Free Speech For People has filed an amicus brief in the U.S. District Court for the District of Columbia in support of the Securities and Exchange Commission’s anti-“pay-to-play” rule for investment advisers, which prevents investment advisers from receiving management fees from public funds when they’ve given political contributions to the elected officials who influence the choice of investment advisers for those funds. Our brief argues that the rules protects the First Amendment rights of public employees by preventing investment advisers from using a portion of their pension money to pay for political spending.

The SEC had been working on this rule since the 1990s, but finalized it after a “pay-to-play” scandal involving the New York City pension system. The challengers claim that it forces investment advisers to choose between either making political contributions or practicing their chosen profession.

Free Speech For People’s amicus brief notes that public pension investment advisory fees are typically drawn from the assets bought with employees’ mandatory salary deductions. When pension advisers, in the hope of receiving and retaining investment contracts, recycle advisory fees into political contributions, then public employees are forced to subsidize these political contributions. Our amicus brief argues that the government has a compelling interest in protecting public employees from being forced to support investment advisers’ political contributions with their pension money.

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