Press Releases

Release Date: December 15, 2006

SIFMA Files Lawsuit To Protect Privacy Of Connecticut Children And Spouses

Connecticut Campaign Finance Law Requiring Publishing Names of Children and Spouses on Internet is Unsafe and Unconstitutional

SIFMA Appeals for Safety and Privacy and New Solution to Serve Public Interest

Contact:
Jeannie Bunton, 202-216-2067

WASHINGTON, D.C., -- The Securities Industry and Financial Markets Association (SIFMA) today filed a complaint and motion for preliminary injunction in U.S. District Court (D. Conn.) to stop the state from publishing the names of the spouses and dependent children of state contractors on the State Election Enforcement Commission’s Internet site on December 31, 2006, as required by the state’s campaign finance reform law.

This law, if fully implemented forces executives and managers of state contractors to reveal the names of their spouses and dependent children and even affects contractors and their families who live out of state.

Moreover, the name of the child would be linked to the names of both parents and the place of business of at least one—making it easier to identify the dependent child and his or her surroundings.  As a result, anyone with Internet access could gather the names of five-year olds playing in the backyard, middle schoolers waiting at the bus stop, or 20-year olds away at college. 

 “While we support the goal of Connecticut’s campaign finance statute, there are more narrowly tailored solutions that would achieve the same result,” said SIFMA General Counsel Ira Hammerman.  “SIFMA filed suit to protect the identity, privacy and safety of thousands of children and spouses.  The law as it currently stands is unworkable, unsafe, and unconstitutional.”

Though the Internet is a powerful tool for public disclosure, very real danger can result from the availability of personal information on the Web.  The Federal Children's Online Privacy Protection Act, the FBI and the Connecticut Department of Education privacy policy all warn against publishing information about children on the Internet.

Based on these concerns and warnings, some employees of state contractors are refusing to provide the names of their spouses and children for the purpose of publishing them on the state’s Web site, presenting their companies with a terrible choice: either choose not to comply with the law and refrain from providing substantial valuable services to the state or fire those employees who insist on trying to protect their families.

The Connecticut Business & Industry Association, which represents about 10,000 businesses statewide, filed an affidavit in support of the SIFMA litigation.  Joseph F. Brennan, CBIA’s Senior Vice President for Public Policy, stated, “Our members do not believe that exposing spouses and dependent children to potential harm by placing their names and addresses on the Internet is a necessary component of campaign finance reform. The court should stop the posting from going forward until the legislature has another chance to look at this.”

“SIFMA’s strong desire is to work with Connecticut officials to find a solution that is both in the public interest and consistent with the goals of the new campaign laws. However, given the December 31, 2006 deadline and the fact that the Connecticut General Assembly does not come back into session until January 2007, SIFMA had no choice but to file suit and seek a preliminary injunction on behalf of its member firms that provide vital municipal bond underwriting, financial advisory services, and asset management services to the state,” said Hammerman.

The law defines state contractors as those who have contracts valued over $50,000, either with the state, or a state agency, such as construction or manufacturing companies, healthcare providers and educators.  No other group has similar disclosure requirements under the Act.  For example, lobbyists, who likewise face a contribution ban, are free to interact with the state without having to sacrifice the privacy and security interests of their family members by turning the names of those individuals over to the state for publication on a Web site. 

In the suit, SIFMA argues that both Connecticut’s campaign finance reform disclosure requirement as it applies to spouses and children, and the provision banning spouses and dependent children from making campaign contributions, are unconstitutional under the First and Fourteenth Amendments as they deprive individuals of their constitutionally-protected rights to privacy, to freedom of association, to equal protection, and to free speech.

“SIFMA and its members have and will continue to support reasonable laws aimed at curbing abuses that have been associated with state contracting and political contributions,” Hammerman added. 

For example, SIFMA’s broker dealer members are already covered by contribution bans as they relate to the Connecticut State Treasurer, as well as contribution restrictions imposed by the Municipal Securities Rulemaking Board’s Rule G-37, which prohibits children and spouses of contractors from serving as a conduit for campaign contributions.

Visit http://www.sia.com/ct_lawsuit/ to find the legal complaint, and other resources on this issue.

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The Securities Industry and Financial Markets Association brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members’ interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong.