Under SEC rules, investment advisors who do work for state and local pension funds can be disqualified if they make political contributions at certain levels to elected officials or candidates for those offices who have a say in the public pension decisions to contract with investment advisors. That’s a good thing because public pension funds such as CalPERS and CalSTRS enter into money management contracts the objectives of which should be to protect pension beneficiaries and taxpayers, not to enrich Wall Street.
Contrast that with California rules permitting Medicaid managed care corporations, government employee unions and other suppliers of services to make political donations to lawmakers who approve contracts with those donors. In June, CA’s legislature and governor approved a budget paying out the lion’s share of $300 billion to those and other political donors. To add insult to injury, political donations during the period of time the budget was negotiated were not disclosed until after the budget was signed.
Why limit political donations from (say) private equity manager Blackstone but not managed care corporation Health Net or prison guard union CCPOA? Budgets should enrich the lives of students and residents, not suppliers. California should ban political donations from corporate, union and other contractors with the state or its subdivisions.