Lockyer taps ex-banker to head state bond sales

California Treasurer-elect Bill Lockyer on Monday chose a former De La Rosa & Co. investment banker to take charge of handling bond sales for the state, which is the largest issuer of tax-free municipal bonds in the U.S.

Paul Rosenstiel, 56, was picked by Lockyer to direct the treasurer’s public finance unit. Rosenstiel managed the San Francisco office of De La Rosa, a Los Angeles-based municipal bond underwriter, until last year, when he left to become the policy director for Steve Westly’s unsuccessful Democratic primary campaign for governor.

Lockyer’s decision places Rosenstiel in charge of selling the record $43 billion of bonds approved by California voters last month to raise funds for construction on roads, waterways and other projects. The bonds were approved as voters also elected Lockyer, currently the state’s attorney general, to replace fellow Democrat Phil Angelides as treasurer.

De La Rosa was in the news last month amid controversy over the city of Los Angeles’ decision to award the firm a chunk of a bond sale for a new police headquarters.

The City Council backed the sale of $500 million in bonds with a select group of underwriters, including De La Rosa, overruling the advice of the city’s top administrator that taxpayers would do better with competitive bidding for the bonds.