June 5 Notebook

Civilian Control of the Government

Most would agree that civilian control of the military is an important guiding principle in a democracy. When the Rhode Island Board of Education meets tomorrow evening to decide on awarding Education Commissioner Deborah Gist a new contract, we’ll find out if RI leaders believe that civilian control of the school system is important too.

38 Studios but 1 Witness

At around the same time, the RI House Finance committee will be hearing a single witness on repayment of the 38 Studios bonds, Matt Fabian of Municipal Market Advisors. Ted Nesi of WPRI-TV (CBS 12) points out that the Finance Committee’s single witness has already expressed a definite opinion on this subject…

Last July, Fabian predicted doom for Rhode Island if taxpayers fail to pay the 38 Studios bondholders, who include USAA and Transamerica. “The market would treat it as tantamount to defaulting,” Fabian told Stateline. Rhode Island, he warned, “would be ostracized.”

One immediate question raised by Mr. Fabian’s previous remarks is how coherently the “market” can work at “ostracizing” someone before antitrust issues come into play.

Two other reactions to the announcement of the one-witness hearing come via Twitter, one from Gary Sasse, director of Bryant University’s Hassenfeld Institute for Public Leadership…

It doesn’t appear that the HFC is interested in hearing diverse views on 38 studios debt. Will this lead to sound decision making?

…and one from House Republican Leader Brian Newberry, quoted by Katherine Gregg of the Projo…

Newberry: “Hearing has one purpose/to scare the literally dozens of Dems who do not want to support repayment but are afraid to buck leadership”

(Note: I added two vowels, a consonant, a space and spelled out the number “one” in forwarding the above tweet.)


Philip Marcelo of the Providence Journal notes several facts that might call the neutrality of Mr. Fabian reasonably into question…

A financial analyst scheduled to talk to lawmakers Thursday about the ramifications of defaulting on the 38 Studios debt works for a firm that has ties to companies involved in that deal.

Matthew Fabian is managing director of Municipal Market Advisors, a company whose client list includes Assured Guaranty Municipal Corp., the state’s insurer in the $75-million loan guarantee deal, as well as Charles Schwab, an investment house that is among the 38 Studios bondholders, according to the company’s website.

6 Economic Development Bills, 4 No Votes

The full Rhode Island House voted yesterday to approve 6 bills from the leadership’s “Economic Development Package”, that would create a new “Secretary of Commerce” within the Governor’s office (aka the “undergovernor for commerce”), and tinker with the quasi-public Economic Development Corporation. Given that the major changes to the EDC passed by the House are 1) a name change 2) making the new “Secretary of Commerce” its head and 3) mandating that the board set up a new subcommittee, risk-management program and accountability standard for monitoring itself, while virtually all of its extant powers are left intact, Representative Joseph Trillo’s question, reported by David Klepper of the Associated Press, is apt: “Why is this going to be any different and how is this going to be any better?”

The Republican caucus had submitted a decent alternative bill earlier in the session, creating a cabinet level department of commerce (whose head would be subject to Senate confirmation) and completely eliminating the EDC as a quasi-public corporation (seventy-two pages of strikethroughs simply deleted the laws authorizing the EDC). Yet when the rename-the-EDC-and-not-much-else bill came up for its vote on the House floor, half of the Republicans voted for in favor; Newberry, Trillo and Doreen Costa, plus Democrat Patrick O’Neill were the only exceptions. If RI Republicans expect to persuade others to support them, they need to show a little more support for their own positions on the legislative floor.

2 National Security Appointments

President Barack Obama announced today that Rhode Island native Tom Donilon is resigning as National Security Advisor (that’s my barely-relevant Rhode Island hook). Current United Nations Ambassador Susan Rice will become the new NSA, while Samantha Power will become the new UN ambassador. Power can fairly be described as the liberal version of a neoconservative (which is not inherently a bad thing, though I doubt she would accept the description), i.e. someone who weights sovereignty less than most in deciding on foreign policy actions, though who more than traditional neoconservatives is willing to support breaches of sovereignty for humanitarian rather than conventional interests and to support working closely with international institutions. Rice, on the other hand, has found herself on the other end of the foreign policy spectrum, as the public face of the Obama administration’s rejection of deterrence and containment as fundamental security strategies in response to the attack at Benghazi. A coherent worldview in this simultaneous promotion is not immediately evident.

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