Committee Approves Legislation to Ban Contributions to Federal Committees by Pension Fund Managers
TRENTON — Legislation authored by Senator Shirley Turner that would help keep political favoritism away from the investments of public pension funds was approved by a Senate committee on Thursday. The bill, S-2430, would apply the same pay-to-play prohibitions on contributions to national political organizations by private investors that apply at the state level. The bill would also require more transparency by the State Investment Council, requiring the public disclosure of private money managers and the fees they receive for managing pension investments.
“Politics and political favoritism should be kept away from the public employees’ pension funds,” said Senator Turner. “The method of investment should be selected based on performance and merit, not because of campaign contributions. The investments should be made in the best interests of our retirees who rely on their pensions after careers of dedicated public service.”
Senator Turner is acting in response to the disclosure that employees and others tied to private firms managing portions of the state’s $80 billion pension funds have given more than $7.1 million to the Republican Governors Association and more than $3.9 million to the Republican National Committee (http://tiny.cc/7g8bmx).
Governor Chris Christie serves as chairman of the RGA and is actively engaged in national Republican politics. The head of the State Investment Council, which approves the selection of private fund managers to handle investments, is a political ally of the governor. State and federal laws ban money managers from collecting fees from states where they have financed political candidates, but these pay-to-play laws don’t cover national political organizations, such as the RNC and RGA. In fact, the Christie Administration adopted a rule in 2013 specifically stating the prohibitions don’t apply to federal donations (http://tiny.cc/0m8bmx).
Senator Turner’s legislation, voted out of the Senate State Government, Wagering, Tourism & Historic Preservation Committee 3 -1, would require the investment council to put in place a rule prohibiting firms it selects to invest pension funds from making contributions to any national political organization.
New Jersey also does not require the regular disclosure of the fees paid to the private investment firms selected to manage pension funds.
“Based on what we have learned about the Christie Administration’s investment practices, these standards of accountability and transparency are needed,” said Senator Turner. “It’s not their money nor does it belong to any governor or any other political figure.”
Senator Turner’s bill would require quarterly reports by the investment council detailing the investment returns of the private firms and the fees they receive. The report would have to be submitted to the governor, the Legislature and posted online to be made available to the public.