Crist, Sink want assets in trusts
By JENNIFER LIBERTO
Published January 4, 2007
TALLAHASSEE — Only two of the four members of Florida’s Cabinet are following the advice of the State Ethics Commission and putting their personal financial assets in a blind trust to avoid conflicts of interest.
Gov. Charlie Crist and Chief Financial Officer Alex Sink are setting up trusts, which will manage their money while they handle statewide matters that often directly affect the financial well-being of private companies and landowners.
But Agriculture Commissioner Charles Bronson doesn’t plan to use a trust and Attorney General Bill McCollum remains undecided.
The Ethics Commission made its recommendation last year after it was revealed that then-Chief Financial Officer Tom Gallagher was investing in insurance companies while he served as state insurance commissioner.
The commission suggested that the use of trusts, in which the owner surrenders direct control over his or her assets, would free officials to make decisions without knowing how it might affect them personally.
Securing assets in blind trusts has been a common practice of elected officials for some time, and has gained more attention recently following a congressional season fraught with scandal. Former Gov. Jeb Bush placed his assets in a blind trust during his tenure.
Besides Crist, who has a net worth of $422,000, CFO Sink is the only Cabinet member who has so far committed to placing her assets into a blind trust. Financial disclosures list her net worth at $10-million, with several hundred thousand dollars in stocks and mutual funds.
Sink had vowed during the campaign to establish this trust and feels strongly that “this is the way to go,” said her spokeswoman, Tara Klimek.
By contrast, Commissioner Bronson has not placed any of his assets in a blind trust, on the grounds that he “already has fully disclosed ad nauseam,” said his spokesman, Terry McElroy.
Bronson’s net worth is about $5.9-million, mostly in real estate, with about $500,000 in banking stocks. Bronson says he’s following the law and adds that he has recused himself from Cabinet business if he thought a conflict could arise.
Attorney General McCollum also doesn’t have a blind trust for his assets of about $1-million, including about $175,000 in stocks, but is “reviewing all of his assets to determine if placing them in a blind trust is appropriate,” said his spokeswoman, Sandi Copes.
McCollum supports legislation that would require statewide elected officials, like himself, to put their assets in blind trusts.
Blind trusts carry a price. The officials give up the right to control how their investments are managed, and they also have to pay an attorney and a financial trustee to set up and maintain the trust.
Trustee fees can be a small percentage of the value of the holdings in the trust, said Ward J. Curtis Jr., chief executive of Sabal Trust Co. in St. Petersburg. (On a $10-million dollar trust, the trustee management fee could be anywhere from $75,000 to $150,000.)
But that money can be seen as “reputation” insurance, said Edmond M. Ianni, senior vice president for Millennium Wealth Management in Delaware, which sets up blind trusts for public officials and corporate executives.
“If the situation comes up and there is an innocent coincidence of a sale of a stock right before bad news comes out, and it looks like he was saving himself, there is reputational damage of being brought through the headlines,” Ianni said. “None of that would have come about if blind trusts are used.”
Sen. Mike Fasano, R-New Port Richey, has two bills this year requiring the Cabinet to submit to blind trusts.
“Perception means a lot and plays a big role,” said Fasano, who sponsored a similar bill last year. “If we can take out any type of perception that there’s any conflict, we should do that.”
[Last modified January 4, 2007, 20:39:06]
[an error occurred while processing this directive]