# Blind Trust An arrangement in which a public official's assets are transferred to an independent trustee who holds **sole discretion** over them and is barred from communicating holdings back to the beneficiary. The defining feature is not that someone else trades the assets — it is that the official **cannot know what he owns**. An official who can read a list of his own positions does not have a blind trust, whatever the arrangement is called. ## The presidential norm President Lyndon Johnson pioneered the practice in 1963. Since then every modern president has used one of three approaches before or upon taking office: 1. a **qualified blind trust** with an independent trustee, 2. **broadly diversified funds and Treasuries**, where individual-company conflicts cannot arise, or 3. **liquidation** — Jimmy Carter sold his assets outright. None of the three is required by statute. The federal criminal conflict-of-interest provision, **18 U.S.C. § 208**, has excluded the president and vice president since its 1962 enactment, on the theory that political accountability would substitute for legal constraint. The **[[STOCK Act]]** of 2012 requires a sitting president to *disclose* individual securities transactions; it does not prohibit them. ## Why the distinction matters in this KB Three different arrangements are routinely described with the same phrase, and only one of them is a blind trust: | Arrangement | Who picks the securities | Can the official see holdings | Blind? | | ---- | ---- | ---- | ---- | | **Qualified blind trust** | Independent trustee | No | Yes | | **Broad-index fund** | Nobody — the index | Yes, but it is one line item | Not blind, but conflict-free | | **Discretionary managed account** | Outside manager | Yes — the filer certifies the transaction list | No | A holding in a broad-market index fund appears on a public financial disclosure as a **single line**. Thousands of itemized single-company transactions are, by construction, not that. This is the arithmetic underneath [[Spending Gap - No Role in Selecting Investments vs. the 1,051-Trade June Ledger]]. ## Related [[STOCK Act]] · [[Office of Government Ethics]] · [[Emoluments Clauses]] · [[The Spending Gap]] · [[Trump Corruption News Log]] · [[Donald Trump]]