New Jersey Lawmaker Pushes For Stricter Pay-To-Play Rules For Pension Investments

SEC rules prevent pension funds from investing with firms that have made political contributions to politicians with any control over the pension fund’s investment decisions.

But a New Jersey Senator wants the state to go even further. Reported by NorthJersey.com:

The law that restricts the state pension fund from investing in firms whose investment managers make political contributions to New Jersey candidates should be expanded to include donations to national political groups, a legislator said Wednesday.

Sen. Shirley Turner, D-Mercer, announced her intentions to broaden the state’s pay-to-play law a day after the Division of Investment confirmed the pension system had sold its stake in a venture capital fund with ties to a Massachusetts gubernatorial candidate who donated to the New Jersey GOP.

[…]

When the pension system approves an alternative investment — including venture capital firms and hedge funds — those firms are required to fill out disclosures listing the managers of the particular fund New Jersey is investing with and whether those individuals have made political contributions. But the state’s conflict of interest law does not cover political donations to groups outside New Jersey, like the Republican Governors Association, which Governor Christie heads.

“The method of investment should be selected based on performance and merit, not because of campaign contributions and investments should be made in the best interests of our retirees,” said Turner, whose district includes a significant number of state workers, said Wednesday in a statement. “There shouldn’t be even the appearance of political favorites.”

This is a hot-button issue in New Jersey. One union, the New Jersey AFL-CIO, filed an ethics complaint last week asking whether political donations have influence pension investments.

The issue was also raised at the meeting of the State Investment Council on Tuesday.

Photo by Truthout.org via Flickr CC License