Frist Knew About Blind Trust Investments (documents)

In an effort to avoid even the appearance of a conflict, Frist put his assets in a blind trust under Tennessee law when he was first elected to the Senate in 1994, even though the ethics committee told him it wasn't necessary. Under state law, the trust had to be diversified, and the senator was never told how much remained of his holdings in his family's company.

Frist held that trust until he won his second term in 2000, when he put his assets into a federally qualified blind trust under the auspices of the Senate Ethics Committee, with additional restrictions.

By placing his assets in a blind trust, the senator relinquished control over his holdings to an independent trustee with a banking or investment company. Frist has not been told anything about how his assets are being managed, except that he would be notified if the trustee sold off a stock or sold enough so that a stock's value dipped to $1,500 or less, said Frist's former chief of staff, Mark Tipps, who helped him set up his first blind trust.

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Tipps said that under federal trust law, a trustee managing assets that are heavily invested in one stock or just a few different companies is required to immediately begin diversifying the holdings.

"So whatever component was HCA stock at the beginning, there's significantly less today," Tipps said. "It would be highly unlikely that he would have millions of dollars of HCA stock under that rule, and no one knows what he's got."

http://www.usatoday.com/news/washington/legislative/senate/2003-04-21-frist-healthcare-ethics_x.htm