Of ‘blind’ and citizens’ trusts – Tola Adenle

[With President Jonathan’s public disclosure of  his assets – and those of his wife – still pending, here is an essay from President Obasanjo era that shows the total disregard by Nigerian rulers to public opinion of the citizens they supposedly serve.  While Obasanjo might have declared his assets at the beginning when he supposedly had under N50,000 to his name, he left office a very rich man with assets in education, manufacturing (cement), etcetera.  I am not aware of another public declaration when he left office. 

Meanwhile, like his political godfather, Jonathan makes a mantra of probity and transparency in government and war on corruption which has reportedly seen him set up a World Bank office inside Aso Rock while paradoxically, he has refused to follow the constitutional directive to publicly declare his assets. To read the story of the soul-numbing confirmation of the president’s handing over the running of the economy to the World Bank and donor agencies, please visit the Punch at:   http://www.punchng.com/editorial/glamour-of-world-bank-desk-in-the-presidency/http://www.punchng.com/editorial/glamour-of-world-bank-desk-in-the-presidency/.

Here is my contribution to the “glamour” story:
TOLA ADENLE March 3, 2012 at 6:18 am

Nothing glamorous about this but sheer insanity! The president has lost the right to lead this country since he has no confidence in any of his own staff and the ability to show those he personally selected or civil servants to do what is right., By the way, his refusal to declare his assets PUBLICLY as required is a pointer to people who work under him that it is biz as usual. emotanafricana.com  MARCH 4, 2012



by Tola Adenle

The press was awash with news of President Obasanjo’s purchase and fully-paid for 200 million shares in Transcorp Nigeria, a modern-day engulf-and-devour corporation that is buying up juicy public assets although as I’m writing this at the end of August, I have not come across a denial or otherwise of this incredible story.  As most Nigerians know, many shareholders of Transcorp are individuals who work for government agencies or parastatals e.g. Mrs. Okereke, Director General of the Stock Exchange, etcetera – and now, we are told, the President.  Their initial investment, we are told is one Naira each, an amount that would not pay 10% of a motorcycle ride even in the rural area.

I’ve also read reports in which the President’s action was described as being “in conformity with best practice in other parts of the world.” Well, in checking various sources on the web, I could not find references to “other parts of the world” except the USA where‘Blind Trusts’ originated as a direct result of the availability of possible means to vast wealth often available to public office seekers.

There are various definitions of ‘Blind Trusts’, two of which I find particularly explanatory: trust set up by a settlor who reserves the right to terminate the trust but agrees to assert no power over the trust (which is administered without account to the beneficiary/settlor) or to retain any other measure of control over the trust’s administration. For example, it is common for government officials to vest all their investment property to a blind trust to avoid any conflict of interests. www.leanlegal.us/dictionary/b.asp

There is also: An investment account managed by a third party where the owner has no knowledge of the assets being held.  www.freebuck.com/reference/glossary/b.htm

I also searched far and wide to see if this American practice has ever had any US officials create a ‘Blind Trust’ AFTER being elected to office, or acquiring businesses, including stocks while in office but found none.  The general practice seems to be that an official puts assets he/she owned before being elected into such investment accounts.

About a year ago, there was uproar over the US Senate Majority Leader’s supposed ‘Blind Trust’which investigations revealed seemed not to be ‘blind’ after all. Here is an excerpt from “Frist Stock Sale Raises Questions on Timing” written by Washington Post Staff Writers, R. Jeffrey Smith and Jeffrey H. Birnbaum in the September 22, 2005 edition of that newspaper:  The excerpt includes opinions by ethics and legal experts as well as watchdogs:


Senate Majority Leader Bill Frist (R-Tenn.) has maintained for years that his stock holdings in the nation’s largest for-profit hospital chain posed no conflict of interest for a policymaker deeply involved in health care matters. He even received two rulings in the 1990s from the Senate ethics committee that blessed the holding of the stock in blind trusts.


So when Frist decided in June to dump all the stock, and later cited as the reason his desire to avoid the appearance of a conflict of interest, eyebrows went up among ethics experts and congressional watchdogs. Why did he do it at that time?


Precisely a month later after the stock was sold, its price tumbled 9 percent when executives in the company — HCA Inc., which was founded by Frist’s father and on whose board Frist’s brother serves — disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.


The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company. “Frist has been in the Senate for many years now, and the conflict is not new,” said Melanie Sloan, executive director of the watchdog group, Citizens for Responsibility and Ethics in Washington. “Why did he decide to sell it then? Why not years ago? What’s changed? Did he know that the stock was about to take a fall?”`

Until the sale, Frist’s holdings in HCA formed a significant source of his wealth. His political career was launched in part by a loan secured by the stock; in 1994, he valued his holdings at $13 million, and the following year he placed them in a blind trust. In 2000, he transferred the HCA stock into a new blind trust, a transaction that could have given him insight into its valueFrist’s signed financial disclosure statements indicate that the overall value of his blind trusts did not substantially change from 2003 to 2004.

Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, “The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn’t make any sense. It means you have a seeing-eye trust and not a blind trust. It’s ridiculous.”

Kathleen Clark, a law professor at Washington University in St. Louis, said she was surprised that Frist had ever claimed before this summer’s liquidation that he might have owned no HCA stock. “Did he say that? What was he thinking of?” she asked. “How did he know to tell the trustee to sell it [his HCA stake] if he didn’t know that he had it in the first place?”

Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement “seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose.”

A sample agreement for blind trusts published by the Senate ethics committee staff on its Web site states that there should be no “direct or indirect communication” between senators and trustees unless the senator is directing the trustee “to sell all of an asset . . .

Jan W. Baran, a Republican ethics expert at Wiley Rein & Fielding LLP, said, “That’s the question, ‘What changed?’ ” to compel Frist to sell his stock when he did.


In an essay under the title, “Bill Frist, The Former 2008 Presidential Candidate”, Jason Leopold wrote:  It is one thing to lie in politics. It’s another to be caught in a lie. Bill Frist has been caught in a lie. His political future is over.

In the USA whose system of government Nigeria supposedly runs, members of Congress are required to file annual financial disclosure statements that offer a broad look at their finances. The reports include assets, income and debts, etcetera a requirement that cannot be said to apply to Nigeria’s lawmakers and other (s)elected officials although there exists a provision for declaration of assets at the beginning and end of an elected official’s term.  Lawmakers in that country must also report trips others paid for, any boards or foundations they serve on, …  This rule, too, applies (even) to the President of the United States. I read of President Clinton having to reimburse the US Government for his daughter, Chelsea’s trip with him during his presidency.

Now, back to the definitions of ‘blind trusts’ and its application to Obasanjo Holdings, Transcorp shares, etcetera.  I have no idea whether the laws of this land are compatible with a ‘blind trust’ but while like most Nigerians I tend to believe that the President would not be preaching transparency in government while he is involved in transactions that would not do justice to the image of a crusader, three questions are baffling:


  • Does the President indeed own two hundred million shares in Transcorp?  I am not that concerned whether his shares are paid for because I do not know what the President had in assets before May 1999?
  • If yes, is the President unaware of this huge investment which, to go by one of the definitions of a ‘blind trust’ is supposed to be “managed by a third party where the owner has no knowledge of the assets being held”?
  • Can elected officials continue to engage in huge personal business activities while in office?

Most Nigerians believe that the President is a honest man who just happens to belong to a party perceived to be peopled by members whose raiments are less than clean. I have wondered often, how Officer Bode George can still be holding important PDP national office in spite of the several allegations against him by presidential panels.  Pending conclusion of findings, should not such a person step down in line with a President’s war on corruption and transparency?

Finally, here are other troubling subjects that make citizens wonder at the genuineness of the President’s stand on good governance:  the EFCC’s selective investigations; EFCC and INEC acting as police, prosecutors, judges and executioners. And wouldn’t it have been better if the President had prevented the formation of Transcorp as presently constituted, and also avoided the public launch of a university, supposedly his, to which public corporations and state governments had to donate generously?

The Nation on Sunday, October 29, 2006

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2 Comments on “Of ‘blind’ and citizens’ trusts – Tola Adenle”

  1. Fatai Bakare Says:

    What do you expect from a President who was the official Minister for Petroleum throughout his two terms in office? I think he is the first President in the history of Nigeria to occupy that post with presidency. Greed galore.



    • emotan77 Says:

      Fatai, Thanks, as always.

      Till today, I still wonder how rtd. General Obasanjo (rGO) was able to get away with what was nothing but a travesty and why Nigerians let him. Much as I hate to join the likes of Alhaji Saburi D. Bankole of the infamous House of Reps saga who described Nigerians as “docile followers”, the impunity that Nigeria’s “elected” leaders demonstrate is beyond baffling. When I read of the “oil subsidy” removal New Year’s Eve in the States while Nigerians were still in revelry, I blurted: only in Nigeria could a head of state greet his country’s citizens on the first of the year with bad news! Jonathan knew nothing could and would happen and he not only got away with it but the stage is being set for the removal of the “last phase”: intermittent gasoline shortages are already on. By next month, Ms. Lagarde, Ms. Iweala and Dr. Jonathan would be ready to send Nigerian masses to the gallows.

      As for rGO, I think he’s already gotten his verdict of history: as he continues to run around endlessly for relevance, Mandela sits contentedly in his home, in his country while adulation pours his way from the world over.




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