The Not So Blind Trust
The Not So Blind Trust
“It’s always been a matter of trust”
-Billy Joel
One of the most important positions in the world is the Majority Leader in the United States Senate.
It’s only a few steps from Majority Leader to President. Lyndon Johnson made it. Bob Dole and others tried.
Current Majority Leader Bill Frist has his eye on the White House. He may be looking at a stay in the big house instead.
Frist is from an incredibly rich family. His father and brother founded Hospital Corporation of America (HCA), the nation’s largest hospital chain. Senator Frist disclosed that he is worth somewhere between $7 million and $35 million.
You won’t find him in the line to get a payday loan.
Like many rich people, he owns stock that can make or lose money because of decisions the government makes.
Most wealthy senators, including Frist, put their money in something called a “blind trust.” They turn their money over to someone else and not supposed to know how it is invested.
I know a lot about blind trusts. One of my friends ran for Governor of Kentucky several year ago and asked me to manage his blind trust if he won.
If I ran through the money, he wouldn’t find out until he got out of office.
I was honored but stressed. I would have been responsible for him and his family. If I screwed up, his kids did not go to college.
He lost the election but his children will be well educated.
Jimmy Carter did a really stupid thing with his blind trust. He put Billy Carter, his beer swilling, red neck brother, in charge.
Jimmy lost re-election and found that Billy’s shrewd money management caused Jimmy to be broke and heavily in debt. Jimmy had to start writing books to get out of hock.
Frist does not have Carter’s problem. His family knows how to handle money. The question is whether they know tricks that hurt the public.
Two possible scandals have erupted for Senator Frist. The first is that the Senator and HCA are being investigated by the Securities and Exchange Commission and the Justice Department for possible insider trading.
Senator Frist was able to sell its HCA stock right before it dropped 15%. The Senator was either tipped off or incredibly lucky.
Insider trading is the same thing that Martha Stewart went to jail for. She went for chump change. If found guilty, Frist would be looking at a serious sentence.
Company executives have to sit tight when they have information that the public doesn’t know about. People will not buy stocks if they think the market is rigged.
Friends of Frist say he would not have done something illegal because he is rich. He does not need the money.
ANYONE accused of insider trading is rich. It is a crime committed by wealthy stockholders and their friends at the country club.
You don’t see people on food stamps being accused of insider trading.
When the Justice Department stops by HCA to drop off a subpoena, things are very serious.
Especially since the leaders at Justice were appointed by Frist’s close friend George W. Bush.
Insider traders have to be stupid as technology makes it easy to catch them. If HCA did wrong, we will know.
A bigger concern is that Frist’s blind trust had a seeing eye dog, Senator Frist himself.
Numerous documents show that Frist kept a close eye on his money. He was actively involved in many of the “blind” trust decisions, including the one to dump the HCA.
The blind trust seemed to have 20/20 vision.
Along with being greedy, Frist might be a liar.
In a 2003 television interview, he said that “as far as I know, I own no HCA stock.” Two weeks before that interview, the trustee had given Frist an update on the HCA stock he owned.
Frist is in a position that effects every American. Forget the fact that he is dying to be President, he has a huge amount of power right now.
He can use it to help us or use it to line his pocket. If he is going to stay a United States Senator, he needs to show that he is obeying the law.
It is a matter of trust.
posted by Don McNay @ 1:48 AM
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