“The strongest in the nation and appropriately so” is how Gov. Bill Richardson described today’s ban by the State Investment Council (SIC) of future investments with companies that employ third-party marketers to help them win government contracts.
The SIC also voted unanimously today to require what a news release from Richardson’s office called “sweeping disclosure” of all payments made in relation to permanent fund investments, and to ban certain campaign contributions.
“With this ban, and the more stringent transparency and disclosure policies in place, I want the public to be confident that we are acting as responsible managers of the state’s permanent funds,” Richardson said.
From the news release:
“The State Investment Council policy will preclude any investments being made with money managers who use outside placement agents to market their fund or services. This is a complete ban of third-party marketers, not just ‘targeted’ placement agents, whose practices have come under increasing scrutiny both in New Mexico and nationally in recent weeks.
“Money managers who use internal marketing teams will have to disclose details of their relationships to be considered for SIC investments. Details of these and all other third-party fees connected with an SIC investment will be made public for review prior to investment finalization. Fees paid to attorneys, consultants, brokers, administrators and others related to SIC investments will also require disclosure under the new SIC rules.
“The wide ranging policy also prohibits any SIC investment managers or contract holders from making campaign contributions to any elected or appointed officials who may have influence over the State Investment Office or its advisory and oversight boards. The prohibition spans the full term of the investment as well as the two years prior.
“Penalties outlined in the new policy will allow the SIC to recoup damages and repayment of management fees from any investment partner who fails to fully disclose a financial benefit to individuals related to a state investment. These penalties help bolster the law signed by Governor Richardson last month, making failure to disclose third party marketers a felony in New Mexico.”
As reported by The Santa Fe New Mexican’s Steve Terrell, it’s not clear whether the ban on campaign contributions applies to contributions to political actions committees, political parties and legislators who sit on committees that oversee investments.
Regardless, this is strong action, and comes on the heels of several other steps taken in recent weeks in New Mexico as the investment scandal has exploded here, in New York and elsewhere.
Attorney General Gary King has joined a national task force that is investigating the spreading scandal. In New Mexico, the scandal has also led to the firing of Aldus Equity, which advised the SIC and Educational Retirement Board, and the disclosure for the first time of many of the third-party marketers investment firms employed in their dealings here.
Aldus’ founder is among those facing criminal charges in New York.