Senate Races and SEC Limits on Political Contributions

Last year a new rule from the Securities and Exchange Commission went into effect that limited the ability of investment advisers and private fund managers to make political campaign contributions. The purpose was to prevent some illicit pay-to-play activity by government officials who control government sponsored investment funds. With the close of the national political conventions and selection of the Republican and Democratic tickets, it’s clear how the pay-to-play rule for investment advisers will affect the presidential fund-raising.

It won’t.

Let’s take a look at Congress and see how  Rule 206(4)-5 affects campaign contributions for some of the currently competitive Senate races.

Connecticut

Chris Murphy is currently a member of the US House of Representatives. Therefore, donations to him would not be limited by the rule.

Linda McMahon does not currently hold a political office. She was the former CEO of World Wrestling Entertainment. Therefore, donations to her would not be limited by the rule.

Indiana

Joe Donnelly is a member of the U.S. House of Representatives. Therefore, donations to him would not be limited by the rule.

Richard Mourdock is the current  State Treasurer of Indiana. That position raises a red flag and requires further research. The Treasurer or his nominee serves on the Board of Trustees of the Indiana Public Retirement System, the state’s largest pension system. If your firm want access to those government investment funds, you will need to limit donations to Mr. Mourdock.

Massachusetts

Scott Brown is the incumbent Senator. Therefore, donations to Mr. Brown would not be limited by the rule.

Elizabeth Warren is a professor at Harvard and does not currently hold a political office. Therefore, donations to her would not be limited by the rule.

Missouri

Claire McCaskill is the incumbent Senator. Therefore, donations to her would not be limited by the rule.

Todd Akin is a Republican member of the United States House of Representatives. Therefore, donations to him would not be limited by the rule.

Montana

Jon Tester is the incumbent Senator seeking reelection. Therefore, donations to him would not be limited by the rule.

Denny Rehberg is currently a member of the US House of Representatives. Therefore, donations to him would not be limited by the rule.

Nevada

Shelley Berkley is a member of the United States House of Representatives. Therefore, donations to her would not be limited by the rule.

Dean Heller is the incumbent Senator. Therefore, donations to him would not be limited by the rule.

North Dakota

Heidi Heitkamp is a former Attorney General, but does not currently hold a political office. Therefore, donations to her would not be limited by the rule.

Rick Berg is a member of the United States House of Representatives. Therefore, donations to him would not be limited by the rule.

Ohio

Sherrod Brown is the incumbent Senator. Therefore, donations to Mr. Brown would not be limited by the rule.

Josh Mandel is the current Treasurer of Ohio. Donations to Mr. Mandel are limited by the rule. The Treasurer appoints members to the state retirement system boards who select investment and investment advisers.

Virginia

Tim Kaine is a former Governor of Virginia. Therefore, donations to him would not be subject to the rule. If he was still the sitting governor, donations to him would have been limited.

George Allen is also a former Governor of Virginia and was a former US Senator from Virginia. Therefore, donations to him would not be subject to the rule. If he was still the sitting governor, donations to him would have been limited.

Wisconsin

Tammy Baldwin is currently a member of the US House of Representatives. Therefore, donations to her would not be limited by the rule.

Tommy Thompson was a former governor of Wisconsin, but does not currently hold a political office. Therefore, donations to him would not be subject to the rule. If he was still the sitting governor, donations to him would have been limited.

Also keep in mind that contributions to state and local political parties are also limited by the rule.

Even if the contributions to a particular candidate are not limited by the rule, an investment adviser is still required to keep a record of all campaign contributions.

Senate Map is from Real Clear Politics

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