Former CalPERS CEO to Plead Guilty in Pay-to-Play Case Last week we highlighted the case of TL Ventures to warn of the large enforcement claim staked by the SEC in connection with Rule 206(4)-5 of the Advisers Act. Not to be outdone by a sister regulator, the Justice Department has now announced that Federico R…. Continue Reading
There is nothing like a snow day to focus the mind on compliance and there is nothing like public admonition and discipline of others to induce night-sweats on a cold day. Just this week, both the Connecticut Office of Government Accountability and the California Fair Political Practices Commission have used different vehicles to remind us… Continue Reading
Momentum Builds Across California for School Bond Pay-to-Play Reform
Like a slow-moving train wreck, we simply cannot look away from the debacle stirred up by the sexual harassment allegations lodged against San Diego Mayor Bob Filner recently. Admittedly, those allegations rank pretty high on the “Public Official Being Gross” Scale; sufficiently high, in fact, to break John Oliver’s “Eww-O-Meter”.
If you heard talk of tremors in the Bay Area recently, that wasn’t the relatively benign 2.9 and 4.0’s that struck this morning (causing no reported injury). San Franciscans use 4.0 earthquakes to stir their coffee in the morning.
If it takes three times to make something a habit, it is safe to say that “pay-to-play” legislation in the State of California is getting to be a bit habitual. For the third time in as many years, the California State Legislature has decided to ripple the “pay-to-play” regulatory waters by passing an “urgency” measure designed to clarify and modify the state’s existing restrictions on investment managers and investment placement agents who do business with California’s public employee pension funds, such as the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS). The new piece of legislation, Senate Bill 398 (SB 398), was signed into law on October 9, 2011 by Governor Jerry Brown, and is designed to complement two other recently-passed bills regulating the activities of pension fund investment managers.
As we anticipated for you last November, Los Angeles has passed into law an ordinance establishing pay-to-play restrictions. The measure passed by a 75% -25% margin and targeted city contractors who are perceived to make their living procuring contracts greased by campaign contributions.
As many will recall, CalPERS’ board of directors was subjected to significant scrutiny as a result of investigations in New York that demonstrated a relationship between placement agents, investment firms, and public retirement systems. Earlier this year, the California General Assembly enacted Assembly Bill 1743 designed to make placement agents for public retirement systems register as lobbyists and comply with all attendant restrictions, registration and disclosure requirements.
The Los Angeles City Council is expected to approve a recommendation to place a measure on the March 2011, Los Angeles municipal ballot banning bidders on LA contracts from making contributions or fundraising for City officials or candidates. The recommendation was made by a unanimous vote of the Los Angeles City Ethics Commission earlier this month. The Commission chose to enhance the bite of the proposed ban on bidder contributions by adding further recommended restrictions.
Proposed legislation in California would prohibit a person acting as a placement agent in connection with any political investment made by a state public retirement system unless such person is registered as a lobbyist.