State Comptroller Thomas DiNapoli proposed legislation on 2 June to permanently ban the use of placement agents, paid intermediaries and registered lobbyists from doing business with New York State’s $140 billion pension fund.
“As long as I’m in office, I will never allow placement agents in [New York State Common Retirement Fund] deals,” said DiNapoli in a statement. “But we have to eliminate any potential for abuse in the future. This bill will make sure that the fund is protected no matter who is comptroller.”
The bill defines a placement agent or intermediary as any person, including a registered lobbyist, that is directly or indirectly compensated by an investment manager to promote investments to or solicit investment by the pension fund, whether compensated on a flat fee, a contingent fee or any other basis.
As long as I'm in office, I will never allow placement agents in [New York State Common Retirement Fund] deals.
The comptroller’s latest move comes on the heels of New York Governor Andrew Cuomo’s proposal to permanently ban placement agents.
In April, Cuomo directed New York’s insurance department to issue permanent regulations banning placement agents, lobbyists and elected officials from conducting business with the state’s pension fund.
The new regulations also contain new provisions that will permanently ban “pay-to-play” at the pension fund.
The new regulation would prohibit improper relationships between pension fund officials and an investment firm's personnel, “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.
The regulation also will ban investment firms that directly or indirectly make campaign contributions, charitable contributions or gifts to the comptroller.
Previously, the insurance department issued temporary regulations as a result of Cuomo's investigation of the state pension fund as attorney general. The temporary regulations will be made permanent.