Morgan Stanley

This week in New Orleans, an obscure self-regulating board called the Municipal Securities Rulemaking Board (it's made up mostly of bond industry pros, but was created by Congress and is overseen by the SEC) is meeting to discuss how to deal with a persistent problem in state and local bond measures. Bond underwriters across the country (and particularly in California) often contribute to the political committees that support the campaigns for bond measures. When the measure passes, the bond underwriters who make contributions often end up handling the bond work.

There's growing concern about this sort of "pay to play"  among big underwriters such as Citi, JP Morgan and Morgan Stanley. Already, underwriters are barred from giving to public officials who oversee bond issues. The proposal being discussed that week would extend the ban to donations to ballot measure committees. More details via The Bond Buyer.  This seems wise. It's crucial that the ban have no loopholes. It should cover any firm or lender of any kind who might be involved in the bond business.