Wednesday, 17 May 2017

Venetian Blind Trusts

Venetian Blind Trusts

By: Ryan Young

It was revealed during estimates in the House of Assembly on Tuesday that the establishment of the premier’s blind trust left the taxpayers of Newfoundland and Labrador on the hook for $42 900. This little tidbit came up when opposition members were questioning the government on expenses within the premier’s office, in particular, the amount that was listed under professional services.

Finance Minister Cathy Bennett was quick to point out that this is a long-established practice and provided a few details on the process. Any minister of the crown that has dealings that may be in a conflict of interest with the government must put their business holdings in a blind trust. The minister's work with the Chief Electoral Officer to establish the correct parameters regarding the blind trust and they approve any expenses that are deemed satisfactory. The minister pays for the expenses but is later reimbursed by the government and the cost is absorbed through their respective departments as “professional services.”

In this time of belt tightening it was surprising to hear that we pay for the establishment of these business trusts. Unfortunately, this is not the first time that blind trusts in this province have come under scrutiny. I’m sure that most of you are already thinking about the controversy surrounding the blind trust of former premier Danny Williams. While Williams was running the province, his blind trust (managed by his son-in-law) acquired 550 acres of land from the NL Housing Corporation at rock bottom prices. While no wrongdoing was ever proved, the situation did raise the issue of blind trusts in the public eye.  It is also worth noting that Williams took well over a year to put all his holdings in trust.

More recently, Dwight Ball was questioned on why it took him so long to establish his blind trust. Questions of conflict of interest first arose in April 2016 surrounding Ball’s stake in the senior’s residence, Sundara. By July, the trust had been established, but Ball had some curious comments for reporters who asked him for details:

“It’s called a blind trust for that reason.” Said Ball “And so the advice that I’ve been given, that the blind trust people that actually manage that — there’s a reason why it’s called a blind trust. For me to actually remove myself from my business interest, and put two people there that I would then publicly announce, would, I guess, the advice that I was given was, I guess, it wouldn’t be blind anymore, would it?”

It might have been nice if Ball had actually taken the time to look up the definition of a blind trust:

“A financial arrangement in which a person in public office gives the administration of private business interests to an independent trust in order to prevent conflict of interest. Under the trust, the owner does not know how the assets are managed.

Being a “blind” trust has absolutely nothing to do with who knows who is managing the business interests and the fact that the premier didn’t know this is alarming. During the election campaign in 2015 Ball committed to being open and transparent when asked about blind trusts and promised to do whatever was necessary to strengthen legislation regarding conflicts of interest. Ball holds interests in at least 16 companies, several of which have involvement with government, which is why it is essential that he adheres to the guidelines outlined in legislation. Some people agree with the practice of using blind trusts, while others firmly believe that all government members should have to divest themselves of any business interests that put them in a conflict of interest before sitting in the legislature.

It is very hard to believe that a husband or a cousin or a son in law would be able to properly keep business dealings hidden and that no conversations will occur at family dinners or get togethers.
While most people would agree that blind trusts are necessary to keep business dealings at arm's length from ministerial duties, many people feel they are little more than see-through “venetian blind trusts,” that sound good, but are not very effective at accomplishing their main goal or instilling confidence in the public that no back-door deals are being done to benefit business interests.

Back to the main point at hand, while it is great that Ball and his ministers have been able to get their holdings into their respective blind trusts, the fact that the taxpayer must foot the bill for the establishment of these trusts should be an outrage to the people of Newfoundland and Labrador. I’m sure that if Premier Ball wants to retain his business holdings, that the expenses related to establishing and administering his trust should be his responsibility. Nobody should begrudge the premier or any other minister for any success they have had in their personal careers, but when they made the choice to run for public life they should have accepted the costs of establishing their respective trusts as the cost of doing business.

After nearly a year and a half of hearing Dwight Ball talk about our dire financial situation, learning that we paid $42 900 to establish his blind trust is beyond bad optics. Ball spent over $200 000 out of his own pocket during the Liberal leadership campaign in 2013 but the overburdened taxpayer is expected to pick up the tab for his blind trust? It doesn’t sit well with this blogger and I’m willing to bet that it is not going to sit well with very many voters when the information gets out to the public.

While this may have been acceptable behaviour in the past, this government has made it very clear that times are tough and things need to change. Maybe before they close any libraries or raise any more fees they should look at how much money is being spent on absurd entitlements like this on the taxpayer’s dime. If Dwight Ball really wanted to be a leader, he would lead by example and pay back the $42 900. Anything less is an insult to all of the people who are being burdened with over 300 new taxes and fees and being told that we all need to do our part.

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