kowtow to their "brilliance." Raimondo deserves the accolades of all of us in the private and public sector for averting a disaster, something the boys' club had failed to avert for years. Now they just want to take her out for her audacity in promoting reform.

Mr. Taveras will, no doubt, revert to innuendo about her receiving funds from outsiders despite her policy of not accepting donations from those investment managers who do business with the state treasurer's office. One has to wonder whether his lackluster fundraising is really about envy.

I hope the foolishness of "the boys club" ceases and that the challengers and their proxies can begin to address the real issues facing this state, as opposed to the concocted issues. Then again, maybe they don't have anything to say.

Violet is an attorney and former state attorney general.

Comments

Look the Taveras and Raimondo tag team for the Dems is not going to change anything positively for RI they are both to beholding to the unions and special interests groups, it's in their blood.
Block is the only one that can really make a change that will benefit the majority or people in RI. He will build what we need to get back some of our future that the Dems keep taking more and more away.