esquire.com – CLEVELAND, OHIO—Josh Marshall tipped us to this strange, but apparently quite accurate report from the good folks at OpenSecrets.org. As nearly as can be told, the selection of Mike Pence as the Republican vice-presidential nominee has the unintended consequence of putting something of a crimp in the party’s ability to raise money. The explanation lies in a somewhat weedy corner of the campaign finance system wherein can be found the Security and Exchange Commission.
Pence is a sitting governor. That means contributions to the ticket will be limited by the SEC’s 2010 pay to play rule, also known as Rule 206(4)-5 of the Investment Advisers Act of 1940, as amended. The rule prevents “SEC registered investment advisers” from contributing more than $250-$350 to state or local officials who could select the firm that would manage a state or local pension fund, or some part of it. That means most hedge funds and private equity firms—their PACs, their executives, their fund managers and probably their investor relations staff—can’t give to the ticket. If they violate the rule, they face a two-year ban on managing Indiana’s pension money—or at least, on collecting management fees and a percentage of the profits they earn for the funds, which certainly takes all the fun out of it for firms.
Categories: Election 2016