Wednesday, June 20, 2007

Hillary Clinton's Blind Trust Revisited Again

When asked at a January 1996 press conference about the Money magazine report which implied that the Clintons "were nearly broke,” 2008 Democratic Presidential Candidate Hillary Clinton’s husband answered that “I suppose that that probably is right” and “I’ve never added it all up, but that’s probably right.” Yet when asked by Downtown/Aquarian Weekly to respond to reports that the Clintons were now “broke,” a source at Boston Harbor Trust (the trustee of the Clintons’ blind trust stock portfolio) initially replied that it was “highly unlikely” that the Clintons were broke in 1996 and characterized the Clintons as “one of our accounts.”

When Boston Harbor, a subsidiary of United Asset Management’s Pell, Rudman & Co., was appointed trustee of the Clintons’ blind trust in July 1993, the value of the Clintons’ blind trust portfolio was nearly $1.2 million. Although, according to the Encyclopedia of Banking and Finance, “the trustee” of a blind trust “must be empowered to make investment decisions independent of any consultation with or control by the interested parties,” the Clintons—not their Boston Harbor trustee—decided to have Essex Investment Management begin managing this $1.2 million blind trust portfolio in July 1993; following a May 1993 consultation with Essex Investment head Joseph McNay at the White House in which McNay talked with Hillary Clinton “about his investment philosophy,” according to the Boston Globe (8/31/93).

Among the assets contained in the Clintons’ “blind trust” when Essex began managing their stock portfolio were the following: AT & T; Bell Atlantic; Bell South; NYNEX; TCBY Enterprise, Wal-Mart Stores; Liz Clairborne and Box Energy Stock; Louisiana and Arkansas state bonds; individual retirement accounts in the Janus Fund, the Strong Opportunity Fund and the Charles Schwab CEF Government Money Market Fund; and partnership interests in Value Partners I Ltd.

After United Asset Management’s Pell, Rudman & Co. subsidiary, Boston Harbor Trust, was appointed trustee of the Clintons’ blind trust in July 1993, the Boston Globe (8/31/93) noted that the United Asset Management-affiliated firm would “handle bookkeeping and asset transfers” and would “file returns and financial reports for the Clinton blind trust.”

Coincidentally, in its Jan. 17, 1994 issue, the New York Times reported that “United Asset Management, close to…J.P.Morgan & Co. in asset size, is a little-known financial giant” and “under controversial accounting approaches…included in President Clinton’s tax package, United Asset can completely write off the cost of its acquisitions.” The Times also noted that “this means United Asset gets to reduce from taxes the amount it spends to buy money management firms;” and, “as a result of this tax break, has an enormously powerful cash flow.”

Ironically, according to United Asset Management’s 1994 Annual Report, the owner of the trustee of the Clintons’ blind trust had its “federal income tax returns for the years ending Dec. 31, 1984 through 1992…under audit by the Internal Revenue Service.”
(Downtown/Aquarian Weekly 2/14/96)

In his book The Great Whitewater Fiasco, Martin Gross noted that while her husband was governor of Arkansas, former Rose Law firm partner Hillary Clinton “was very active financially, dabbling in a whole range of money instruments to make the family fortune;” and “bought oil-drilling partnerships that generated tax deductions, which she took, along with deductions for playing the market with losing stock index futures.” In addition to earning $203,000 a year as a Rose Law firm partner in 1992, the 2008 Democratic presidential candidate also “was taking in $64,000 a year just for serving on the board of such Arkansas-based giants as Wal-Mart and TCBY” in 1992.

In acquiring their $1.6 million pre-Clinton White House era total fortune by combining Hillary’s role as a corporate lawyer-lobbyist in Arkansas with Bill’s role as Arkansas’ governor, “Hillary’s ongoing conflicts of interest…didn’t seem to bother either her or Bill,” according to The Great Whitewater Fiasco. The same book also noted that “With Bill silently approving, over the years Hillary became more and more obsessed with money;” and “she has been very secretive about her moneymaking schemes and has sworn her friends-in-investment to secrecy.” During the Clintons’ first two terms in the White House, the 2008 Democratic presidential candidate had “a full-time staff of 13 and an office in the Executive West Wing” and “her expenditure of taxpayer money” was “perhaps $2 million,” according to The Great Whitewater Fiasco book.
(Downtown 12/13/95)

Next: Woody Guthrie’s Post-1950’s FBI File