New Jersey Gov. Christine Todd Whitman is planning to issue an executive order that should substantially alter the debt-selling policy of her predecessor. Jim Florio.
The Florio policy, also enacted in an executive order, restricted the state's use of negotiation in the sale of municipal bonds. The order followed a federal investigation into the state's negotiated deals and into a bond firm owned by Florio's chief of staff, Joseph Salema.
In July, an advisory panel appointed by Whitman to review the Florio policy issued a report that many on Wall Street saw as favoring negotiated sales.
One of the panel's members, Whitman chief counsel Peter Verniero, said in a telephone interview on Tuesday that he is working on a draft executive order for the governor to review. Verniero served on the panel with state Treasurer Brian Clymer and Attorney General Deborah T. Poritz.
Verniero said he will complete the draft in the next two or three weeks. State officials expect Whitman to issue a new executive order shortly thereafter.
"I imagine the executive order will be similar to ,the report," VernierO said. "But the final decision has not been made."
Verniero would not say what areas of the panel's report Whitman favors. State officials say the governor is likely to call for some changes in the group's recommendations, but they will not say what part of the report Whitman will amend.
"We want to move expeditiously Without sacrificing quality," Verniero said. "It's important that we take time to order develop an executive that's clear an d easy to implement."
The panel's report said the state could use negotiated sales for complex or poorly rated issues, or when markets are volatile and when a deal's size exceeds $300 million.
The panel also recommended that State bonding authorities be given .greater flexibility in choosing their underwriters and bond counsel for-all bonds not secured by state revenues.
Municipal market executives said the report marked a change in the state's attitude toward negotiated sales. Under the Florio system, negotiated sales were discouraged in favor of competitive bidding.
The Public Securities Association lobbied against Florio's executive order saying that new campaign contribution restrictions and other rules now being enforce by the Securities and Exchange Commission would discourage most of the abuses in negotiated sales.
