IN 1999, the US Securities Exchange Commission (SEC) proposed prohibiting money managers from making campaign contributions to officials or politicians who could influence the awarding of contracts to manage public money.

Fortunately for Dr. Ewart Brown, the SEC's proposal was not enthusiastically pursued, and in 2002, he was free to accept contributions from companies eager to earn fees from the management of Bermuda's pension funds.

He was able to do so because his friend Thaddeus Fletcher had introduced Ms Tina Byles Poitevien to Bermuda's Public Finance Investment Committee (PFIC) and its chairman, Calvin White.

She was hired by the PFIC as its pension consultant, and shortly afterwards, she introduced the ubiquitous US "pay-to-play" arrangements to some of those with control of Bermuda's pension funds.

Understanding and experience of the rules of the insidiously corrupt "pay-to-play" scheme appears to have helped expand Ms Poitevien's success and influence; since 1998 it is understood that a business with fewer than five employees and a few accounts has quadrupled assets under management, consulting, "fund of funds" management and staff numbers.

Her Fiduciary Investment Services (FIS) group has three separate divisions: Fiduciary Investment Solutions is the consulting entity hired by the Bermuda committee for advice, and by other governmental entities such as Prince George's County in Maryland, from where she was recently terminated; FIS Funds Management, which selects the managers for pension funds and other clients; and Alternative Investment Solutions, the entity which was removed by the Nashville Metro area in an ethical dispute, and by the National Bank of Canada, Nashville's hedge fund manager, which also cited ethical concerns.

"When she denies that something happened to FIS, she knows that it did happen to AIS or some other subsidiary; the denials are like a shell game, if they didn't happen over here, they happened over there," said a fund management source.

"Ms Poitevien got the Prince George's County assignment in 1998 from Howard Stone, the chairman of the county executive. When he retired around 2001, he was hired by FIS.

"She continues to get new business to replace accounts like Prince George's County, because there is this network of people ? investment managers and officials with pension funds who need each other, and people like Tina Poitevien act as the 'fixer'; there are people who want to profit from their ability to affect the placement of the pension funds, like Dr. Brown, and there are fund managers who are desperate to get new funds under management.

"People like Tina set up the 'pay to play' arrangements so that the managers pay money to the politicians or officials who control the purse strings, and hope that the cheque will help buy them a piece of the action."

"Extreme pressure is put on managers to contribute, and you would find that the same people, the ones who made the contributions to those fund-raisers, would appear at almost every one of the events organised by FIS.

"Of course, no manager ever wanted to do it, but it was just understood, particularly by small managers, that if you didn't contribute, your chance of being selected was considerably reduced."

The paying guests at a lunch arranged by Ms Poitevien in Washington in 2002 may not have known, or cared, that Dr. Brown's position in Government gave him no obviously direct involvement with Bermuda's pension funds or in the choosing of fund managers; they would have understood that their cheques would help maintain Ms Poitevien's position as Bermuda's pension fund consultant, that she had recommended them to the PFIC, or might do so in future.

"Some prospective managers go to these lunches and pay and pay," a manager source reported, "and don't always get picked right away. But they are paying for access, for consideration; if they are patient, they will get their reward.

"The bottom line is that all of this comes down to having Tina Poitevien look as if she is a person of political influence, as she certainly is. She comes to the table with the ability to raise a lot of money.

"If (managers) contributed to Dr. Brown, and didn't get subsequently picked for Bermuda, perhaps because their (investment) products weren't the right fit for the Bermuda funds, they know they will have another chance. They are paying to be in the 'circle of influence'."

It is understood that some household-name fund managers, or those who are highly accomplished, may be spared the "pay-to-play" ritual, or refuse to pay, but that they are rare.

"Some managers who are considered sufficiently meritorious are out of that loop, who don't have to pay to get business, but more times than not, it would certainly assist a manager to be part of this circle of contributors.

"For example, with the Prince George's County situation, a Fire and Police pension fund of about $1 billion, there was a list of managers who were supposed to be selected, even before the research was done! Public (pension) plans are notorious for this kind of thing. For a smaller manager, the questions are ? how do you get noticed? How do you get business? How do you compete with a huge Wall Street name? You go along with this system is how. Some managers just flat refuse to do it, and want to be picked on merit, not by making contributions."

Another source questioned the size of the consultancy fee authorised by PFIC compared to Ms Poitevien's fee for the consulting to the Philadelphia plan.

"It struck me as odd that Bermuda, with fund assets of about $1 billion in 2000, was charged a fee of $500,000, when Philadelphia, then with assets of about $4 billion, paid only $285,000.

"But there seems to be a pattern here; Calvin White also directs the Hotel pension fund, which also paid Tina Poitevien a high fee for the size of that account: $50,000 a year for general consulting, rising by $5,000 per year, $15,000 per search for publicly-traded portfolios, $20,000 per search for privately-traded portfolios and $300 per hour for all other services.

"That's the trade-off here, and what makes 'pay-to-play' so dangerous. Because the politicians and public pension plan officials are being paid off, they allow consultants like Tina Poitevien to charge more than the job deserves, and allow some investment managers a piece of the action who may not have been picked purely on merit.

"This is serious, this is the management of the public's pension money."