Chris Christie addresses an audience during a his birthday celebration in September 2014.
Photo by Matt Rainey—Getty Images
By Dan Primack
November 26, 2014

Yesterday I appeared on WNYC’s Brian Lehrer Show to discuss several issues related to the New Jersey state pension system, including pay-to-play allegations and the recent resignation of investment chief Bob Grady. Near the end of the interview, Lehrer asked if I agreed with my fellow guest — David Sirota of the International Business Times — that New Jersey Gov. Chris Christie may have difficulty raising presidential campaign donations from Wall Street investment firms and their executives (assuming, of course, that he decides to run).

I said that I did, based on Securities and Exchange Commission pay-to-play rules. Lehrer then tweeted out:

Some listeners emailed to ask why this would be the case, given that presidential campaign contributions would go to a federally-focused political committee, as opposed to the state-focused committee where Christie could have influence over pension investments. Moreover, the contributions would, in effect, be aimed at relocating Christie from Trenton to Washington, D.C.

The answer can be found in a lengthy document published by the SEC, which foresaw such a scenario. It says:

Under our rule, as proposed, a candidate for federal office could be an “official” under the rule not because of the office he or she is running for, but as a result of an office he or she currently holds.150 So long as an official has influence over the hiring of investment advisers as a function of his or her current office, contributions by an adviser could have the same effect, regardless to which of the official’s campaigns the adviser contributes. For that reason, we are not persuaded that an incumbent state or local official should be excluded from the definition solely because he or she is running for federal office.

Even if Christie were to immediately resign as governor in order to focus on the campaign, his appointees to the state investment council would likely remain. As such, the pay-to-play prohibition would still be enforced on those contributing to a “Christie for president” committee.

To be sure, there are plenty of investment managers who have never, done business with the New Jersey state pension system, nor ever intend to. But this is an $81 billion system that features scores of investment managers from just about every imaginable asset class. Christie would be unable to solicit funds from many of them, putting him at a competitive disadvantage against potential GOP primary rivals (save for Rick Perry, who would have similar difficulties) and presumptive Democratic Party nominee Hillary Clinton.

This issue will not be the reason Chris Christie does, or doesn’t decide to run for the White House. But it’s certainly got to be part of the math.

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