Why Clintons' Blind Trust Should Have Been Blind

Any Clinton White House staff member reading Barron’s (6/25/90), Forbes (8/2/93), Pensions & Investment (9/6/93) or Money (11/93) magazine or telephoning CDA Spectrum in Rockville, MD during the 1990s could have obtained a list of specific stocks that 2008 Democratic presidential candidate Hillary Clinton’s Blind Trust stock portfolio was likely to then include. Yet there were good reasons why the first Clinton Administration’s Office of Government Ethics should have insured that Bill and Hillary were actually blind to which stocks would likely be contained in their stock portfolio. As the Encyclopedia of Banking and Finance noted:

“An underlying concept is that if a government official does not know the identity of his…financial interests, his…official actions should not be subject to collateral attack by questions of conflict of interest or the appearance of such a conflict. In other words, if the government official does not know what he…owns, it is impossible for him…intentionally to take actions to benefit specifically his…own personal interests.

“Therefore, the general public policy goal to be achieved through the use of blind trusts is an actual `blindness’ or lack of knowledge by the government official with respect to the holdings held in trust…

“…The interested parties will have no knowledge of the trustee’s acquisitions; and thus the government official and the other interested parties will be truly blind with respect to these holdings…Every proposed trustee…must be approved by the Office of Government Ethics. This is essential so that the office can ensure…that the proposed trust arrangement satisfies the letter and spirit of the established standards.”
(Downtown/Aquarian Weekly 11/13/96)

After it apparently rubber-stamped the Hillary Clinton’s choice of Essex Investment to begin managing her Blind Trust stock portfolio in July 1993, the Office of Government Ethics apparently talked numerous times by phone with Essex. But in 1996 it wasn’t willing to answer many specific questions from the press about the Clintons’ Blind Trust arrangement. An Official of Government Ethics spokesperson, Norman Smith, told Downtown/Aquarian at that time:

“We’d be happy to answer general questions about our Blind Trust program. But we don’t answer specific questions of the type you ask.”
(Downtown/Aquarian Weekly 11/20/96)

After Hillary chose Joseph McNay’s Essex Investment Management firm to handle her “blind trust” in July 1993, Merrill Lynch & Company broker Robert Malloy told the New York Times (10/4/93) that Essex Investment head McNay “had 25 percent of his holdings in insurance stocks” in the early 1980s. The Times also reported that McNay “`still feels good’ about…insurance and reinsurance companies” and “is also interested in health care, especially health care management.” Coincidentally, during her husband’s first term in the White House, Hillary Clinton tried to sell us a health care reform plan that would have likely increased the value of Big Five insurance company stock (such as Prudential's stock) and health care management organization stock.

Besides apparently investing Clintons’ money in insurance company and health care management stock during the 1990s, McNay’s Essex Investment Management firm also managed a $34.8 million stock investment portfolio for Arkansas’s Winthrop Rockefeller Foundation in that decade. (Downtown 10/27/93)

The Blind Trust portfolio which Essex Investment managed for Hillary Clinton during the 1990s may also have contained Starbucks stock. When Boston Globe reporters asked Essex honcho Joe McNay “Where are you moving money right now?” in April 1996, the 2008 Democratic presidential candidate’s money manager replied:

“We continue to own…a wide variety of technology and communications stock, and a few highly specialized consumer stocks where there are strong franchises…A reasonable example of that would be Starbucks, where we think there is a strong franchise and good business.”

Next: U.S. Political Prisoner Marilyn Buck: A 1994 Downtown Interview—Part 1