WASHINGTON - The National Association of Independent Public Finance Advisors is expected to ask its members next week to follow the lead of 17 Wall Street firms and adopt individual bans on political contributions, the group's president said yesterday.

Robert C. Bendzinski, the association's president and president of Detroit-based Bendzinski & Co., said that the group already has adopted a recommendation that its 13 member firms not make political contributions to get or retain municipal bond business.

"What we will do next week is take it the next step and recommend that the firms adopt the statement of initiative" that was backed by Securities and Exchange Commission Chairman Arthur Levitt and adopted by the 17 firms, Bendzinski said in a telephone interview.

After a meeting at SEC headquarters Oct. 18 with top executives of the 17 firms, Levitt announced that the firms had agreed to voluntarily bar employees in their municipal bond departments from making contributions to state and local officials responsible for awarding negotiated bond underwritings.

The action has since triggered a series of related moves by the SEC and market participants. For instance, Levitt last Thursday sent a letter to 11 trade groups representing issuers, bond lawyers, dealers, and financial advisers recommending that they urge their members to join the Wall Street firms and enact voluntary bans.

The Public Securities Association this week sent letters to senior managers from more than 200 regional bond firms inviting them to a closed-door meeting in Chicago on Nov. 17 to discuss whether firms should voluntarily ban contributions.

And the National Association of Bond Lawyers next week is scheduled to appoint a 10-member panel to develop recommendations on whether lawyers should restrict contributions.

The move by the independent financial advisers is significant because independents have a large chunk of the municipal advisory business. Bendzinski notes that in 1992, independents cornered about 43% of the dollar volume of all issues. Bendzinski says his firm, for instance, represents roughly 60% of all Michigan cities, counties, villages, and townships.

Bendzinski said the amount of business done by independents is on the rise as issuers in Massachusetts and other states respond to federal and state investigators' probes into questionable arrangements between firms by demanding that the advisers they hire be independent of underwriters.

He cited a recent request for proposals made by the county of Kauai, Hawaii, for a financial adviser. The RFP specified that the firm "must be independent of the underwriting and securities functions in order to provide advice which is free of conflict of interest and in the best interest of the county."

Bendzinksi said his firm probably will adopt a ban. "We are very strongly considering and leaning toward adoption" of such a policy, he said. "I would hope to have it done before the board of directors meeting."

But Robert Pulscher, president of Springsted Inc. in St. Paul, said, "I don't know that we would sign on to an absolute ban. Pulscher said that if he lived in St. Paul and someone were running for mayor who "would be a benefit for the city," he would want to reserve the right to contribute to that person's campaign.

"We will, as a firm, certainly discourage contributions that are made in pursuit of business or of maintaining business. But I don't know if we'd want to ban individual contributions for candidates for which we have [a strong] affinity. This issue is far from settled on the national [level]. People are still doing [it]," Pulscher said.

He pointed to an article in the Nov. I issue of The Bond Buyer stating that, based on a review of campaign finance documents for Virginia's gubernatorial candidates, contributions continue unabated.

"We do not give political contributions any longer," said Freda Johnson, president of Government Finance Associates in New York. "We have not in recent months. We would expect as a firm to sign [the] policy statement."

Seegar Swanson, executive vice president of Ehlers & Associates in Minneapolis, said, "Our company already has a policy against giving political contributions" to issuer officials with whom the firm does business.

"No ifs, ands, or buts about it," Swanson said. "We would support any effort by the national association so that all members subscribe to that type of a ban."

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