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Ag Secretary nominee will sever ties with his farming business

Erik-S-Lesser/GettyImages Sonny-Perdue-Erik-S-Lesser-GettyImages-2000
Sonny Perdue will keep his real estate investments.

by Bill Allison

President Donald Trump’s pick to lead the U.S. Department of Agriculture will sever ties with his farming business while keeping his real estate investments, according to disclosures released Sunday by the Office of Government Ethics.

Sonny Perdue sparked controversy during his two terms as Georgia governor by refusing, as Trump has, to place his assets in a blind trust. But if confirmed as agriculture secretary, he will turn over his company interests to a pair of new trusts in which neither he nor his wife will have a beneficial interest, according the ethics agreement he signed. 

Perdue, 70, will still own real estate in Georgia and Florida worth between $1.1 million and $2.3 million, and he will continue to receive payments totaling as much as $6 million that he is owed from his holdings, according to the ethics agreement and his financial disclosure. 

That raises a concern about whether Perdue will recuse himself from situations in which there could be a conflict of interest, said John Wonderlich, executive director of the Sunlight Foundation, a government transparency advocate.

“But at least it’s being mediated through the channels of the Office of Government Ethics and the agency lawyers,” Wonderlich said. “That’s more than the president has done.”

The ethics agency reviews plans by presidential appointees to avoid or remove conflicts of interest while in office. The OGE’s approval of Perdue’s agreement paves the way for his confirmation hearing, which has yet to be scheduled.

Governor Tenure
During his tenure as governor from 2003 to 2011, Perdue faced complaints that he intermingled his business interests with his official duties. In 2010, he met with officials of the Georgia Port Authority to discuss his family’s trucking business, the Atlanta Journal-Constitution reported. 

Perdue disclosed assets between $11.3 million and $47 million, the bulk of which were held by a pair of family trusts. Values are reported in wide ranges. The largest holding was in AGrowStar LLC, a Georgia-based grain broker, worth as much as $25 million. Perdue holds a promissory note with the firm worth as much $1 million, disclosures show.

He also disclosed between $942,000 and $1 million in income, more than half of which came from Perdue Inc., a trucking company. 

According to his disclosures, a pair of trusts owns Perdue’s holding company, Perdue Business Holdings Inc., and its subsidiaries, which include trucking, real estate and fertilizer distribution firms. Perdue and his wife, Mary, are the trustees and beneficiaries of one, while his wife is the trustee and one of the beneficiaries of the other.

New Trusts
In his ethics agreement, Perdue pledged that within 90 days of his appointment as agriculture secretary, neither he nor his wife will be a trustee or a beneficiary of either new trust being created. One of the two, the New Wealth Preservation Trust, will make payments on a promissory note for as much as $5 million and will “guarantee timely payments” on AGrowStar’s promissory note, according to the disclosures.

Perdue pledged that New Wealth Preservation Trust “will expressly prohibit its appointment committee from appointing trust assets to me or spouse,” but he does not make the same guarantee about the other vehicle he is establishing called the New Family Management Trust. The agreement also does not specify the beneficiaries of either trust.

The agreement appears to allow Perdue to take actions as secretary having a direct effect on the new trusts that may benefit family members other than he and his wife, said Larry Noble, general counsel of the Campaign Legal Center, which advocates for stricter controls on money in politics.

“Without knowing what the new trust agreement provides, there is no assurance that steps will not be taken once he leaves office to allow him and his wife to directly benefit,” Noble said. 

A message seeking comment from the White House press office was not immediately returned.

To contact the reporter on this story: Bill Allison in Washington at [email protected]

To contact the editors responsible for this story: Joshua Gallu at [email protected]

Mark Niquette, Bruce Rule

© 2017 Bloomberg L.P

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