Department of Defense[...]
Thursday, March 22, 2001
Presenter: Rear Admiral Craig R. Quigley, DASD PA
Q: On another topic, Secretary Rumsfeld's stock portfolio investments -- can you update us on whether he's divested defense- related companies? Are we going to see a list of those --
Quigley: Eventually, yes. There's two documents that are relevant, that address this. One is his Special (sic) [Standard] Form 278, SF-278. It's a financial disclosure form. That one's been out in the public domain for many weeks now. That offers a description of the sorts of holdings, financial holdings, that an individual has, in public life, and a range of their value.
The second document is an ethics agreement that had been entered into by Secretary Rumsfeld, by the Senate Armed Services Committee, by the Office of Government Ethics, and by the Pentagon Office of Ethics. And this was an agreement that addressed two things. One was his membership in organizations, and the second was his divestiture of financial holdings that had Defense Department ties in some way. So this agreement, put very simplistically, was to his agreement on membership in organizations and holdings of financial interests in companies that would have some business dealings with the Department of Defense.
A lot of his financial holdings are very complicated. And the period of time that was agreed to was a 90-day period of divestiture. And so that's roughly three months from the 20th of January that he would have to completely divest himself of those issues -- of those financial issues that would be at issue here in the ethics agreement.
Within days, the membership in the various organizations was done. And also, very quickly, many of the financial divestitures were done. But some are still very much a work in progress because they're very complicated. They involve limited partnerships and things of that sort where you would have a very real impact on markets by an individual selling, or even exchanging the ownership of some of these complicated, very illiquid assets that he is the owner of.
So, as the legal team and the financial management team works very hard to divest all of this stuff; when that process is complete -- certainly by the 90 days -- the ethics agreement itself will then be a public document as well.
Q: So you are saying --
Quigley: Long answer to your question.
Q: So when is that, next month?
Quigley: Well, I'd have to figure out exactly when 90 days is, but it's 90 days from, you know -- February, March, April 20 -- April, roughly.
Q: Conceivably, he's making major decisions that could affect his investments that we don't know about. So there's no transparency on defense-related investments. That's what you're saying.
Quigley: Well, you can only do what you can do, Pat. I mean, a lot of these relationships that he's in are not liquid. I mean, if I own or you own a share of a mutual fund or a stock, and it's just owned outright, I can sell it. I can sell it tomorrow. But that is way more simplistic than a lot of his financial holdings, and you simply cannot divest yourself of the complicated ones without a long-term effort. That was the agreement in -- that was why 90 days, because those on the Senate Armed Services Committee and the Office of Government Ethics understood that these were very complex financial holdings that you simply could not sell the next day. And they're working very hard at that as we speak, and have been for weeks now.
Q: So the deadline is the 20th of April then?
Quigley: Well, that's close. I mean, whatever 90 days is from the 20th of January.
Q: So you're going to -- either on that date or before that, you're going to give us this information?
Quigley: Yeah, there are several Freedom of Information Act requests, both here and in the Office of Government Ethics for that document. And when the divestiture is complete, the FOIA requests will be honored.
Q: Why do we have to have a FOIA request for a public document like this involving the secretary's personal investments?
Quigley: Well, because that's --
Q: Why do we have to do that?
Quigley: Because that's the process that the law describes.
Q: Well, but that's a roadblock at this building, as you well know. You could make it in two days or 10 years with Freedom of Information Act. Why can't you just hand this out when it's ready?
Quigley: I don't agree with your characterization.
Q: Well, that's my experience with it. It's outrageous, your Freedom of Information policies. There's no freedom of information.
Quigley: It's never --
Q: I mean, to hide behind that --
Quigley: It's never done --
Q: (Off mike) -- documents is unacceptable.
Quigley: I disagree with your characterization.
Q: I was just wondering, is the issue that all of these holdings that are related to defense will be divested; there will be no blind trusts or that kind of thing? He is divesting, so --
Quigley: You got me there. I don't know the mechanisms by which his financial team is accomplishing that. I don't know.