SACRAMENTO — The state Assembly passed a bill Wednesday that would limit the influence of people hired by money management firms to win business from the state’s public pension funds.
The bill, passed 56-9 with bipartisan support, would require so-called "placement agents” to register as lobbyists and report gifts. It would also ban outside investment managers from paying them contingency fees.
Democratic Assemblyman Ed Hernandez, of Baldwin Park, said the bill would promote transparency and accountability at the California Public Employees Retirement System.
California Attorney General Jerry Brown last month sued two former CalPERS officials, accusing them of setting up a system of kickbacks, including a Lake Tahoe condominium, to guarantee that outside firms won a piece of the fund’s investment portfolio.
CalPERS transactions also are under investigation by the U.S. Securities and Exchange Commission.
Hernandez said the state has long banned lobbyists from receiving contingency fees, so it makes sense to extend the ban to placement agents.
"This bill does not make it illegal for a placement agent to do business in the state of California,” Hernandez said before the vote. "What it’s saying is they cannot have a contingency fee, but they’re allowed to do a retainer fee or engage in a contract with the manager to get business with CalPERS.”
But Republican Assemblywoman Diane Harkey, of Laguna Niguel, said rather than addressing the problem of former CalPERS board members who influence pension investments, the bill handicaps all placement agents by preventing them from collecting contingency fees.
"The problem with this bill is it seeks to divert attention from the real issue at hand, and to place it with a legitimate SEC-registered group of individuals that compete for investment options with the Wall Street banks,” Harkey said.
The bill, AB 1743, now moves to the Senate.
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CA Is Burning said:
Makes sense, 500 union jobs, millions in donations from unions to democrats.
CA Is Burning said:
Providing Feedback said:
Rick Bonilla said:
Rick Bonilla said:
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