Reid Follows Frist, Sets Up Blind Trust
Senate Minority Leader Harry Reid (D-Nev.) is placing all of his assets into a blind trust, saying his new position of authority prompted him to seek out a way to avoid any questions of impropriety.
Reid, who was worth at least $2 million at the end of last year, is setting up a financial arrangement akin to the one being run by his counterpart, Majority Leader Bill Frist (R-Tenn.), whose decision to tell his trust to sell stock from his family’s hospital chain has prompted a dual-track federal investigation.
While the paperwork has not been finalized on Reid’s trust, the Minority Leader said that having a financial arrangement in which he wouldn’t know which stocks or other publicly traded assets were being bought and sold would avoid any appearance of conflict on his voting and leadership decisions.
“Just to avoid somebody raising an issue,” Reid said Thursday, explaining his decision.
Reid said he already had begun the process of establishing a blind trust when asked about the propriety of Frist’s sale of HCA Inc. stock just before it dropped by nearly 10 percent.
Reid defended Frist’s actions.
“I know he wouldn’t do anything intentionally wrong,” Reid said of his counterpart.
Reid, who has spent most of his life in public service, immediately distinguished his net worth from that of Frist, whose family started the hospital chain and has been millionaires for decades in Nashville.
“I don’t have the resources he has,” Reid said.
Still, the Nevadan has assembled a large number of holdings — including a chunk of stock in HCA, the company at the center of the investigations by the Securities and Exchange Commission and the U.S. Attorney for the Southern District of New York.
Ironically enough, Reid has profited off the Frist family’s fortune in the past. On April 6, 2004, Reid sold between $1,001 and $15,000 worth of HCA stock, leaving him with less than $1,000 worth of the stock as of Dec. 31, according to financial disclosure reports filed with the Secretary of the Senate.
Reid also invested in another company founded by a colleague, Kohl’s Corp., the department store chain once run by Sen. Herb Kohl (D-Wis.). On the same day he sold HCA stock, Reid also sold off a similar amount of Kohl’s stock, leaving him with less than $1,000 in the department store.
Potentially subject to greater conflicts are Reid’s holdings in companies that have major issues before the federal government, including defense manufacturer United Technologies, Wal-Mart, Freddie Mac, Microsoft, Pfizer, General Electric and Citigroup.
Reid served for many years on the Senate Ethics Committee, most recently as the panel’s top Democrat, a post he yielded once he became Minority Leader.
That rise to the top leadership post is what prompted Reid to decide that he should hold himself to a higher ethical standard and place his assets in the blind trust, said spokesman Jim Manley.
Reid said that once he places all of his holdings into the trust, he’ll no longer know what is bought and sold — a job that will fall to a yet-to-be-designated trustee.
“The trustee makes all the decisions,” he said.
The ethics committee must still approve the final dimensions of any blind trust established by Reid.