Jim Hill is treasurer of Oregon, and he's wrong.

Jim Hill spoke out last Tuesday at the annual gathering of the Western States Treasurers Association in Santa Fe, asserting that Rule G-37 "was specifically designed to roll back the gains that women and minorities have made in the field of municipal finance."

Rule G-37, everyone in the muni business knows, was promulgated a year ago by the Municipal Securities Rulemaking Board to keep municipal bond dealers from getting business advantage out of campaign contributions. That is, if they contribute to officials who oversee bond sales, they cannot do business with those governments for two years. The rule is designed to-stop "pay for play," a practice so prevalent in recent years that it seemed likely to undermine confidence in municipal bonds as sound investments. The rule has nothing to do with the type of bond firm -- big or small, minority or otherwise -- that makes the contribution.

Hill, pressing his accusations of a ploy, criticized the "lightning speed" with which G-37 was spawned, but that's hardly an accurate description of a rule published more than a year ago. To make matters worse, Hill raised the prospect of a congressional fracas. Hill said he wouldn't be surpri.sed if the Congressional Black Caucus looked into G37, and he claimed that "women and people of color" were not politically sophisticated enough "to address the issue as it arose." That was a terrible put-down of some highly capable, experienced minority firms.

It's true, to be sure, that minority firms were not able to profit from the unworthy "pay-to-play" system for as long as other securities firms, because minority firms have not been in existence as long. But that is no argument for making them an exception to reform.

The broader solution, as Micah Green, executive vice president of the Public Securities Association, told the Santa Fe parley, is "comprehensive campaign finance reform." Real reform, however, lies nowhere on the political horizon yet, and in the meantime, G-37 will help remedy a real ill in municipal finance. Jim Hill is off base.

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