New Jersey Gov. Chris Christie vetoed legislation that would have expanded the scope of restrictions on political contributions made by money managers doing business with the $77.1 billion New Jersey Pension Fund, Trenton.
The legislation also would have required greater detailed disclosure of fees paid to investment managers.
The veto, issued Monday, affected a bill that would have added national organizations, national committees and out-of-state organizations to the political-contribution restrictions that now affect political committees and political organizations inside New Jersey.
In addition, the legislation would have required the State Investment Council to issue quarterly reports about fees charged by investment managers. The council develops policies for the Treasury Department's division of investment, which manages pension fund investments.
Identifying individual fund managers and their fees “will put the state in a disadvantageous position relative to other institutional investors who require no such disclosure,” Mr. Christie wrote in his veto message. “As such, many of the premier fund managers may elect not to continue a relationship with the state if their confidential fee arrangements will be made public.”
Mr. Christie rejected the political contribution wording of the legislation as unnecessary. Investment managers hired by the state “are also subjected to stringent disclosure requirements regarding their political activity including federal and state restrictions that prohibit or limit the types of donations they can make to state and federal campaigns and candidates,” the governor wrote in his veto message.
“The fund managers and investment advisers already must abide by federal campaign contribution laws,” he added. “Because the federal campaign contribution laws pre-empt state law in this area, I cannot approve of such a provision.”
Mr. Christie's rejection of the bill was in the form of a conditional veto, a procedure by which a governor can veto the bill while offering recommendations to change it. The Legislature would have to approve the bill with the suggested changes and then send it back to the governor. Mr. Christie recommended the State Investment Council issue an annual report describing fees paid for certain assets classes — but not for individual managers.
State Sen. Shirley Turner, the bill's lead sponsor, said in an interview Tuesday that the governor's proposal amounted to “little more than a fig leaf” and that he stripped the most important parts from the legislation.
“I would rather accept an outright veto than accept” a bill containing his recommendations, said Ms. Turner, a Democrat, adding that she will see if there are enough votes in the state Senate and Assembly to override Mr. Christie's veto.