The last milestone in CalSTRS' efforts to enact state regulations restricting campaign contributions to board members was passed Monday, October 29, when the state Office of Administrative Law filed the regulations with the Secretary of State.

The regulations, which become effective November 28, 2007, underscore CalSTRS' commitment to continue to operate at the highest ethical level, and seek to guard against the appearance of "pay to play" on investment decisions.

The regulations:

• Restrict campaign contributions to board members and the Governor to no more than $1,000 individually or $5,000 in the aggregate for a twelve-month period;
• Require board members to recuse themselves when such a campaign contribution is received; and
• Disqualify a party in violation of the regulations from engaging in future or additional business with CalSTRS for a period of two years.

The board first approved proposed regulatory language last December. Hearings followed and written comments were received from members of the public, including the business and investment communities. The regulations then made their way through the Administrative Procedure Act rulemaking process.

CalSTRS is the first public pension fund in California to pursue ethics reform of this scope.