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Martin Dyckman: Blind trusts protect the politicians, not the taxpayers

If the Legislature decrees that two plus two equals five or that water runs uphill, does that make it so?

A similar question is percolating in the Florida courts.

Does a blind trust constitute “full and public disclosure” of the financial interests of a public official?

Common sense says no. A law passed in 2013 says yes.

And so said a circuit judge in upholding the law. His decision is being appealed to a higher court.

According to this law, an official who puts assets into a blind trust he doesn’t control becomes immune to any charge of conflict of interest.

What’s more, the official “will not be influenced or appear to be influenced by private considerations.” (Emphasis supplied)

It’s one thing for the “wisdom of the Legislature” — a term that politicians, lawyers and judges say with straight faces — to whitewash a politician’s self-serving actions in office.

But the public can and will decide for itself how that looks.

The badly written law is more about protecting politicians than perfecting their ethics.

Florida’s Constitution requires legislators, governors, and all other constitutional officers to file “full and public disclosure of their financial interests” when they become candidates and then annually. It calls for the details of what they own and what they earn.

It’s part of the “Sunshine Amendment” ethics initiative that Gov. Reubin Askew took to the people in 1976.

The language left an opening for the Legislature to tweak the specific requirements — but not to weaken them.

That’s what it did in 2013, in a comprehensive ethics package –Senate Bill 2 — that also put some teeth into the penalties for failing to disclose.

A statewide grand jury and the Florida Ethics Commission had called for a blind trust law. Senate Bill 2 passed without a dissenting vote. Even Askew, who died this year, had praised the pending legislation to Senate President Don Gaetz.

But what look like splendid solutions often create new problems. The devil in this one really is in the details.

The public official knows what goes into the trust and chooses who will manage it. While close relatives and some others are barred, the trustee could legally be a long-time lawyer, CPA or financial adviser who is a personal friend and knows the official’s investment strategy without needing to ask.

And if the trust turns a profit from the trustee capitalizing on the official’s conduct, no one need ever know. The assets must be disclosed to the public only when they go into the trust, not after. Nothing would have to be reported but the annual total income and net worth of the trust.

The law falls far short of the federal law on blind trusts, especially with regard to penalties – none — and the trustee’s actual independence.

“It’s really not a blind trust. It’s more like a removable blindfold,” says Dan Krassner, executive director of Integrity Florida, a non-profit watchdog. (Disclosure: I’m a former member of its board of directors.)

Phil Claypool, a former general counsel and executive director of the ethics commission, says the Legislature weakened the commission’s recommendations.

The result is “like a magic cloak,” he said. “Nobody knows what you did with it. You can hang onto it until you leave office, convert the assets, and liquidate the blind trust. You conceal all that conflicting activity from the public, but you know what’s there.”

At Tallahassee, Circuit Judge John C. Cooper took as fact that the official setting up the trust would not know what’s in it. He didn’t acknowledge the loopholes or the toothlessness.

Moreover, he overlooked what Askew had in mind in 1976. It wasn’t simply to discourage conflicts of interest, but to earn the public’s confidence in its government. Concealed assets hardly encourage confidence.

Jim Apthorp, who had been Askew’s chief of staff in the battle to pass the Sunshine Amendment, filed the suit and is appealing Cooper’s decision to the First District Court of Appeals.

Secretary of State Ken Detzner is the nominal defendant, but the real party in interest, many think, is Gov. Rick Scott. He’s the only official currently maintaining a blind trust.

But there will certainly be others.

The only realistic deterrence to conflict of interest is for the public to be able to see when a public official is feathering his or her nest. By definition, blind trusts prevent that.

Martin Dyckman is a retired associate editor of the Tampa Bay Times. He lives near Waynesville, North Carolina. Column courtesy of Context Florida. 

 

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