The following is a Public Securities Association statement to be attributed to Heather L. Ruth, its president, in reaction to the statement released yesterday by the Municipal Securities Rulemaking Board.
The Public Securities Association welcomes the statement of the Municipal Securities Rulemaking Board released [yesterday].
State and local officials should not be influenced by political contributions in their award of any business including selection of bond underwriters or other professionals engaged in the municipal finance business.
It is the interest of both issuers and all members of the municipal finance community to preserve public confidence in the municipal market.
The actions announced today by the MSRB constitute a good beginning of a process which can ensure the credibility of all the financing mechanisms available to state and local governments.
Just as elected officials at the federal level are struggling to devise appropriate solutions to the high and growing cost of financing political campaigns for federal office state and local officials should continue to seek ways to reduce the pressure faced by officials to solicit and for the municipal bond industry to contribute campaign funds.
These pressures of course apply to all business sectors at the state and local level not merely to participants in the municipal financing process. State and local elected officials should exercise their authority as lawmakers to strike an appropriate balance between the integrity of the process by' which state and local governments raise capital and individuals rights to participate in the political process.
While political contributions are currently subject to disclosure requirements in many' jurisdictions PSA encourages the MSRB to explore vigorously' ways in which the self-regulatory' process governing bond dealers can be employed to improve mandatory' disclosure of political contributions.
More accessible information about campaign contributions that might appear to be related to the bond business may in itself serve to moderate excesses in these areas.
Whether through the actions of state and local officials or through the MSRB, PSA believes that disclosure requirements should be as comprehensive as possible, covering contributions by firms employee political action committees and relevant professional employees insofar as information regarding the last can reasonably' be obtained by employers Authorities should also consider requiring disclosure of expenditures to seek municipal finance business through political consultants or lobbyists and disclosure of other business relationships that may influence the selection of underwriters.
PSA pledges its support and active participation with the MSRB and with issuer groups as the Association actively consults its membership seeking way's to ensure the continued efficiency' and public confidence in municipal finance.
PSA urges organizations representing other participants in the process of financing state and local government -- including non-dealer financial advisors bond and underwriters' counsel and credit enhancers -- to do the same.
PSA is the international trade association of banks and brokerage firms which deal in municipal securities U.S. government and federal agency' securities mortgage and other asset-backed securities and money' market instruments'.