Investment firm donated thousands to campaign

KANSAS CITY, Mo. -- Some critics say actions of the state Insurance Department indicate that Gov. Matt Blunt is too pro-business.

Missouri's securities regulators sought restitution from investment adviser Waddell & Reed Financial Inc. earlier this year, saying the Overland Park, Kan.-based company was selling inappropriate products to the elderly. Blunt's administration tried to block the enforcement action.

Insurance companies and their executives gave Blunt at least $30,050 in campaign contributions in the first half of the year, according to reports filed last month. More than a third of those contributions came just 10 days after the Insurance Department's action in April.

Increased contributions

Waddell & Reed and two of its executives contributed an additional $4,600 to Blunt within a month after the department's move to intervene. That was nearly three times as much as the company and its employees contributed to Blunt during last year's governor's race.

The company had no comment on the contributions, but state Democratic Party spokesman Jack Cardetti did.

"It is shocking to find out that just days after Governor Blunt protected this company that exploited Missouri investors, he had the nerve to turn around and ask them to help fund his re-election campaign," Cardetti said.

Blunt spokesman Spence Jackson denied the insurance industry received any special benefits.

The Insurance Department argued that only it had the power to regulate the investment products Waddell & Reed was selling -- even though the department had no regulations on whether variable annuities are appropriate for a particular investor. The department has since proposed such rules, but they have not taken effect. Variable annuities combine a mutual-fund investment with insurance features, such as a death benefit and tax-deferred status.

In the end, the case was dismissed when Waddell & Reed agreed to a global settlement of all variable-annuities litigation.

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On the Net:

Waddell & Reed: http://www.waddell.com

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Information from: The Kansas City Star, http://www.kcstar.com