Familiar Names, Familiar Practices
The curious story of the resignation of West Warwick’s pension investment consultant brings us around (as you had to know it would) to some familiar names:
In early 2009, [Pension Board Chairman Geoffrey] Rousselle sought out the services of Jeffrey E. Bogosian, an investment broker already known in West Warwick through previous business with the pension board and a friendship with former board member Stephen D. Alves, also a former state senator. …
… Bogosian [is the] owner of Winchester Investment Securities, which is based in the same downtown Providence office building as Alves, House Speaker Gordon D. Fox, and former House Speaker William J. Murphy.
The consultant firm that has resigned, P-Solve, argued against the investment from the beginning, and some of its concerns have a familiar ring:
On July 9, P-Solve produced a 26-page memo urging the board not to invest public pension dollars with Cole. The consultant cited a volatile real-estate market, “an extremely high” fee structure, a lack of transparency, many conflicts of interest and low liquidity. …
[A subsequent memo], just two pages, was far more direct: “There are many reasons why we believe this investment to be wholly inappropriate for the Town of West Warwick …”
The first was “excessive fees,” including “approximately 13 percent in up-front fees to pay commissions, offering fees and acquisition fees.” P-Solve noted that “a substantial portion” of the fees would go to Bogosian’s company, Winchester Investment Securities, for “sourcing the deal.”
No doubt the outcry from concerned Rhode Islanders — specifically those residing in West Warwick and, especially, those whose pensions depend upon the board’s wisdom — will be absolutely impossible to hear. The Rhode Island Way rolls on.