When Frank Montanaro Sr. Helped Linc Almond Bring Fidelity To Rhode Island

Aug 25, 2017

The death of Rhode Island labor leader Frank Montanaro Sr. reminded former Gov. Lincoln Almond of Montanaro’s crucial role in helping to get the Fidelity Investments building in Smithfield done in the 1990s without a labor-management dust-up that could have killed the project.

After months of quiet, even secret, negotiations between Almond and top Fidelity brass, including longtime company chairman Ned Johnson, Fidelity agreed to move an installation to Rhode Island. It was seen a coup for both Almond’s administration and Rhode Island, a state that seemed hopelessly yoked to the faded manufacturing economy of jewelry, textiles and electronics.

Almond and his economic development advisors were searching to diversify the economy. In those days, financial services was seen as a coming industry, one that required brains, not brawn, and Fidelity was a gold-standard brand.

The template was set under Gov. Bruce Sundlun, who took an idea from banker Terry Murray, a Rhode Island native, and approved a tax break for Fidelity, eliminating so-called passive investment taxes. In Massachusetts, then-Gov. Bill Weld wanted to do away with that tax, but the Massachusetts legislature wouldn’t go along. Rhode Island wasn't getting revenue from the law because the state didn't have large investment companies, so it was a no-brainer for the General Assembly to eliminate it. By contrast, Massachusetts government was harvesting about $400 million annually from the many financial services giants in Boston. (Massachusetts later rescinded the tax, after Fidelity moved some operations out of the Bay State, including to RI and New Hampshire).

When Almond took over as governor in 1995, he went to work to try to lure Fidelity. After the company agreed to move here, there was a last-minute snafu over whether the new building would be constructed under a Project Labor Agreement, requiring 100 percent union labor, or whether the project would be subject to an open-bidding process, where non-union companies could compete for work.

Johnson, the Fidelity chief honcho, was “adamant,’’ Almond said, that the job not be 100 percent union, but be open to bidding. Johnson made this demand at the 11th hour and Almond was concerned that opening up a management-labor joust over the union issue could jeopardize the project.

So the governor called a meeting at the Statehouse. He invited then House Speaker John Harwood, Senate Majority Leader Bill Irons, Construction magnate William Gilbane, Montanaro, then head of the AFL-CIO and his chief lieutenant, George Nee, who is the current AFL-CIO  president. After some discussion, Montanaro agreed to go along with Almond’s call to allow open bidding to the project could proceed.

In the end, more than 75 percent of the jobs ended going to union building trades members anyway. And on future state projects, such as the Ryan Center at the University of Rhode Island, Almond always supported project labor agreements. Almond was a Republican and Montanaro a staunch Democrat, but the two Rhode Island natives,  who hailed from modest backgrounds and  were both big URI basketball fans, got along well.

“We came to an agreement to do the Fidelity job by bids,” Almond said today in a telephone interview. “Frank was very helpful with all the unions.’’

“I was very sad to hear of his passing,” said Almond. “We got along well, we always had very positive meetings. He was honest, a very good man and a very good leader.’’

Ah, the days when Democrats and Republicans dealt with each other across the aisle.