The First Lady of New Jersey has embattled Sen. Bob Menendez’s seat in her sights—bringing the “blind trust” where she and Gov. Phil Murphy have stuffed their fabulous wealth into view.
Tammy Murphy, daughter of a Virginia car dealership dynasty and now an aspiring U.S. senator, faced a dilemma common to one-percenters in politics when her fellow Goldman Sachs alum hubby assumed the governor’s mansion in 2018: their vast financial holdings could represent a conflict-of-interest, given the huge powers and budgets the Garden State’s chief executive commands and the prominent role the First Lady plays in the state’s civic life. So the couple turned to an equally common solution: the “blind trust.”
And like former President Donald Trump, they decided the seeing-eye dog for their fortune should be family: in the Murphys’ case, the First Lady’s auto-hawking brother, Steve Snyder. Unlike Trump, though—whose own attorney admitted that his trust could never be “totally blind”—the Murphys have maintained this set-up insulates them from their investments.
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“The establishment of the blind trust, which ensures the public that the governor’s decisions are based solely on the public benefit, represents yet another promise kept,” Murphy spokesman Dan Bryan told Politico at the time.
Representatives for the First Lady, who despite never having held elected office has quickly accumulated endorsements in her quest for Capitol Hill, were adamant on this point in conversations with The Daily Beast. And like the ex-president, they noted the power couple entered the framework voluntarily, as the law did not require they establish a trust for their assets.
The Democratic campaign bridled at the comparison with the old GOP commander-in-chief, noting that the New Jersey State Ethics Committee had blessed their arrangement and they had complied with the law.
“Gov. Murphy and First Lady Tammy Murphy worked with the New Jersey State Ethics Commission to set up a voluntary blind trust that complies with the rules that govern New Jersey elected officials,” Bryan, who has recently come off working for the governor’s dark money Stronger Fairer Forward group to work on the Senate bid, told The Daily Beast. “She believes strongly in transparency, accountability, and ensuring the public knows whose side their elected officials are on."
But while a blind trust guided by a family member might be good enough for the corruption-plagued Garden State, experts The Daily Beast consulted said it won’t fly in D.C. The federal Ethics and Government Act, which sets the standards for the Senate, does not allow a family member to steer an elected official’s relative—and for good reason, said Gary Altman, a longtime D.C. area estate planning attorney who has worked with a number of government officials.
“I think the real world logic of that is, if your brother is controlling your money, he’s not going to tell you how he’s investing it?” remarked Altman. “Your brother may say he’s not telling you how he’s investing your money, but who the hell is going to believe him?”
In seeking Altman’s insight and expertise, The Daily Beast described the Murphys’ trust situation to the veteran lawyer without providing names or identifying details. But Virginia Canter, senior ethics counsel for the nonprofit Citizens for Responsibility and Ethics in Washington, had specific advice for New Jersey’s First Family.
Canter, who advised the Clinton and Obama White Houses, argued that the “best practices” enshrined in the federal law have gained a special resonance amid the scandal engulfing Menendez, who prosecutors accuse of accepting bribes and acting as a paid agent for Egypt. Gov. Murphy was among the first Democrats to urge the legislator to abdicate his seat, a call that Menendez has to date ignored.
“After what’s happened with Senator Menendez, they should put ethics at the forefront of the agenda, and do everything they can to eliminate any appearance of or actual conflict of interest,” she told The Daily Beast, noting that the Ethics and Government act is a role model not just for states but foreign countries. “I would advise them to follow best practices and establish a blind trust that meets the standards of the Ethics in Government Act.”
For their part, the Murphy team disputed the claim the federal bar exceeds the state one, noting New Jersey statute forbids an elected official from learning about the sale of assets within the trust, and prohibits the trustee from “knowingly making any investment” in an enterprise doing business with the state. However, Bryan said that the First Lady will “work with the Senate Ethics Committee to comply with the rules that govern federal candidates and elected officials.”
However, he did not say whether this would involve simply replacing Snyder as trustee—and, if it turns out that he is replaceable, why it was so important that he manage the trust in the first place.
Canter highlighted another issue confronting a “blind” trust with a family member in charge: relatives often have common financial investments, which could impinge on the independence of the trustee.
“If you have a family member, for example, and if they also owned stock in the same holding, it might not necessarily be in the family’s interest to divest those assets—but it might be in the fiduciary interest,” said Canter. “You want to make sure there’s the requisite independence so that they’re able to protect both the blindness of the trust, and that it’s not like a ‘wink-wink’ situation, where, ‘We know what’s in there and I’m not going to do anything that you wouldn't want me to do.’”
Snyder, the First Lady’s brother, told The Daily Beast in a brief phone conversation that his sister had “no interest” in the family’s sprawling Checkered Flag car dealership chain—though would not answer whether she would be entitled to any proceeds if the entire business were sold, nor about whether the siblings shared stakes in any other property, estate, or business concern. He referred all further questions to the Murphy for Senate campaign.
The financial disclosures the governor filed in 2018 and 2019 both listed a “Snyder Family Trust,” valued at “more than $500,000,” among Tammy Murphy’s assets. However, by 2020, this holding had vanished. A note to the filing states that “due to deaths in the First Lady’s family, the First Lady and/or her immediate family anticipates becoming beneficiaries of one or more additional familial trusts, including with respect to life insurance policy proceeds”—an apparent reference to the 2018 passing of the now-Senate candidate’s father. Her mother had passed away a year prior.
The 2021 submission reveals the First Lady held between $50,000 to $100,000 in stock in a company called “Snyder Plaza Properties,” an entity that had not before appeared in the disclosures, and has not since. The Murphy campaign refused to answer questions about the disposition of these assets.
Also in 2021, the duo began disclosing the existence of two “Tammy S. Murphy and Descendants” trusts—one in her mother’s name—dated to 1994, containing more than $1 million in mutual fund holdings. The filings have also consistently shown that the couple’s dependent children are beneficiaries of a “Snyder Grandchildren’s Trust.” The first four years of filings do not reveal the contents of this trust, but beginning in 2022, the Murphys began to disclose it contained various index and mutual fund investments.
These specific assets, representing only a fraction of the Murphy family’s total holdings, could point a way forward for the couple if they wish to eliminate any questions or concerns about their investments. Altman, the estate planning attorney, argued that the way for politicians to render their portfolio truly blind is to liquidate their assets and sink it all into mutual and index funds.
“Sell everything, put it in a diversified portfolio, and maybe you need a blind trust, but that way it doesn't matter, since there’s no individual stock whatsoever to cause you a problem,” he advised.
