Elaborate government investment fraud creates incentive for election fraud.

The latest shiny news object in Rhode Island media is the revelation that the Tidewater soccer stadium will cost Rhode Island taxpayers $132 million in order to finance $27 million of the construction costs, or $4.4 million per year for 30 years.  Grumbling is being heard from people with familiar names — “obviously these are not favorable terms,” said Democrat Speaker of the House Joseph Shekarchi — but that will fade, and nobody is putting forward ideas to protect Rhode Islanders from further increases on this deal or similar abuse in the future.

Tidewater reveals one of the great frauds of modern government.  The labor unions that placed Dan McKee in office secured a massive project with his tie-breaking vote on a bad idea, and the investors get to demand high rates of return by pretending the debt is riskier than it is.  That second point is more important than is usually acknowledged.

Heretofore, these “revenue,” or “moral obligation,” bonds have inspired what opposition they have in the Ocean State on the grounds that they end-run around voters.  Government officials simply borrow the money based on the pretense that taxpayers won’t actually have to pay it, because the money will come from some future revenue stream, when everybody knows there’s no way elected officials will let investors take a hit if the revenue doesn’t materialize.

This mismatch between the risk everybody pretends exists and the actual risk creates a fraudulent gap in which insiders can profit.  We should remember that Rhode Island voters (guided by partisans, special interests, and do-what-they’re-told union members) have reached the point of near 100% certainty for debt approval.  In that light, the use of “moral obligation” bonds looks more like a means of making it more costly for taxpayers than simply a means of avoiding our vote.  If government secures that vote, then nobody can pretend they might lose their money, and investor profits shrink.

With this observation in mind, I can’t help but think of a recent survey from the Heartland Institute and Rasmussen Reports that found 28.2% of mail ballot voters admitting “to committing at least one of… four types of fraud.”  The study found that the presidential election would have flipped if even 4% of mail ballots were found fraudulent and therefore excluded.  Even if the survey overstates fraud by seven times, it still changed the results.

Mammoth debt for Pawtucket’s minor-league soccer stadium is a drop in the bucket of the incentive for election fraud.  If greedy insiders would maneuver to avoid public votes on debt because it will make that debt more expensive (which conservatives and progressives can probably agree they would do), and if politicians would play along for the promise of power (ditto), then they’d certainly look for ways to control votes when it serves their interests to hold them.

The solution for the Tidewater fiasco-in-the-making is the election of officials who will have the intelligence and fortitude to say, when the revenue to pay the bonds doesn’t materialize, “Sorry.  You knew the risks and received a premium on your investment, and taxpayers shouldn’t be responsible for your bad investment decisions.”

Until recently, the election of such people was made unlikely by the many special interests who would be harmed by a reduction in government’s power.  However, the election of Donald Trump over consummate insider, Hillary Clinton, scared the power brokers, and nobody should dismiss as conspiracy talk the possibility that they’ve taken steps to ensure that it never, ever happens again.  And like the spurious prosecutions of the former president, we’d be insane to think they’ll treat him as a special case but otherwise leave the integrity of our government intact.

 

Featured image by Justin Katz using Dall-E 3.

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Ken Williamson
Ken Williamson
1 month ago

Justin, I don’t understand how Rhode Island manages to make projects cost so much!

In 2002 City & County of Honolulu cut the ribbon opening the Waipio Peninsula Soccer Complex, the largest of its kind in Honolulu, HI on 288 acres consisting of 21 FIFA regulation size soccer fields including the stadium, full night illuminated soccer stadium with 5,000 seats expandable to 18,000 seats, locker rooms and showers, referees room, storage room, consessions, public restrooms throughout complex, parking throughout complex with overflow parking area. The complex supports 30,000 soccer players and families.

All 21 regulation soccer fields are fully equipped so 21 game matches can be simultaneously in action.

Annual City & County of Honolulu Department of Parks and Recreation maintenance budget is $750,000 per year and final total construction cost is $23 million year 2002.

Waipio Soccer Complex (honolulu.gov)

Good Luck with this Pawtucket Soccer debacle which looks like Rhode Island will be left holding the bag of worthless fodder!

Donna J Cook
Donna J Cook
1 month ago

Great article. I’m so sick and tired of the poor governance of this state. It never seems to get better. Bonds we can’t vote on, debt we can’t afford on a stadium.
Oh, BTW, we can’t even trust proper safety checks for Washington Bridge, so unsafe that it has been shut down going south on 195. Total chaos trying to get to work, school and emergency vehicle travel to save lives. Heads need to roll on this debacle. We deserve better. Roger Williams lively experiment has failed!

Ken Williamson
Ken Williamson
Reply to  Donna J Cook
1 month ago

Donna, I was born and raised in Rhode Island over 70 years ago and my family and my departed wife’s family were either politically appointed, elected officials or civil servants of state and municipal RI governments plus a photography hobby of mine allowed me access to where other photographers were not allowed. I personally have been attacked by RI members of the general assembly due to contract for first new RI Junior College class ringes (now called RI Cummonity College which I designed both female and male rings) and showed the quality of local RI company high school ring deteriation after 1 1/2 years of normal wearing to first RIJC graduating class. The class voted for out of state ring company but yet members of RI of general assembly attacked me even though I had no vote.

I’ve personally, publicly been attacked by RI politicians in municipalities, state and federal level for following the printed rules and regulations protecting the public at large from fraud, waste and abuse!

RI is all about who is feeding Uncle Vinney’s back pocket and untill the ethics laws in RI become a lot stricter it will be business as usual causing RI taxpayers extreme wallet paine.

This is why I got out of Dodge City (RI) to a state that has some of the strictest ethics laws in U.S.A. to where politicians will not visit holiday parties for fear of being accused of accepting gifts.

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