In first act, new Pennsylvania treasurer cracks down on pay-to-play fees
In his first action as Pennsylvania treasurer, Joseph M. Torsella barred firms that invest treasury funds from using politically connected "finders" to land business with his department.
The move comes after the arrest last year of Chester County millionaire Richard Ireland on charges of seeking to bribe former Treasurer Rob McCord with $500,000 in campaign donations and a job offer in exchange for McCord's placing hundreds of millions of dollars in public funds with Ireland's clients for investing.
Federal financial regulators have essentially banned investment houses from giving campaign donations to elected officials as a way to crack down on “pay-to-play” corruption. To get around the restriction, some investment firms hire finders, also known as “third-party marketers,” to line up business with public agencies. The finders, as middlemen, are free to reward politicians with generous campaign donations.
In an interview Wednesday, Torsella, a Democrat, said he imposed the ban right after he was sworn into office Tuesday. Among his reasons: Payments to finders drive up costs to taxpayers, and studies show that firms that use finders typically perform more poorly than competitors who don’t.
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