Blind Trusts: Not Illegal but potential National Security Risk

Salome with the Head of the Baptist by Caravaggio

Blind Trust: “A trust in which the executors have full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust. Blind trusts are generally used when a trustor wishes to keep the beneficiary unaware of the specific assets in the trust, such as to avoid conflict of interest between the beneficiary and the investments.” (Source: investopedia)

What are the implications of this sort of Trust and, should a politician and, above all, a presidential candidate invest in a blind trust?

A blind trust can have two implications:

1. The executors of the trust take the beneficiary’s money and invest it in a pool of investment used to laundry money belonging to Hezbollah, Hamas, Al-Qaeda or even Iran. This would basically mean that a politician/presidential candidate could be, in fact, sponsoring terror activities against the nation it serves/runs to serve and protect.
2. Since the beneficiary of a blind trust cannot be held accountable for the manner in which his investment grows (e.g. if one day the authorities find out that the beneficiary’s investment served the purpose of laundering money for drug cartels or terrorist groups, he will not be liable and will avoid being accused of jeopardising National Security), what could be the sense of ethics of the individual who seeks to avoid being held responsible for his own investments?

Presidential candidate Mitt Romney has been under fire because of his offshore accounts and the reluctance to publish his tax returns (even though, in the American case, it is not required by law). Everything has been said about the offshore accounts and if I were Mitt Romney’s team I’d do something about those tax returns because, politically speaking, the situation does suggest lack of transparency. However, Mitt Romney may have committed political suicide when he stated that his assets are held in a blind trust and that he doesn't “even know where they are”…

Why may he have committed political suicide? Because,among many things, it suggests a behavioural pattern: behave in Politics as you behave in Business – if Mitt Romney would be elected and, one of the members of his administration would mess up he would not take full responsibility, as the commander-in-chief, since he could simply defend himself by saying “I didn’t even know what he/she was doing”…

Furthermore, candidate Romney may have served his head on a silver platter to his opponent: imagine if someone traces his investments and discovers that his money was injected in investment pools used to circumvent financial sanctions against Iran (for instance)?

Mitt Romney’s Blind Trust could very well go from betting against the dollar to betting against America…