CORONADO, Calif. -- Western state treasurers agreed this week on the importance of reforming all aspects of campaign finance -- and not only at the state and local levels, but also at the federal level.
"Fundamental and comprehensive campaign finance reform should be a priority not just for treasurers, but for officeholders at all levels of government," the Western States Treasurers Association said in a two-page resolution approved late Tuesday.
The statement, considered the strongest yet by a group of state treasurers, is expected to set the tone as the National Association for State Treasurers approaches some of the thorny issues facing the municipal market, said officials attending the Western group's annual meeting.
"I think we're going to have broad support" from state treasurers nationwide, said Lucille Maurer, Maryland's treasurer and president of the national group.
The Western treasurers' resolution urges the national association "to be proactive in aggressively developing reform measures and communicating those measures to the decision-makers in Washington, state, and local officials, and all participants in the municipal securities market."
Maurer stressed that "we need to have a comprehensive reform package." Focusing only on certain aspects, such as political contribution limits, "just weights it in one direction," she said.
State treasurers attending this week's conference were especially adamant that other officeholders -- particularly those at the federal level who are eager to reform state and local practices -- share in any new restrictions.
"It's got to go all the way up and down," said Tony West, Arizona's treasurer and incoming president of the Western state treasurer's group.
"If there's any part of the system that still lets pollution in at one avenue, it's going to run through and pollute everything," West said.
Some state treasurers said the leaders of the crusade against state and local practices include federal office-holders and regulators who have gladly raised money on Wall Street.
Utah Treasurer Edward Alter pointed to Arthur Levitt Jr., the chairman of the Securities and Exchange Commission, saying he has helped tap the Street for national politicians.
At any rate, Alter said, much of the criticism directed at state and local issuers "is a total bum rap." Some federal officials "make it sound like we're all dirty, and that just isn't true," he said. "We're all getting tarred with the same brush."
Nevertheless, state treasurers meeting at the Hotel Del Coronado agreed that some reform is inevitable and necessary.
"We know the business isn't going to be conducted as usual," Maurer said. She added, however, that "care must be exercised" when specific problems provoke talk of wide-ranging changes.
And the municipal market has to tackle issues beside political giving, Maurer said. There are "all kinds of practices" that need to be looked at, she said.
The Western treasurers outlined some of these in an eight-point statement. For example, "comprehensive municipal market reforms should be explored regarding the practice of fee splitting, consulting fees, suitability rules, price transparency, the awarding of finder fees, and of financial advisers participating in underwriting," the resolution said.
In other recommendations, the Western treasurers said "competitive bidding in debt issuance should be emphasized."
When negotiated sales are needed, "a competitive process as practiced in several Western states should be in place for selection of underwriters."
But the treasurers stressed that "whatever policies are adopted should not adversely impact opportunities for minority- and women-owned firms to participate in the process."
Regarding secondary market disclosure on municipal bonds, the Western treasurers said the national treasurers association should "work for continuing disclosure of material information."
The Western treasurers specifically commended California Treasurer Kathleen Brown for her recent decision not to accept contributions from any individual who takes part in municipal deals. She had already ruled out contributions from securities firms.
"Kathleen Brown has really set the standard for other finance officers to follow suit," said West. Her prohibition "is unmatched or unparalled" by other officeholders, he said.
West, noting that he is a Republican while Brown is a Democrat, said the treasurers transcended partisan division as they worked out their position.
The Western group also strongly recommended that federal securities regulators should include a representative from the national treasurers group in all deliberations regarding reform efforts.
Regardless of whether one believes that concern over local and state bond practices "is way overdone," state treasurers need to participate in the process "because the train is already rolling ahead" toward some sort of reform, Alter said.
As proof of that change, treasurers noted the voluntary ban by major Wall Street firms on donations to state and local officials who award negotiated bond deals.
But such targeted efforts could warp the political process further, some treasurers warned, if Wall Street keeps giving money to governors and other prominent politicians.
The two-page resolution stresses the need for comprehensive contribution reform.
"Campaign finance disclosure laws ought to be extended to all other federal, state, and local officials, and should be strengthened to include reporting of contributor occupations, employer, and addresses," the resolution says.
In addition, "federal, state, and local campaign finance reforms should address contributions linked to expenditure limitations as well as public financing and equitable and meaningful access to the mail, the media and other forms of communication between citizens and their representatives," the resolution says.
Maurer said she is also encouraging state treasurers to make sure their congressional delegations are aware of the brewing reforms targeted at certain officeholders.
"I'm not sure it's reached a level [to appear] on their radar scopes yet," even though a comprehensive approach would affect all officeholders, she said.
Western Treasurers Take a Stand
The following statement was adopted by the Western States Treasurers Association on
Tuesday, October 19, 1993 at is annual meeting: RESOLUTION on Initiatives to Maintain Public Confidence
in the Municipal Market
WHEREAS, The Western States Treasurers Association believes strongly in our responsibility to build and maintain public trust and confidence in the conduct of our offices, and have pursued many means of doing so.
WHEREAS, The Treasurers have performed with integrity in the sale of municipal securities, and have put the public's trust and confidence foremost in the sale of those securities.
WHEREAS, The Western States Treasurers remain committed to municipal market reform, and commend efforts by California State Treasurer Kathleen Brown and other Western States Treasurers in taking the national lead in adopting campaign contribution reforms.
WHEREAS, The Western States Treasurers, elected on a statewide basis and subject to their states' campaign finance laws, are already disclosing campaign contributions and support those state disclosure laws.
WHEREAS, The Western State Treasurers believe these same requirements should also be applied to all federal, state, and local officials.
WHEREAS, The Western States Treasurers Association urges the National Association of States Treasurers (NAST) to be proactive in aggressively developing reform measures and communicating those measures to the decision-makers in Washington, state and local officials, and all participants in the municipal securities market.
THEREFORE BE IT RESOLVED that the Western States Treasurers Association adopt and forward the following recommendations to the National Association of State Treasurers for their consideration. 1. The National Association of State Treasurers should continue to explore campaign contribution reform, including but not limited to contribution limitations from participants in the municipal finance markets, such as those already adopted or about to be adopted by several Western States Treasurers. 2. Campaign finance disclosure laws ought to be extended to all other federal, state and local officials, and should be strengthened to include reporting of contributor occupations, employers, and addresses; 3. Competitive bidding in debt issuance should be emphasized. Even when sales are negotiated, a competitive process as practiced in several Western states should be in place for selection of underwriters; 4. Whatever policies are adopted should not adversely impact opportunities for minority and women-owned firms to participate in the process; 5. Comprehensive municipal market reforms should be explored regarding the practices of fee splitting, consulting fees, suitability rules, price transparency, the awarding of finder fees, and of financial advisers participating in underwriting; 6. NAST should work for continuing disclosure of material information for secondary municipal market securities; 7. The Western States Treasurers Association strongly recommends that federal securities regulators include and appropriate representative from NAST in all deliberations regarding municipal securities reform efforts; 8. Fundamental and comprehensive campaign finance reform should be a priority not just for Treasurers, but for all officeholders at all levels of government. Federal, state, and local campaign finance reforms should address contributions linked to expenditure limitations as well as public financing and equitable and meaningful access to the mail, the media, and other forms of communication between citizens and their representatives.
BE IT FURTHER RESOLVED that the Western States Treasurers Association believes a continuing effort needs to be made to ensure the public's trust and confidence in financing management at all levels of government. WSTA looks forward to working together with all municipal market participants, investors, and the public in addressing these issues in a forthright, thoughtful, and effective manner.
