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1. Rhode Island’s pension fund is back above $8 billion after gaining 11.6% in the 2016-17 fiscal year – less than Connecticut and Massachusetts, but beating the likes of CalPERS and North Carolina. General Treasurer Seth Magaziner argues the performance is a sign his “Back to Basics” investment strategy is working. “After a period of time where, frankly, we were at the bottom of the pack compared to our peers, we’re now moving our way more toward the middle of the pack, which is a good thing,” Magaziner said on this week’s Newsmakers. The State Retirement Board, which Magaziner chairs, recently voted to lower the pension fund’s projected rate of return from 7.5% to 7%; that will cost taxpayers more money in the near-term, but the treasurer argues it will save money over time by avoiding underfunding. And while it’s hard to imagine a recession with the stock market setting new records, Magaziner noted that “this recovery may be getting a little long in the tooth” – it could soon be the longest since World War II. The next downturn, whenever it comes, will be the biggest test of his strategy. (Also worth pondering: what would a downturn mean for Providence, with its pension shortfall now nearly $1 billion?)
2. House GOP Leader Patricia Morgan raised money for her potential 2018 gubernatorial run on Wednesday evening – in Washington. Former RNC Chairman Michael Steele was a co-host of the event – held at the law firm Clark Hill – as was Steele’s former deputy Neil Alpert and GOP fundraiser Lisa Spies, whose husband Charlie works at Clark Hill. Morgan said the event went well, though she didn’t know how much money was raised. (“I didn’t handle the checks.”) Asked how she got on Steele’s radar screen, Morgan said, “I’ve always stayed busy trying to help the Republican Party, our Republican Party in Rhode Island, so I would reach out to the RNC for help – guidance, mentoring – and that’s how I got to know Michael.” While in Washington, Morgan also said she attended a meeting of an ad-hoc group focused on pension policy. “I’m really concerned about our municipal pensions that are in critical status,” she said. “If I’m governor that’s going to be something I’m trying to solve.”
3. Also on the GOP front, Allan Fung’s latest filing shows his campaign has brought on board Cranston Republican City Committee Chairman Mark Collins as a $500-a-month consultant. “Mark’s been my treasurer for the past several cycles and has an intimate knowledge of the campaign finance rules,” Fung told me. “I need to ensure that I have a meticulous and dedicated person like Mark handling my finances, especially with the volume of fundraising that I expect to receive.”
4. Two of Governor Raimondo’s outside political advisers were prominently quoted in the press this week. Mark Putnam, who makes her TV ads (and produced that Kentucky congressional candidate’s well-received intro spot), explained to Rhode Island native Graham Vyse why he thinks broadcast commercials will still play a big role in campaigns for the foreseeable future. And Pete Brodnitz, who does her polling, told The New York Times’ Tom Edsall what a recent poll shows about risks Democrats face opposing President Trump.
5. Rep. Robert Craven plans to decide by the end of September whether to run for attorney general in 2018. “I still haven’t made a final decision, but I’m doing all my due diligence,” the North Kingstown Democrat tells me. Noting he worked in the AG’s office for nearly a decade, Craven said, “It’s been something that I’ve always given thought to, going back, and I’m probably at a point in my career where if I’m going to do it, I should do it now.” Craven has two fundraisers scheduled over the coming weeks, one of them a golf outing, as he tests the waters. “I’m leaning towards doing it – but I have a constituency of one at home that I have to work on,” he quipped.
6. Patricia Morgan’s Democratic counterpart in the House, Majority Leader Joe Shekarchi, continues to pile up big money in his own campaign account. Excluding Governor Raimondo – who blows all comers out of the water with her $2.67 million stockpile – Shekarchi had more cash in his account than any other state-level politician as of June 30: $644,000. And that doesn’t count another $88,000 stowed away by Shekarchi’s political action committee, the Rhode Island Good Government PAC. Asked why he’s devoted so much energy to fundraising, Shekarchi told me, “In my new role as majority leader, I plan on being very active in supporting my colleagues in the House caucus.” Shekarchi is often mentioned as a potential candidate for another office – Warwick mayor, attorney general – but he’s not fanning those flames at the moment. “At the present time I have every intention of running for re-election,” he said. “I enjoy the new role, new responsibilities, and to be quite honest with you I am learning a lot. It’s a different role. I’m just trying to absorb the duties and responsibilities and trying to be a good leader to everybody – both the Democrats and Republicans, and the speaker.”
7. Now that the dust has settled following the General Assembly’s budget blowup, attention is turning to how to avoid a similar meltdown next year. Speaker Mattiello told RIPR, without offering specifics, that he wants “to work on creating systems that this never happens again.” One idea that the Senate may consider: creating conference committees, similar to those in Congress. Senate Finance Committee Chairman Bill Conley hinted at the concept on Dan Yorke’s TV show this week. Talking about the budget breakdown, Conley said, “I think what it shows is that there should be a better process for reconciling differences between the two chambers. If you look at the past two years, what happened? What happened is, the end of the session has been fairly chaotic and unpredictable.” Referencing Mattiello specifically, Conley said, “Is one person by fiat saying ‘I’m leaving at 10 o’clock’ a process? I think not. I think there needs to be a more predictable process, a more transparent process, one that members of the legislature as well as the public can rely on. So I think that those flaws have been exposed, and I think it’s time to have a conversation about how we address those flaws.”
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8. Our weekly dispatch from WPRI.com’s Dan McGowan: “Providence’s attempt to generate revenue from its water supply might not have much support in the General Assembly, but that’s not stopping the Elorza administration from telling ratings agencies it believes the city could see between $300 million and $400 million from a sale or lease agreement. In reports released this week, both Standard & Poor’s and Moody’s Investors Service said the city’s proposal to use the proceeds from such a deal to boost its severely underfunded pension system would be a positive development; both agencies voiced strong concern about the city’s long-term obligations for retirees. On Newsmakers, Treasurer Magaziner said ‘all options should be on the table’ as Providence tries to find ways to solve its pension challenges, but the water deal ‘needs a fair amount of additional vetting.’ Magaziner said the city’s legal ability to sell or lease the system still seems to be an unanswered question. So what are the chances of the city getting something done next year? Considering that we’re heading into an election year, it’s difficult to imagine anything happening in the immediate future. But Mayor Elorza has vowed to keep pushing for state lawmakers to consider creating a regional board that would have the ability to buy or lease Providence Water.”
9. The name Ed Pacheco came up frequently after Tim White and I published our first report on Frank Montanaro Jr.’s free tuition; as a former House lawmaker and Democratic Party chairman who’s now a RIC bigwig, Pacheco was seen as someone who might have been involved. And indeed, the internal emails we obtained this week from RIC showed Pacheco was kept in the loop throughout the affair, even being dispatched by HR to collect overdue documents from Montanaro. But in an interview with us, Pacheco insisted he had no role in the decision to give Montanaro the free tuition, acting only as “a conduit.”
10. It turns out JCLS director isn’t the only position Frank Montanaro Jr. has with Speaker Mattiello. Montanaro is also chairman of the Democratic Representative District Committee for Mattiello’s seat in Cranston, House District 15, according to a document filed in January with the secretary of state’s office. Those committees decide who receives the party endorsement in their districts (see John Carnevale last year, for example.) The District 15 committee’s other two members are John Manni, a lawyer for the House, and Nicholas Mattiello Jr., the speaker’s son.
11. The Judicial Tenure and Discipline Commission’s 13-1 vote to recommend Judge Rafael Ovalles’s removal is an unusual occurrence. According to a court spokeswoman, the last time the commission recommended a judge be dismissed was 12 years ago, in the case of Traffic Tribunal Judge Magistrate Aurendina Veiga. (Veiga then resigned.) It’s apparently only happened to two other judges since the discipline commission was created in the 1970s: Administrative Adjudication Court Associate Judge John Lallo, who was removed and fined in 2000, and Superior Court Associate Justice Antonio Almeida, who had already retired when he was removed in 1992.
12. Governor Raimondo “will be vacationing in Rhode Island with her family for the next two weeks,” her office reports. “Regular public schedules will resume upon her return on Monday, August 28.” The governor has said a trip to Block Island is on deck.
13. Mark your calendars: the first-ever Pawtucket Restaurant Week will take place Sept. 4 to Sept. 10, coinciding with the city’s Arts Festival. More than 30 restaurants are participating, including Heritage Tap, 10 Rocks Tapas and China Inn. Breakfast/lunch will be $7.99, and a three-course dinner will be $14.99.
14. Elon Musk rattled the NGA audience in Providence last month with his jarring warning about the possibility of artificial intelligence creating killer robots. But Brown’s Michael Littman tells Kim Kalunian he’s skeptical of such apocalyptic predictions.
15. SENEDIA’s Molly Donohue Magee talks up Defense Innovation Days.
16. Things I didn’t know: there was a push in the 1930s for South Attleboro to secede from Attleboro – and possibly become a town in Rhode Island.
17. Congrats to Tim White and his co-authors on their big movie deal!
18. Gary Oldman’s star turn as Winston Churchill looks amazing.
19. Are Americans today too focused on critiquing, rather than celebrating?
20. Set your DVRs: This week on Newsmakers – General Treasurer Seth Magaziner. This week on Executive Suite – RISD President Rosanne Somerson. Watch Saturday at 10:30 p.m. or Sunday at 8 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Catch both shows back-to-back on your radio Sundays at 6 p.m. on WPRO-AM 630 and WEAN-FM 99.7. And you can subscribe to both shows as iTunes podcasts – click here for Executive Suite and click here for Newsmakers. See you back here next Saturday morning.