Phil Scott’s 20-20 Trust

(This one is about two months overdue. Your Minor Heretic has been busy, alternately cajoling and hammering on large machinery. I’m happy to report that the floggings did increase morale and that the machinery is now running.)

If you’ve been following Vermont political news at all you know that Lieutenant Governor Phil Scott is officially in the race for governor. I listened to an interview with him on Vermont Public Radio back in mid-September. One of the topics was the problem of Scott’s ownership of DuBois Construction, a company that does business with the State of Vermont. As governor this would present a conflict of interest.

Actually, as Lt. Governor it presents a conflict of interest, so there’s another story. For the moment I’ll focus on the potential problem.

Scott explained that he would solve the problem by turning over the operation of the company to a blind trust. This makes no sense at all.

People who hold public office sometimes put their financial holdings in a blind trust. An investment advisor takes over the holdings and buys and sells stocks, bonds, and other assets without informing the public official what is in the portfolio. Thus the official’s self-interest is generalized to a healthy economy. There is no reason for the official to favor one business or business sector over another. At least, that’s the theory.

Let me emphasize before going further that conflict of interest is always judged on appearance. Absent mind reading abilities, nobody can tell whether an official’s actions are influenced by an investment. In this particular case, we might assume that Phil Scott is honorable and still raise objections to an appearance of conflict of interest. The same rules apply to everybody.

That said, the idea that Phil Scott could put a single company into a blind trust goes against basic logic. Despite his absence from day to day operations at Dubois, he would still know that he owns the company. He has stated that he intends to go back to running the business after eventually departing politics. He would have a definite interest in the continued prosperity of the company. Decision makers throughout the state government would also know this. How screamingly obvious. It’s not a blind trust if you know what’s in it.

I don’t know whether to question Scott’s judgment or question his opinion of average voter intelligence. Wherever the non-baked idea of a single-asset “blind” trust came from, he should drop it. Getting back to the present problem, if the governor running a business that contracts with the state government is a conflict of interest, how is the lieutenant governor in the same situation not a conflict of interest? Phil Scott needs to remove Dubois Construction from the business of government contracts.