Blind trusts urged for leaders' stocks

Published November 30, 2006

TALLAHASSEE - The Florida Commission on Ethics wants to require the governor and four other statewide elected officials to put their stock holdings in a blind trust before taking office to avoid potential conflicts of interest.

No such requirement currently exists in Florida. The proposal is a result of an ethics case involving Tom Gallagher, the elected chief financial officer who ran for governor in 2006.

"This would take away the presumption of a conflict of interest," said Norman Ostrau, a Fort Lauderdale lawyer and former legislator who chairs the ethics commission. "The germination of this was the Gallagher issue."

Gallagher faces a possible fine for buying stock in two firms regulated by his office while he was insurance commissioner in 2002. The ethics commission found probable cause in July that the longtime Republican officeholder violated state law in both cases.

Gallagher has rejected a proposed settlement of the case, and a trial before state administrative law judge Barbara Staros is scheduled for Jan. 19.

Messages left Wednesday with Gallagher's spokeswoman and attorney were not returned.

The St. Petersburg Times reported in January that Gallagher used an online brokerage account to manage a personal investment portfolio that at times included stock of companies regulated by the Cabinet.

The blind-trust idea first won the preliminary support of ethics commissioners at a meeting in March. The initial suggestion came from Mike Carr, a Naples lawyer who contributed to Gallagher's campaign for governor. The proposal is likely to be formally endorsed Friday when the nine-member commission adopts a set of ethics reforms to put before the state Legislature in 2007.

A draft of the proposal notes that it would apply to the governor, lieutenant governor and three elected Cabinet members: the chief financial officer, attorney general and agriculture commissioner. It says no official may attempt to influence management of the assets, and the trustee must be a disinterested party who is not a relative of the official, a public official or an appointee to a state agency.

Ostrau said he worries whether the idea will gain enough support from legislators to pass. He said ethics reforms often become controversial in the Legislature, and he noted that no ethics proposals are among House Speaker Marco Rubio's 100 ideas for improving government in Florida.

Sen. Mike Fasano, R-New Port Richey, said he will sponsor the blind-trust legislation in the regular session that begins in March.

"It's a great idea and it is needed," Fasano said. "Everything needs to be transparent."

Jeb Bush has kept his investments in a blind trust throughout his eight-year career as governor, and has suggested that other elected officials do the same.

Steve Bousquet can be reached at bousquet@sptimes.com or 850 224-7263.