Candidates Would Need Amnesia for Blind Trusts to Work

When he ran for governor, Ned McWherter was asked about his business interests and he said his assets were in a "venetian blind" trust. Everybody laughed.

What McWherter meant was that he owned a trucking company, a beer distributorship, and a nursing home. He put the running of these businesses in a "blind trust." But unless he developed amnesia, how could he forget that he owned a trucking company, a beer distributorship, and a nursing home? He certainly didn't intend to sell them. It doesn't take peeking through the venetian blinds to have a good sense of how business is doing.

A blind trust works when a politician has stocks and bonds and a money manager authorized to buy and sell assets. The officeholder doesn't know what stocks he owns in what companies and thus is not influenced when it comes to public policy.

But if you own a real business, especially a family business, you a.) don't intend to sell it, and b.) can't pretend you don't know you own it while in public office.

Knoxville Mayor Bill Haslam has been catching grief about his Pilot Corp. holdings; he was asked last week if he would put his Pilot holdings in a blind trust. Haslam correctly observed that he didn't see that it made much sense. As someone with a business background, he realized such a trust would be silly. Haslam's mistake is not realizing that politics is full of silly shit. Like McWherter, do it anyway. Fellow gubernatorial candidate Mike McWherter, by the way, who owns a beer distributorship, has criticized Haslam for not using a blind trust and said he would do so. Mike McWherter didn't call his a "venetian blind" trust, but then he isn't as witty as his father.

The issue of Haslam not disclosing his Pilot Corp. holdings and the blind-trust question have been the storyline of the Republican primary for the last two weeks. This is partly due to the lack of other issues cropping up. The only other story has been Haslam's red-umbrella television ad. Haslam doesn't need for his personal wealth to continue to be an issue. It is a rich vein for criticism by his opponents and it finds fertile ground among bloggers and columnists looking in vain for an issue in the race.

On one hand, the continued sniping at Haslam by the other candidates indicates that he is viewed as the man to beat. I'm not sure they would agree that he is the frontrunner now, but the other campaigns do know he can spend them into bankruptcy as the campaign goes along. Recent Tennessee political history demonstrates the effectiveness of this strategy—i.e. Bill Frist, Bob Corker, Phil Bredesen et al. If Haslam's wealth and business interest is a major issue for the entire campaign, the more he spends the more he can be criticized.

But criticism of a rich candidate for spending his money is usually offset by the effectiveness of an ad blitz. Bredesen and Corker were criticized for spending millions of their personal wealth in the final days of their campaigns, but the spending resulted in winning the election.

Haslam was also backed into a corner recently and said he would recuse himself on any issue that involved Pilot Corp. I assume he meant an issue like Pilot trying to locate a travel center at an interstate exit or some such. But it opened the door for his opponents to take the statement literally, and Congressman Zach Wamp asked how a governor can ignore issues involving gas taxes, beer sales, tobacco sales, and lottery tickets—the profit centers of convenience stores.

Haslam needs to find some way to defuse the issue. A blind trust would be a start. Reporting at least something about his Pilot holdings. Explaining exactly what he means by recusing himself. But most of all, he needs to go on the attack, find other issues, and change the subject.

Unless Haslam goes on offense, he is going to need more than a red umbrella to protect him.