Governor Cuomo Proposes New Pay-to-Play Restrictions

New York’s Governor has directed the State Insurance Department to draft permanent regulations to ban “pay-to-play” in the State pension fund. The new regulations would include: • A permanent ban on the prospective investment manager’s use of elected officials, lobbyists and all placement agents, whether paid or unpaid. • Prohibitions against: improper relationships between pension fund officials and an investment firm's personnel or agents, "revolving door" employment by investment firms of former public pension fund officials and employees, and improper gifts by investment firms to public pension fund employees and officials. • A ban on investment firms that directly or indirectly make campaign contributions, charitable contributions, or gifts to the Comptroller. This new initiative builds on a foundation that includes the code of conduct the Governor had incorporated into the settlement of investigations of investment firms he had conducted as Attorney General, State Comptroller DiNapoli’s executive order banning pension fund investment opportunities for firms making contributions to Comptroller candidates, and SEC rules prohibiting investment advisers from providing investment advisory services to a governmental entity within two years after covered contributions to government officials.