Patterico's Pontifications


Blind Trust in Frist

Filed under: Politics — Patterico @ 7:19 am

In the context of stock funds, what does the phrase “blind trust” mean to you? Apparently, it means something different to Bill Frist.

The people who put “blind trust” in his previous explanation might be feeling tricked right about now.

20 Responses to “Blind Trust in Frist”

  1. Does Frist really believe that he is electable as President with this thing for opponents to throw at him? No matter how he explains it or how often, he can’t throw off all doubt. Even if 08 is two years away, no one will forget this or let him or the voters forget it.

    Craig R. Harnon (faf284)

  2. OT: Looks like Bloomberg needs to do a little fact checking; the linked article states: ” Frist, a heart surgeon who is the Senate’s only medical doctor…”

    Senator Tom Coburn will be surprised to hear that.

    Old Coot (2f7b84)

  3. I don’t see anything new here. Frist couldn’t make the HCA investment totally blind because he already knew he had a big stake in the family business.

    Crank (5f5694)

  4. Granted, Frist should not have used the term “blind trust.” But as the New York Times reported back in September,

    Federal ethics laws make it virtually impossible for members of Congress or top White House officials to set up trusts fully beyond their knowledge or control. While officials may choose to set up a conventional blind trust under the control of an independent administrator, ethics laws require the annual public disclosure of its contents.

    So the laws provide for the creation of special “qualified blind trusts” like Mr. Frist’s that are exempt from public disclosure. The laws strictly limit communications between the trustee and the beneficiary, but they also mandate disclosure of the original holdings and notification to the beneficiary whenever an original asset is sold.

    So the problem would appear to be more with the stupidity of the law than with any unethical behavior on the part of Sen. Frist.

    Tim K (7e41e8)

  5. Frist’s story doesn’t pass the smell test. If he wants to run for higher office, which I see as problematic, he needs to back up the explanation for his decision to sell with something a bit more satisfying.

    Directing his trustees to sell stocks shows his “blind trust” could see far enough to read the writing on the wall.

    Black Jack (9f37aa)

  6. Apart than the “blind” issue, would Frist have been insider trading or otherwise taking improper advantage of his knowledge/position? That’s what the public will find unpalatable, to say the least.

    biwah (f5ca22)

  7. Tim K has it right. That “blind trusts” aren’t really “blind” is the problem – not anything Frist did or didn’t do.

    Not that I have any love for Frist but in fairness to him this is just the way the law is set up from what I’ve read.

    Dwilkers (a1687a)

  8. Frist should have known better than to appear on Meet the Press yesterday too. I’ve never seen a politician look so nervous and defensive answering questions. If he can’t lie better than that, he has no business being in politics.

    Psyberian (1cf529)

  9. “I’ve never seen a politician look so nervous and defensive…”

    Apparently you missed “Splash” Kennedy yesterday. He should have known better than to compound his ugly misbehavior at the Alito Hearings with an equally deranged and incoherent rant in the full Senate.

    Republicans, however, were delighted.

    Black Jack (d8da01)

  10. I’ve already addressed why Sen. Frist was aware of what was happening with his trust — the law required that he be kept informed about that. As to the question whether Sen. Frist relied on insider information or otherwise did anything unethical, the following is from a WSJ editorial on September 26:

    Mr. Frist has said he first requested legal advice about selling his HCA stock in April to avoid any hint of future conflicts, and received Ethics Committee approval. If he did indeed ask for advice in April, this would have been before even HCA would have forseen earnings trouble. April would also have been a smart time to sell, with the company’s stock up 40% for the year.

    If this account is accurate, and I have seen nothing to indicate that it isn’t, I fail to see what Sen. Frist has done that is unethical.

    Tim K (7e41e8)

  11. Tim,

    You make a good case, however, your assumption HCA couldn’t have foreseen earnings trouble in April isn’t necessarily so.

    It might be informative to know if other insiders were also active during the same time period. Of course, if Senator Frist were a Democrat, he’d be in the clear, but as GOP Senate leader he’s going to be held accountable to higher standards.

    Black Jack (d8da01)

  12. Black Jack, that is a laugh. When you’re guilty as hell, just claim discrimination. I thought conservatives opposed affirmative action?

    That said, Tim K makes a good point that Frist is not obviously guilty, but the WSJ editorial doesn’t say much that would exonerate him. Frist had access to far more info than “oh look, April’s turning out great, why not sell now?”

    And realistically (though not legally), the burden is on him to some degree to show that he wasn’t acting on info that foresaw the larger trajectory of the stock.

    And though I won’t prejudge him, it’s impossible not to notice that he seems nervous.

    biwah (f5ca22)

  13. biwah, you make my point:

    That “realistic though not legal” burden on Frist does to some degree show he’s subject to a higher standard. But, you say you won’t prejudge him, not even after doing so in your opening sentence. There you have it, the Left’s application of affirmative action for GOP leaders.

    BTW, Justice Stevens is 86. Does that make you even a tiny bit nervous?

    Black Jack (d8da01)

  14. Black Jack, the burden is not contingent on his party affiliation. It’s contingent on his selling an assload of stock at a very opportune time when a lot of non–insider stockholders were left in the lurch.

    It’s politics, not a criminal case, so the measure of his defense is not legal standards but perception. Didn’t realize it was necessary to explicitly point out this distinction, which I can explain further if you’d like.

    biwah (f5ca22)

  15. Frist is a train wreck. It boggles the mind that your caucus can’t come up with someone more effective.

    Geek, Esq. (5dd2be)

  16. So Dingy Harry is your candidate for Mr Effective? LOL

    Black Jack (d8da01)

  17. Reid is the Minority leader.

    Geek, Esq. (5dd2be)

  18. Yes, I know, he’s my Senator. What’s your point?

    Black Jack (d8da01)

  19. “It boggles the mind that your caucus can’t come up with someone more effective.”

    Mine too. But it boggles even more that the whole group irrespective of party are such a bunch of clowns don’t you think? They’re all so damn dumb its embarrassing. How the hell do they get elected?

    Pick one. How about Patty Murray? You mean to tell me Murray is an example of the state of Washington at its finest? Puh-lease. I’ve got a basset hound that’s got more sense than she does.

    The Senate is an embarrassment right now. Nunn, Moynihan, have been replaced with the likes of Hagel and Boxer. Talk about the lowest common denominator.

    Dwilkers (a1687a)

  20. The good ol’ days for me will be when it was Dole and Mitchell on their respective sides.

    Geek, Esq. (5dd2be)

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