Tags: Rumsfeld | Asks | for | More | Time | Sell | Millions

Rumsfeld Asks for More Time to Sell Millions in Private Investments

Wednesday, 25 April 2001 12:00 AM

Three months into his tenure, Rumsfeld has been unable to find buyers for up to $100 million in limited partnership holdings that he agreed to sell by now in a special arrangement with the Office of Government Ethics and the Senate Armed Services Committee. The Pentagon has declined to name the holdings for fear their disclosure would depress their potential value.

"He has requested an additional 90-day extension," said Rear Adm. Craig Quigley, a Pentagon spokesman. "All the divestitures are not yet complete. It's not for lack of trying."

Neither the Senate committee nor the government ethics office has replied to Rumsfeld's request. Concerns have been raised that the defense chief will be holding investments possibly relevant to his official decisions six months into his tenure.

Rumsfeld quickly sold his publicly traded stock after taking office Jan. 20. The limited partnerships are much more difficult to sell because they are not publicly traded and therefore have no market-set value. Some are risky venture capital investment partnerships that with today's sluggish economy may be difficult to unload.

"It's a private market, and so you are largely at the mercy of a private entity to come in and make a bid," Quigley said.

Rumsfeld could walk away from the partnerships entirely or donate them to charity, steps he has so far been unwilling to take. The former Illinois congressman amassed a fortune after his first stint as defense secretary during the Ford administration.

From 1977 to 1985 Rumsfeld was chief executive officer of G.D. Searle & Co., a pharmaceutical business. Later he was chief executive and chairman of General Instruments, a cable television company, and served on a variety of corporate boards, including Sears, Roebuck & Co. and Tribune Co.

By January of this year, Rumsfeld had amassed a fortune valued at between $55 million and $217 million, based on the range of values he provided on financial disclosure forms. About 40 percent of that was estimated to consist of limited partnerships and other private investments.

The value of many of those public and private holdings declined substantially during the recent stock market slide. It is unclear precisely when Rumsfeld sold his various stock shares and to what degree the stock market swoon affected his investments.

Rumsfeld has a financial adviser and four law firms working on finding buyers. One adviser close to Rumsfeld has said the amount of money he is paying these firms to handle the divestiture will exceed his annual salary as defense secretary of $161,200.

In the ethics agreement he reached with the Senate Armed Services Committee and the Office of Government Ethics, Rumsfeld indicated he is exploring setting up a blind trust that would enable him to retain ownership of certain investments provided he gives up day-to-day control.

But Larry Noble, executive director of the Center for Responsive Politics, a government watchdog group, said blind trusts have fallen out of favor because they are costly to establish and cumbersome to maintain. In addition, people moving from lucrative corporate careers into senior government positions have found they can realize substantial tax benefits through divestiture.

(c) 2001, Chicago Tribune.

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Three months into his tenure, Rumsfeld has been unable to find buyers for up to $100 million in limited partnership holdings that he agreed to sell by now in a special arrangement with the Office of Government Ethics and the Senate Armed Services Committee. The Pentagon has...
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2001-00-25
Wednesday, 25 April 2001 12:00 AM
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