What is a blind trust?
Current EventsI heard Mitt Romney mention that his investments are in a blind trust. What is this? He used it to explain why he had investments in Freddie Mac, but why would that matter?
In this case the blind trust term is used to mean that he (Mr Romney) is not in control of the investments, he is "blind" to the allocation activity in the trust. The trustee or trust manager is taking care of the investments and the trust beneficiary (Mr. Romney and his family) have no insight into the investing activity and also have no right to intervene.
In this fashion, it can't be said that any investing activity in the trust is being undertaken for a particular interest that could be affected by policies that Mr. Romney may or may not support. It's not at all uncommon for high-profile politicians to have a blind trust managing their assets in order to remove the potential for conflict of interest.
It's a trust in which a beneficiary (in this case, Gov. Romney) has no knowledge of the holdings of the trust and no right to intervene in the way assets are handled.
A blind trust enables Romney to remain unaware of the specific assets he owns in order to avoid potential conflicts of interest.
