The National league of Cities was scheduled to vote yesterday on whether to adopt a stinging resolution in opposition to the Municipal Securities Rulemaking Board's up-coming political contributions rule.
The MSRB on Nov. 11 announced that it will propose a tough new standard barring 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 this month for review, and the SEC could approve it as early as January. The rule is expected to appear in the board's quarterly report to dealers, "MSRB Reports," later this month.
"Be it resolved that the National League of Cities hereby opposes adoption of MSRB Rule G-37 in its current form," said the statement, approved by the League's resolutions committee Friday afternoon and scheduled for a vote by the full membership Sunday. The League was holding its annual Congress of Cities meeting in Orlando, Fla.
"NLC is very concerned [that the rule] would deny citizens their constitutional right to full participation in the electoral process at the state and local level, if those citizens are engaged in the municipal securities industry," the draft resolution said.
The rule would "interfere" with public-private partnerships in cities to raise capital to sponsor international, national, and regional conventions and events, the draft resolution said.
The rule would mandate "significant new, unfunded financial disclosure burdens and requirements on cities - especially smaller cities and towns," the draft resolution warned. "NLC believes that the MSRB proposed rule sets a double standard for participation in the electoral process at the state and local levels, as compared to the federal level."
The resolution acknowledged a need for the "highest ethical standards related to disclosure on contributions." But the league's resolution 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 draft said the league stands ready to work to strengthen existing local statutes and ordinances if there is evidence that they are insufficient to maintain the integrity of the market. It said the league opposes any mandate on financial disclosure without a full cost-benefit analysis and 100% coverage of any municipal costs incurred to comply with the standard.