Asbestos trusts say they have nothing to hide, but act like they do
"Where are you going?" "What will you be doing?" "Who's going to be there with you?"
Those are questions all good parents ask of their children, but the answers are not always satisfactory.
"Nowhere." "Nothing." "Nobody."
Parents like transparency. When children are secretive or evasive, parents have reason to worry. Reluctance to reveal their destinations, their activities and their companions leads parents to believe that their offspring may be hiding something.
Citizens like transparency, too, and become indignant when public servants try to avoid proper scrutiny. If they don't have anything to hide, we wonder, then why are they acting like they do?
Transparency should be a desirable quality for administrators of asbestos trusts, as well. Again, if there is nothing to hide, why act suspiciously?
Asbestos trust funds were established so that future claimants can receive benefits from asbestos manufacturers going bankrupt. But the lack of transparency can facilitate fraud, and cause claimants and attorneys to seek redundant restitution from multiple funds.
As U.S. Rep. Lamar Smith (TX-21) has observed, the federal Bankruptcy Code favors transparency in bankruptcy cases, but "this principle of openness is no longer being fully implemented" for asbestos trusts.
Two years ago, Smith asked the Government Accountability Office to investigate the asbestos trusts and raise the veil of secrecy. In a report released last October, the GAO acknowledged that the lack of transparency could facilitate fraud, but concluded that none was occurring. The veil of secrecy was not raised.
Whether there is or isn't fraud, the fact remains that there could be and that just isn't right.
Fortunately, legislation has been introduced in Congress to reduce the potential for fraud. House Resolution 4369 would require bankruptcy trusts to disclose claims and exposure allegations and submit to third-party discovery in civil lawsuits.
Opponents say there's no need for the bill, but you have to wonder why they favor secrecy. If there's nothing to hide, why keep hiding it?