State Treasurer Cites Anomalous Kidnapping Case, Office Distraction In Denying Newspaper Access To State Pension Fund Records

Failures

from the because-DANGER-and-also-office-gossip dept

In the supposed interest of safety (among other things), Rhode Island’s state treasurer is seeking to keep management contracts a secret — but only for a select group of managers. Here’s the impetus:

Citing the case of Eddie Lampert, an investor who was abducted in 2003 by ransom-seeking kidnappers, the letter to Assistant Rhode Island Attorney General Michael Field from Raimondo’s office further argued that disclosing too much information about financial fees and compensation could endanger the lives of hedge fund managers.

Notice that it’s only hedge fund management Rhode Island treasurer Gina Raimondo is concerned about. Although upper level management in other industries is likely compensated at rates attractive to ransom-seeking kidnappers, Raimondo just wants this select few to be exempt from public disclosure. This is for several reasons, but mostly this reason:

Raimondo is a Democrat who founded one of the financial firms that manages Rhode Island pension money.

Raimondo’s letter, in addition to raising ridiculous kidnapping fears (the thing that happened ONE TIME, more than a decade ago), also claims that publicizing hedge fund managers’ compensation makes it hard to get any work done around the office.

“Fund managers keep this information confidential to help preserve the productivity of their staff and to minimize attention around their own compensation…”

These reasons were all cited in the state’s refusal to disclose details of hedge fund management contracts to Rhode Island’s largest newspaper, the Providence Journal. Not covered in the refusal letter was Raimondo’s involvement in steering billions of dollars of state pensions into funds with higher risks and higher fees, or that Raimondo’s firm, Point Judith, receives a cut of the $7.7 billion at stake.

Of course, the spokesperson for the treasurer’s office claimed the office was all about transparency.

“Rhode Island has become a national leader in disclosing management and performance fees paid to all investment managers, including hedge funds, private equity, equity and fixed income managers.” The state has disclosed the total fees paid to financial managers while merely withholding the management contracts, the treasurer’s office maintains.

Her office also maintains that Raimondo has done everything possible to insure her position avoids any conflicts of interest. And yet, her office tells journalists it won’t be releasing public records about state pensions. If I were a government official foisting some sort of new surveillance on the public, I would say this lack of openness indicates Raimondo has something to hide. But I’m not one of those people. Instead, I’m just more than a little cynical which, oddly enough, brings me to the same conclusion.

It’s hardly surprising that a government official would try to use fear (kidnapping!) as an excuse to keep public records away from the public. This tactic informs nearly every FOIA request refusal from our nation’s investigative and intelligence agencies. This misdirection is used to excuse all sorts of misconduct from law enforcement officers. This is also used to ensure backroom deals stay hidden in the back room. If Raimondo has truly “taken all recommended steps” to avoid conflicts of interest, then she should have no problem turning over these contracts. But she’s gone the other way, surprising no one and further widening the distance between her office and the public it’s supposed to be serving.

Filed Under: eddie lampert, foia, gina raimondo, public records, rhode island, state treasurer