New Rule Takes On Pay-to-Play in Muni Bonds


Sunlight has long been an advocate for not only improved transparency of government institutions but also for thoughtful transparency measures that have open data standards in mind. Today we submitted a letter to the Municipal Securities Rulemaking Board (MSRB) supporting a proposed rule change that would give voters more information about who is trying to influence bond ballot issues.

The Board is working toward improved disclosure of ballot campaign contributions by those with certain connections to municipal bonds. We applaud this step toward greater transparency on an issue that deeply impacts local governments and their constituents. Voters have a clear interest in understanding the context of the bonds approved for their communities. Investigative journalists have already used these kinds of disclosures to write stories like this one from Voice of San Diego, which exposed the trend of those who contributed to school bond campaigns receiving the contracts they spent money influencing. The improved disclosures MSRB is mandating will be available through the Electronic Municipal Market Access (EMMA) system, which is the free public platform for searching municipal bond information maintained by MSRB.

Our comments also suggest the Board consider two more steps it could take toward 21st century disclosure. First, we recommend the Board consider the benefits of moving to an XML format rather than its current document-based system. This would help make the databases more structured and the data easier to reuse and analyze. We already know the Board has these kinds of goals in mind — it talks about them in its Long-Range Plan for Market Transparency Products.

We also recommend that the board adopt non-proprietary unique identifiers for tracking companies, issuers, and securities. The current system of identifiers, CUSIP numbers, is a proprietary system owned by the American Bankers Association. Switching to non-proprietary unique identifiers would free this data and improve search functionality. Once again, it’s a recommendation that lines up with the Board’s Long-Range Plan.

These common sense additions to the MSRB’s already strong plan for public disclosure are too easy and important to be ignored, and we hope MSRB gives them due consideration.

Read more in our letter to the MSRB:

Sunlight Letter to MSRB on SR-MSRB-2013-01