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THE RACE TO THE WHITE HOUSE

Estimate of Heinz Fortune Doubled

John F. Kerry's wife oversees assets worth about $1 billion, a new Times analysis indicates.

June 27, 2004|Ralph Vartabedian | Times Staff Writer

Teresa Heinz Kerry, through a network of investments in blue-chip corporations, venture capital funds and municipal bonds, controls a family fortune worth an estimated $1 billion, an examination of public records shows.

The $1-billion figure is double the estimates of her wealth that are widely cited in news stories about her husband, Massachusetts Sen. John F. Kerry, the presumptive Democratic nominee for president.

The couple would rank as the wealthiest to occupy the White House, far surpassing such storied presidential fortunes as the Kennedys'. Their assets are so vast and far-reaching that they mirror the U.S. economy, and will likely raise questions about conflicts of interest.

"She represents a new ballgame in terms of her wealth and in terms of the wealth she controls," said Kevin Phillips, a political commentator and author of the history "Wealth and Democracy."

Heinz Kerry's investments, worth an estimated $500 million in 1995, have grown over the last nine years to $1 billion or more, even accounting for large living expenses and charitable contributions, according to an analysis of Securities and Exchange Commission filings, Senate financial disclosure reports, probate documents and other public records.

Since key details of Heinz Kerry's investments are not in the public record, a precise valuation is not possible. The Times analysis produced estimates as low as $900 million and as high as $3.2 billion.

Three senior executives at investment firms that handle accounts for wealthy clients reviewed The Times' study and said the $1-billion valuation was a fair and conservative estimate.

Heinz Kerry has declined requests by The Times in recent months for interviews. Campaign representatives for Sen. Kerry and his wife said the couple regarded their assets as private. The representatives also declined to provide answers to written questions over the last two weeks.

Heinz Kerry's money is actively managed every day of the year, providing capital to Gannett, Anheuser-Busch, Pfizer and Procter & Gamble, among many others. It helps finance municipal sewer systems, technology start-ups, schools and more.

The trust accounts are held at Mellon Financial Corp., the Pittsburgh institution that has long handled the affairs of the Heinz family. She inherited the family's fortune in the food business 13 years ago.

In 2003, the Heinz trusts made 890 trades in stocks, bonds, funds and other investments -- more than three trades for every day that securities markets were open. In dozens of cases, the trades were for assets valued above $1 million, and scores of other trades involved assets worth hundreds of thousands of dollars.

Heinz Kerry's net worth is usually estimated at half a billion dollars, though these estimates are not explained in documentation. In its latest annual ranking, Forbes magazine did not include her among the world's billionaires; the last time the magazine estimated her wealth was in 2002, when it said she was worth $550 million.

But The Times examined financial disclosures as far back as 1982 filed by Sen. John Heinz (R-Pa.), who died in 1991, and Kerry. In 1995, H.J. Heinz Co. filed an SEC document that showed Heinz Kerry was the beneficiary of trusts that held $400 million of Heinz stock. Separately in 1995, the year they married, Kerry filed a Senate disclosure report that showed Heinz Kerry had other assets worth an estimated $100 million.

The Times examined the portfolio of stocks and bonds for each year since 1995, and concluded that it grew to roughly $1.3 billion, in part by diversifying out of Heinz stock.

Records and public statements show that charitable contributions and family living expenses could have drained no more than $300 million out of the trust fund. Last month, she disclosed that she had income of about $5.1 million in 2003, apparently representing some of the income generated by the trusts.

"If you had $500 million in 1995, I don't see how you couldn't be close to $1 billion today with any reasonable equity strategy," said L. David Tisdale, chief executive of Starbuck, Tisdale & Associates, a Santa Barbara investment advisor who reviewed The Times' work.

Certainly, the Kerrys would be among the richest families to ever occupy the White House, eclipsing even President Kennedy and well ahead of the other moneyed chief executives over the last century.

When Franklin D. Roosevelt died in office, he left an estate valued at $1 million, according to his presidential library. That would be worth about $11 million today when adjusted for inflation. Herbert Hoover had roughly $8 million when he entered office in 1929, according to archivists at the Hoover presidential library -- an amount worth $88 million today.

Lyndon B. Johnson was worth an estimated $14 million in 1966, Life magazine said at the time. That would be worth $82 million today. The magazine Trusts & Estates estimated Johnson's worth at $20 million in 1973, worth $85 million today.

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