Pay-to-Play Compliance in Municipal Contracts

The U.S. Municipal Securities Rulemaking Board (MSRB), Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and Commodity Futures Trading Commission (CFTC) have all promulgated rules restricting political contributions by certain financial or advisory services government contractors to state and local government entities. These rules apply to covered business with state and local governments nationwide. Moreover, many states and localities have their own "pay-to-play" rules as well, which typically apply more broadly to government contractors (not just financial services or advisory firms) in the jurisdiction.

For firms pursuing or performing work with state and local governments, counsel must understand these rules, particularly their breadth and impact on company strategy (during the pursuit phase) and the daily administration of public contracts post-award. Counsel for local governments must also understand the requirements and prohibitions of these rules.

Listen as our experienced panel discusses navigating this sometimes complicated regulatory landscape and provides tools to help avoid costly missteps.

1. Regulatory overview
   1. MSRB amended Rule G-37
   2. SEC Rule 206(4)-5
   3. FINRA Rule 2030
   4. CFTC Regulation 23.451
2. Municipal application
   1. Local governments
   2. Government contractors
3. Outlook and expectations
   1. Judicial challenges
   2. Legislative developments

The panel will review these and other critical issues:

• To which business activities do pay-to-play laws apply?
• Which affiliated individuals and entities are subject to the law?
• What are the consequences for covered individuals and entities (prohibitions, reduced contributions limits, reporting)?
• What are the penalties for violating applicable pay-to-play laws?