Secretary of defense sold assets to comply with rules

WASHINGTON -- Defense Secretary Donald H. Rumsfeld sold between $20.5 million and $91 million in assets last year to avoid conflicts of interest, he says in a disclosure report that includes a slap at the required forms.

Rumsfeld complained in an unusual letter to the Office of Government Ethics that the "excessively complex and confusing" forms cost him more than $60,000 in accountants' fees to compile.

"I do not have the time" to fill them out personally, Rumsfeld wrote.

The defense secretary told reporters Tuesday he signed the forms "with a prayer and a hope" that they were accurate, because he didn't read every entry.

"They're so complex that no human being, college educated or not, can understand them," Rumsfeld said of the disclosure forms.

Rumsfeld's report, released in response to a request by The Associated Press, shows a major shift in his investments to comply with government ethics laws. The defense secretary sold nearly all of his individual stock holdings and limited partnership shares and put between $25 million and $50 million into a blind trust.

He also invested between $11 million and $55 million in municipal bond and other tax-free mutual funds.

Under federal disclosure rules, officials like Rumsfeld report their assets in broad ranges of values rather than specific numbers.

Top corporate executive

Rumsfeld made millions as a top executive at several large corporations after serving as President Ford's defense secretary from 1975 to 1977. He was chairman of California-based drug maker Gilead Sciences before returning to the top job at the Pentagon last year.

Although the report does not list Rumsfeld's net worth, it details assets worth a total of between $53 million and $175 million. That includes real estate -- most of it in northern New Mexico -- worth between $7 million and $23.6 million. It also includes between $5 million and $25 million in the D.H.R. Foundation, of which Rumsfeld is the president and source of funding.

The report showed Rumsfeld also owned millions of dollars worth of stock in computer graphics chip maker Nvidia, where he had been a business adviser before his Defense Department appointment.

Rumsfeld said last year he kept out of decisions on weapons systems until his holdings could be sold. He also removed himself from discussions of AIDS because Gilead makes several drugs for treating HIV.

Rumsfeld had said selling the shares in limited partnerships was difficult because the market for such investments was narrow and the value was hard to define. His report shows that Rumsfeld sold those investments for between $15.7 million and $71.6 million.

He also earned $4.7 million of investment income from those partnerships in 2001.

On company boards

Rumsfeld also made about $759,000 in deferred compensation from five companies on whose boards of directors he used to serve. Most of that -- $538,000 -- was from Sears, where he also retains a lifetime merchandise discount.

Stock Rumsfeld sold included shares of defense contractors such as Raytheon and Northrop Grumman as well as between $1,000 and $15,000 worth of stock in Enron, the now-bankrupt Houston energy company. Army Secretary Thomas White is a former Enron executive. Rumsfeld's report says he sold his Enron stock about April 10, 2001, before Enron's financial troubles made the stock worthless.

The report says Rumsfeld bought between $2 million and $10 million in two stock market index funds and 1.5 acres of land in New Mexico for between $100,000 and $250,000.

In his letter to the ethics office, Rumsfeld said the financial disclosure forms should be simplified. "There is no doubt in my mind but that with effort, this document could be simplified down to less than one-third its length, and rewritten so it can be understood by the preparer as well as the reader," he wrote.