Nesi’s Notes: Feb. 18

Eyewitness News Investigates

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Happy Saturday! Here’s another edition of my weekend column for WPRI.com – as always, send your takes, tips and trial balloons to tnesi@wpri.com and follow @tednesi on Twitter.

1. Five days before UHIP launched last September, I interviewed two of Health and Human Services Secretary Elizabeth Roberts’ top aides, Jennifer Wood and Wayne Hannon, about the project’s latest nine-figure funding request. Both expressed full confidence the system would go live with only minor hiccups; Wood noted their professional reputations were on the line. She extolled the first-in-the-nation integrated system, literally knocking on wood: “When we go live successfully on Tuesday – not ‘if’ – we’ll get some national coverage,” she told me. Fast-forward to this week: Roberts has lost her job, Wood has been demoted, Governor Raimondo has apologized before a bank of TV cameras, and UHIP is synonymous with government failure. The UHIP assessment report by Raimondo aide Eric Beane – who, as a deputy chief of staff, had oversight responsibility for Roberts’ agency – argues contractor Deloitte is “largely” to blame for what went wrong. And the company’s statement about Beane’s criticisms wasn’t particularly defensive, acknowledging the obvious problems. But others were quick to question the assertion that Raimondo couldn’t have known the full extent of the problems until this week – Governor Chafee received a memo back in 2014 warning UHIP had significant “defects” and “a lack of functionality,” and the federal government warned the state unambiguously. Regardless, this week represented a clear pivot point for the administration, ripping off the Band-Aid and acknowledging how much work – and money – will be needed to get UHIP on track; acting Secretary Anya Rader Wallack sure has her hands full. But a lot of damage has already been done – including real political damage to the governor.

2. Can’t make it up: Governor Raimondo jetted off to California the day after the UHIP news conference – and participated in an event sponsored by Deloitte. (A spokesman says the governor committed a while ago to do the event, a Girls Who Code forum, and talked to Deloitte’s CEO about UHIP while she was there.)

3. One reason it may have been untenable for Elizabeth Roberts to stay on after the UHIP assessment came out was her long involvement in the project. Shortly after he took office as governor, Lincoln Chafee made Roberts the leader of a Healthcare Reform Commission that he tasked with figuring out how Rhode Island should implement Obamacare. The commission’s meeting minutes are still online, and they testify to Roberts’ leading role in conceptualizing and overseeing UHIP. Example: a meeting on Jan. 24, 2013 – more than four years ago – entirely devoted to UHIP that already included a mention of Deloitte as well as Roberts’ reference to the “utopian goal” of the project. Clearly Roberts does not bear sole responsibility for UHIP, but clearly she was not a peripheral participant, either.

4. A rumor has been sweeping Rhode Island’s political class that Hillary Clinton just bought a mansion in Westerly. It’s not a crazy idea – Clinton vacationed in Watch Hill after the election, and her close friend Maggie Williams has lived there for a number of years. But Clinton spokesman Nick Merrill tells me the former first couple doesn’t have an 02891 zip code as of now. “While they love spending time in Rhode Island, none of these rumors are true I’m afraid,” Merill reports.

5. This week’s Newsmakers is a rollicking roundtable on President Trump’s first month, with a focus on foreign policy. Brown University’s Michael Kennedy made an interesting point, which he also wrote about on RIFuture: “Trump might have legal authority, but will lack the cultural authority to exercise it.” While Kennedy does not dispute the obvious fact that Trump is the duly elected president of the United States, he argues that the circumstances of his win and his early moves are delegitimizing him in the eyes of a sizable number of Americans. This rings true, and seems evident in the tension between U.S. Sens. Jack Reed and Sheldon Whitehouse and progressives in the Democratic base. Reed and Whitehouse, like many elected Democrats, have suggested they need to accept the new administration as a fact on the ground and work with it when possible, including by supporting acceptable Cabinet nominees, as they would with any GOP administration; activists want them to take a position of near-total resistance to Trump.

6. Now that Michael Flynn is out of the White House, one Nesi’s Notes reader suggests he could take a page out of his mother’s playbook – and run for U.S. Senate. The late Helen Flynn ran in the 1982 Democratic Senate primary against former Attorney General Julius Michaelson, losing in a landslide on an anti-abortion platform. (Republican John Chafee managed to beat Michaelson that fall, in a tough year for the GOP.)

7. On the domestic policy front, D.C. Republicans are at odds over one of their top priorities, corporate tax reform. The reason: House Speaker Paul Ryan’s proposal calls for a new tax on imports, also known as a border adjustment tax, which has some businesses up in arms. But one of the nation’s biggest companies – Woonsocket-based CVS Health – hasn’t joined the fray. Major retailers including Walmart and Target have formed a coalition to oppose the Ryan plan, but a spokeswoman confirms CVS hasn’t joined, even though its chief rivals Walgreens and Rite Aid are both members. CVS has a lot riding on the debate: unlike many companies, it actually does pay the country’s very-high-on-paper 35% corporate tax rate, with its effective rate coming in at almost 40%. “The details of tax reform will matter, and today while there’s a lot of discussion, nothing has been decided,” CVS CEO Larry Merlo told investors last week. “Suffice it to say that a fairer tax code that includes a meaningful reduction in the effective corporate tax rate would allow CVS to unlock even greater economic opportunities.” (Another NN reader points out CVS may also be picking its battles in Washington, since the company has a lot at stake in the parallel Obamacare-repeal fight, too.)

8. David Cicilline and his staff are mastering the art of going viral.

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9. Our weekly dispatch from WPRI.com’s Dan McGowan: “Keep an eye on Providence Water. With Mayor Elorza’s office confirming this week it wants to hire an outside firm to assess the value of the water supply, it’s becoming clear the city is going to make a serious play to turn a profit on its most value asset. (It’s no coincidence, by the way, that the City Council has hired Jeff Britt as its State House lobbyist.) We already know the mayor refuses to use the ‘p’ word – privatization. What is less clear is how the city will go about trying to generate new revenue. One potential path is to take a similar approach to one that was attempted during the Taveras administration. In 2013, while Brett Smiley was still chairman of the Providence Water Supply Board, several House lawmakers co-sponsored legislation to create a regional water board with the authority to purchase any existing water system. The deal collapsed because the city didn’t get Local 1033 to sign off, which raised red flags in the Senate. Keep in mind any attempt to generate new revenue from the water supply will almost certainly be tied to Providence’s pension system, which is hovering around 25% funded. City officials view the water system as Providence’s best chance to save the pension fund – short of hitting the Powerball.”

10. Turns out there is life after 38 Studios. Back in 2013, the year after 38 Studios collapsed, the state auctioned off the assets of the company’s Maryland subsidiary Big Huge Games for $320,000. The buyer: Big Huge Games co-founder Brian Reynolds, who relaunched the company and had it develop a mobile game called DomiNations. The game was a hit, with more than 19 million downloads, and Big Huge Games was eventually bought by the Tokyo-based gaming giant Nexon for an undisclosed sum. In a Bloomberg interview this week, Nexon CEO Owen Mahoney expressed high hopes for its U.S. expansion founded on the former 38 Studios division, saying, “We think that there’s a great opportunity in the North American market.” Makes you wonder what might have been.

11. The Senate has rolled out its high-priority slate of mental-health bills.

12. One of the reasons the Rhode Island General Assembly is such a leadership-dominated institution is because the legislature’s largely Democratic rank-and-file rarely fight for their own prerogatives. That was in evidence during this week’s House rules debate, when Rep. Jared Nunes was the only Democratic lawmaker to speak in favor of proposals to decentralize authority (which were also backed by Republicans and good-government groups). Leadership allies say that’s a sign most reps are comfortable with how things operate; Nunes isn’t convinced. “I put my all into presenting amendments that would increase accessibility to our government, and increase legislators’ ability to represent their constituents. It’s very disheartening that I was out there by myself,” he told me. “No matter what side of the political spectrum you fall on, there’s no reason not to be able to request a vote on a piece of legislation that you or your constituents care about. And we can’t be serious about ending the end-of-session logjam without tightening the rules relating to hours of operation and suspension of rules.”

13. Keep an eye on this GOP complaint about Speaker Mattiello’s PAC.

14. The Rhode Island Foundation has come out with an interesting report showing, among other things, tiny Rhode Island has more than 100 business-support organizations. (Think Chambers of Commerce, company incubators, government agencies, etc.) The report, by Boston-based Next Street, suggests more could be done to help small businesses navigate that long list of potential partners.

15. Something to keep in mind as Rhode Island looks to Brown University for economic development: Harvard’s endowment is 10 times bigger. Size matters.

16. Rhode Island’s Ocean SAMP team just won a Peter Benchley Ocean Award.

17. Here’s some news you can use: if you have an Amazon prime membership – or a .edu, .mil or .gov email address – you can get a free Washington Post subscription.

18. CNN’s Dylan Byers has a great profile of Sean Spicer. And speaking of the White House press secretary, my colleague Patrick Little interviewed him in Washington this week and will have a report Monday at 5 on WPRI 12.

19. “Fake news” has been around for a long, long time.

20. Set your DVRs: This week on Newsmakers – a political roundtable breaks down President Trump’s first month, featuring Cara Cromwell, Michael Kennedy and Jim Ludes. This week on Executive Suite – Upserve CEO Angus Davis. 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.Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter, Facebook and InstagramAn earlier version of this column misstated Julius Michaelson’s first name.

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Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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