ETHICS AIDE SAYS CASEY WAS WRONG ON TRUST RULES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00587R000200880097-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: July 14, 2010
• Sequence Number: 97
• Publication Date: March 29, 1985
• Content Type: OPEN SOURCE

STAT
Sanitized Copy Approved for Release 2010/07/14: CIA-RDP91-00587R000200880097-0
M hrlif APPEARED
OK PAC.
on trust rules
WASHINGTON (AP) -The head
of the Office of Government Ethics
BALTIMORE SUN
29 March 1985
Ethics aide says Casey was wrong
said yesterday that CIA Director
William J. Casey and his lawyers
misunderstood the rules of his blind
trust when they excluded his stock in
Capital Cities Communications, a
media conglomerate planning a
takeover of ABC.
Mr. Casey did not put his Capital
Cities stock into a blind trust when
he established one for most of his
other investments in 1983. A spokes-
men for Mr. Casey said that was be-
cause government ethics regulations
do pot permit such trusts to include
a stock that is more than 20 percent
of a person's entire holdings.
But David H. Martin, director of
the government ethics office, said
his office was authorized to grant
exceptions to that exclusion rule and
could permit the Capital Cities stock
to be placed -in Mr. Casey's blind
trust.
. "At the time the trust was set up,
I' truly think ... Mr. Casey and his
lawyers were under the impression
that indeed there was no exception
available to them on the Capital Cit-
ies stock," Mr. Martin said in a tele-
phone interview.
"In fact, we could have made an
exception at that time, had they ap-
plied," Mr. Martin added. "They did-
n't, apparently because they misun-
derstood they could not."
Mr. Casey said late Wednesday
that he was willing to place the
shares in the trust. A CIA spokes-
woman, Kathy Pherson, said yester-
day that the director had sent a let-
ter to his personal attorney who han-
dled the blind trust, Leonard Silver-
stein, authorizing him to take the
steps needed to have the stock
moved into the trust.
Mr. Silverstein did not immedi-
ately return a reporter's telephone
call seeking comment:
Mr. Martin said the office proba-
bly would grant an exception and al-
low the stock to go into the trust.
Ms. Pherson said she did not
know the exact number of shares
Mr. Casey holds and could not con-
firm reports that he holds 34,755
shares. That amount would be worth
more than $7 million.
Mr. Casey's latest financial dis-
closure form, dated May 15, 1984,
states that his Capital Cities stock is
worth more than $250,000 and that
his wife's holdings were valued at
between $100,001 and $250,000.
Mr. Casey established the blind
trust in October, 1983, while under
pressure from Congress because of
his stock dealings while CIA direc-
tor.
Asked if Mr. Casey or his lawyers
misunderstood the blind trust, Ms.
Pherson said, "AU I know is he had
asked his attorney to work out the
transfer of securities to a blind
trust."
Mr. Martin said regulations of his
office under the Ethics in Govern-
ment Act set a limit of 20 percent in .
any one block of stock for such a
blind trust in order to assure that the
portfolio is diversified and that the
securities are readily marketable.
If a person's portfolio is dominat-
ed only by one stock, he said, "you
don't want a blind trust. You want a
recusaL" That means, he said, that
the person would excuse himself
from any consideration or action on
dealings with 'that company in the
course of his government job.
Linda Gustitus, minority staff di-
rector of the Senate Government Af-
fairs subcommittee on oversight of
government management, which
handles ethics matters, said the 20
percent requirement was to ensure
the "blindness" of the trust.
Sanitized Copy Approved for Release 2010/07/14: CIA-RDP91-00587R000200880097-0