For two decades, municipal securities dealers have been subject to Municipal Securities Rulemaking Board (“MSRB”) rule G-37 which bars them from receiving state and local business for two years after certain political contributions are made by the dealers and individuals affiliated with them.  Earlier this week, the MSRB advanced amendments to rule G-37 that would expand its reach beyond dealers to include municipal advisors and those associated with municipal advisors.

When Congress passed the Dodd-Frank Act in 2010, it granted the MSRB broad authority to regulate “municipal advisors,” individuals and companies that provide advice to municipalities regarding municipal securities and products.  In connection with that authority, the MSRB this spring proposed, and submitted for comment in August, new regulations that would extend its pay-to-play laws to include municipal advisors.  The proposed regulations, which the MSRB has now advanced to the SEC for approval, make municipal advisors and individuals associated with them subject to the same pay-to-play restrictions applicable to municipal securities dealers.  Under the proposed amendments to G-37, municipal advisors may not engage in municipal advisory business with a municipality within two years after a political contribution to certain municipal officials is made by the municipal advisor, certain employees and individuals associated with the municipal advisor, or their political action committees.  Similar provisions restrict the ability of these individuals and entities to solicit others to make political contributions to municipal candidates and state or local party committees.

The proposed rule now goes to the SEC, where the SEC will decide whether to publish the proposal for additional public comment.  In the meantime, municipal advisors would be well-advised to begin the process of preparing pay-to-play compliance policies consistent with these proposed rules.

Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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