CHICAGO – Gov. Bruce Rauner, perhaps the wealthiest officeholder in Illinois history, said just before taking office last week that he had set up "blind trust procedures" to shield himself from conflicts of interest with the extensive portfolio of investments he holds.
But the wealthy Republican did not set up a blind trust, instead granting administrative power over much of his money to an investment adviser with whom he can share financial information, the Chicago Tribune reported Thursday.
Experts say the plan is not as rigorous as a blind trust. A blind trust would have required Rauner – while remaining the beneficiary – to transfer his wealth to an independent trustee who would not disclose how the money is handled.
Instead, he gave power of attorney to handle his investments to Roundtable Investment Partners, in which Rauner is an investor. He said all financial information would bypass him and go to Roundtable and he said Roundtable would provide him only with minimal information necessary to complete disclosure documents.
"Generally, a blind trust is supposed to insulate the government official from information and any involvement in the decisions regarding his or her investments," said Larry Noble, senior counsel with the Campaign Legal Center, a Washington-based ethics monitor. "It does not work if the (adviser) can share info with the official prior to making investments or get the official's input into what investments should be made."
A true blind trust would be prohibited by Illinois ethics law, which requires officeholders to annually disclose their major holdings.
Rauner spokesman Lance Trover said the governor used the term "blind trust" to suggest the safeguards he was seeking. It is not "feasible" for Rauner to use a true blind trust under ethics law, said Trover, who noted it could also block a politician's assets from public scrutiny.
"This is the strongest possible structure that both established blind trust procedures and allows the Rauners to fully comply with the state's economic disclosure laws moving forward," Trover said.
Rauner, a private equity investor, earned more than $60 million in 2013 and estimates his net worth at more than $500 million.