Kerry's "Benedict Arnold" Investments
John Kerry has had tough words on the Presidential campaign trail for "Benedict Arnold CEOs" who export U.S. jobs. But according to the May, 2003, financial disclosure form he's required to file with the U.S. Senate every year, the Democratic candidate has stock in several multinationals that have outsourced work overseas -- General Electric (GE ), Procter & Gamble (PG ), and Verizon (VZ ), among others.
Such holdings, through trusts Kerry inherited, account for a sizable part of his portfolio. Kerry, whose assets are estimated at more than $1 million, was required to declare only monetary ranges, but the records show holdings in U.S. companies that outsource jobs of at least $125,000 and possibly as much as $650,000.
Kerry's wife, Teresa, has an even larger stake in such companies -- at least $10 million, held in the H.J. Heinz III Marital Trust, which she inherited from her late first husband, John Heinz. According to the disclosure, the trust invested over $1 million in IBM (IBM ) the same year it laid off more than 15,000 workers. Not exactly an endorsement for Kerry's argument that companies should "no longer be able to surprise their workers with a pink slip instead of a paycheck." The fund also invested between $1 million and $2 million in insurance giant AIG (AIG ) in 2002, the same year it set up an offshore-development center.
The Kerry camp makes a distinction between his and his wife's assets, asserting he has no financial stake in those holdings. They also point out that the Massachusetts senator has no say in the investments held in his family trusts. "It's a silly comparison," says Kerry senior adviser Michael Meehan. "Senator Kerry has a plan to crack down on companies who send jobs overseas."
Christine Owens, director of public policy for the AFL-CIO, a labor organization that staunchly opposes offshore sourcing and supports Kerry, didn't see a problem with the senator's holdings, either. She notes that, given the number of major companies exporting jobs overseas, it's difficult not to be invested in them. "We can at least not reward these companies with tax breaks," says Owens. Most companies cite competition -- not tax breaks -- when announcing a move offshore, however.
Still, the investments raise the question: Can Kerry coerce U.S. companies to resist the tide and keep jobs at home when investors -- including those handling his and his wife's money -- are buying into the bottom line that comes with offshore sourcing? "It does have the specter of hypocrisy," says Charles Lewis, executive director of the Center for Public Integrity, a nonpartisan watchdog.
It seems as if Kerry's trust-fund managers haven't been heeding his stump speeches -- or even listening to them.
By Michael Eidam in Atlanta
Edited by Douglas Harbrecht