Home > Uncategorized > Pension Funds and Charters Linked in MA Investigate Report

Pension Funds and Charters Linked in MA Investigate Report

David Sirota’s International Business Times article on MA Governor Baker’s the shady scheme to get contributions for his pet initiative to expand charter schools is gut wrenching example of profiteers think. Instead of accepting the regulations put in place to ensure that democracy can operate without the influence of money funneled into political campaigns, they collude with elected officials to find workarounds or, in the case of Mr. Baker, get themselves elected so they can develop the workarounds themselves. As Mr. Sirota notes in his article, Mr. Baker, a former CEO of a financial firm, was charged with violating federal pay-to-play laws in NJ prior to his election as Governor in NJ:

During his 2014 gubernatorial run, Baker faced a New Jersey ethics investigation when documents surfaced showing that he gave $10,000 to the New Jersey Republican Party just before Gov. Chris Christie’s administration awarded Baker’s financial firm a pension management deal. New Jersey pension overseers divested the state’s holdings in Baker’s firm — though Christie’s administration ruled that the state’s pay-to-play rules had not been violated.

Being exonerated by the Christie administration is hardly a clean bill of health, but it was an acceptable verdict from the MA voter’s perspective… and now they have a Governor who has come up with his own creative means of funding a favored initiative. Mr. Baker is a staunch advocate of charters and he has fully endorsed a (presumably) grassroots ballot initiative to allow for the expansion of charter schools in that state. Mr. Sirota, a dogged investigative journalist, has looked carefully into the funding of the advertising for this initiative and, lo and behold, it seems that Mr. Baker might have engaged in some pay-to-play chicanery to generate funding for supporters!

…the state pension board — which Gov. Baker appoints members to — gave lucrative contracts to manage teachers’ pensions to Wall Street firms whose executives then bankrolled the Baker-backed ballot initiative.

Baker is covered by (pay-to-play) rules because he appoints three members to the board of the Massachusetts Pension Reserves Investment Management Board (MassPRIM). IBT/MapLight’s report showed that eight firms delivered more than $778,000 to groups supporting Question 2, which would expand the number of charter schools in Massachusetts. Baker has led the fight for the ballot measure, and a group that received money from MassPRIM money managers is now airing television ads promoting Baker.

While the federal pay-to-play rules aim to restrict Wall Street donations directly to public officials and political parties, they do not explicitly bar such donations to groups that support a lawmaker’s favored cause — or that promote a public official in paid ads. However, the rulesdo include anti-circumvention provisions which prohibit financial firms and public officials covered by the law from doing “anything indirectly which, if done directly, would result in a violation of the rule.”

“These rules are in place specifically to prevent Wall Street firms from throwing money at the feet of those responsible for awarding financial contracts in an effort to curry favor in the awarding of those contracts,” said Public Citizen’s Craig Holman, whose watchdog group advocates for tougher ethics laws. “We are seeing Wall Street funnel their money to nonprofit organizations and super PACs that support the same governors — and now to a pet policy project of Massachusetts Gov. Baker, backing his ballot measure.”

In response to this gambit, Mr. Sirota notes that “the two largest teachers unions in Massachusetts asked federal and state law enforcement officials to investigate whether large donations to a charter school ballot measure backed by Republican Gov. Charlie Baker violated anti-corruption rules.”

My guess is that the FEC or whoever looks into this will look the other way or, like the Christie investigators, declare there is only smoke and no fire. And the voters? If Mr. Baker’s election is any indication they will view the whole episode as unworthy of their consideration in deciding on his integrity. After all, he seems like a nice guy.

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