(Reuters) – Former New York City Mayor Michael Bloomberg on Thursday said he is considering entering the race for the 2020 U.S. Democratic presidential nomination, raising questions about how he would disentangle himself from his business.
former New York City Mayor Michael R. Bloomberg arrives at Gala Dinner on the occasion of the World Mayors Summit in Christiansborg in Copenhagen, Denmark October 10, 2019. Ritzau Scanpix/Martin Sylvest via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. DENMARK OUT. NO COMMERCIAL OR EDITORIAL SALES IN DENMARK.
Bloomberg, 77, is the controlling owner, chief executive officer and founder of Bloomberg L.P, a financial information and media firm. Forbes ranks Bloomberg as the eighth richest American with an estimated worth of $53.4 billion.
The following explains how Bloomberg walled off his fortune in the past during his years in elective office and the structures some politicians have used to minimize conflicts of interests.
During Bloomberg’s 12 years as mayor he recused himself from day-to-day management of his company but reserved the right to weigh on major strategic decisions. He did not divest himself of holdings in Bloomberg LP.
Bloomberg suggested last year in an interview with Radio Iowa that he would either place his stake in the company in a blind trust or sell it if he became president.
Federal law does not prohibit the president from being involved in private business while in office, even though members of Congress and lower-ranking executive branch officials are subject to strict conflict-of-interest rules.
Unlike earlier presidents, President Donald Trump has maintained ownership of his real estate company, the Trump Organization, in an arrangement that watchdogs say poses conflicts of interest.
Trump’s businesses were moved into the Donald J. Trump Revocable Trust, an umbrella entity controlled by his oldest son, Donald Trump Jr., and a business associate, Allen Weisselberg. The president is the sole beneficiary of the revocable trust and can withdraw money from it at any time.
A lawyer for Trump said during a January 2017 news conference that the president would not be involved in the company’s management and would only know of its deals if he heard about them through the news media.
U.S. Senator Mitt Romney of Utah disclosed a fortune of around $250 million when he ran for president in 2012. Earlier in his career, when Romney became the governor of Massachusetts, the former private equity executive placed his assets in a structure known as a blind trust. Under such an arrangement, an independent adviser is in charge and the owner has no say or knowledge in how the assets are managed.
During the 2012 campaign, Romney was criticized for having a friend and longtime financial adviser manage the trust. Former President Barack Obama’s campaign said this arrangement, combined with the fact that Romney had signed off on the broad outlines of his portfolio, meant the trust was not totally blind.
Romney’s campaign said that if he won he would have an outside firm manage his money.
Before Romney’s campaign, the blind trust model was used by presidents including Ronald Reagan and Jimmy Carter.
Former President Bill Clinton and his wife, Hillary, relied on a blind trust when he was in office. They liquidated the trust in 2007, when she ran for president, saying turning stock into cash would eliminate the appearance of conflicts of interest.
Instead of using a blind trust, Obama sold off stock holdings and invested in U.S. Treasury notes and index funds. Ethics expert said those bland investments did not pose potential conflicts of interests.
Reporting by Jan Wolfe; Editing by Noeleen Walder and Leslie Adler