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Joe Biden’s transition team has informed Democratic officials that Gina Raimondo, the centrist governor of Rhode Island, is under consideration as the next Secretary of the Treasury should Biden win the election, multiple sources have confirmed to the Prospect.
Raimondo, in her second term as governor, dazzled Biden’s campaign in interviews to become his vice president back in June. A former venture capitalist who took the governor’s mansion on the strength of millions of dollars in Wall Street donations, Raimondo’s name will stir the long memories of union leaders. They have held a grudge with her for years over her tenure as state treasurer, when she cut pension benefits for public employees, while steering over $1 billion in state money to hedge fund investments.
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But recalling those hard feelings may be the point. One source theorized to the Prospect that leaking Raimondo’s name could make Federal Reserve governor Lael Brainard, until now seen as the leading possibility for Treasury Secretary, seem more palatable. Brainard, who worked at Treasury under Tim Geithner, has been attempting to portray a more liberal public image as the decision approaches.
Progressives have endorsed other names for Treasury Secretary, the most prominent being Sen. Elizabeth Warren (D-MA). Others being discussed include Atlanta Federal Reserve chair Raphael Bostic and former Fed and Treasury official Sarah Bloom Raskin.
Whether legitimate or a trial balloon with an ulterior motive, Raimondo’s mention has already triggered opposition in progressive circles. “Raimondo has built her career on subservience to Wall Street—and her selection would be an affront to organized labor,” said David Segal, Executive Director of Demand Progress, a leading progressive organization in the battle over personnel in a hypothetical Biden White House. Segal is also a former member of the Providence City Council and a state representative in Rhode Island.
She is known as a favorite within Biden circles, and she is well-liked among centrists and Wall Street-friendly Democrats.
In a statement, a Biden transition spokesperson said, “The Biden-Harris Transition team is not making any personnel decisions pre-election.”
Governor Raimondo’s office has not yet responded to requests for comment.
Raimondo, 49, graduated magna cum laude at Harvard and was a Rhodes scholar at Oxford. She served as senior vice president at Village Ventures, a Massachusetts VC firm backed by Bain Capital, and later joined another firm named Point Judith Capital, before entering politics.
She is the first woman to serve as Rhode Island’s governor, and if she took over for Steven Mnuchin as Treasury Secretary, she would be the first woman to serve in that position. Biden has been outspoken about his desire to create diversity within his cabinet, should he win.
Her history with state pensions while serving as Rhode Island’s treasurer from 2011 to 2015 might be more notable, however. Raimondo aggressively pursued a pension overhaul that cut benefits for those already retired and froze cost of living adjustments. She then transferred 14 percent of the state fund to hedge fund investments, including Dan Loeb’s Third Point Capital and Paul Singer’s Elliott Management.
Loeb and Singer subsequently enjoyed tens of millions in fees from a state Raimondo presented as so cash-strapped that public employees would have to give back benefits they earned through a lifetime of toil. The hedge fund investments, meanwhile, wound up underperforming the stock market.
The Rhode Island play became something of a national trend of pension cuts and hedge fund investments that effectively transferred state cash to Wall Street. And Raimondo became the concept’s avatar, feted by former Enron executive John Arnold, and showered with political donations from financial firms like Goldman Sachs, Bain Capital, and JPMorgan Chase. She rode those to the governor’s mansion.
Raimondo has governed Rhode Island since 2015, and earned enough plaudits from the party’s centrist wing to get onto the VP shortlist. During the coronavirus crisis, Raimondo initially was praised for preventing a second wave over the summer after a difficult spring, thanks to increased testing and public-private partnerships. The initial success led to a sort of “Mission Accomplished” one-on-one interview with Geithner ghostwriter Michael Grunwald for Politico Magazine.
Cases started rising that week, and are now above the May peak; last week saw a record high. Hospitalizations have climbed steadily since late September.
Segal, of Demand Progress, criticized Raimondo for slashing in half a state aid package for distressed communities that has been in place since 1990. “If Biden’s Treasury selection is meant to reassure the everyday Americans in the midst of the pandemic and economic collapse,” Segal said, “choosing somebody who has bungled her state’s COVID response and who is currently implementing illegal funding cuts to the state’s most impoverished and diverse cities and towns would be scandalous.”
Of course, Raimondo may just be a red herring, whispered intentionally to improve the outlook for Brainard. But she is known as a favorite within Biden circles, and she is well-liked among centrists and Wall Street-friendly Democrats. In the struggle to define the post-Trump Democratic Party, Raimondo’s ascendancy would be a signal that Big Finance still has a lock on the upper echelons of power.