NEW: Block Pledges No More Moral Obligation Bonds if Elected
Thursday, May 15, 2014
Rhode Island Republican gubernatorial candidate Ken Block has pledged that under his administration, there would be no moral obligation bonds, saying the 38 Studios bond deal "demonstrates a rigged Wall Street Game."
“Career politicians like using moral obligation bonds because they can spend money on whatever they want without any check or balance by the taxpayers.” Block said. “The corruption around 38 Studios shows exactly why political insiders need moral obligation bonds, because Rhode Island voters would never have approved general obligation bonds for this project. Wall Street insiders use moral obligation bonds to line their pockets at the expense of taxpayers across the country. They charge higher interest on these bonds than on taxpayer approved bonds, and then blackmail governments into treating them exactly the same.”
Block Statemen
The Block camp issued the following statment:
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“The use of moral obligation bonds will cease to exist when I am elected Governor,” said Block. “These types of bonds make no sense: Rhode Island is paying a higher rate of interest for no good reason at all. On top of that, moral obligation bonds allow politicians to bypass voters and loan public money to projects that would never gain public approval.
Moral obligation bonds are different from general obligation bonds because the voters of Rhode Island do not approve them and there is no legal requirement to pay them. They are also subject to higher interest rates.
“The rating agencies are claiming that there is no difference between repaying general obligation bonds and moral obligation bonds in terms of the impact on the state’s credit rating,” said Block. “This begs the crucial question: if there is no risk of default, as is the case for general obligation bonds, then how come Rhode Island was not able to borrow at a lower rate of interest, as is the case for general obligation bonds? There is no reasonable answer: this system simply makes no sense.”
Even S&J Advisors, authors of an alarmist report in favor of repayment, acknowledged that “the rates on the 38 Studios Bonds seem quite high (especially for bonds rated AA+ by S&P and Aa3 by Moody’s due to the insurance policy by Assured Guaranty).
Block said that repaying the 38 Studios Bonds is an issue that stretches beyond Rhode Island.
“This issue concerns the borrowing practices of municipalities, counties, and states across the country,” Block said. “We are all playing a rigged game where taxpayers pay higher rates of interest for no justifiable reason. Wall Street has created a system where excessive interest rates are charged and the rating agencies are used to prop up this scam.”
Block also pointed to deeply corrupt practices at the big three rating agencies during the lead up to the financial crisis, as reported by CBS, the New York Times, Business Insider, Huffington Post, and Rolling Stone Magazine.
“It’s very difficult to understand how the rating agencies have retained any credibility in light of their awful performance during the recession,” said Block.
Related Slideshow: 10 Questions Block Has to Answer When Running for Gov of RI
Related Articles
- Advisors: Defaulting on 38 Studios Would Make RI Bonds Junk Status
- LISTEN: EDC Paid $40K to Bond Agencies for 38 Studios
- NEW: Block Calls for Halt on 38 Studios Bond Payments
- NEW: Doherty Campaign Manager Endorses Ken Block
- NEW: Block Islander Brian Williams Rapping Goes Viral
- Arthur C. Schaper: 2013 So Far–38 Studios, Babysitters, and Guns
- LISTEN: Fox, Corso and 38 Studios
- NEW: Chafee Supports Initial Ruling in 38 Studios Case
- NEW: Former Radio Host Helen Glover Endorses Block for Governor
- Block Blasts Fung, Taveras, Raimondo for Support of Fox
- RI State Report: Fung’s Governor Moves + 38 Studios Hearings
- Arthur Schaper: The Politics of 38 Studios: Junk
- Roach: 38 Studios Loan Debate at Heart of RI Gubernatorial Race
- NEW: Full Documents - 38 Studios Defendants’ Responses to Suit
- NEW: Fung + Block to Compete in Straw Poll at North Kingstown GOP
- Block: Fung + Raimondo “Engage in Destructive Political Games”
- Rhode Island EDC Paid $40K to Bond Agencies for 38 Studios
- Chafee Blasts Critics Pushing for Default on 38 Studios Bonds
- Russell J. Moore: Licht Admits Negligence on 38 Studios
- NEW: Meeting Notes Show Fox, Paiva-Weed Pushing for 38 Studios
- NEW: Fung Campaign Calls on Ken Block to Release Tax Returns
- Chippendale Requests Corso, Esten for Hearing on 38 Studios
- Sony Boss Blames Gov Chafee for 38 Studios Failure
- NEW: State’s Wistow Responds to 38 Studios Defendants’ Charges
- NEW: GOP Candidate Block Unveils Plan to “Fix Rhode Island”
- Fung and Block: Do Either Represent GOP on Guns?
- Does Carcieri’s 38 Studios Legacy Hurt Fung?
- State Report: Racial Profiling, Master Lever Ban + 38 Studios
- New RIPEC Report: RI Begins Post-38 Studios Recovery
- NEW: Ken Block Receives Endorsement From RI Taxpayers
- John Hazen White’s LOOKOUT: Heeding Block’s Call for Bold Actions
- Does Carcieri’s 38 Studios Legacy Hurt Fung?
- Who Wants to Pay and Who Wants to Default on the 38 Studios’ Bonds
- NEW: Block: Fung Flip-Flops on Corporate Tax Cut
- NEW: Ken Block Receives Endorsement From Rep. Doreen Costa
- NEW: Block Blasts Chafee and Raimondo on “Closed Door Deal Making”
- 38 Studios Contractor Ordered to Install Equipment in Fox’s Crony’s Bar
- INVESTIGATION: Fox, Corso and 38 Studios
- NEW: 38 Studios’ SJ Advisors Have Ties To Licht
- NEW: Cape Air Announces Service to Block Island
- RI Public Radio Reporter Says Station Blocking Her Unemployment
- NEW: Block Calls Out Raimondo, Taveras, Fung for Ties to Fox
