Giovanni Feroce sees himself as a proven leader, a visionary, someone who can create an economic future for Rhode Island as a hub for blockchain, an emerging technology that he says will replace the internet.
As a Republican candidate for governor, the former CEO of Alex and Ani LLC is emphasizing his business acumen, including his experience growing a company into one of the country’s most recognized brands.
At the same time, he’s trying to distance himself from personal and business challenges that have generated headlines over the past four years. They include the unraveling of his plans for the failed Benrus LLC, the military-style watch brand that he led as CEO until last year, and the auction sale of his home in Newport, for $4.4 million, $2.4 million less than he bought it for in 2014.
In May 2017, he paid $16,487 in settlement fees to the state for workers’ compensation insurance that was not paid to cover players on his semi-pro basketball team, the Providence Sky Chiefs LLC (now on hiatus) and for staff at Benrus. He settled but said he did nothing wrong. In the case of Benrus, the complainants were shareholders, not employees, he explained.
But the controversies that seem to have surrounded him in recent years have not deterred the 50-year-old Newport resident from seeking the state’s highest elected office.
“We have to get out of this tippy-toeing around reality,” Feroce said. “The reality is you’re going to be seeing flying cars soon. The reality is people are learning online. The reality is that health care needs to be ready, made for people to access quickly. We cannot be last. It takes my kind of leadership, my kind of disruption, to make that happen.”
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NEW ECONOMY: Rhode Island gubernatorial candidate Giovanni Feroce, former CEO of Alex and Ani LLC, wants to design a new economy for the state, which he sees as a hub for blockchain, an emerging technology he says will replace the internet.
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Why are you running for governor? I have a set of experiences and leadership skills that allowed me to understand how to design a new economy for Rhode Island. For me, it’s very specific. I realize Rhode Island needs hundreds of new companies, thousands of new jobs. It needs a future. It needs to understand what industries it’s in.
Why now? Do you sense Gov. Gina M. Raimondo is vulnerable? It’s a moment in time in the world. The world is ready for new economies. It’s a moment for Rhode Island to seize new opportunities. I designed my platform based on Rhode Island seizing the blockchain.
How has your experience as an executive and as a former senator in the General Assembly prepared you for the role of governor? First and foremost, as an executive, I’m a visionary. There are different types of executives. I set the objective and design the plan, so we can execute the plan to meet the objective. The talent required for that plan comes in stages. There are those who have the tolerance to be there at the beginning. Those who are great at coming in the middle. And those who want to come in to a very sound situation. Understanding how to layer that talent in is probably the most important thing an executive can do.
Is the state comparable to a business? How is the governorship different from your position at Alex and Ani? It has more to do with getting the vision passed by a secondary body that has to approve the vision.
Do you have those relationships with the General Assembly? I do. It wouldn’t be too different than if you had a board and you are convincing the board why you are doing things. But I’ve always been in a growth situation. I know why I’m hired. I know what people are looking for, so I have the stomach for it.
How do you differ from your GOP primary opponents? I clearly have more leadership and experience. That’s what I’m running on. I’ve had a career that’s spanned decades, both in business and in the military. You have [Cranston Mayor] Allan W. Fung, who is saying, hey, it’s my turn again. I just need one more shot. And his messaging is clearly better than the existing governor, as far as I’m concerned, but it’s not revolutionary. … When it comes to [Rep.] Patricia [L.] Morgan, her message is just no. … Stop everything. That, for me, that’s not the answer.
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Given your recent financial troubles, the end of Benrus, the loss of your house, the issues with the basketball team, why should you be entrusted with state leadership? Those who are looking at it negatively, frankly, I find it almost quite silly. It’s clearly a trademark issue. I supported an entity that was not properly secured by our general counsel, over which we are now in litigation. All I did was subsidize it to the point where I did not want to subsidize it any longer. As far as management, it makes no sense. I didn’t manage a going concern that had yet to begin. It was securing a trademark. The trademark was not secure. I spent literally almost three and a half years in that process. All I did was spend the money to not stop from brand-building, but I never launched the actual company, the watches.
What are you offering state residents as a vision for Rhode Island? I believe my Blockchain Centered Development Act will revolutionize and transform Rhode Island. It highlights … areas in which Rhode Island can become a hub and the home for the blockchain industry. The way we do that is the first part is education. That is to make University of Rhode Island the equivalent to Stanford, when it became the hub of how Silicon Valley was built. I will do that with the University of Rhode Island and will have all of the other institutions of higher learning in Rhode Island plug into it.
Blockchain is a ledger system that is a more secure way of moving information, and for the first time, of moving value. … The internet changed the way we live. … Blockchain will replace, entirely, the internet, because it’s a more secure version. The internet, the way it’s built, is there is centralized information. If I want to go get a new license, I have to go over there. … If [the employee] says yes and blesses it, I get a new license. On the blockchain, my information sits on that whole block, more than one computer. If I determine I need to show my license to a police officer, electronically, this will produce my license. … Things like moving a title to a car. Or moving a deed for a home. All of that can now be done, because there is a network of computers that actually take a vote, when you move information, for the first time ever. And they all have to verify in a nanosecond that that’s the accurate information. If you modify it in any way, it will get denied.
What is the strength of consolidating this all in a single geographic area such as a state? The first [step] is education. Right now, these are self-taught coders. No one is getting degrees. There is no accreditation. By making our institutions focus on this, this will become the hub of where you get your education.
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Have you approached URI about this? I have not. The three institutions it would have some influence on – URI, Rhode Island College and Community College of Rhode Island – obviously the people that would serve under me in whatever capacity would be greatly inclined to want to feed the plan.
How will this create jobs? First you have the education jobs. All of those people have to be taught. Then, people as they graduate or get certified, start to build companies. They are literally going to build hundreds, if not thousands, of companies. Every company that you know of will have a blockchain version of itself. We are going to become the Silicon Valley of the East.
The second thing you have to do is create the business environment. That means not taxing the transactions. Not regulating to the point of suffocating, or not being looked at as the first option for new businesses, whereas now they go to the Cayman Islands, or Malta. … I also want us to become the home of where you register the blockchain LLC. To have the low cost of entry to register your LLC. … The third part is using Rhode Island as a model for using the technology. So, we’re going to get rid of the Department of Motor Vehicles. It will be on the blockchain. There will be no need for a DMV.
It sounds promising but also like it’s years away. It wouldn’t be. It will happen very fast.
How alone are you in this? Is there anyone else? I am the most educated on this. I understood [the need] to create the act first. … The [next step] would be to utilize it. [Next would be] to create an accelerator and an incubator, what’s called a cryptocosm center. And that would replace [R.I. Commerce Corp.]
[Then] you have people who come in. Just like Silicon Valley, people would have a reason to be here. They would launch here, they would have their own company here.
But URI is not on the same level as Stanford right now. It is not a top 20 national university. How do you get from here to there? Blockchain is new to anyone and everyone. There is no established leader to include educational institutions. I’m saying the University of Rhode Island as a vehicle. Who we become as opposed to who we are … is in line with how I operate. I don’t walk into a company and say, OK, this is who we are. Who cares who we are? I care about what we want to be. And then I make the moves to make us that.
Through the second quarter your campaign raised about $20,000. Can you effectively compete? You have to know my plan in order to know what I’m doing. I’m funding my plan at the [level] it needs. I don’t want my opponents to see what we’re doing.
What is your position on the Burrillville energy plant and the LNG plant in Providence? I am opposed to both of those. I just don’t think those are the right answers. It is old technology that doesn’t need to be pursued at this point.
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OLD TECHNOLOGY: Giovanni Feroce, former Alex and Ani CEO and Republican candidate for governor of Rhode Island, said he is opposed to the proposed Clear River Energy Center power plant in Burrillville as well as the LNG plant in Providence because “it is old technology that doesn’t need to be pursued at this point.” / PBN PHOTO/RUPERT WHITELEY[/caption]
What are your thoughts on a $15 minimum wage for Rhode Island? I would be against that. It would just accelerate the purchase of more robots.
Sports betting has been approved. Online gambling may come next. Are those appropriate economic vehicles for Rhode Island? The issue is that they’re looked at as economic vehicles. I would not use them as a core revenue generator, but I wouldn’t be opposed to making them available for our citizens.
Do you have any proposals or interest in increasing the supply or affordability of housing in Rhode Island? I do. … Quonset Point [is] an area where I could envision assembly lines being created to build houses of the future. Modular types.
One of the big obstacles is zoning in communities, where people don’t want the additional density. How do you resolve that? It’s generational. It’s really the core of my race, my reason for running. We have to get out of this tippy-toeing around reality. … I see [artificial intelligence] and other things all happening quickly. We cannot be last. It takes my kind of leadership, my kind of disruption, to make that happen.
The Pawtucket Red Sox. What was your feeling on the R.I. deal? I think that corporations and entities are private businesses and they need to operate as private businesses. That’s for any and all companies. Either a business stands on its own or it does not.
On your economic proposal, you’ve said you will eliminate the income tax. How are you going to make those numbers work? When you replace the $1.3 billion to $1.6 billion, you are immediately going to replace it by … cutting spending, because I’m going to eliminate complete budgets. You’re going to cut spending. The Department of Revenue, the DMV … would go away.
The disruption that could cause would be immense. I respectfully disagree. There would be an uptick in population. There would be an immediate regrouping and retaining of brain power. The quality of individuals who remained in the state would be dramatic, anybody who we’re losing now. Anyone who has ever been successful [leaves R.I.] … because of the income tax.
Would the sales tax be raised to make up the loss? No.
Very few states do this. I will be cutting the budget. I’m not saying the whole thing. I served in the [state] Senate back in 1994. I see how mindsets operate. Someone says, “I need a job for these five people.” They literally create new departments. … It’s not just cutting, it’s also making money. That’s where the incorporations for blockchain LLCs [come in]. If I can add those millions of dollars [in fees], and get to those numbers, now we’re layering that in.
If we have transportation needs, we apply it. I look at the really ridiculous Amazon proposal, a missed opportunity. I would have, in a heartbeat, emptied the Providence Place mall and made that the offer [to come to R.I.]. And transitioned all of those teams onto Westminster Street, and created a Newbury Street for Rhode Island. First you create the end state and then you do it.
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What would you do to make Rhode Island businesses more competitive? Eliminate the income tax. Right away, your talent would be relocating quickly. The top people in the company, you’re going to come here. If you are here, you’re not going to leave. The corporate tax rate, you always want to keep them real low. Three, I would do tuition reimbursement, so companies could get their professional development in place.
What is your opinion on Rhode Island Promise, the free-tuition program for CCRI? It’s sickening. There are no rules. What if I just want to party at URI for eight weeks? There is no measurement. You should have to put some money down. I don’t care if it’s just $1,000. That will make the difference between me just signing up for stuff and me actually going and trying to finish.
You’ve proposed moving credits for companies that come to Rhode Island. What is this? In the same vein as giving companies credit for … training their workforce, same thing if you are growing and moving talent here. Let’s say it costs $12,000 to move you from Delaware to here … we can support companies to go ahead and pull that trigger.
What would you do about existing Rhode Islanders who are not prepared educationally for jobs that are being created now, and which are coming in the future? Again, the job training needs to be a main focus. Educationally, to give them the opportunities. But there is a big difference between something not costing anything … and making it affordable.
How will you address Medicaid spending, which is now one-third of the state budget? As someone who is strategic … those are not the areas you cut in. I recently visited an adult day center. I understand the fear they have of further cuts. That is the last place you [cut]. There is still a need to take care of people, ultimately. The ones you have to take care of first are the ones who cannot take care of themselves. Medicaid is the area … that they look at, the target.
What is your position on RhodeWorks? It’s just going to be another attack on personal income. It’s this attack on disposable income that needs to stop.
Mary MacDonald is a staff writer for the PBN. Contact her at Macdonald@PBN.com.