Spouses of PM and Cabinet hold stocks of publicly traded companies.

[driveway]

Should spouses of the PM and Cabinet Ministers be expected to move their finances into blind trusts in order to prevent conflict-of-interest with their elected spouses?

http://www.ottawacitizen.com/busines...354/story.html

A Citizen review of asset statements filed by MPs shows that Harper’s wife, Laureen, as well as the spouses of Finance Minister Jim Flaherty, Labour Minister Lisa Raitt and five other cabinet ministers currently hold investment accounts unencumbered by blind trusts.

Flaherty’s wife, for example, holds shares in a chartered bank that is currently awaiting her husband’s approval to acquire another bank.

In most cases, the names of the stocks owned by cabinet spouses are not known publicly.

...

According to the prime minister’s disclosure statement, Laureen Harper’s portfolio with the investment firm Raymond James Ltd. is “partly comprised” of publicly-traded companies.

Harper himself lists no stock holdings, suggesting that the couple’s financial investments are made in her name.

...

Harper, then-opposition leader, was particularly critical of [former PM Paul] Martin’s arrangement, saying, “A blind trust should be a deaf trust as well,” and vowing in the 2005-06 election campaign to end the practice.

[Slava]

I don't know about the federal government, but provincially MLAs have to provide full information on what they hold and they can be ordered to make changes if there are potential improprieties. I would imagine that the same type of restrictions are in place federally.

To be honest, I'm not sure why anyone would knowingly put themselves in these positions though? It would obviously be politically devastating if for example they held shares in Progress Energy and approved the sale, or bought shares this morning only to reverse their stance on the sale next week. You would have to be incredibly short-sighted to think it would work and that it would be a good idea.

[Agamemnon]

If it's legal I don't see the 'legal' problem... morally its a disaster though, no idea what they are thinking. Obvious conflicts of interest.

[GP_Matt]

As long as it is transparent then I don't have a problem with it.John Kerry's wife owned a large chunk of Heinz and it doesn't make sense that she would have to divest the asset if her husband was elected. But because it is transparent they should know that any decision made that affects their shares will be scrutinized quite closely and they will be held to account if they abuse it. I would think that it might fall into the realm of insider trading if they bought Progress this morning before reversing the decision.

I agree with Slava though in that I would not want to put myself in that position if I were elected. I would probably convert everything to very broad ETF's and similar products that aren't heavily weighted in any one company or sector.

[Slava]

Originally Posted by GP_Matt

As long as it is transparent then I don't have a problem with it.John Kerry's wife owned a large chunk of Heinz and it doesn't make sense that she would have to divest the asset if her husband was elected. But because it is transparent they should know that any decision made that affects their shares will be scrutinized quite closely and they will be held to account if they abuse it. I would think that it might fall into the realm of insider trading if they bought Progress this morning before reversing the decision.

I agree with Slava though in that I would not want to put myself in that position if I were elected. I would probably convert everything to very broad ETF's and similar products that aren't heavily weighted in any one company or sector.

Or get someone to manage the funds on a discretionary basis.

[FlamesAddiction]

Isn't this why people get into politics in the first place?

[Canehdianman]

Due to my job, I know inside information on dozens of publicly traded companies. It doesn't mean that I can't own shares in those publicly traded companies (in fact, I own shares in several of them).

What it does mean is that I must be aware of insider trading regulations and cannot allow my ownership to compromise my professional obligations with regards to each company.

I don't see why it would be any different for a MP.

If they run afoul of insider trading laws, then they should be charged (just like I would be).

[Slava]

Originally Posted by Canehdianman

Due to my job, I know inside information on dozens of publicly traded companies. It doesn't mean that I can't own shares in those publicly traded companies (in fact, I own shares in several of them).

What it does mean is that I must be aware of insider trading regulations and cannot allow my ownership to compromise my professional obligations with regards to each company.

I don't see why it would be any different for a MP.

If they run afoul of insider trading laws, then they should be charged (just like I would be).

Its not quite the same thing though. The information they have is one thing, but the decisions that they make can be the influencing factor. Its one thing to have seen the financials today that are due to be released tomorrow, but a whole other thing if you are making the call on a deal and own shares in the firm.

[Azure]

It should be fully transparent, and there should be rules to follow in terms of insider trading and such.

Question is, are they being transparent about it?

[Canehdianman]

Originally Posted by Slava

Its not quite the same thing though. The information they have is one thing, but the decisions that they make can be the influencing factor. Its one thing to have seen the financials today that are due to be released tomorrow, but a whole other thing if you are making the call on a deal and own shares in the firm.

That's a good point, but I don't think it's reasonable to not allow MPs to own shares of public companies at all.

Perhaps a governance policy that states they cannot sell or buy shares of a company that is currently, or expected to be, under review?

[Slava]

Originally Posted by Canehdianman

That's a good point, but I don't think it's reasonable to not allow MPs to own shares of public companies at all.

Perhaps a governance policy that states they cannot sell or buy shares of a company that is currently, or expected to be, under review?

Well ya, that would be sensible. I guess what I think is that this most likely already exists. I know that it does in Alberta and surely there is something federal as well.

[MoneyGuy]

Originally Posted by FlamesAddiction

Isn't this why people get into politics in the first place?

With very rare exceptions, the only good politicians are municipal politicians.

[Azure]

Originally Posted by Canehdianman

That's a good point, but I don't think it's reasonable to not allow MPs to own shares of public companies at all.

Perhaps a governance policy that states they cannot sell or buy shares of a company that is currently, or expected to be, under review?

Or perhaps once they become public servants, all their stocks and holdings are transferred to a government program that looks after all their interests for them. Once they retire they can look after it themselves.

[Rerun]

What if my job was to manage my family's stock portfolio and thats how I made my money (kind of like Milt Romney). My wife decides to go into politics. Now all of a sudden my job is taken out of my hands?

How far would you go with this policy? Should politician's adult children, along with the spouses, be included too?

Perhaps a better way is if there is a perceived conflict of interest the spouse that is in politics should excuse themselves from any discussion or decision making with regards to that.

[Slava]

Originally Posted by Rerun

What if my job was to manage my family's stock portfolio and thats how I made my money (kind of like Milt Romney). My wife decides to go into politics. Now all of a sudden my job is taken out of my hands?

How far would you go with this policy? Should politician's adult children, along with the spouses, be included too?

Perhaps a better way is if there is a perceived conflict of interest the spouse that is in politics should excuse themselves from any discussion or decision making with regards to that.

Well the adult child would be discretionary management, so its a non-factor. Bottom line is that people with inside information can't be sharing it so that other people are making investment decisions on said information. I have no doubt it happens, but I haven't seen evidence that suggests our current government has been involved in any way. I think that those who read my posts in the political threads recognize that I would be all over them if I could find a reason!

[Azure]

Originally Posted by Rerun

What if my job was to manage my family's stock portfolio and thats how I made my money (kind of like Milt Romney). My wife decides to go into politics. Now all of a sudden my job is taken out of my hands?

How far would you go with this policy? Should politician's adult children, along with the spouses, be included too?

Perhaps a better way is if there is a perceived conflict of interest the spouse that is in politics should excuse themselves from any discussion or decision making with regards to that.

If the only thing you're doing is managing your family's stock portfolio, either you're very rich to begin with, or you're managing a very rich portfolio. If you're any good with it to begin with, you won't have a problem finding a different job, and if not, well the government is doing your family a favor by taking the job away from you.

Either way, I agree with Slava. There is too much of a conflict of interest. I'm sure this is especially a problem in the US when so many of the politicians are controlled by lobbyists.

[driveway]

It is most emphatically not being done transparently.

In most cases, the names of the stocks owned by cabinet spouses are not known publicly.

...

Harper’s office refused to say which stocks his wife’s portfolio contains, or whether any of them are among the Alberta energy companies whose future performance could depend on upcoming cabinet decisions about pipeline policy and Chinese investment in the oilsands.

...

Effectively, Canadians must trust there is nothing in these portfolios that could clash with their spouses’ public duties or, if there is, that they wouldn’t act on any cabinet confidences their husbands or wives let slip.

[Azure]

Harper and his family come from Calgary, and own a house there, right? Hard to think that they're not involving financially with SOME energy companies.

I see a direct conflict of interest because of that. Sadly, I doubt anything will be done about it.

[Canehdianman]

Originally Posted by Azure

Harper and his family come from Calgary, and own a house there, right? Hard to think that they're not involving financially with SOME energy companies.

I see a direct conflict of interest because of that. Sadly, I doubt anything will be done about it.

You don't get to imply (not infer) a relationship you can't prove and then express dismay at the existence of this 'problem'.


I doubt that Harper owns so much of one company's stock that it is material to him to risk his political career to aid it in ways he wouldn't aid any Canadian company.