(by Ameli Berksman)

Commerce Bancorp Inc., one of the fastest-growing U.S. banks, faces NASD investigation over the possible breach in use of political donations.

Commerce stopped bond sales for municipalities only after two bankers were charged with making favorable loans to former Philadelphia Treasurer Corey Kemp having steering municipal deposits to Commerce and taking out a $30 million line of credit in return.

“If they’re doing these things in the industry that are known as pay for play, we want to look at it,” said William Horn, a senior compliance officer in Philadelphia for NASD, a self-regulatory agency.

In the course of investigation, NASD asked current and former employees if anyone at the bank’s municipal unit solicited contributions, also discussed what candidates would receive the donations, and if donors were told where their money was going.

Actually, some of the donations from the federal PAC were loaned back to the state committee and then driven to local candidates, they say.

39 current and former municipal bankers, traders and salespeople at Commerce Capital Markets, Commerce Bank’s public finance division, donated $191,450 to the bank’s federal political action committee within the period of 1999-2003. Due to the state records, PAC spent $136,700 on federal candidates and loaned $126,338 back to the bank’s state PAC.