Christie vetoes restrictions on investments involving donors

TRENTON, N.J. (AP) -- Gov. Chris Christie has conditionally vetoed legislation barring the state from making investments with firms whose money managers have contributed to national political campaigns.

Christie announced the decision on Monday saying that federal and state restrictions already impose stringent disclosure requirements.

"The fund managers and investment advisers already must abide by federal campaign contribution laws. Because the federal campaign contribution laws pre-empt state law in this area, I cannot approve of such a provision," Christie said in a statement.

The measure would also have required a quarterly report to the Legislature showing the state's return on investments as well as fees charged by external money managers.

Christie instead called for a single annual report and said that individually identifying fund managers negotiated with the state could put prove unfavorable for the state.

Democratic state Sen. Shirley Turner, who sponsored the bill, called the conditional veto a "fig leaf."

"He completely removed the provisions that would prevent pay to play between state investors and national political organizations connected to state political figures," she said.

The Democratic-led Legislature passed the bill in February and sponsors argued that financial professionals who handle the state's $80 billion pension fund should be free from even the appearance of a conflict of interest.

Lawmakers said they have not turned up a smoking gun showing such impropriety but wanted to act pre-emptively.

Recently the State Investment Council moved forward with a $100 million investment in a firm whose executive gave $2.5 million to the Republican Governors Association, which Christie headed last year.

Spokespeople for the Christie administration and Denver-based KSL Capital Partners, whose chairman Mike Shannon donated to the RGA, said the governor did not solicit the money and it had nothing to do with the investment.

Council Chairman Brendan Tom Byrne Jr. said at the time the investment doesn't violate any state rules and the opportunity came about after an internal search for opportunities.

Treasury spokesman Christopher Santarelli said in March that investment decisions are based "solely on the merits and performance of the proposed fund."

KSL Capital Partners invests in real estate and leisure businesses and had attractive returns, according to a Treasury Department memorandum recommending the investment.

Investments like the one in KSL Capital might never materialize though had the Legislature's bill becomes law.

But Byrne said the measure would be burdensome for Division of Investment staff, who profile companies before bringing them to the council for review, and could result in the state selling off assets because they violate the measure's prohibition.

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