Sen. Bob Bennett is asking the Securities and Exchange Commission to investigate whether law firms sometimes give big campaign donations to officials who oversee government pension plans so they can be rewarded with lucrative law contracts to represent those funds.
"Sweetheart deals that result from generous campaign contributions by investment companies and law firms take money out of the pockets of retired teachers, firefighters, police officers and other public employees who are members of pension funds," Bennett said Tuesday.
"Public employees need to be assured that there is no 'pay-to-play' or conflict of interest occurring on the part of the elected officials controlling the funds," said Bennett, who is a member of the Senate Banking Committee.
He wrote the SEC on Tuesday asking it to widen its "pay-to-play" investigation from just looking at pension fund managers and financial firms to also include law firms and attorneys who end up selected to file securities class-action lawsuits for pension plans that could bring them millions of dollars in fees.
He wrote that many press reports show "that state officials with control over pension fund decisions ... receive very substantial campaign contributions from out-of-state law firms with no apparent interest in their election — other than the possibility of being chosen as the pension fund's lawyer in a class-action."
Bennett added, "Attorney pay-to-play raises profound concerns about the integrity of pension funds and the securities class-action system at a time when pension funds are reeling from the decline in financial markets. It is critical that the commission seek to eliminate every possible avenue for political profiteering.'