John Kerry: No Blind Trusts, Tax Avoidance, and Conflicts of Interest
Senator John Kerry (D-MA), the richest member of the United States Senate and one of the most senior members of the debt super committee, is seen as an advocate for raising taxes on the rich, echoing the Obama administration. But with a net worth over $230 million, Kerry and his wife -- whose $1B net worth dwarfs her husband’s -- over the years have avoided millions of dollars in taxes through a complex web of inherited trust funds. Last year alone they earned about $4.8 million for which they paid no taxes.
Moreover, the Kerrys haven’t placed any investments into a blind trust, as recommended for avoiding conflicts of interest. They also have numerous stock investments in companies standing to benefit from Kerry’s voting for bailouts and ObamaCare.
According to the Center for Responsive Politics (CRP), the 12-member super committee, charged with cutting the national debt $1.5T, “by and large, are far wealthier than the average American.”
Leading the pack, financially speaking, is Senator Kerry, whose net worth is estimated to be $239M (averaging the latest available estimated minimum and maximum values from CRP). This is about 2,500 times the average American’s net worth of $96,000.
John Kerry is a descendant of the Winthrop-Forbes family. John Winthrop “founded the Massachusetts Bay Colony in 1630 and served as governor.” The Forbes family dates back to the mid-18th century, when Reverend John Forbes moved to Boston from East Florida. Winthrop-Forbes trust accounts cover seven pages of Kerry’s latest available financial disclosure report. Kerry inherited all his wealth: Excepting his $174,000 senatorial salary, Kerry’s income comes from “publicly traded assets and unearned income sources.”
Kerry’s wife Teresa inherited husband H. John Heinz’s fortune when he died in 1991. In 2008, Forbes estimated her net worth at $1B. Her “H.J. Heinz III Marital Trust” and “Heinz Family Investment Bond Fund” cover nine pages of Kerry’s financial report, comprising 178 municipal bond investments worth an estimated $78.8M ($61.0-$96.6M), earning about $4.8M last year in tax-free income ($4.7M-$5.0M).
On July 23, 2010, the Boston Herald reported that Kerry berthed his new $7M yacht in Rhode Island, which had repealed its “Boat Sales and Use Tax.”
Sen. John Kerry, who has repeatedly voted to raise taxes while in Congress, dodged a whopping six-figure state tax bill on his new multimillion-dollar yacht by mooring her in Newport, R.I. [emphasis added]
A week later, Kerry explained that he “always intended to pay taxes in Massachusetts” and “mishandled the public furor over his decision to dock the vessel in tax-free Rhode Island.” His decision was partially motivated to forestall a potential tax evasion investigation by the Massachusetts Department of Revenue.
Recently, Kerry said “difficult choices will be made in Washington in the future” and “cuts should be properly balanced by new revenue sources.” Herein lies the focal point, because “new revenue sources” is bureaucrat-speak for solving the budget crisis through increased taxes.
But Kerry’s actions to avoid personal taxes are only one aspect that conflicts with his qualifications to help resolve America’s financial crisis.
In their attempt to derogate Congressman Darrell Issa for allegedly using his position to further his own business interests, the New York Times promoted the criteria that representatives should place their investment portfolio into a blind trust, which Issa hasn’t:
Most wealthy members of Congress push their financial activities to the side, with many even placing them in blind trusts to avoid appearances of conflicts of interest.
Kerry’s financial report contains no reference to blind trusts. Dan Auble of CRP concurs, noting that blind trust owners would have the “Qualified Blind Trust column checked in the Part III/Type of Income section.” This column isn’t checked once among the hundreds of Kerry’s (and Teresa’s) itemized investments.
The New York Times also derogated mixing one’s business interests with policies promoted in Congress:
[Issa’s] pro-business policies usually align closely with those of the firms he has worked with in his wide-ranging business career both before and after he joined Congress.
John and Teresa have numerous investments in the businesses and industries that stand to benefit from favorable legislation Kerry has voted for in recent years.
Kerry voted for the Emergency Economic Stabilization Act of 2008. Also known as Troubled Asset Relief Program, it authorized the “Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system.”
During this time, Kerry owned and traded in stocks of numerous banks receiving government bailout money: Bank of America, Bank of New York Mellon, Citigroup, JP Morgan Chase & Co, State Street Corp, U.S. Bancorp, and Wells Fargo. Teresa also owns stock in many of these banks, worth an estimated $2.6M ($1.6-$3.5M).
Between 2003 and 2009, Kerry’s financial transactions included 61 purchases and sales of the above mentioned banking stocks; 50 of them occurred in 2009, containing 36 purchases estimated at $1.3M ($.75M-$1.8M).
Kerry has also owned and traded stocks of many insurance, medical, and pharmaceutical companies while voting for the Patient Protection and Affordable Care Act, aka ObamaCare.
In 2009, Forbes reported that pharmaceutical companies were “expected to pour as much as $150 million into advertisements supporting the reform effort.” Because of changing regulations and business models, Pharma expected to benefit from ObamaCare.
The American Medical Association also supports ObamaCare, citing the need to “increase health insurance coverage substantially for the uninsured” and “implement long overdue reforms to the health insurance market.”
Kerry owned Wellpoint and UnitedHealth Group stock, but appears to have divested before ObamaCare was introduced. However, Teresa still owns over $1M in UnitedHealth Group stock, returning an estimated $75,000 (range between $35,000 and $115,000) annually in dividends and capital gains. She also owns Aflac and Metlife stock.
John Kerry owns about $122,000 in pharmaceutical and medical industry stocks ($26,000-$218,000). Teresa owns about $6.2M in these two industries ($4.4M-$8.1M), earning her about $1M in dividend and capital gains income ($0.3M-$1.6M).
While the New York Times piece on Congressman Issa may be rife with errors, its criteria remain valid. Kerry keeps none of his investments in blind trusts. He and wife Teresa own millions in stocks of companies standing to benefit from legislation Kerry voted for. While they can afford a multi-million dollar yacht, they only paid home-state taxes after exposés ran on their berthing the yacht in tax-free Rhode Island. They earned nearly $5M last year in tax-free income alone, separating them from the economic reality experienced by nearly all Americans.
Since the 12-member super committee is supposed to decide America’s financial future, data like Kerry’s highlight the continuing importance of representative government -- especially on the issue of taxation without representation -- upon which our founding principles exist.
Article printed from PJ Media: https://pjmedia.com/
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