"We need an immediate ban on third-party marketers," writes Joe Torsella, newly chosen Pennsylvania Treasurer candidate for the Democrats, citing the latest Inquirer revelations on predecessor Rob McCord's corruption case, in which McCord reportedly tried to help prosecutors by recording conversations confirming cash-for-contracts deals with state investment managers and other service contractors.

After previous scandals, public funds in New York, California and other states have banned private investment managment contractors from paying marketing reps, or "placement agents," to help win deals managing public pension funds. Philadelphia pension director Fran Bielli says the city doesn't approve of marketing payments either.

But SERS and PSERS, the Pennsylvania state workers' and state school employees' retirement funds, allow the use of placement agents.

For example, last year, SERS says, placement agents at Credit Suisse assisted a fund called Primavera Capital II, which was awarded state business; agents at TransPacific worked with manager Francisco Partners IV, which SERS hired; Eaton Partners aided ADV Opportunities Fund I; Park Hill Group aided Clearlake Capital IV; Compass Group/NH Investments & Securities worked with Blackstone Capital VII; Brooklands Capital helped Ridgemont Equity II.  Park Hill also represented Denham Commodity Partner Fund VI and Clearlake Capital IV when they were hired by PSERS.

What do these placement agents do for their money? Three years ago former Phillies star Larry Christenson told me a little of what he did to earn millions as a placement agent. Christenson's clients included a New York firm, Arden Asset Management. The state paid Arden $20 million to pick hedge funds from 2006-12, and Christenson was paid 20 percent of that to help land the state as a client.

As I wrote here in 2013: "Christenson rubs elbows with Pennsylvania movers and shakers. Last June, Christenson cosponsored a fund-raiser for NHS Human Services, a Philadelphia-based, multistate social service agency for "special-needs" people, headed by ex-state Sen. Joseph Rocks, a longtime member of the SERS board that hires managers such as Arden. (Rocks was paid more than $1 million a year to run NHS and its affiliates. He has since retired.)

"I asked Christenson whether sponsoring events for SERS trustees' charities helped his clients get hired. 'This world is run with relationships,' Christenson told me. 'People like to do business with people they like. We comply with every single rule and regulation,' he added obliquely. 'We aren't paying to play.'"

After Caspersen's arrest, Christenson told me he never met the accused, and added, "We do things absolutely to the book." Unlike some rivals, his firm isn't a registered investment advisor, which he said could create conflicts of interest, but just "a solicitor and a placement agent," and a "consulting business. We help make our managers better" so they can land more business. "It's no longer just doing business with good old boys." Used to be "politicians had their hands out. It's wrong." He didn't provide examples of specific wrongdoing.

How much do placement agents collect? Used to be, up to half of money managers' fees, according to early 2000s records obtained by the Inquirer. Currently, "I am not free to report the details of the contracts between (an investment firm general partner) and the placement agent," said Pamela Hile, SERS spokeswoman.

PSERS officials "do not compile a tracking list of placement agents that are being used by all of the funds," said spokeswoman Evelyn T. Williams. "While funds may use placement agents for introductions and marketing, PSERS's decision to invest or not invest in a fund is based on a very complete and detailed due diligence process. Placement agents are not involved in that process."

The Park Hill firm, a publicly-traded company whose largest investor is billionaire Blackstone investment group founder Steven Schwarzman, collects more than $100 million a year in placement-agent fees and another $200 million plus in investor advisory fees.

Last month one of Park Hill's placement agents, Harvard Law School graduate Andrew W.W. Caspersen, was charged by federal prosecutors in New York with criminal fraud for allegedly bilking a client out of $25 million for phony investments. Caspersen was fired and is contesting the charges. Read more here.

"Nobody at PSERS has ever met Andrew Caspersen, or even heard of him before reading the article about fraud charges," Tatkovski told me. She said PSERS had instead dealt with George Eberly, one of Caspersen's colleagues.

Back to Torsella: "Pennsylvanians need to be able to trust that their money will be managed with fairness and integrity, uncompromised by conflicts of interest, political affiliation, favoritism, or other unfair considerations," he added in his statement.

"Under my administration, the days of needing to know someone to do business with Treasury will be over." He "will implement a ban on the use of third-party marketers" on Treasury accounts and will "work with the legislature and the pension boards to universally ban third-party marketers involving SERS, PSERS, and other investment funds controlled by the Commonwealth."

Torsella says third-party marketers cost taxpayers millions -- which SERS and PSERS deny, noting any marketing spending is done by money managers from their own funds, not taxpayer fees (though money is fungible; what's the difference?).

Torsella also said marketers are more likely to influence the pension funds "to possibly make investments based on political relationships rather than the appropriateness of the strategy for an investment fund."

How much is at stake? We don't know: because SERS and PSERS, these days, don't patrol how much marketers are paid, and don't make it their business to know how valuable working with state contractors may be for placement agents.