Ted Nesi’s Saturday Morning Post: March 12


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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. It’s been a newsy couple weeks for Rhode Island’s tech sector, with ShapeUp getting acquired and Swipely getting a new name (Upserve). But Upserve CEO Angus Davis thinks it’s important to keep a healthy perspective on the industry’s current reality. “In order for Rhode Island to have a truly sustainable tech ecosystem, we’re going to need some companies to get bigger than so far any of us have gotten,” he told me earlier this week. That would mean hundreds if not thousands of employees, $100 million or more in annual revenue, and perhaps the eventual possibility of an IPO. As examples, he pointed to the pivotal roles played by Fairchild Semiconductor and Digital Equipment Corporation in the rise of Silicon Valley and Route 128, respectively. “You get a company like that, that becomes like the anchor tenant in the mall – people can leave that company and start other things. You create that ecosystem,” he said. “No Rhode Island startup company has become the anchor tenant.” He also has some advice for Governor Raimondo and other state leaders: “The number one thing we could do to grow more innovation-economy, knowledge-worker-type jobs would be reducing the distance between us and Boston; you’re not going to bend time and space, but you could make it quicker to get to Boston.” Davis put his money where his mouth is: when Upserve chose a new office, he made sure it was as close to the train station as possible to benefit his employees who live in Massachusetts. So, is $1.5 million for Rhody Pass enough?

2. Hasbro CEO Brian Goldner joined me on this week’s Executive Suite for an update on the Pawtucket toymaker’s corporate health and to share his views on Rhode Island’s economy. Hasbro currently has about 1,500 of its 5,000 employees in Rhode Island – and no plans to move. “We’re very committed,” he said. “We really believe that the state is on the right track.” In particular, Goldner applauded Governor Raimondo’s focus on education, skills and job training, saying he sees those as crucial to growth. He also shed some more light on the failed effort to lure GE to Rhode Island, as one of the business leaders enlisted by Raimondo to woo the company. And like Angus Davis, Goldner has transportation on the brain – one of the biggest drawbacks GE execs saw in the state, he said, was a lack of flights out of T.F. Green. “We want to be able to bring people here – our customers from all over the world come here to see our product lines,” he said. “So having an airport that can enable us to do that is an important element.” The governor appears to be listening: her budget proposes $1.5 million to subsidize additional direct routes between T.F. Green and “major metropolitan areas.”

3. Citizens Financial Group’s announcement that the company will build a new corporate campus in Johnston came as a relief to state officials who’d once worried the newly independent bank, which has a robust presence in Boston, might seek greener pastures. Just imagine the outcry this week if Citizens had chosen some vacant land in, say, Seekonk or Quincy? (Not everyone was thrilled, however. Greater City Providence bemoaned the sprawl Citizens will cause, and Superman building spokesman Bill Fischer tweeted that the bank’s “dalliance” with the empty skyscraper “delayed a meaningful conversation on the best way to repurpose” it.)

4. One of the Brookings Institution proposals that hasn’t come to formal fruition yet: a proposed new group called the Partnership for Rhode Island that would bring together top CEOs, university leaders and other key elites. Keep an eye out for that in the coming months.

5. The latest on Connecticut’s fiscal crisis. Grim.

6. The SEC’s fraud charges over 38 Studios are about more than Rhode Island’s failed video-game deal: they’re also about sending a warning to public-sector borrowers coast to coast, according to Law360’s Ed Beeson. And they should be viewed in tandem with another case brought this week, against a California water district that compared its accounting to Enron’s. “Our actions against senior officials of municipal issuers in these cases highlight the commission’s commitment to holding individuals accountable for wrongdoing,” the SEC’s enforcement director told Beeson. As Ian Donnis noted Friday on Newsmakers, there are now at least three legal cases in progress stemming from 38 Studios: the state’s civil lawsuit, the SEC charges, and the State Police investigation now wrapping up. What’s unclear is whether any of them will answer the biggest remaining question about the whole affair – what was discussed by Gordon Fox, Mike Corso and Tom Zaccagnino when they started cooking up the deal in 2009?

7. As I’ve mentioned before, if the GOP presidential primary turns into a drawn-out fight for every delegate, the 19 that Rhode Island will hand out on April 26 could make a difference. Supporters of Ted Cruz, John Kasich and Marco Rubio – and opponents of Donald Trump – are focused on preventing Trump from obtaining a majority of delegates before the convention, and holding him back in Rhode Island could help their cause. One interesting wrinkle, as Jonathan Bernstein notes here, is how much freedom delegates actually have. Rhode Island Republican National Committeeman Steve Frias tells me that while all 19 of the state’s delegates will be bound by the results of the primary on the convention’s first ballot, after that they’d be free to vote for whoever they want.

8. Surprising how many Rhode Island elected officials owe big money to the state.

9. Our weekly dispatch from WPRI.com’s Dan McGowan: “If claiming Providence’s firefighters were abusing the city’s sick time and injured-on-duty policies counted as the Elorza administration’s brushback pitch to a disgruntled union, the decision to move forward with firing Capt. Dennis Tucker was very much a beanball right between the numbers. The problem, as pointed out this week by those close to negotiations over the mayor’s department reorganization, is now the benches have cleared and tempers are back to where they were several months ago. (If you don’t believe me, refresh your Twitter feed.) Nobody involved in the dispute wants the Rhode Island Supreme Court rendering a decision on the matter, and in recent weeks it had appeared that at least some progress was being made as far as settlement talks go. But though the two sides met this week for another arbitration hearing, they remain far apart. As far as the firing goes, it’s clear the administration was caught off guard when Public Safety Commissioner Steven Pare confirmed the city plans to challenge Tucker’s pension. (As Tim White pointed out this week, the city rarely attempts to strip city employees of their retirement benefits.) Now they have to weigh whether the message they wanted to send – ‘we won’t put up with insubordination’ – is worth the headache it clearly caused.”

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10. And a bonus dispatch from Dan McGowan: “As Governor Raimondo continues to roll out education policy changes that are unlikely to face much opposition from the General Assembly – first it was free PSATs and SATs for high school students; now it’s a pledge to have every school offer computer-science classes by December 2017 – it’s still unclear what will happen with the state’s charter schools. Raimondo proposed withholding about $350 per student for the sending district every time a kid chooses to attend a public charter school, but there has been no indication yet that her plan will stop the General Assembly from approving two bills that would make it significantly more difficult for existing charter schools to expand or for new ones to open. Here’s one thing to keep an eye on as the legislative session continues: not all charters are created equally. A lot of the backlash from lawmakers has been directed squarely at the mayoral academies, the high-performing charter schools that are building K-12 pipelines in several communities around the state. They’re far more open to giving back some per-pupil funding to sending districts, but they believe the charter bills would be devastating. The independent charter schools are also concerned about the two bills – particularly one that requires approval from the municipal council of every sending district – but they’re particularly concerned about the $350 withholding. One possible solution could be a three-tiered system that involves one level of funding for traditional public schools, one level for independent charters and one level for mayoral academies, but those discussions are still in their early stages. No matter what, you can expect the charters to once again be among the biggest issues at the end of the legislative session.”

11. Mayor Elorza is losing his policy director and his City Council liaison.

12. Federal, state and city leaders will gather Monday morning across the street from Brown’s School of Professional Studies at 200 Dyer St. to announce that the spot will be a future stop along “a new downtown enhanced transit corridor,” per a media advisory.

13. Attorney General Loretta Lynch and U.S. Sen. Sheldon Whitehouse caused a stir this week after Whitehouse got her to weigh in about his ongoing push for legal action against companies that “deny” the science of climate change. According to a Daily Mail summary, Lynch told Whitehouse: “This matter has been discussed. We have received information about it and have referred it to the FBI to consider whether or not it meets the criteria for which we could take action on.”

14. Did you catch Tim White on John Oliver’s HBO show last weekend? It’s actually his second cameo on the show. “One more and I get a T-shirt,” Tim quips.

15. A must-read each year: Warren Buffett’s annual letter surveying the economic scene. One local angle: in discussing the challenges facing workers today, Buffett recalls the difficult period when he was shrinking Berkshire Hathaway’s original New England textile operation: “Many older workers at our New Bedford plant, as a poignant example, spoke Portuguese and knew little, if any, English. They had no Plan B.” (It’s true: many people don’t realize Buffett’s conglomerate has its roots in Southern New England.) Buffett also says he favors expanding the Earned Income Tax Credit to help low-wage workers, as Rhode Island has been doing.

16. The case against new streetcar lines – from the left.

17. Mayor Elorza is on the host committee for a March 28 fundraiser at the Hope Club to benefit Central Falls Mayor James Diossa, who’s up for re-election in November. The list also includes former Mayor Joe Paolino, Narragansett Bay Commission Chairman and former Rep. Vincent Mesolella, Rep. Shelby Maldonado, former Alex + Ani CEO Giovanni Feroce, Jerry Adams, Chris Boyle, Zach Darrow, Steve Hourahan, Eva Marie Mancuso and Mark Ryan.

18. Powerful, bracing read: “An open letter to the Whole Foods shoppers who consoled me when I learned of my dad’s suicide.”

19. Don’t forget to set your clocks forward an hour tonight.

20. Set your DVRs: This week on Newsmakers – Sens. Susan Sosnowski and John Pagliarini debate the proposed ban on handheld phone use in cars; a reporter roundtable discusses the week’s headlines. This week on Executive Suite – Hasbro Chairman, President and CEO Brian Goldner. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). Catch both shows back-to-back on your radio Sunday nights at 6 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 hosts Executive Suite and writes The Saturday Morning Post. Follow him on Twitter: @tednesi

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