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Congresswoman Norma Torres

Representing the 35th District of California

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Torres Bill Brings Accountability to Wall Street Firms That Invest in Fire and Ambulance Services

September 15, 2016
Press Release

WASHINGTON, DC – Today, Rep. Norma J. Torres (D-CA) introduced the 911 Emergency Services Protection Act to hold Wall Street firms accountable when they invest in local emergency services companies.

 

“If a private equity firm decides to invest in an emergency service company, they also take on the responsibility to provide those services to the level our communities expect,” said Torres.  “Unfortunately, that doesn’t always happen, and the consequences can be tragic.  This is why I introduced legislation to make sure there is transparency and accountability when Wall Street firms decide to invest in these vital community services.”

 

The 911 Emergency Services Protection Act requires investment advisers who advise private funds that own a controlling interest in an emergency services company to disclose to the Securities and Exchange Commission (SEC) the average response times of emergency vehicles deployed in response to 911 calls.  Specifically, they would be required to report the change in average response times since the fund acquired a controlling interest and the percentage of response times that do not meet requirements set out in the contracts between local governments and emergency services companies.  If response times are failing to meet contractual requirements, equity fund advisers will have to provide an explanation as to why times are failing to meet requirements and how this has impacted emergency services in the community.

 

“When it comes to responding to an emergency, there is no margin for error, and under absolutely no circumstances should profit come before saving lives,” continued Torres, who served as a 911 dispatcher for 17 years.  “My bill doesn’t prohibit private equity funds from investing in emergency services or place restrictions on how they choose to invest, but it does provide reassurance to residents that when they call 911, their lives won’t be put at risk because their local fire or ambulance service needs to turn a profit.”

 

According to a June 26th New York Times article, since the 2008 financial crisis, private equity firms have invested in growing numbers in emergency services companies, in some cases with disastrous results.  The article reported slow response times and mismanagement to the point that emergency service companies claimed their parent companies were not able to pay salaries or restock critical supplies.

 

Last week, Torres introduced similar language as an amendment to H.R. 5424, the Investment Advisers Modernization Act of 2016.  It was supported by 176 Members of Congress.  The text of the bill can be found here.

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