IVCA updates list of 'Prohibited class' of elected officials

IVCA updates list of 'Prohibited class' of elected officials

June 8, 2011

Guidance from IVCA-PAC on Political Contributions in light of SEC Regulations

The IVCA-PAC instituted new policies in mid March 2011 to ensure compliance with - œpay to play-  rules on the federal, state and local levels of government.

The IVCA-PAC will contribute only to candidates or members of the Illinois General Assembly. It will no longer make contributions to statewide officials (Governor, Lt. Governor, Comptroller, Attorney General or any other elected officials (or candidates for these elective offices) at the County or City levels of government as these positions frequently hold pension board positions.

As part of its new compliance processes, the IVCA-PAC will maintain a - œprohibited persons list-  of offices and persons deemed to have, directly or indirectly, the legal authority to cause or can influence the awarding of an investment advisory contract. Currently in Illinois, the IVCA-PAC - œprohibited persons list-  includes the following five such offices and one additional elected official on the list:

At the State level:
- ¢ The Governor appoints pension fund board members (Pat Quinn).
- ¢ The Treasurer who serves on a pension fund board and invests the State's money (Dan Rutherford).
- ¢ The Comptroller (Judy Baar Topinka) serves on the Illinois State Board of Investments (ISBI).
- ¢ One member of the Illinois House (no one is currently filling this seat) serves on ISBI's Board.
- ¢ One member of the Illinois Senate (currently Senator James F. Clayborne) serves on ISBI's Board.
- ¢ Justice Thomas E. Hoffman of the Illinois Appellate Court serves on ISBI's Board.

In addition to this prohibited list of officials, anyone in a firm who gives individually to candidates for elective office should be cautious and take steps to ensure no candidate receiving campaign contributions from them has influence over any public pension fund selection of investment advisors or the awarding of government contracts.
So for example, firms which have or wish to have Chicago pension funds as limited partners are prohibited from contributing to the re-election campaign of Chicago City Treasurer Stephanie Neely who serves on the Boards of:
o Municipal Employees' Annuity & Benefit Fund,
o Laborers' Retirement Board Employees' Annuity & Benefit Fund of Chicago,
o Policeman's Annuity & Benefit Fund of Chicago and
o Fireman's Annuity & Benefit Fund of Chicago.

It is the responsibility of the individual to determine whether or not his or her campaign contributions do not violate any federal, state or local pay to play rules. The SEC rules are the most restrictive and carry significant penalties for the firm if violated. The IVCA-PAC has taken steps to ensure full compliance with all relevant rules in this area and as part of the compliance process requires any candidate for the Illinois General Assembly being considered for a PAC contribution to sign the attached letter certifying that he or she does not have influence in any public pension funds' selection of investment advisors. IVCA suggests that firms review the attached letter, revise it and provide it to any person in the firm who makes campaign contributions on an individual basis.

For more information on these compliance policies and procedures go to the IVCA website, Members site and click on the PAC dropdown.