WASHINGTON -- Even the president of the National Association of State Treasurers has had problems with the political contributions rule issued by the Municipal Securities Rulemaking Board.

Marshall G. Bennett, Mississippi state treasurer, ran for Congress this year and found himself at a financial disadvantage. Raising money to challenge an incumbent is hard enough, but the MSRB's rule restricting bond dealers from contributing to state and local officials made it that much harder.

"All candidates would solicit contributions from all the legitimate sources. Why limit some office seekers?" Bennett said in a telephone interview.

The treasurers association has made its position on political contributions known to the Securities and Exchange Commission.

The ban should be "applied across the board," Bennett said. "It's unfair to allow political contributions to a federal official and not to a governor, treasurer, or mayor."

Over the past year, the state treasurers group has taken a leading role on political contributions and secondary market disclosure issues as well as addressing many other finance issues, said Milton Wells, the group's executive director.

The association has created a special task force to address the concerns raised by secondary market disclosure and political contributions, Bennett said.

The SEC is still modifying its views on political contributions, and the state treasurers group is confident that some easement or fairness will be built into the ban, Bennett said.

Support for Coyne Bill

Along with the new developments in the MSRB's requirements, the state treasurers group has beat a "steady drum [for] tax law changes on expanding the use of tax-exempt bonds" while integrating the understanding that expanding infrastructure investment is important to statewide, as well as nationwide, economic development, Wells said.

Bennett said that, because state and local governments build their futures with tax-exempt bonds, the organization supports any federal tax law changes that would ease the use of the bonds.

The treasurers group supports legislation sponsored by Rep. William J. Coyne, D-Pa., a member of the Ways and Means Committee, that is aimed at easing curbs on the use of tax-exempt bonds that were included in the Tax Reform Act of 1986.

Specifically, the Coyne legislation would create a new category of tax-exempt bonds specifically for use in economically distressed communities.

Another issue important to state treasurers is unfunded federal mandates, Bennett said. The group has held conferences and lobbied on Capitol Hill to let Congress know it "must be mindful of the burden [unfunded mandates places] on the states," he said. The state treasurers group would wholeheartedly support any federal legislation prohibiting Congress from passing on unfunded mandates to the states and cities, Bennett said.

Bennett will be president of the treasurers association until Nov. 30, when a new president, to be elected at the group's annual meeting in New Orleans this month, will take the helm, Wells said. Bennett will remain on the group's executive committee for another year.

Bennett was named Mississippi treasurer in 1987, and was returned to office in a 1991 election. Because of a change in the state constitution, Bennett was the first person to be elected to the office.

Along with serving as state treasurer, Bennett has served as treasurer of the National Association of Auditors, Comptrollers, and Treasurers. He was also chairman of the state's strategic planning task force on economic development.

Before serving Mississippi as treasurer, Bennett was assistant attorney general for seven years and directed the state's office of consumer protection. He also was a legislative assistant to the governor and served as chairman of the state's workers compensation commission for six years.

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