Treasurer Mark J. Saladino announced his office will no longer do business with securities brokers making political contributions to school bond campaigns. The pay-to-play policy is an attempt to prevent campaign donations from influencing the hiring of underwriters by school districts. The policy is also expected to increase competition between dealers and save taxpayer dollars.

Under the new policy, underwriters must not donate to school bond measures if they want to qualify for the treasurer’s list of investment banks and securities dealers eligible to sell county bonds. The restriction applies to monetary donations, non-monetary contributions, and pre-election services.

In statewide surveys, virtually every securities broker hired by a school district contributed to the district’s bond campaign and was retained without competitive bidding. A recent study focusing on California school bond issues found post-election fees paid to underwriters making contributions were on average $27,576 more than those paid to brokers not contributing.