Bans on political contributions by municipal finance firms and executives may be designed to limit opportunities for women-owned and minority-owned firms, Oregon's state treasurer alleged Monday.
"When you look at the nature of the investment banking business, they have been making contributions to politicians for years," with few problems or improprieties, said Jim
Hill, treasurer of Oregon. "All of a sudden one situation comes up, and all of the rules are changed." Hill made his remarks at a conference on the emergence of minority-and women-owned securities firms sponsored by the Strategic Research Institute in New York City.
"I am deeply concerned by the trends running against women and people of color. I honestly believe there are people out there who are coming for us," Hill said.
When problems with campaign contributions arise, states should be able to handle them, Hill said.
"I don't need the [Municipal Securities Rulemaking Board] to make any rules for Oregon," he said. "The voters of our state can deal with it."
Hill, the first black treasurer of Oregon, said he believes bans on political contributions are being enacted to curtail the growth of minority-owned and women-owned firms in the industry, and to obstruct politicians who support the firms' participation in public finance from being elected.
"I think the point of all of this is there are some people in the industry who believe women and people of color have made too much progress," Hill said.
Participation of minority-owned and women-owned firms in public finance is a direct result of the election of minority and women politicians, Hill said.
"That is the only reason why we were let into this business in the first place. If you doubt it, you just have to look at the way we're being shut out of the corporate finance area," he said.
Major investment banks have few minorities and women in their corporate finance departments, and minority-owned firms have a difficult time breaking into the corporate finance arena. Hill said.
Bans limited to municipal finance executives can hurt minority and women finance professionals because most are employed in this sector of the securities industry, Hill said.
Recently, regulatory agencies such as the MSRB and the Securities and Exchange Commission began discussing the need to ban political contributions after questions arose regarding several New Jersey financings.
In New Jersey, a federal investigation questioned whether underwriters at major Wall Street firms developed joint ventures with a firm with ties to the outgoing Florio administration in order to obtain public finance work. There also were concerns about whether the firm was paid for underwriting work it did not perform.
Hill also complained that minority-owned and women-owned firms have had little input into the formation of the recently enacted MSRB contribution ban.
"We've had no input at all. We've had no respect whatever and this process is moving very quickly," Hill said.
If regulators believe problems exist with campaign contributions, then reforms should be widespread, the Oregon treasurer said.
"Until there's public financing of campaigns, money and politics will be a problem. But don't single out a particular industry or group" in an attempt to correct the situation, Hill said.