Backwards Ownership in Government Spending

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Sometimes one must be reminded how backwards some sectors have become, particularly when government is involved.  Consider labor union claims that they own a particular employer’s jobs.  Most people would say that, while holding it, a job belongs to an employee and, in general, is under the authority of the employer who created it.  In the union mentality, the outside organization that somehow managed to secure employee approval — often sometime in the distant past — rises above both parties such that the job belongs to the union.

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Similarly, Democrat Governor Gina Raimondo’s old investment firm, Point Judith Capital, in a real sense appears to own the money the state unwisely invested with the company, as Kathy Gregg reports in the Providence Journal:

Point Judith Capital, the private equity firm co-founded by Gov. Gina Raimondo before she entered politics, has advised the state it intends to hold on to an under-performing Rhode Island pension-system investment for one more year, under the terms of a 2006 agreement. …

Over the span of the investment, the pension fund paid the firm $1,011,891, according to Magaziner spokesman Evan England.

The way the state treasury accounts for investments, England reported: Point Judith earned the pension fund 0.6 percent on average each year, and a total of $297,466.

So, the state has hired this company to earn money on a sizable investment, and instead, Point Judith has collected more from the state than it has provided in investment returns.  Yet, it is up to the company to decide whether the state can have its money back in order to find a contractor who can actually perform as expected.

Maybe it makes one an investment-world yokel to say so, but something just seems wrong about that. This sort of option may be very common, but why would the state accept it?



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