John E. Petersen, a member of the Municipal Securities Rulemaking Board, professor at the George Mason School of Public Policy and a highly regarded expert on the municipal bond market, died April 4 of a heart attack. He would have turned 72 on May 5.
John made many significant contributions to the public finance industry throughout his career,” said MSRB Chair Alan D. Polsky. “We were honored to have him as a member of our Board of Directors.”
“John was a giant in the municipal bond market,” said Robert Doty, president of AFGS in Sacramento, who formerly was general counsel to the Government Finance Officers Association. “For four decades, he was the leading economist analyzing the municipal market and he was continuing that work until he died.” His recent research showed the default rate of municipalities during the Great Depression was far lower than previously thought and was mostly due to bank failures, Doty said.
“He helped convert the municipal market into the sophisticated market that it is today,” said Bart Hildreth, a professor in the Andrew Young School of Policy Studies at Georgia State University in Atlanta and editor of the Municipal Finance Journal. “He’s got fingerprints all over the municipal area.”
“There is no one that I know who understood public finance or the municipal market as well as John Petersen,” said Jeff Esser, executive director and chief executive officer of the GFOA.
“You never saw John without a twinkle in his eye and a ready smile, and no matter how crazy a question you asked him about the municipal market, he would get you the answer. You can’t say that about many people,” said Frank Shafroth, director of the Center of State and Local Leadership and an assistant professor at George Mason, as well as director of legislation at the Municipal Securities Rulemaking Board. “He’s a big factor in the market we have today.”
“John always kept on the cutting edge of municipal finance,” said Richard Ciccarone, a managing director and chief research officer at McDonnell Investment Management.
“John was in the catbird’s seat from the beginning,” Hildreth said. Mr. Petersen started out as a capital markets economist at the Federal Reserve Board where he followed the muni market and, according to Hildreth, studied whether tax-exempt munis should be replaced with taxable bonds that would be directly subsidized by the federal government.
From 1970 to 1973, he was director of public finance for the Securities Industry Association, the predecessor of the Securities Industry and Financial Markets Association, where he worked on establishing industry-wide standards for bond underwriting and trading. He left the SIA to open a Washington, D.C., office for the Municipal Finance Officers Association, later renamed the GFOA. Mr. Petersen had tremendous credibility because he had worked for the federal government, the industry, and the state and local governments, Hildreth said.
At the GFOA, Mr. Petersen played a major role in Congress’ establishment of the MSRB and helped lawmakers write the Tower Amendment, which bars the Securities and Exchange Commission and the MSRB from requiring issuers to file bond documents with them before selling. Doty said Mr. Petersen recently had begun exploring the limitations of the amendment.
Doty credits Mr. Petersen with writing GFOA disclosure guidelines that “revolutionized disclosure practices in the municipal market” and helped bring the municipal bond market back to life after New York City’s financial crisis.
In 1976 and 1977, Mr. Petersen was director of the Center for Policy Research and Analysis for the National Governors Conference. He then became senior director of GFOA’s Government Finance Research Center for 14 years. For many years he produced an annual report on the fiscal condition of cities and states that was published by the Joint Economic Committee in Congress. When President Ronald Reagan proposed a budget that inadvertently would have done away with tax-exempt bonds, Mr. Petersen helped turn administration officials around by showing them how it would adversely affect federal facilities, Shafroth said.
Jeff Green, former general counsel for the Port Authority of New York and New Jersey, remembers Mr. Petersen helped kill a tax provision that would have hurt the muni market by convincing lawmakers the revenue losses to the federal government would be far greater than estimates.
Mr. Petersen in 1992 founded the Government Finance Group, a consulting firm that provided financial advisory and research services here and overseas. From 1998 through 2002, he was a division director at ARD/Government Finance Group. He joined George Mason University in January 2002.
He had a bachelor’s degree in economics from Northwestern University, a master of business administration degree from the Wharton School at the University of Pennsylvania, and a doctorate in economics from the University of Pennsylvania.
He is survived by his wife Mary, children, and grandchildren.
The funeral will be held on April 13 at 11:00 am at Truro Church, 10520 Main St. in Fairfax, Va.
There will be a reception afterward at the Petersen home, which is at 3936 Chain Bridge Rd. in Fairfax, beginning at 1:00 pm.
The George Mason School of Public Policy is hosting a webpage — http://www.currents.gmu.edu/ — for mourners to share condolences.
The Petersen family is establishing a public policy lecture series on finance at Mason in memory of John. Donations to the George Mason University Foundation for the series will be accepted online at give.gmu.edu. Donors should note that their gift is in memory of John Petersen.