Friday, December 19, 2008

“Just (Blindly) Trust Us!”

Earlier this week the state Government Accountability Board (GAB) told Supreme Court Justice Annette Ziegler to disclose what is in her family’s blind trusts. Ziegler asked that the GAB waive the full-disclosure requirement even though it is needed to avoid conflict-of-interest, the very thing that has gotten her in so much trouble in the recent past. As a GAB board member and former judge said, Ziegler has had “problems in the past understanding” rules that guard against conflicts. One particular sign that Ziegler is still tone deaf on this issue is the fact that her brother-in-law is designated as trustee.

In her letter to the GAB board (page 37) today’s Ziegler contradicts the Ziegler of last year. In it she argues as follows:

It is a near impossibility that a publicly traded company's stock value could ever be affected by a Wisconsin court decision, and even more unlikely that the
value of a Judge's portfolio may be affected by such a decision. If there is
concern that a Judge may rule for a company because they own stock, then the
concern is associated with the notion that the Judge seeks to gain from that
ruling. As a practical matter, any such gain would be next to impossible.

It seems that in addition to missing the point, Ziegler is also contradicting her own actions from last year. At that time, as a Washington County judge and candidate for the high court, she stepped down from a Wal-Mart case because she held significant stock in the company. She only did that a month after her financial interest was revealed, but she did it none-the-less. So if she stepped off the Wal-Mart case, why does she now say that such a conflict is really no big deal? Is it because she is not running for anything now? Some might call that the same “political gamesmanship” that she also bemoans in her letter to GAB.

Annette Ziegler is not the only state elected official that should be answering questions about blind trusts. Given GAB’s ruling, we should also be watching Attorney General J.B. Van Hollen. He also put his vast array of investments into a blind trust. Will he now seek a waiver or will he fully reveal his potential conflicts to the public?

I am certainly no expert on blind trusts, but there are a few things that I would be looking for if Van Hollen would opt for full disclosure. Is most of his wealth still wrapped up in the various family businesses? Does he still own hundreds of thousands of dollars in chemical industry stock? To the extent that his financial activity would be disclosed, has he finally paid off that “$50,000 or more” loan from his father that he reported on his Statement of Economic Interests? I seem to remember that arrangement raising a few eyebrows because it happened while he was gearing up for his AG run. In any case, there are many questions that would be answered if Van Hollen simply decided on full disclosure.

In the high positions that both Ziegler and Van Hollen hold, it is critical to give the public a full view of whatever financial interests that they have and if they are prone to any potential conflicts. Thus far it seems that these two state officials are telling both the GAB and the public to “just (blindly) trust us.”

*This was originally posted to the One Wisconsin Now blog where I will be posting content until the end of the year.

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