Majority Leader Bill Frist hasn’t been following all the Senate’s rules when it comes to disclosing details about his finances.
Frist and his wife are the sole trustees in charge of a family foundation bearing the senator’s name, according to Internal Revenue Service forms. However, he has not been listing that position on his Senate disclosure forms, which are made public every year.
Annual forms detailing lawmakers’ personal finances are supposed to list all positions members of Congress hold outside government. Those include unpaid posts such as serving as a director or trustee of a nonprofit.
When asked about the discrepancy by The Associated Press, Frist spokesman Bob Stevenson said the senator’s office was unaware of the omission.
“It was recently discovered that Senator Frist’s Senate financial disclosure forms may contain some inadvertent errors which are under review and will be promptly corrected by amending his financial disclosure,” Stevenson said.
The family foundation had more than $2 million in assets in 2004, the last year for which a tax form was available.
Frist, who is considering running for president in 2008, set up the organization about 12 years ago. It did not have much money until 2001 when Frist inherited HCA Inc. stock from his mother.
Foundations like this generally not taxed
Janne Gallagher, vice president and general counsel at the Washington-based Council on Foundations, said assets that go directly from an estate into a private family foundation, as in this case, are generally not taxed, unlike money distributed directly to heirs. She said once in the foundation, the money is largely tax exempt.
The foundation does not stand to benefit from a recently proposed buyout of HCA, because the HCA stock was sold off shortly after going into the foundation.
Frist is under federal investigation for selling other shares of HCA stock he owned last year around the time insiders were selling and when the stock price hit a 52-week high.
His foundation did not make charitable contributions in 2004 or 2003. However, but that was allowed under IRS payout rules that generally require annual donations because the foundation in 2002 made a large contribution of roughly $877,000.
That went to the Montgomery Bell Academy, a private boys’ school in Nashville that Frist attended. The money, which went toward the school’s endowment, has been the foundation’s main charitable gift over the years.
Staff says omissions will be amended
There were about 30,000 private family foundations in existence in the United States in 2004, the last year for which data is available, according to the nonprofit Foundation Center, based in New York.
Frist and his siblings are vice presidents of another charitable foundation bearing their parents’ names. Frist also failed to list his position with that foundation on his Senate disclosure form, and his staff said that would be amended as well.
He has disclosed on a Senate form his board position with World of Hope, a charity that gives money to causes associated with AIDS but which has come under scrutiny for paying consulting fees to members of his political inner circle.