To crack down on pay-to-play practices involving public funds, New York State is restricting its pension fund from doing business for a time with anyone who makes a campaign contribution to the comptroller's office.
The new rule, an executive order by Comptroller Thomas DiNapoli, will prohibit any company that makes a contribution to the comptroller, or a candidate for that office, from seeking business from the $116.5 billion fund for two years. Unlike most states, where boards oversee pension fund investments, the New York comptroller is the fund's sole trustee.
New York is the 17th state (the others include Illinois, New Jersey and Connecticut) to enact a campaign contribution ban, according to Ki Hong, a partner at the Washington office of Skadden, Arps, Slate, Meagher & Flom. More than a dozen cities and counties have adopted similar bans, he said.
New York's new policy is similar to a proposed rule by the Securities and Exchange Commission that is expected to be finalized in the next few months.