Executives at investment firms that manage Chicago pension funds have since 2011 poured more than $600,000 in contributions into Mayor Rahm Emanuel's campaign operation and political action committees (PACs) that support him, according to documents reviewed by International Business Times. These contributions appear to flout federal rules banning companies that manage pension funds from financing the campaigns of officials with authority over pension systems, say legal experts.
The contributions also potentially conflict with an executive order Emanuel himself signed in 2011 prohibiting city contractors and subcontractors from making campaign donations to city officials.
A former chief of staff to President Obama, Emanuel, a Democrat, was elected Chicago mayor three years ago with a substantial boost from financial services executives. Since 2011, at least 31 executives at firms that harvest fees by managing city pension funds have contributed to his campaign and associated PACs. That list of donors includes Kelly Welsh, a Northern Trust executive who was recently appointed by President Obama to the top legal position in the U.S. Commerce Department. (See related story here.)
Former prosecutors, corporate compliance attorneys and erstwhile officials at the Securities and Exchange Commission describe the donations as a clear breach of the spirit -- and perhaps the letter -- of the SEC's so-called pay-to-play rule, which seeks to prevent pension investments from being doled out as a form of patronage to those who contribute to campaigns.
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