In order to get rich in Washington, usually you have to leave government. Just ask Joe Biden’s secretaries of state, defense, treasury, agriculture and homeland security—who all left their official posts around the time Trump took over and made millions out of office, giving speeches, joining corporate boards and otherwise cashing in on D.C.’s revolving door. The Biden cabinet member who might be the wealthiest, however, stayed in government the whole time.
Attorney General Merrick Garland is worth an estimated $20 million, tied with Janet Yellen at the top of our tally of Biden’s richest cabinet secretaries. How did Garland, who earned a salary of $141,000 to $230,000 every year from 1997 to 2020 as a federal judge, get so wealthy? Forbes set out to unravel that mystery, finding that Garland and his wife inherited plenty of money.
The story starts on a chilly September evening in 1987, when Garland married Lynn Rosenman at the Harvard Club in New York City, a building featuring wooden walls adorned with portraits and, in one place, a giant elephant head. The setting suited Garland, a graduate of both Harvard College and Harvard Law School, as well as the family he was joining. His bride, a fellow Harvard grad, worked as a staff assistant at a government contractor. Her father, also a graduate of Harvard College and Harvard Law School, made his living as an attorney at Cravath, Swaine & Moore. Her grandfather was a well-known New York lawyer, who served on the state Supreme Court, in addition to advising Harry Truman and Franklin Delano Roosevelt (for whom he reportedly coined the phrase “New Deal.”)
Merrick Garland was no slouch coming into the family. Eleven years into his own legal career at that point, Garland had already clerked under Supreme Court Justice William Brennan, served about a year and a half at the Department of Justice and joined a firm called Arnold & Porter. Despite his early success, Garland was still building his resume. Less than two years after the wedding, he returned to the Justice Department, where he ultimately prosecuted violent drug organizations and crooked corrections officers. On April 19, 1995, Timothy McVeigh blew up the Alfred P. Murrah Federal Building in Oklahoma City, killing 168 people in the worst case of homegrown terrorism in American history. Two days later, Garland was in Oklahoma to serve as the lead federal prosecutor on the ground.
Garland Vs. Barr
In Joe Biden’s cabinet, Merrick Garland is one of the richest members. But he only has half as much money as Trump’s attorney general.
That September, Bill Clinton nominated Garland to serve as a federal judge. As part of the confirmation process, Garland submitted a handful of documents that, 26 years later, still provide key clues in figuring out his finances. The filings show that Garland made good money in private practice, $200,000 in 1993, when he worked for nine months at Arnold & Porter. But he also had a robust fortune outside of his day job, with $3.5 million in assets and zero debt.
On the 1995 filing, Garland split his holdings into various categories—“cash” amounting to about $520,000, “listed securities” worth $470,000, “real estate” valued at $490,000 and so on. The largest category was called “trusts,” worth about $910,000. An attachment showed that those trusts were all from his wife’s family. Between 1989 and 1994, Garland’s mother- and father-in-law established three trusts for their heirs, including Lynn Garland, according to the documents. For purposes of net worth calculations, Forbes counts any holdings owned by an official’s spouse or dependent children as belonging to that official, consistent with the way federal ethics laws treat assets. So as of 1995, much of Garland’s money came from his in-laws.
Over the years, the fortune swelled, according to financial disclosure reports filed between 2004 and 2021, some of which Forbes obtained through a public-records request and others of which were preserved by Judicial Watch, Fix the Court and the Center for Public Integrity. At the start of the period, Garland declared $2.9 million to $6.5 million of assets. Ten years later, that range had grown to $7.6 million to $28 million. Today it’s $8.6 million to $33 million.
The secret to that kind of growth could have been as simple as compounding returns. If Garland had just taken the $3.5 million he had in 1995 and stuck the whole thing in the S&P 500, it would have turned into $25 million by now. But the attorney general didn’t invest quite so aggressively, instead maintaining a diversified portfolio of stocks, bonds, cash and so on. He did just fine, with the government paying him an earn upper-middle class salary while his in-laws kept handing down assets.
Inside Garland’s Wallet
The attorney general owns millions of dollars worth of real estate, some apparently inherited from his in-laws, but the bulk of his fortune is concentrated in more liquid investments like stock funds and cash accounts.
In 2010, a New York City property suddenly showed up on Garland’s financial disclosure report. It appears to have come from his in-laws. The property was held through a trust, and earlier filings show that Garland’s family held a “non-vested” interest in a Manhattan apartment through a trust. Nine years later, a second property appeared, also through a trust. That one, listed at a value of $500,000 to $1 million, consisted of real estate in a Connecticut town where Garland’s in-laws lived part-time.
Transferring property, as it turns out, has multiple benefits for families looking to pass down fortunes. First, wealthy benefactors can hand off the real estate itself. Then, they can pump cash through that real estate by paying rent to their heirs. Apparently, that’s what happened in this case. Over 12 years, Garland recorded $600,000 to $4.6 million of rent as income on federal disclosures. It all seems to be the result of careful planning. “The basis for rent calculations is a third party’s professional assessment of fair-market value, solicited by the law firm that created the real estate trust,” an advisor to Garland explained in a statement.
Rich people sometimes bend the rules when passing down fortunes, but all of this appears to be legal. “The concept of taking real estate and putting it in trusts for heirs is a very common tool,” says David Cannon, a New York real estate trusts and estates lawyer. “So that doesn’t raise my eyebrows at all.” Good news for Garland, the top law-enforcement officer in America.
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August 06, 2021 at 05:30PM
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How Attorney General Merrick Garland Amassed A $20 Million Fortune - Forbes
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