During last night's Republican presidential debate, Newt Gingrich criticized Mitt Romney for having invested money in government-backed mortgage giants Fannie Mae and Freddie Mac, which many conservatives blame for the housing crisis.
"First of all, my investments are not made by me. My investments, for the last 10 years, have been in a blind trust, managed by a trustee," Romney replied. He then went on to say that the blind trust made investments in mutual funds and bonds that held the stock - it didn't buy Fannie and Freddie stock directly - and pointed out that Gingrich himself owns mutual funds that have Fannie and Freddie stock as well.
Romney was right that Gingrich also made indirect investments in the companies, and Gingrich has a far more direct link to Freddie: His company was paid at least $1.6 million for Gingrich to serve as a consultant. But Romney's financial disclosure statement would seem to contradict the candidate's claim that his Fannie and Freddie investments are held exclusively in a blind trust.
As the Boston Globe reported in September, Romney's financial disclosure statement showed that the former Massachusetts governor owned between $250,001 and $500,000 in a mutual fund that invests in Freddie and Fannie.
"And unlike most of Romney's financial holdings, which are held in a blind trust that is overseen by a trustee and not known to Romney, this particular investment was among those that would have been known to Romney," the Globe reported.
Brad Malt, Gov. Romney's trustee, said in a statement to Hotsheet that the investment "was not known to Governor Romney."
"It was held within Governor Romney's Charitable Remainder Unitrust, which I have been sole trustee of since it was established in 1996, and which I have managed on a totally blind basis since 2002," he said. "In addition, the ultimate beneficiary of this trust is charity, not Governor Romney."
Questions over whether the investments were "blind" once again shine a light on both Romney's personal wealth -- estimated in financial disclosures with the Office of Government Ethics to be between $190 million and $250 million. They also illustrate the complexity of the tax code, particularly for wealthy Americans like Romney: His recent release of his 2010 tax returns and an estimate of his 2011 taxes amounted to more than 500 pages.
Also worth considering: Romney's past statements on blind trusts themselves. As the Gingrich campaign pointed out in an email to reporters, Romney in 1994 said that "[t]he blind trust is an age-old ruse."
"You give a blind trust rules," he said in 1994, in a comment that would seem to contradict his debate suggestion he has no control over "blind" investments. "You can say to a blind trust, 'don't invest in properties which would be in conflict of interest or where the seller might think they're going to get an advantage from me.'"