The SEC complaint in the JPMorgan case offers a close look at how pay-to-play works. According to the SEC, J.P. Morgan Securities Inc. and two of its managing directors agreed at the direction of certain local officials “to pay more than $8.2 million in 2002 and 2003 to, in most instances, local broker dealers.” These same officials “were instrumental in selecting J.P. Morgan Securities as the underwriter, and its affiliated commercial bank as the swap provider, on county transactions.” The local brokers had no role in the transactions and performed “few, if any services.” The “transactions” mentioned in the complaint involved a sewer revenue bond and 18 related swap deals.

What’s interesting, if you look at the SEC complaint, is that what got these JPMorgan people in hot water is not the deal per se, but the fact that it wasn’t disclosed: “J.P. Morgan Securities failed to disclose any of these payments, and the inherent conflicts of interest raised by the payments, either to the county or investors in bond offerings, or to the county in the swap agreements at issue. This conduct deprived Jefferson County and its investors of objective and impartial bond-underwriting processes and swap-agreement negotiations.” The moral failing here, the alleged corruption of public officials, is not illegal, at least not in the eyes of the federal government.

At least something happened this time. This is a national problem, but efforts to address it have been slow in coming. When Governor Bill Richardson of New Mexico withdrew from consideration for commerce secretary in January, it was revealed that he did so because of a federal investigation of pay-to-play in the municipal bond business. But this investigation has yet to bear much fruit. In one rare action that surfaced last week, a politically connected company called CDR Financial Products and two of its executives were indicted in an alleged muni bond bid-rigging scheme. In July, the SEC announced proposed regulations that would crack down on pay-to-play in the pension fund business. Among other things, the rule would prohibit a money manager from working for a government client for two years after making a campaign contribution to key elected officials or candidates. The proposed new rule has loopholes a truck could drive through, but it’s a start.

What’s needed at least as much as regulatory reform and law enforcement is awareness. Voters have to be willing to give a damn when their elected officials take campaign contributions from investment firms that do business with them. Just that very thing arose during the recent New York City mayoral campaign, when Democratic candidate Bill Thompson was the subject accused of doing just that (he denied the contributions influenced the granting of contracts), and you could hear the yawns from here to Canarsie. It was a nonissue in what amounted to practically a noncampaign.

Voters don’t care. That’s the real scandal.