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RALEIGH — Regulators at the U.S. Securities and Exchange Commission are due to propose new rules this week that could dramatically change the nature of campaigns for state treasurer.

The position is one of 10 statewide elected positions and is responsible, among other things, for managing a $58 billion public pension fund.

Executives and political committees associated with financial service companies make up a large number of donors to those campaigns. Some of those same companies, such as CitiGroup and Wachovia, are among those that end up landing lucrative contracts to manage investments for the pension fund.

SEC Chairman Mary Schapiro recently told Congress that her agency would propose rules to curtail what she described as “pay-to-play practices by investment advisers to public pension plans.”

A key feature of that plan would require a waiting period — two years is an often-cited figure although the plan has not been released — between the time an investment house or one of its executives made a contribution to a state treasurer and the time when they could legally hold a contract to manage that state’s money.

A hearing to unveil that rule and begin a public comment period is scheduled for Wednesday afternoon in Washington.

“I do recognize there are perceived and actual problems with this,” said state Treasurer Janet Cowell. “There’s just so much money at stake.”

Cowell’s predecessor, Richard Moore, was dogged by news reports that tied his political donors to those managing the state’s pension fund. And Cowell’s own campaign finance reports have plenty of financial players listed.

She said the proposed SEC rule would change the game for those running for treasurer.

“It would shut down all financial services donations,” she said. “No one wants to take the headline risk of making a mistake.”

The question would then become how candidates could raise money to introduce themselves to voters.

Political players and those in the campaign finance reform community say Cowell’s office is one of a number afflicted with this type of problem. They are lesser-known offices and tend to attract interest and donations mainly from those they regulate or who might seek work from them.

During the last campaign, North Carolina extended its public campaign finance law to the state superintendent of public instruction, state auditor and insurance commissioner. Candidates for those races gather a number of smaller-dollar donations and then receive taxpayer-financed money to pursue their elections.

“I’ve been working with the legislature to try to convince them that the voluntary public financing bill is the better approach,” Cowell said. But with state budgets strained because of the poor economy and lawmakers considering a tax increase, there is resistance to extending public financing beyond its current reach.

The House has passed a measure in the vein of the SEC rule. It would ban companies and their executives, including financial service companies, that are bidding on state contracts from giving campaign donations to the heads of public agencies if they are bidding on state work.

“It’s not as tough as we would have liked,” said Bob Phillips, who leads the North Carolina chapter of Common Cause. He said he would have liked a cooling-off period not unlike the two years that could be part of the SEC rule. His group also supports public financing, saying it would help avoid appearances of conflict.

“It just seems like there is a conflict when someone who is looking at doing business with the state can give or raise money for the decision maker,” he said. “Whether you’re doing it with an ulterior motive or not, it’s the perception you’re getting something for that.”

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com