Romney aides explain trusts

Political Notebook

January 28, 2012

Ron Paul was joined yesterday by Colby College students Brian Russo (left),… (Robert F. Bukaty/Associated Press)

JACKSONVILLE, Fla. - Mitt Romney’s campaign sought yesterday to explain complexities in his financial trusts, following his assertion in Thursday’s debate that investments related to Fannie Mae and Freddie Mac were made without his knowledge.

The trustee who manages Romney’s money said those investments were made through a charitable trust “operated on a totally blind basis’’ that Romney did not control. He also said that the investment related to Fannie Mae and Freddie Mac, quasi-public agencies that many conservatives blame for the housing crisis, has been sold.

“This investment, which has been sold, was not known to Governor Romney,’’ Brad Malt said in a statement. Although Romney’s financial disclosure forms do not list it as such, Malt said the fund was held within a charitable trust and has been managed “on a totally blind basis since 2002.’’

The financial disclosure forms that Romney filed last year show that he reported owning between $250,001 and $500,000 in a mutual fund that invested in debt notes of Fannie Mae and Freddie Mac, among other government entities.

Unlike most of his financial holdings, which are held in a blind trust and unknown to Romney, this particular investment was listed on a page separate from those held in a formal blind trust. It is listed on the same page as his Bank of America cash account, compensation for his “No Apology’’ book, speaking fees, and time on the Marriott board - as well as at least $250,000 in gold holdings.

The Globe first reported about the issue in September, saying that Romney’s investment in funds related to Fannie Mae and Freddie Mac would have been known to him because it was outside of his blind trust investments. The Romney campaign at the time declined to comment on the record and did not dispute anything in the Globe report until yesterday.

Romney placed his assets in a blind trust after he was elected governor in 2002.

Romney’s profits from Fannie Mae and Freddie Mac have increasingly become an issue in the Republican nominating contest as Gingrich rebuts charges he was a lobbyist to Freddie Mac.

“We began digging in after Monday night because, frankly, I’d had about enough of this,’’ Gingrich said in the debate. “We discovered to our shock, Governor Romney owns shares of both Fannie Mae and Freddie Mac. Governor Romney made a million dollars off of selling some of that.’’

Romney countered that his investments were not known to him, since they were managed by a trustee and in a blind trust. Romney also clarified that his investments were not made in Fannie Mae or Freddie Mac directly, but through a mutual fund that in turn invested in the government-backed mortgage companies.