Could President Bloomberg Keep His Company?

Would Mayor Bloomberg be pressured to relinquish his majority stake in his lucrative and beloved financial services company if he were to become the country's commander in chief?

That is the question some government watchdogs and Bloomberg LP employees are asking as the 2008 presidential contest gets into full swing.

While there are no federal requirements that prevent a sitting president from owning a company, some financial consultants and ethics professionals say the nature of Bloomberg LP and its journalistic arm, Bloomberg News, could create a web of potential conflicts that would make it difficult for the mayor to retain his 68% share in the company if he ends up in the White House.

"I don't see there being any way, if he's elected to the office, that he would be able to maintain any ties whatsoever," a special counsel at Institutional Shareholder Services, Patrick McGurn, said.

Mr. McGurn predicted that if Mr. Bloomberg upsets the political establishment and gets elected, he and his creation, Bloomberg News, would at the very least run into the appearance of conflicts of interest.

"It would be covering all facets of the administration, all facets of the economy, and all of the political issues involved in the day-to-day politics of Washington," he said.

Others say that while the case would test new waters, Mr. Bloomberg would be able to figure out a way to hang onto his share of the company and satisfy the public through financial disclosures and firewalls.

The possibility of a Bloomberg candidacy has some employees at the company's towering Lexington Avenue headquarters wondering about the fate of the business. While Bloomberg News currently has a full-time reporter covering the mayor at City Hall, covering the president could pose a host of more complicated challenges, such as covering key economic presidential appointees like the chairman of the Federal Reserve Board.

Lawyers and observers say determining what to do with the company must be part of Mr. Bloomberg's calculus as he weighs a run. To date, Mr. Bloomberg has denied that he has any intention of getting into the race.

The questions a Bloomberg candidacy raises, however, are not new.

When Mr. Bloomberg became a candidate for mayor in 2001, he stepped down as chairman of the company's board, and when he was elected he relinquished his position as chief executive. During his first year in office, he sold his entire stock portfolio, which was reportedly worth at least $45 million, after the city's Conflicts of Interest Board issued a ruling at the mayor's request. He has since recused himself from certain policy decisions, such as city cable franchise negotiations.

While his vast wealth has required a complicated set of actions to ensure immunity from conflicts, it has also allowed him to bill himself as beholden to no special interests.

Mr. Bloomberg is hardly the first elected official or political wannabe to face the potential conflicts that arise from financial investments and assets.

Publishing executive Steven Forbes, who ran for president as a Republican in 1996 and in 2000, offers a comparison. He maintained ties with his Forbes magazine, and wrote a regular column. In 1992, third-party candidate Ross Perot, a billionaire, stepped down as CEO but did not relinquish his ownership stake in his technology company, Perot Systems Corporation.

While Mr. Bloomberg might be a long-shot candidate because he would be running as an Independent, nearly all political observers believe he would have a far better chance of actually making it to the White House than Messrs. Forbes or Perot.

In April, Senator Clinton, who is vying for the Democratic presidential nomination, liquated a blind trust to avoid any possible conflicts of interests.

In the past, many candidates have employed blind trusts to shield themselves from the appearance of conflict. But that is viewed by many as a Swiss cheese solution, riddled with holes, and wouldn't work for Mr. Bloomberg because he no longer owns public stocks.

Mr. Bloomberg's current practice is to release heavily redacted tax returns that include ranges but not specific dollar amounts, making it impossible to discern how much he money he has coming in and how much he is paying in taxes. Federal financial disclosure forms require basically the same data, but if he is elected and finds a way to hold onto his company he might come under public pressure to provide more information.

Mr. Bloomberg's spokesman, Stuart Loeser, has said the mayor cannot publicly release specifics on his tax returns because they would offer too much information to Bloomberg LP's competitors.

Yesterday, Mr. Loeser dismissed questions about whether Mr. Bloomberg would put his company on the market. "It's an irrelevant question since the Mayor is not going to run for President," he said via e-mail.

A spokeswoman for Bloomberg LP, Judith Czelusniak, said there have been no discussions about selling the financial information business.

A top election lawyer, Jan Baran, said "there's nothing illegal" about being a "rich and successful businessman and running for president."
He said that while there might be political pressure and questions Mr. Bloomberg, would be able to point to the successful setup he established as mayor.

Imagining Mr. Bloomberg's internal dialogue about avoiding a liquidation, he said: "I've been mayor for eight years and I've haven't done that, so what's the problem? If it wasn't a problem for the citizens of New York City, then I don't expect it to be a problem for the American citizens.'"

Several government experts, including the policy director at the Campaign Legal Center, Meredith McGehee, said Mr. Bloomberg's political rivals would likely capitalize on the potential for conflict.

Officials at the Office of Government Ethics, the supervising ethics office from the executive branch, declined to comment. But federal statues regarding conflicts of interest do not apply to presidents, vice presidents, members of Congress, or federal judges.

Some said Bloomberg News could take several steps if Mr. Bloomberg is elected president to ensure its clients and the public that it is fortifying the editorial wall between the newsroom and the White House.

The ethic group leader at the journalism organization the Poynter Institute, Kelly McBride, said publicly stating how conflict pitfalls would be avoided along with training employees on conflicts could help establish the necessary barriers.

A former Italian prime minister, Silvio Berlusconi, faced constant questions when he was in office and simultaneously the primary owner of three national television stations. If Mr. Bloomberg joins the field of 2008 contenders, the issue would likely be subject to much debate in America.

"It doesn't appear to be a legal problem at all," the election lawyer, Mr. Baron, said. "Whether it would be a political problems remains to be seen."