Republican U.S. Rep. David Trott confirmed in a recent congressional report that he sold his 81 percent interest in the Farmington Hills-based law firm he helped lead for decades, with the partners buying out his stake over five years.
After winning the Republican primary against Rep. Kerry Bentivolio, R-Milford, a year ago, Trott said he would sell his stake in the firm his father started, then known as Trott & Trott PC, which processes home foreclosures for banks and lending institutions. He has not divulged the sale price.
The move came after a primary in which Bentivolio and his allies labeled Trott a "foreclosure king" because of the extensive work the firm performed processing foreclosures during the recession. Democrats continued to attack Trott, a Birmingham resident, on the issue during the fall campaign, but Trott won the November election with 56 percent of the vote to Democrat Bobby McKenzie's 41 percent.
"I have no interest in the law firm," Trott said in a recent Detroit News editorial board interview. "I don't have an office there, and that's actually what's required by the House Ethics (Committee) because the law firm is clearly a fiduciary business."
Ethics rules prohibit House members and their senior staff from practicing law, selling real estate or engaging in other professions that involve fiduciary relationships because they pose a risk of conflicts of interest. Trott was declared the wealthiest incoming freshman member of the 114th Congress by the Center for Responsive Politics.
The congressman said he also sold his interest in the real estate brokerage Coldwell Banker Weir Manuel in Birmingham, but maintains an interest in legal newspapers that publish foreclosure and other legal notices.
Trott's campaign said in August 2014 he sold his interest in the law firm to partners Jeffrey Raff, Marcy Ford and Jeff Weisserman and that he had not played a substantive role in the leadership or operations at the firm for several years.
Trott's investment in the firm contributed to his ranking by the Center for Responsive Politics among this year's 20 wealthiest members of Congress. His net worth is estimated at between $89.9 million and $311 million. (Lawmakers report the value of their debts and holdings in wide ranges.)
The congressman said he sought a legal opinion to guide his required divestment under the ethics rules.
"It was more involved than I anticipated, candidly. What's deemed to be a fiduciary business is a whole lot broader than I thought," he said. "I knew I would have to sell my interest in my law firm."
According to his recent disclosures, Trott's largest assets include stakes in the investment firm Toucan Family LLC and some real estate holding companies. He reports that he no longer holds positions as proprietor and officer of Dietz Trott Sports & Entertainment Management or Attorneys Title Agency in Farmington Hills, among other companies.
Trott and his wife, Kappy, maintain a stake in the Attorneys Title Agency, where she is chairwoman, as well as Talon Title Agency, with locations in central Ohio. Trott said he's not involved in the title companies.
"My wife owned a title company, that's how we got into it 30 or 25 years ago," Trott said. "But she's not working there, nor is she drawing a salary."
Trott remains a partner in publicly traded partnerships, including Valero Energy Partners, Sunoco Logistics Partners, Atlas Pipeline Partners, Magellan Midstream Partners, Phillips 66 Partners and Western Gas Partners.
Trott's father, Robert A., founded the family law firm in 1976, with Trott joining it in 1985 after graduating from Duke University Law School.
The financial disclosure report filed in August by Trott says that, per the terms of a stock-redemption agreement between Trott and the firm, Trott ceased to be a shareholder, director or officer of the company upon the agreement's closing. Sale installments from the firm are reported as assets valued between $1 million and $5 million.
"As of Dec. 11, 2014, I no longer have any ownership interest in the law firm. I don't hold any position in the law firm, and, to the extent the law firm is profitable, I'll get paid some money over five years," Trott said last week.
Based on those details, experts described the buyout deal as relatively typical of someone detaching himself from a partnership.
The report and Trott disclosed no other details about the buyout terms or price, except that the firm will assume Trott's 2014 tax liability stemming from his partnership income.
Ethics rules say a House member may not "permit his name to be used" by professional services firms, and Trott & Trott in December officially registered a name change with the state, becoming Trott Law.
"The firm is named after its original founder, Robert Trott," managing partner Jeff Raff said in a statement.
Stanley Brand, an attorney with Akin Gump in Washington, D.C., and an expert in public and political ethics, noted that many firms are similarly titled after deceased partners.
"As long as he's not holding himself out as a practicing attorney, I really don't see a problem," Brand said of Dave Trott.
Norman Ornstein, a resident scholar at the American Enterprise Institute and a congressional expert, said it might be out of Trott's control.
"Keeping the name — that's something you probably shouldn't do because they're trying to capitalize on having someone in office," Ornstein said. "But the problem with that is it's the law firm's choice, and they're not covered by the ethics rules."
The congressman also reached an agreement with the firm about his continued participation in the firm's 401(k) plan and trust, although "there will be no plan contributions from any source" to Trott's 401(k) account subsequent to the Dec. 11 stock agreement, the report says. His 401(k) plan with the firm is valued at between $250,000 and $500,000.