Should high gov't officials be allowed conflicting financial interest?

News from Thailand concerns ex-PM Thaksin who used his governmental power egregiously to build profits at his own companies. We like to think this couldn’t happen in the U.S.A.

But is that true? While Rumsfeld was Sec’y of Defense, he held millions of dollars worth of stock in Gilead Sciences, which then sold about $2 billion of Tamiflu to the U.S. military! (Rumsfeld allegedly recused himself from this purchase decision.) Gilead has since issued a statement:

Dick Cheney had a big financial interest in Halliburton, which in turn had a big financial interest, due to no-bid contracts, in the Iraq War of 2003-2008. Cheney continued to draw a Haliburton salary and saw his Haliburton options increase in value by over $10 million in 2005, despite saying “I have no financial interest in Halliburton of any kind” on Meet the Press in 2003. Perhaps his excuse is the same as Thaksin’s: when you’re fabulously wealthy it’s hard to keep track of where every nickel and dime is invested!)

Even those who think Rumsfeld and Cheney are noble patriots with no motive but defending freedom might agree such conflicts appear wrong.

I would say such situations should not be permitted. Perhaps high officials should be required to place any large assets in a blind trust. Salaries could be raised to compensate partly for the financial sacrifice caused by such blindness and, anyway, if a would-be Cabinet Secretary lacks the altruism or patriotism to serve despite some financial sacrifice, I, for one, might not want him to serve.

That’s not actually true. Cheney had sold his Haliburton stock upon becoming vice president and put all his investments in a blind trust. A blind trust is a trust, usually used by politicians to avoid conflict of interest, where the trust is managed entirely by a manager. The person in whose name the trust is has no knowledge or control of where the money in the trust is.

Cheney did have Haliburton options, some of which matured when he was vice president, but he signed an agreement, called a “gift trust agreement”, saying that the trust administrator should exercise the options at some future date, and give the profits to charity…in particular, 40% to the University of Wyoming, 40% to the George Washington University Medical Center, and 20% to Capital Partners for Education, a charity that helps poor students in Washington DC go to private or religious schools.

As for the salary, he did receive a salary from Haliburton when he was VP, but not for the time when he was Vice President. Cheney was part of a deferred compensation program, and he chose to take the salary he had earned in 1999 and have it paid to him over five years. Cheney also received a bonus for his work in 2000, which obviously couldn’t be paid to him until 2001.

Thanks to Factcheckfor providing this information.