Senate Committee approves Correa bill in response to pension fund investment scandal

PHOTO FROM FILE: California State Senator Lou Correa (center) listening to testimony from witnesses during a Public Employment and Retirement Committee hearing.

NEWS RELEASE

State Senator Lou Correa,­­­­­­­­­­­­­­­­ ­34th Senate District

For Immediate Release: June 24, 2010

Contact: John Scribner (916) 651-4034

Senate Committee Approves Bill in Response to Pension Fund Investment Scandal

SACRAMENTO, CA – The Senate Public Employment and Retirement Committee approved legislation this week that would require placement agents to register as lobbyists and would end contingency fee arrangements based on winning contracts from California’s public retirement systems.

Authored by Assembly Member Ed Hernandez (Baldwin Park) and co-authored by the committee’s chairman, Senator Lou Correa (Santa Ana), Assembly Bill 1743 (AB 1743) would help to ensure that transactions that involve placement agents securing investment assets from the state’s pension funds remain above board.

“Placement agents typically can earn up to 3 percent of the money they place under the management of their client. With billions in California public pension fund investment assets available, and performance pay used as a carrot to win pension fund contracts, the existing system invites corruption”, said Correa.

Senator Correa further added, “When it comes to public funds, we must hold all to a higher standard of accountability and transparency. This bill provides both.”

Requiring placement agents to register as lobbyists would make them subject to the Political Reform Act. Under this Act, lobbyists are required to render quarterly activity reports including any honoraria, fees or other compensation. The Act also requires them to attend a biennial ethics class, and places significant limits on gifts, among other requirements. Senator Lou Correa represents the 34th District, which includes the cities of Anaheim, Buena Park, Fullerton, Garden Grove, Santa Ana, Stanton and Westminster.

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Lina Hamilton
Legislative Aide
Office of Senator Lou Correa, 34th District
(916) 651-4034
lina.hamilton@sen.ca.gov