Bloomberg reported on a Republican led legal challenge on banned donations from firms that manage state pension money or public funds.
The SEC’s rule took effect in 2011 after disclosures that investment advisers were raising money for politicians who in turn helped them win business from state pension funds.
In response, the SEC decided that if a financial firm or certain of its executives make more than a nominal campaign donation to a state official with a say over contracts for investment plans, the firm should be barred from managing the state’s assets for two years. The regulation covers current office-holders and candidates in state races as well as state officials running for a federal office.
Many banks, hedge funds and private equity firms, which profit from their work for state pension and college savings plans, decided to forgo giving to any state officials to avoid the possible consequences.
Two Republican groups believe the need to raise funds outweighs rules over ethical behavior
“We see this as something that has been a great detriment to our ability to help out candidates,” said Jason Weingartner, executive director of the New York Republican State Committee, which brought the case along with the Tennessee Republican Party. “This is something that needs to change.”
The legal challenge comes amid a general loosening of U.S. campaign finance rules. Over the past seven years, U.S. Supreme Court decisions have steadily eroded limits on contributions. Meanwhile the Federal Election Commission hasn’t updated its regulations. Together, those developments have opened new avenues for corporations to support candidates.
If the SEC ban were eliminated, Wall Street firms and their employees would be an even larger potential source of campaign cash.
Yes, they would. International Business Times reported:
With the $3 trillion public pension system controlled by elected officials generating billions of dollars worth of annual management fees for Wall Street, Securities and Exchange Commission regulators originally passed the rule to make sure retirees' money wasn't being handed out based on politicians' desire to pay back their campaign donors.
“Elected officials who allow political contributions to play a role in the management of these assets and who use these assets to reward contributors violate the public trust,” says the preamble of the rule, which restricts not only campaign donations directly to state officials, but also contributions to political parties.
Public interest be damned. PEU interest is all that matters. Politicians Red and Blue love PEU.
The last two sitting governors elected President were Arkansas Governor Bill Clinton and Texas Governor George W. Bush. They governed from the White House while private equity rose from meager beginnings, amply enabling their meteoric rise in numerous ways. FT reported:
In the mid-1990s, private equity paid just 2 or 3 per cent of all investment banking fees. Private equity companies have paid a record 32 per cent of US investment banking fees so far this year,
A disturbing, dark symbiosis arose between campaign funders and federal budgeteers that both parties want reinstated. Republicans lead the way on the lawsuit, but Clinton Democrats are cheering mightily. Frankly, these folks are shameless.
Don't stand behind any governors aspiring to be President or Vice President. You'll likely encounter an offensive PEU.
