Hey look – there goes $22 million…

Yesterday, CNBC reported that with more than $100 billion under its management, Ray Dalio’s Bridgewater Associates is once again the world’s largest hedge fund.

Tomorrow, Governor Dannel Malloy and his appointees on the Connecticut Bond Commission will approve a corporate welfare package for Bridgewater Associates that will cost taxpayers $22 million plus.  The plus “part” is due to the fact that Malloy is actually borrowing the money to give to the giant hedge fund, meaning Connecticut taxpayers must pay back the money, along with the associated interest.

As for the entire debacle, long-time Wait, What? readers will remember that this is actually Plan B of Malloy’s effort to subsidize one of the most successful companies in the world.

The Connecticut Bond Commission agenda explains the latest version of the plan as follows:

These funds are requested to provide a grant-in-aid and loan, under the First Five Program, to Bridgewater Associates, LP to assist with expansion of its facilities in Westport, Wilton and Norwalk. The company will retain 1,402 jobs and create 750 new jobs. The loan will be provided at an interest rate of 1% for ten years with principal deferred for five years. The company will be eligible for loan forgiveness if it creates the 750 jobs and retains the existing jobs by the end of 2021. Also included are a $2 million grant to assist with training and a $3 million grant for installation of alternative energy systems.

As an aside, Dalio’s pay – last year – dropped to $1.6 billion, down from the $2.3 billion a year he collected a couple of years ago.

Things are tough all over… Malloy’s solution;

While middle class families across the state struggle with massive costs, such as student loans with rates of 8% or more, not to mention rising energy costs, as a result of Malloy’s economic development strategy, Connecticut taxpayer will be loaning one of the 1%’s most elite members with a $17 million dollar loan at 1% [go –figure] with no payments due for five years  – and, should the company stick to its present business trajectory – they don’t have to pay back the loan at all.  In addition to the $17 million, Dalio and his company will get $2 million to help subsidize their worker training program and $3 so that they can install some “alternative energy systems.”

Meanwhile, Connecticut’s state budget deficit is about $250 million and growing, The Malloy administration has laid off about 1,000 state employees in the last few weeks and Malloy’s new budget counts on his ability to ax as many as 3,000 more state employees in the coming couple of months.

Called by some, the Reverse Robin Hood Strategy, were in Connecticut we know it as Dannel Malloy’s approach to the advanced capitalist system, one in which taxpayers work extra hard so that their government can give money to successful businesses.

For those who want to know more about Malloy’s horrendous Bridgewater give-a-way program, some of the details can be found in previous Wait, What? posts on this issue.

Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund (8/19/2012)

Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO (1/11/2013)

Damn process gets in the way of the Bridgewater Associates corporate welfare give-a-way (10/2/2013)

“This is stealing from the poor and middle class to make a billionaire even richer” (Pelto, August 2012) (6/27/14)

To Hell with Connecticut’s Middle Class – Someone needs to subsidize the Billionaires (9/16/2015)

Oh, and as for the $2 million Connecticut taxpayers are giving to help Bridgewater Associates train their staff?  Check out,

Bridgewater’s Co-CEO Once “Supervised Subordinates Stripping Off Articles Of Clothing And Setting Them On Fire During A Team-Building Exercise”

As long-time Dealbreaker readers know, we have been writing about the slightly unorthodox culture at Bridgewater Associates since 2010, when we received a spiral-bound copy of Principles, the hedge fund’s unofficial company handbook penned by founder Ray Dalio. At the time, it was surprising to learn of an asset management firm that explained its reasoning for why employees shouldn’t hesitate to identify and eliminate weak colleagues via a discussion about “a pack of hyenas [taking] down a young wildebeest”; told them that failing to confront a person about their shortcomings to their face made you “a slimy weasel”; pushed them to ask themselves if they’d “earned the right to have an opinion”; insisted that “firing people is not a big deal”; and quizzed them on all of the above and more.

Amazingly, though, the Westport-based hedge fund continues to surprise us with the new and innovative ways it conducts its business, many of which are on display in Wall Street Journal article today, examining life under the Tao of Dalio..

[…]

Trustfalls…ON STEROIDS: “Mr. Jensen also cut a distinctive path as a manager. About three years ago, he supervised subordinates stripping off articles of clothing and setting them on fire during a team-building exercise at an official company retreat.

No doubt Ray Dalio and his company need the money more than we do.

New York’s “New Visions for Public Schools” is coming to save Connecticut

Brace yourselves … Yet another New York corporate education reform organization has decided to open up shop in Connecticut.

What is that line about robbing banks because that is where the money is…?

In this case, the group is calling itself “Connecticut RISE School Partnerships” but it is really a New York based organization that is known as New Visions for Public Schools.

This latest Connecticut education reform savior is hiring staff in order to “partner” with the East Hartford, Meriden and New Haven public schools systems.

What the “partnership” is or even how the deal to “partner” with an out-of-state entity was cut hasn’t been revealed, but a series of Freedom of Information requests have been sent to the various school districts in an attempt to find out exactly what is going on.

Some of the funding for the endeavor appears to be coming from the Ray Dalio Family Foundation.  Ray Dalio is the billionaire who Governor Dannel Malloy showered with scarce taxpayer funds in a failed effort to help subsidize Dalio’s desire to move his company, Bridgewater Associates – the world’s largest hedge fund from Westport to Stamford.  In the end, Dalio decided to stay in Westport, for the time being, although he did keep in the range of $52 million in public money to cover some of his costs.  (See Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund, Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO and To Hell with Connecticut’s Middle Class – Someone needs to subsidize the Billionaires.)

While details are scarce, New Visions for Public Schools’ website suggests that students, parents, teacher and public schools in East Hartford, Meriden and New Haven will benefit from “partnering” with them because the New York entity is;

“Dedicated to ensuring that all New York City public school students, regardless of race or economic class, have access to a high-quality education that prepares them for the rigors of college and the workforce. Further, we are committed to sharing innovative tools, strategies and lessons learned in New Visions schools with others in New York and throughout the country to prove that meaningful change is achievable at scale and success is possible for every child.”

[As a side note – never trust an education group that uses the words rigor or grit.]

New Visions for Public Schools further reports that the core of their work is to,

“Promote data-driven, peer-to-peer learning to support continuous improvement.”

The entity’s Board of Trustees includes Founder and Co-Chairman Richard Beattie who is the Chairman of Heidrick & Struggles International Inc., Chairman and Partner of Simpson Thacher & Bartlett, a large New York law firm,  and a leading member of the Harley Davidson Board of Directors.

According to Bloomberg News, Beattle, “concentrates on mergers and acquisitions; leveraged buyouts; and corporate law and finance. He has counseled numerous boards and non-management directors on governance issues, investigations and litigation involving corporate officers and other crisis situations. He has also participated in some of the larger and more complex financial transactions, including the merger of America Online and Time Warner, the merger of WellPoint Health Networks with Anthem Inc. and the merger of J.P. Morgan Chase with Bank One.”

New Visions for Public Schools’ other Co-Chairman is Roger C. Altman, the founder and executive chairman of Evercore. (He is the same Roger Altman who served as President Carter’s Assistant Secretary of the Treasury and President Clinton’s Deputy Secretary of the Treasury until he resigned amid the “Whitewater controversy”).

Until recently the President of New Visons for Public Schools was Robert Hughes, who has since left to become the Director of K-12 Strategy for the Bill & Melinda Gates Foundation.

In addition to the money from the Ray Dalio Family Foundation, major supporters of New Visions for Public Schools include the Bill & Melinda Gates Foundation, Bloomberg Philanthropies and a long list of other charter school industry and corporate education reform foundations, companies and donors.

The job postings associated with New Visions for Public Schools and their Connecticut RISE School Partnerships report that the organization will;

  • Collaborate with RISE district teams comprised of the district superintendent, school supervisor, district data administrator, high school principal, high school teacher, and other school and district staff.
  • Cultivate strong partnerships with RISE schools and districts, building strong relationships with teachers and leaders.
  • Develop a nuanced understanding of district strengths, priorities, and growth areas.
  • Provide embedded and consultative support in RISE schools and districts aligned to the Network common aim.
  • Support each school and district on its unique path to advance student outcomes.

Claiming particular expertise in “Data-Driven Innovation,” East Hartford, Meriden and New Haven should prepare to “benefit” from a program that will;

  • Support districts in designing and implementing local RISE Innovation Grants, piloting unique local initiatives designed to advance the Network’s common aim.
  • Facilitate quarterly Learning and Innovation Cycles, convening RISE teams to discuss Innovation Grant undertakings, review progress data, and refine/strengthen implementation.
  • Support the roll-out of new collaboratively-develop RISE data dashboards, providing school and district leaders with access to real-time and user-friendly data visualizations.
  • Build staff capacity around the use of data to systematically drive decision-making.
  • Focus intently on creating school and district systems, structures, and protocols to allow for regular data-driven learning cycles.
  • Support districts in implementing data tools and strategic data check-ins around college and career readiness indicators.

In addition to a the RISE Program Coordinator and the RISE School Partnership Manager, Connecticut’s newest corporate education reform industry group will also be adding a RISE Director Of Data Strategy, whose job will be to “play an integral role designing and leading RISE’s data strategy, overseeing research, development, and capacity-building functions.”

Check back for more information about New Visions for Public Schools’ Connecticut RISE initiative as it becomes available.

To Hell with Connecticut’s Middle Class – Someone needs to subsidize the Billionaires

Here we go again!

As tens of thousands of Connecticut families struggle to pay their local property taxes due to the state’s inadequate funding of public education, Governor Dannel Malloy is giving scarce public funds to some of the wealthiest companies in the country.

As the Hartford Courant reports today in their article entitled, “State Proposes $52 Million In Subsidies To Giant Hedge Fund,”

Bridgewater Associates, the world’s largest hedge fund, can qualify for up to $52 million in tax credits, grants and a loan from taxpayers as it renovates and expands its headquarters in Westport, state officials say.

Bridgewater Associates, which has about 1,500 employees, originally was offered a $115 million incentives package in the state’s First Five program, but it abandoned its plan to build a new headquarters in Stamford after local residents’ opposition. (See: Bridgewater Associates Abandons Plan To Build in Stamford.)

Although it has not been widely reported, before Bridgewater Associates “abandoned” their move to Stamford, the Malloy administration spent millions to help Bridgewater Associates facilitate the move.

But today’s news means that while Governor Dannel Malloy effort to “lure” Bridgewater Associates from Westport to his pet project called Harbor Point in Stamford with that $115 million publicly financed corporate welfare package failed, Connecticut’s taxpayers are now being put on the hook to give Ray Dalio and his gigantic Hedgefund $52 million to help subsidize a half-billion dollar upgrade to their Westport corporate headquarters.

For those who haven’t followed the saga, the following Wait, What? posts are worth a read;

See: NEWSFLASH – I gave a billionaire $115 million today (and if you’re from CT, so did you!) (8/15/2012); Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund (8/19/2012); Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO (1/11/2013) and “This is stealing from the poor and middle class to make a billionaire even richer” (6/27/2014)

The background to this latest development is that for more than three years, Malloy has been working to hand taxpayer money over to Ray Dalio, one of Connecticut’s 16 billionaires.

According to Forbes Magazine, Dalio is a high-ranking member of the list of “The World’s Billionaires.”

Dalio’s worth is estimated at $15.5 billion, bolstered by income of more than $1 billion last year.  His annual salary is down sharply from 2011 when Dalio earned $3.9 billion, making him the highest paid person in the United States.  As of now, Dalio ranks #30 on Forbes list of the richest 400 and #2 among Hedgefund owners.  The number of billionaires who call Connecticut home has actually jumped from 9 to 16 since September 2014.

According to the latest announcements, Malloy’s new plan is for the state of Connecticut to borrow $17 million at about 3 percent a year and lend it to Dalio’s company with a rate of 1 percent interest.

The Courant reports added that,

“The entire loan could become a gift, depending on how Bridgewater meets its job creation targets. But the exact terms are still being negotiated”

In addition to the $17 million loan, the Malloy administration will be giving Dalio and his company $2 million for employee training and $3 million to subsidize the company’s energy costs.  Apparently these funds would also come from money that the state has borrowed as part of its economic development activities, meaning the long term cost to taxpayers is actually significantly higher than $5 million.

Finally, Dalio and his company would also be given $30 million in tax credits over the next 10 years under the “Urban and Industrial Sites Reinvestment Program.”  The actual impact of the tax credits would be that Bridgewater’s tax liability to the state of Connecticut would drop by $30 million.

As to how Malloy can get away with using money for urban renewal on a project in Westport, the Hartford Courant explains,

“Westport is not a distressed city, and the office park is not a brownfield, but because Bridgewater Associates’ investment is so large, it qualifies for the credits.”

Malloy’s rationale appears to be his ongoing reliance on the old theory of “trickle-down” economics which claims that if government uses its taxing and expenditure policies to redistribute wealth from the Middle-Class to the rich, the wealthy will be able to create even more wealth which will then trickle down to the rest of society via more jobs and higher tax revenues.

As if to reiterate how the economic strategy as consistently failed, Reuters is reporting today that;

“Hewlett-Packard Co, which is splitting into two listed companies later this year, said on Tuesday it expects to cut another 25,000 to 30,000 jobs in its enterprise business as the tech pioneer adjusts to falling demand.

The latest cuts, on top of layoffs of 55,000 workers previously announced under Chief Executive Officer Meg Whitman.”

As the independent think-tank, Citizens for Tax Justice has reported, Hewlett-Packard Co, has been a major recipient of taxpayer funded corporate welfare.  In addition to direct subsidies, HP ranks #13 on the list of major corporations that have the most money hidden in “off-shore investments” in order to avoid paying federal and state taxes (See: Offshore Shell Games 2014 The Use of Offshore Tax Havens by Fortune 500 Companies.)

Citizens for Tax Justice notes,

“As of 2013, the 287 Fortune 500 companies that report holding offshore cash had collectively accumulated close to $2 trillion that they declare to be “permanently reinvested” abroad. That means they claim to have no current plans to use the money to pay dividends to shareholders, make stock repurchases, or make certain U.S. investments. While 72 percent of Fortune 500 companies report having income offshore, some companies shift profits offshore far more aggressively than others. The thirty companies with the most money offshore account for nearly $1.2 trillion. In other words, six percent of Fortune 500 companies account for 62 percent of the offshore cash.”

Corporate Welfare didn’t work with Hewlett-Packard Co,  and won’t work with Ray Dalio’s Bridgewater Associates…but that fact certainly isn’t stopping Governor Dannel Malloy from giving one of Connecticut’s billionaires $52 million more of our money.

“This is stealing from the poor and middle class to make a billionaire even richer” (Pelto, August 2012)

Twenty-two months later – vindication!

Almost two years ago, Governor Dannel “Dan” Malloy announced that he was giving Bridgewater Associates, the world’s most profitable hedge fund, $120 million to move their headquarters from Westport to Stamford.

Bridgewater’s CEO, Ray Dalio, is known as the nation’s highest paid individual with an annual income of over $2 BILLION a year.

At the time, Bloomberg news quoted me as saying, “This is stealing from the poor and middle class to make a billionaire even richer.”

But as reported in the Norwalk Hour, Bridgewater announced the following this evening.

“WESTPORT — The Bridgewater Associates’ move to Stamford is not going to happen.

According to a statement released by the global hedge fund on Friday, Bridgewater “will not proceed with the move.”

“After careful examination and reflection surrounding the challenges, time, energy, and resources needed to bring the proposed Stamford project to completion, we have decided not to proceed with the move. We are particularly thankful to Governor Malloy for doing his utmost to make this opportunity possible. We are now exploring our other options,” the statement read…”

While it remains unclear whether Connecticut taxpayers will get all of their money back, the good news is that the governor’s corporate welfare folly for Bridgewater looks like it is coming to an end.

Here is the Wait, What? post from August 12, 2012,

NEWSFLASH – I gave a billionaire $115 million today (and if you’re from CT, so did you!)

When one of my favorite readers sent me the news late this afternoon, I didn’t believe it.

When Bloomberg News Service wrote seeking a comment a few moments later, I almost drove off the road.

Personally, I can’t make my mortgage payments, but like Connecticut’s other taxpayers, it turns out that I managed to scrounge together $115 million for Bridgewater Associates, the world’s biggest hedge fund.

In fact, since the state is borrowing some of the money, it will actually cost Connecticut’s taxpayers well over $150 million.

And what do we get for it.

Bridgewater will build a $750 million headquarters in Stamford, Connecticut.

And the bargain is that it only costs us $25 million for a “’forgivable” 10-year loan with interest set at 1 percent”, plus $80 million in tax credits, $5 million for some type of “alternative-energy system” and $5 million for job training…although the 154,000 Connecticut residents on unemployment (and the additional 100,000 who have part-time jobs when they really want full time jobs) shouldn’t hold their breath; Bridgewater is very particular about the types of people it hires.

Oh, and the kicker, they will be moving their offices….FROM WESTPORT, CONNECTICUT TO STAMFORD, CONNECTICUT.

My first response to the reporter wasn’t printable, so I stopped the car, took a deep breath and tried again.

The following is what Bloomberg News printed under the sub-headline, “‘Shocking’ Deal”:

“This is stealing from the poor and middle class to make a billionaire even richer…“This isn’t economic development…[it is] shocking beyond words…If a Republican governor did this, we Democrats would be calling for impeachment,” said Jonathan Pelto, a Democrat and former deputy majority leader in Connecticut’s House of Representatives.

The full Bloomberg News article can be found here:  http://www.bloomberg.com/news/2012-08-15/connecticut-aids-bridgewater-hedge-fund-to-build-new-hq.html

Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto

For the full Wait, What? post go to: http://jonathanpelto.com/2012/07/18/will-parents-speak-up-in-time-to-end-the-standardized-testing-madness/

Damn process gets in the way of the Bridgewater Associates corporate welfare give-a-way

Bridgewater Associates is the gigantic hedge fund company that Governor Malloy is giving over $115 million dollars in public funds, as part of an effort to assist them in their move from Westport, Connecticut to Stamford, Connecticut.

For some, Bridgewater is better known as the company that paid its CEO a compensation package of $2.3 billion a year or two ago.  (Yes, that is the letter b and not the letter m after the amount the company paid its CEO).

You can read more about the Bridgewater Associates Project here: Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO and here: Yes, you heard right…CT taxpayers give $115 million to Bridgewater, world’s biggest hedge fund

But even when you try to give away $115 million to a successful billionaire financial giant little hurdles develop.

In this case, in order to implement this “economic development initiative,” an existing boatyard has to be moved to make room for Bridgewater’s new headquarters.

It turns out that the developer illegally demolished a 14-acre boatyard in preparation for the Bridgewater Associates project and now needs to find it a new home.

Building and Land Technology (BLT), the developer of the Bridgewater Associates project, had identified a parcel of land owned by the City of Stamford to build the new boatyard.

However, in the face of what appeared to be a pending negative vote yesterday by the Stamford Panning Board, BLT suddenly withdrew its application.

According to a story in the Westport News entitled, Bridgewater plan to relocate from Westport hits new snag, “Planning Board Chairwoman Theresa Dell said BLT General Counsel John Freeman asked to withdraw the proposed agreement at the beginning of Tuesday night’s regular meeting, where the board was expected to consider whether to approve the agreement.”

The BLT General Counsel wrote in an email, “To allow us time to consider and respond to the board’s comments, we have asked the administration to withdraw the application. This will provide us the opportunity to work with city officials to build greater consensus. Ultimately, this project will create new amenities for Stamford residents, boost the city’s economy and bolster the ongoing revitalization of the South End.”

READ:  Help, need more time to line up the votes…

As the Westport News article explains, “The decision to withdraw the agreement erases two months of public hearings and fierce debate before the Planning Board over the agreement’s merits.”

The Westport News added, “In late August, more than 200 Stamford residents turned out to the first two public hearings on the proposed agreement, which would have granted the developer the right to use 2.5 acres of city land adjacent to 205 Magee Ave. The agreement needed the approval of that city’s Planning Board, Board of Finance and the Board of Representatives to move forward.

Under the agreement, in exchange for rights to include the land in a 6-acre boat yard facility, the developer would spend $5 million toward planning, design and completion of a new Stamford animal shelter and additional improvements to Czescik Marina to furnish up to 190 slips to city boaters, as well as landscaping improvements to Kosciuszko and Cummings parks.”

Supporters and opponents of Governor Malloy’s historic taxpayer-funded corporate welfare programs will want to read the full details of this latest development in the Bridgewater Associates story here:  http://www.westport-news.com/news/article/Bridgewater-plan-to-relocate-from-Westport-hits-4861260.php

Slam-Dunk! Touch-down! Goal!!!! Taxpayers come through for American’s highest paid CEO

Don’t let the residue of the Great Recession get you down.

While it is true that America’s middle-class is on the ropes, unemployment remains high, sending a kid to college costs more than most people save in their entire lives, child poverty in Connecticut has gone up 50% in the last decade and the state is facing a $1 billion dollar budget deficit next year, Connecticut’s taxpayers managed to dig deep and find the money to provide one of the world’s biggest hedge fund owners, Ray Dalio, with $115 million in state funds. Meanwhile Stamford’s taxpayers learned this week that they were helping to put the whole deal together thanks to their Mayor’s decision granting a private developer access to some of the most valuable publicly owned waterfront property left in Connecticut.

In return for all this generosity, Dalio, the founder and CEO of Bridgewater Associates, and a man who was paid $3.9 billion last year will move his offices from Westport to a new $750 million office complex on Stamford’s waterfront.

The deal began with Governor Malloy’s decision to give Dalio a taxpayer-funded corporate welfare package that included a $25 million forgivable loan, $5 million in grant funds for job training, $5 million for an alternative energy system and $80 Million in tax credits.

Now, under Part II of the effort, Stamford’s Mayor Mike Pavia has signed a “letter of intent” granting the developer of Stamford’s Harbor Point the right to use city-owned property as part of overall effort to clear the way for Bridgewater Associates’ headquarters.

The mayor’s action will allow the developer to move the South End boatyard to a different location.  Never mind that boaters say the alternative site doesn’t accommodate their needs, we’re talking about pleasing a billionaire – and that is billion with a B – so what he wants is what he gets.

Just to make the whole situation as absurd as possible and to add insult to injury, while the letter of intent was signed back in December, it was only made public this week.

According to reports in the Stamford Advocate, “Mayor Michael Pavia said the goal of the document was simply to allow the zoning review process to commence so as to give the city a chance to assess the plan…Pavia said the city has not yet negotiated a price for the land in question. According to the letter of intent, should the boatyard plan be approved by the Zoning Board, the city and BLT [the private developer] will determine the price as part of a final agreement granting the developer property rights.”

Oh, and for those who are into reading the fine print, although initially Mayor Malloy and then Mayor Pavia pledged that no development project would go forward without all of the appropriate approvals, the letter of intent includes special language that reads, “The Applicant shall obtain final approval of such grant by City of Stamford Boards and Commissions as may be required by City Charter, state law or as the Mayor of the City of Stamford, in his sole discretion deems necessary or appropriate.”

The new wording certainly suggests that if Stamford’s various public boards and commissions didn’t act in an appropriately way, the mayor might have to intervene to move the project along without such approvals.

It is nice to note though that when confronted about this latest addition, the Pavia administration claimed that the language is being misunderstood and the letter of intent does nothing more than allow the process to start moving forward.

So here we are.

On the long list of challenges facing Connecticut, we can put a check mark next to the task that reads – “Help the world’s biggest hedge fund and the highest paid CEO in the country pay for a great new office with a great waterfront view.”

More on these latest developments can be found in the Stamford Advocate: http://www.stamfordadvocate.com/news/article/Setting-table-for-Bridgewater-city-paves-the-way-4177724.php#ixzz2HgLY6z9H  and  http://www.stamfordadvocate.com/news/article/Boatyard-plan-agreement-defended-4184605.php#ixzz2HgLH7Uac