WASHINGTON The faceoff between Alabama bond dealer William Blount and regulators over political contributions took another turn last week as Blount refused to send the MSRB a report on his giftgiving activities for the past three months.

The quarterly reports were due at the Municipal Securities Rulemaking Board for the first time ever last Monday under Rule G-37, the board's controversial new "pay-toplay" rule. which Blount is challenging in a federal Appeals Court.

The rule, which took effect April 25, bars municipal bond dealers that make contributions to issuer clients from doing business for two years with those governments. Individual employees can still give up to $250 to candidates running for office in the jurisdiction where the employees live.

But in a telephone interview last Thursday, Blount said that he does not have to file a quarterly report until the U.S. Court of Appeals for the District of Columbia has ruled in BIount v. SEC. Oral arguments m the case are scheduled for early December.

"This is all the subject of litigation," Blount said. "We are challenging the constitutionality of the entire rule," not just parts. "When the litigation gets settled, we'll" take appropriate steps.

"That is incorrect," Christopher Taylor, MSRB executive director, shot back in a telephone interview, also on Thursday. "Mr. Blount is subject to the rules and regulations of the MSRB [that] are not stayed by the courts. We would expect a filing on his pan."

Taylor was referring to the fact that Blount won a temporary emergency stay recently from the Appeals Court of a provision in Rule G-37 that bars dealers from soliciting contributions on behalf of a state or local government official.

The stay means that, at least for now, Blount can continue to conduct many of the fund-raising activities that he assumed as chairman of the Alabama Democratic Party.

But the court did not stay the rule's centerpiece provision. which bans business for two years if a municipal dealer or a bond employee has given a contribution. The court also did not stay certain record-keeping provisions of the rule.

Taylor said the board will turn over to the National Association of Securities Dealers the list of firms that have filed Form G-37. The NASD, which routinely inspects firms for compliance with MSRB rules, could then give special attention to the contributions activities of firms that are not on the list.

As of Thursday morning, roughly 180 firms filed reports with the MSRB that can be viewed in the board's Alexandria, Va., public reference room. Firms must file G-37 forms. if during the quarter they underwrote or were the remarketing agent or financial adviser for a negotiated deal and/or if they or their employees gave contributions.

The NASD can match the names against a master list of underwriters that the board has as a result of its Rule G-36, Taylor said. That rule requires underwriters to supply copies of official statements to the board's electronic library, the Municipal' Securities Information Library, within strict timeframes.

"We are in discussion frequently with the NASD about how they will enforce" Rule G-37, Taylor said. "At a minimum we will turn over to them the list of those who have filed" Form G-36, he said.

The NASD could send a letter to firms that have recently underwritten issues saying that records show they have not filed a G-37 form and that they may want to check that they have complied with G-37, Taylor said.

Taylor said there have been errors in the way some firms have been filing information on Form G-37 and that the board will soon send guidelines to rinns on the subject.

Blount attorney Andrew P. Campbell, who is with Leitman, Siegal, Payne & Campbell in Birmingham, Ala., was not available for comment Friday.

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