Concerned that their personal finances might become a political liability once again, Bill and Hillary Rodham Clinton in April sold the millions of dollars of stocks held by their blind trust after becoming aware that those investments included oil and pharmaceutical companies, military contractors and Wal-Mart, among others, their aides said Thursday.
The Clintons liquidated the trust — valued at $5 million to $25 million — and are leaving the proceeds for now in cash in an effort to eliminate any chance of ethical problems or political embarrassment from their holdings as Hillary Clinton runs for the 2008 Democratic presidential nomination, their advisers said. By disposing of all their stocks, Hillary Clinton was seeking to avoid potential conflicts of interest that might arise from legislation that she votes on in the Senate, as well as avoid holding financial stakes in companies and industries — like Rupert Murdoch’s News Corp., the owner of Fox News — that could draw criticism from some Democratic voters.
Clinton automatically became aware of her investments because of a government directive this spring that she, as a presidential candidate, had to dissolve her blind trust and disclose all of her assets to the public.
The decision by the Clintons to sell their stock carried a financial cost, according to their advisers and new personal financial documents made available on Thursday. The couple will owe “substantial amounts” in capital gains taxes, an adviser said, and are giving up the potentially higher returns from stocks for the safety but generally lower returns of holding their money in various forms of savings accounts.
According to the financial disclosure documents, the couple’s total net worth falls between $10 million and $50 million. Besides investments, Bill Clinton earned about $10 million in paid speeches in 2006, continuing a pattern since he left office of earning large sums through speeches and other activities in order to help pay off legal bills and cover the couple’s expenses. Hillary Clinton earned $350,025 in royalties for her autobiography, “Living History,”
The Clintons sold the stock as they prepared to disclose their holdings under government ethics rules for presidential candidates. Until getting ready to release the holdings in the blind trust, the Clintons did not know what stocks and other financial assets it contained. But the rules did not require the Clintons to sell the stock, according to their advisers.
Their decision to cash out their holdings was a reminder of their history with investments that, fairly or not, came back to haunt them politically, most notably the Whitewater real estate affair that dogged them through Bill Clinton’s presidency.
In 1993, Bill Clinton complied with federal ethics rules and created a qualified blind trust to hold and invest the family’s assets. Under the rules, public officials must disclose their assets at the time of the creation of the trust, and then hand off day-to-day management of the trust and its investments to an independent trustee. Officials who set up blind trusts are not aware of, nor do they have influence over, the investments chosen.