Bill Text: NY S07152 | 2009-2010 | General Assembly | Amended
Bill Title: Enacts the New York state public pension fund security act; provides definition of defrauding the government.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2010-05-25 - PRINT NUMBER 7152A [S07152 Detail]
Download: New_York-2009-S07152-Amended.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7152--A
I N S E N A T E
March 17, 2010
___________
Introduced by Sens. KRUGER, C. JOHNSON, ADAMS -- read twice and ordered
printed, and when printed to be committed to the Committee on Finance
-- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee
AN ACT to amend the executive law, in relation to establishing the New
York state public pension fund security act; and to amend the penal
law, in relation to the definition of defrauding the government
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. This act shall be known and may be cited as the "New York
2 state public pension fund security act".
3 S 2. The executive law is amended by adding a new section 41-b to read
4 as follows:
5 S 41-B. PUBLIC PENSION FUND SECURITY ACT. 1. DEFINITIONS. FOR THE
6 PURPOSES OF THIS SECTION:
7 (A) "INVESTMENT MANAGER" MEANS ANY PERSON OR ENTITY, OTHER THAN AN
8 EMPLOYEE OF THE STATE COMPTROLLER, THAT IS RETAINED BY A PUBLIC PENSION
9 FUND TO MANAGE A PORTFOLIO OF ASSETS, DIRECTLY OR THROUGH AN INVESTMENT
10 VEHICLE, INCLUDING SECURITIES, FOR A FEE.
11 (B) "INTERMEDIARY" MEANS ANY PERSON OR ENTITY HIRED, ENGAGED OR
12 RETAINED BY, OR ACTING ON BEHALF OF AN INVESTMENT MANAGER, OR ON BEHALF
13 OF ANOTHER INTERMEDIARY AS A FINDER, SOLICITOR, MARKETER, CONSULTANT,
14 BROKER OR OTHER INTERMEDIARY TO RAISE MONEY OR OBTAIN AN INVESTMENT
15 COMMITMENT FROM, OR TO OBTAIN ACCESS TO A PUBLIC PENSION FUND, DIRECTLY
16 OR INDIRECTLY, INCLUDING, WITHOUT LIMITATION, THROUGH AN INVESTMENT
17 VEHICLE. WHERE SUCH INTERMEDIARY IS A FINANCIAL INSTITUTION, INTERME-
18 DIARY SHALL MEAN THE DEPARTMENT OR UNIT PERFORMING SUCH SERVICES.
19 (C) "PUBLIC PENSION FUND" MEANS ANY RETIREMENT PLAN ESTABLISHED OR
20 MAINTAINED FOR ITS CURRENT OR FORMER EMPLOYEES BY THE STATE OF NEW YORK
21 OR POLITICAL SUBDIVISION THEREOF, OR BY AN AGENCY OR INSTRUMENTALITY OF
22 THE FOREGOING.
23 2. DISCLOSURE OF PAYMENTS. THE COMPTROLLER, IN CONJUNCTION WITH THE
24 SUPERINTENDENT OF INSURANCE AND THE STATE ATTORNEY GENERAL SHALL DEVELOP
25 AND IMPLEMENT A POLICY REQUIRING THE DISCLOSURE OF PAYMENTS TO INVEST-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16249-03-0
S. 7152--A 2
1 MENT ADVISORS BY INVESTMENT MANAGERS IN CONNECTION WITH PUBLIC PENSION
2 FUND INVESTMENTS IN OR THROUGH INVESTMENT MANAGERS. THIS POLICY SHALL
3 INCLUDE, BUT NOT BE LIMITED TO, THE FOLLOWING REQUIREMENTS:
4 (A) DISCLOSURE OF RELATIONSHIPS BETWEEN AN INVESTMENT MANAGER AND AN
5 INTERMEDIARY; AND
6 (B) A RESUME FOR EACH OFFICER, PARTNER OR PRINCIPAL OF THE INTERME-
7 DIARY DETAILING THE PERSON'S EDUCATION, PROFESSIONAL DESIGNATIONS, REGU-
8 LATORY LICENSES OR CERTIFICATIONS AND INVESTMENT AND WORK EXPERIENCE;
9 AND
10 (C) DISCLOSURE OF ANY AND ALL COMPENSATION PROVIDED, OR AGREED TO BE
11 PROVIDED TO THE INTERMEDIARY; AND
12 (D) A DESCRIPTION OF THE SERVICES TO BE PERFORMED BY THE INTERMEDIARY
13 FOR THE INVESTMENT MANAGER; AND
14 (E) A STATEMENT WHETHER THE INTERMEDIARY OR ANY OF ITS AFFILIATES ARE
15 REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE FINANCIAL
16 INDUSTRY REGULATORY ASSOCIATION OR ANY SIMILAR REGULATORY AGENCY IN A
17 COUNTRY OTHER THAN THE UNITED STATES, AND THE DETAILS OF THAT REGISTRA-
18 TION OR EXPLANATION AS TO WHY NO REGISTRATION IS REQUIRED; AND
19 (F) A SIGNED ATTESTATION THAT THE INTERMEDIARY HAS NOT ENGAGED, HIRED,
20 UTILIZED OR RETAINED A LOBBYIST OR ANY OTHER INDIVIDUAL OR ORGANIZATION
21 FOR THE PURPOSES OF SECURING OR INFLUENCING THE DECISION TO SECURE A
22 PARTICULAR TRANSACTION OR INVESTMENT BY A PUBLIC PENSION FUND, OTHER
23 THAN ANOTHER INTERMEDIARY SUBJECT TO THE PROVISIONS OF THIS SECTION; AND
24 (G) A SIGNED ATTESTATION THAT NO EMPLOYEE OR SPOUSE OF ANY EMPLOYEE OF
25 ANY INTERMEDIARY HAS MADE ANY POLITICAL CONTRIBUTIONS TO ANY ELECTED
26 STATE OR LOCAL OFFICIAL, EMPLOYEE OF A PUBLIC PENSION FUND, OR FAMILY
27 MEMBER OF ANY ELECTED STATE OR LOCAL OFFICIAL OR EMPLOYEE OF A PUBLIC
28 PENSION FUND DURING THE PRIOR TWENTY-FOUR MONTH PERIOD. FOR PURPOSES OF
29 THIS PARAGRAPH:
30 (I) FAMILY MEMBER SHALL MEAN ANY PERSON LIVING IN THE SAME HOUSEHOLD,
31 AND ANY PERSON RELATED WITHIN THE THIRD DEGREE OF CONSANGUINITY OR
32 AFFINITY.
33 (II) OFFICIAL SHALL MEAN A PERSON (INCLUDING ANY ELECTION COMMITTEE
34 FOR SUCH PERSON) WHO WAS AT THE TIME OF THE CONTRIBUTION AN INCUMBENT,
35 CANDIDATE OR SUCCESSFUL CANDIDATE FOR ELECTIVE NEW YORK STATE OR LOCAL
36 OFFICE, IF THE OFFICE: (A) IS DIRECTLY OR INDIRECTLY RESPONSIBLE FOR OR
37 CAN INFLUENCE THE OUTCOME OF THE HIRING OF AN INVESTMENT MANAGER BY THE
38 PUBLIC PENSION FUND; OR (B) HAS AUTHORITY TO APPOINT ANY PERSON WHO IS
39 DIRECTLY OR INDIRECTLY RESPONSIBLE FOR, OR CAN INFLUENCE THE OUTCOME OF,
40 THE HIRING OF AN INVESTMENT MANAGER BY A PUBLIC PENSION FUND.
41 3. WRITTEN DECLARATION. ALL INTERMEDIARIES GIVEN ACCESS TO THE PUBLIC
42 PENSION FUND UNDER THE PROVISIONS OF THIS SECTION MUST SIGN A WRITTEN
43 DECLARATION THAT THEIR ACTION WILL BE IN CONFORMANCE WITH STATE LAW AND
44 POLICY AS DETERMINED BY THE COMPTROLLER.
45 4. PROHIBITIONS. A PUBLIC PENSION FUND SHALL NOT ENTER INTO ANY AGREE-
46 MENT WITH AN INVESTMENT MANAGER THAT DOES NOT AGREE, IN WRITING, TO
47 COMPLY WITH THE POLICY DESCRIBED IN SUBDIVISION TWO OF THIS SECTION. A
48 PUBLIC PENSION FUND SHALL NOT ENTER INTO ANY AGREEMENT WITH AN INVEST-
49 MENT MANAGER THAT ENGAGED AN INTERMEDIARY THAT HAS (OR HAS AN EMPLOYEE
50 OR SPOUSE OF EMPLOYEE THAT HAS) MADE ANY POLITICAL CONTRIBUTION
51 DESCRIBED IN PARAGRAPH (G) OF SUBDIVISION TWO OF THIS SECTION FOR FIVE
52 YEARS FROM THE DATE OF SUCH CONTRIBUTION.
53 5. THE COMPTROLLER, IN CONJUNCTION WITH THE SUPERINTENDENT OF INSUR-
54 ANCE AND THE STATE ATTORNEY GENERAL MAY PROHIBIT AN INVESTMENT MANAGER
55 WHO VIOLATES THE PROVISIONS OF THIS SECTION FROM CONDUCTING BUSINESS
56 WITH A PUBLIC PENSION FUND OF THE STATE OF NEW YORK FOR FIVE YEARS. THE
S. 7152--A 3
1 COMPTROLLER, IN CONJUNCTION WITH THE SUPERINTENDENT OF INSURANCE AND THE
2 STATE ATTORNEY GENERAL SHALL, BEFORE MAKING A FINAL DETERMINATION TO
3 PROHIBIT AN INVESTMENT MANAGER FROM CONDUCTING BUSINESS WITH A PUBLIC
4 PENSION FUND, NOTIFY THE INVESTMENT MANAGER AND INTERMEDIARY IN WRITING
5 OF THE REASONS FOR SUCH PROHIBITION AND SHALL AFFORD SUCH INVESTMENT
6 MANAGER OR AGENT AN OPPORTUNITY TO BE HEARD IN PERSON OR BY COUNSEL
7 PRIOR TO MAKING A FINAL DETERMINATION. SUCH NOTIFICATION SHALL BE SERVED
8 PERSONALLY OR BY CERTIFIED MAIL IN ANY MANNER AUTHORIZED BY THE CIVIL
9 PRACTICE LAW AND RULES FOR SERVICE OF A SUMMONS. SUCH PROHIBITION MAY BE
10 REDUCED BY A DECISION OF THE COMPTROLLER, IN CONJUNCTION WITH THE SUPER-
11 INTENDENT OF INSURANCE, UPON A SHOWING OF GOOD CAUSE.
12 S 3. Section 195.20 of the penal law, as amended by chapter 1 of the
13 laws of 2010, is amended to read as follows:
14 S 195.20 Defrauding the government.
15 A person is guilty of defrauding the government when, being a public
16 servant or party officer, OR WHILE ACTING AS AN INTERMEDIARY FOR AN
17 INVESTMENT MANAGER THAT IS SEEKING TO BE OR IS RETAINED BY A PUBLIC
18 PENSION FUND, he or she:
19 (a) engages in a scheme constituting a systematic ongoing course of
20 conduct with intent to:
21 (i) defraud the state or a political subdivision of the state or a
22 governmental instrumentality within the state or to obtain property,
23 services or other resources from the state or a political subdivision of
24 the state or a governmental instrumentality within the state by false or
25 fraudulent pretenses, representations or promises, INCLUDING KNOWINGLY
26 MAKING ANY MATERIALLY FALSE STATEMENT OR OMISSION IN CONNECTION WITH THE
27 PROVISION OF THE STATEMENT REQUIRED UNDER SUBDIVISION TWO OF SECTION
28 FORTY-ONE-B OF THE EXECUTIVE LAW; or
29 (ii) defraud the state or a political subdivision of the state or a
30 governmental instrumentality within the state by making use of property,
31 services or resources of the state, political subdivision of the state
32 or a governmental instrumentality within the state for private business
33 purposes or other compensated non-governmental purposes; and
34 (b) so obtains property, services or other resources with a value in
35 excess of one thousand dollars from such state, political subdivision or
36 governmental instrumentality.
37 Defrauding the government is a class E felony.
38 S 4. This act shall take effect immediately; provided, however, that
39 the provisions of section 41-b of the executive law, as added by section
40 two of this act, shall apply to investments between a public pension
41 fund and an investment manager entered into on and after such date.
