"It's a scam. It's a rip-off. We shouldn't pay it back," said one. "It's unconstitutional to sell bonds without the approval of the voters ....
"This former Red Sox player doesn't think that we, the taxpayers, should be on the hook for the dealings of another former Red Sox player," chimed
"By not paying this bond we will send a statement that these insider, special deals will not be tolerated any more in our state," Stenhouse said to applause from the two dozen or so people from the
But the protest did not draw the big names the organizers had billed as speakers at their protest rally, including "two major-party candidates for governor,"
And the protesters again found themselves on the opposing end of a debate that began Thursday morning, exactly where it left off at budget decision-making time last year, with a top-ranked
But Mattiello said, again, that he believes the state needs to pay the investors who bought the state-backed bonds to avoid serious financial consequences, such as a downgrade in
Hours later, at the protest, Occupy Providence's
But Mattiello effectively said the state can't afford the risk.
Almonte said the state needs to pay the
To suggest otherwise is irresponsible, said Almonte, who is in a three-way Democratic primary race against
The crux of Caprio's argument: "The 38 Studio bonds were not approved by R.I. voters. The sophisticated investors who made the loan are multi-billion-dollar companies who understood the risks and have bought insurance to protect their investment." But he, too, has recommended the state "begin discussions with the rating agencies and the others who hold and insure the bonds."
Almonte said the state has a short window over the next 30 days, before the passage of the next state budget, to try to negotiate a settlement of the amounts the state owes.
"It is nice to say that,"
He recently told the
He said he also had "several conversations with
But Almonte said there is no guarantee that rank-and-file lawmakers will approve the payment of the next
His argument: "The insurance company will pay the bondholders if the state does not. Then they would likely sue the state for repayment, leading to a substantial downgrade of our ratings. This will cost our state -- and likely our municipalities -- more money in interest. That leaves less money for rebuilding our infrastructure like roads, bridges, and school improvements."
"I would bring all of the stakeholders together: the insurance company, defendants, the trustee, a representative for the bondholders, and the state. I would explain that the insurance company received a commission and if the state did not pay they would be on the hook for the full amount due."
In his scenario, everybody would pay something, including the state, which "has some culpability because I believe they did not do their proper due diligence and did not monitor the loan properly ... . Everyone would sign an agreement not to sue ... the payment issue would be over."
In his view, "the bondholders should accept a lower rate of interest in return for full payment of their bonds."
Angry lawmakers approved the first
That does not count the additional
The state's lawsuit alleges fraud, negligence and breach of fiduciary duty.
With reports from staff writer
(c)2014 The Providence Journal (Providence, R.I.)
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