January 27, 2017 •
New Pennsylvania Treasurer Bans the Use of Placement Agents for Public Contracts
The Commonwealth’s new treasurer, Joseph Torsella, banned the use middlemen to assist in connecting investment houses with public agencies.
Torsella, in his first act after being sworn in, issued a policy directive banning the continued or future use of placement agent agreements for contractors entrusted with the investment of public funds.
These placement agents are typically paid a finder’s fee for obtaining business for the investment house. Placement agents are also used to circumvent a federal pay-to-play law prohibiting investment houses from giving campaign donations.
Last year, former treasurer Pat McCord was embroiled in a bribery scandal with one such placement agent. Richard Ireland, a wealthy Chester County resident, is accused of offering McCord $500,000 in campaign donations in exchange for using his clients for investing.
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