FOR IMMEDIATE RELEASE 99-62 STATEMENT BY SECURITIES AND EXCHANGE COMMISSION CHAIRMAN ARTHUR LEVITT CONCERNING ABA PROPOSED PAY-TO-PLAY ETHICS RULE JUNE 3, 1999 "I am pleased that the ABA Ethics Committee has recommended a strong rule for adoption by the House of Delegates and hope that the House will continue to demonstrate its commitment to end pay-to-play by adopting this proposal in August. We are convinced that such measures can be implemented without interfering with cherished constitutional privileges and I am glad the Ethics Committee has found its way to agreeing with us." Pay-to-play is the practice of making political contributions to elected officials or to candidates for local office to influence the award of contracts to bring municipal bonds to market. Both municipal securities dealers and independent financial advisers have signed voluntary bans on the practice. Municipal Securities Rulemaking Board Rule G-37, in effect for five years, restricts pay-to-play activity by municipal securities dealers. Lawyers remain the only group of professionals retained to bring municipal securities to market that have failed to adopt effective proscriptions of pay-to-play. The American Bar Association House of Delegates condemned the practice of pay-to-play by lawyers at its Annual Meeting in 1997 and at last year's annual meeting, directed the Standing Committee on Ethics and Professional Responsibility ("Ethics Committee") to report to the House, by the 1999 Annual Meeting, a Model Rule addressing pay-to- play. The Ethics Committee has recommended the House of Delegates add a new Rule 7.6 to the ABA Model Rules of Professional Conduct: "A lawyer or law firm shall not accept a governmental legal engagement or an appointment by a judge if the lawyer or law firm makes a political contribution or solicits political contributions for the purpose of obtaining or being considered for that type of legal engagement or appointment." # # #