SEC Fines California Investment Firm That Tried Contributing To Raimondo In 2014

Jul 11, 2018

Raimondo during a news conference last year.
Credit Ian Donnis / RIPR

The U.S. Securities and Exchange Commission has imposed a $100,000 fine on a California investment company for violating pay to play rules meant to prevent political contributions from influencing investment decisions. An executive with the company, Oaktree Capital Management, made a $1,000 contribution to Gina Raimondo when she was running for governor in 2014, but it was refunded a few weeks later.

In a filing Tuesday, the SEC said three Oaktree employees made campaign contributions to candidates in Calfornia and Rhode Island between September 2014 and April 2016, whose "offices had influence over selecting investment advisers for public pension plans in those states."

According to the filing, an Oaktree employee made a $1,000 contribution to then-General Treasurer Raimondo on September 15, 2014, as she was running for governor. Raimondo's current gubernatorial campaign said the contribution, from Caleb Kramer, was refunded a few weeks later, on October 24, 2014.

"It was refunded in accordance with Raimondo's policy as treasurer to bar the state's investment advisors from making political contributions," said Emily Samsel, a spokeswoman for Raimondo's current campaign for governor. "In fact, she was the first treasurer to require investment advisors to sign a pledge."

According to the SEC, the state pension system, through a decision by Rhode Island's Investment Commission decided in October 2011 to invest $20 million in a fund advised by Oaktree Capital.

Rival campaigns jumped on details of the story.

Andrew Augustus, campaign spokesman for Republican gubernatorial candidate Allan Fung, referred to Raimondo in a tweet asking, "If she was so honest, why didn't she fire the firm for violating her pledge to not contribute to her campaign?"

Ron Knox, spokesman for rival Matt Brown, asked, "Does anyone believe this is the only time? Raimondo's relentless pay-to-play fundraisers with Wall Street and industries she's supposed to regulate have hurt people and hurt Rhode Island. It's outrageous, and part of a broken system of establishment insiders benefiting from office and using the system for personal political gain."

Samsel responded with this: "Both Mayor Fung and Matt Brown are so obsessed with attacking Governor Raimondo they'll issue Trump-style fake news statements before actually reading a full report."

"Fung is the mayor of law-breaking and pay-to-play -- we still don't know why he got a special deal on rent for his campaign office, a rent-free deal that's an an insult to every Rhode Islander who works hard and plays by the rules," she said. "And Matt Brown? Still no word on the secret donors who funded the dark-money think tank he ran for $300,000 a year after abruptly abandoning Rhode Island."

This report has been updated.