WASHINGTON - The board of directors of the National Association of Counties adopted a resolution Friday urging the Municipal Securities Rulemaking Board to delay its proposed political contributions rule until regulators have consulted more extensively with issuers and studied the rule's costs and benefits.
The resolution, which is not as hard-hitting as one enacted recently by the National League of Cities, was adopted Friday at the 1,700-member group's board of directors meeting held in St. Petersburg, Fla.
Also this month, the National Council of State Housing Agencies person should not serve as an executive director of a state housing agency if, during the previous year, he or she solicited or received a political contribution that could be viewed as influencing the selection of "anyone providing services" in a bond issue. That could include underwriters, bond lawyers, printers and others, a spokesman for the group said.
The group also said, that executive directors should not seek or receive such contributions while they are serving in their posts and for a year after serving.
The moves by the counties and housing officials come one week after the League of Cities adopted a resolution slamming the MSRB's contribution rule. The MSRB voted Nov. 11 to bar municipal bond dealers who make political contributions from doing business for two years with the cities and states that the politicians serve.
The board is expected to send its rule to the Securities and Exchange Commission for review by mid-January.
The League of Cities warned that the MSRB rule sets a "double standard for participation in the electoral process" because it would not cover contributions to candidates for federal office.
The league also said the rule would deny citizens their constitutional right to full participation in the electoral process at the state and local level. And it objected to the "presumption that if an elected official accepts a legitimate campaign contribution from a municipal securities professional, then that elected official will be unable to carry out his or her fiduciary responsibility to taxpayers."
The counties' resolution makes similar charges, but it does not flatly oppose the MSRB rule as the cities do. Instead, it says a steering committee of the counties' group should study the impact of the proposed MSRB rule on county governments and report its recommendations to the group's board of directors.
The MSRB met yesterday in New York for a special session aimed at tightening provisions in the proposed rule that would require employees to disclose the contributions they make to issuers.
"I don't think we have directors that would violate [such a standard] because they are not in the chain of political fund-raising," John McEvoy, executive director of the state housing agencies group, said in a telephone interview yesterday. "But we thought it was appropriate to clarify what roles executive directors ought to play insofar that they have [that] responsibility.
"The issue is not a simple one," McEvoy said. "It involves serious questions of the limits of federal power and the line between what the SEC should do to protect investors and to regulate the markets.
"The federal question here is, what is the appropriate role for the SEC and the MSRB? I'm not suggesting that I have the answer. [But] the states clearly have the responsibility for the insurance of integrity in state and local government practices."
