Mitt Romney makes most of his money from investments, and those investments are housed in blind trusts that are managed by a Boston attorney. The idea is that Romney — who opened the trusts upon becoming Massachusetts governor in 2003 — doesn’t know the companies in which he has a financial interest, so as to sidestep potential conflicts of interest. Pretty common for elected officials.

When running against Ted Kennedy for Senate in 1994, however, Romney referred to blind trusts as “a ruse.” And, at least in his own case, he’s largely correct.

According to Romney’s financial disclosures and tax returns, a majority of his investment income is derived from private equity

Here’s what I mean: According to Romney’s financial disclosure and tax forms, a majority of his investment income is derived from private equity funds (and related affiliate funds). And, within his private equity portfolio, most of the funds are managed by Romney’s old colleagues at Bain Capital.

Romney hasn’t been managing his Bain interests since creating the blind trusts, but he obviously knows about them. After all, they’re based on a retirement package he negotiated upon leaving the firm in 1999. And he also knows about Bain’s largest underlying investments in those funds. Portfolio companies like Clear Channel and Dunkin Brands (DNKN) and hospital chain HCA (HCA).

Or at least I assume he knows, because I assume he occasionally picks up The Wall Street Journal or just about any other newspaper that reported on Bain’s purchases of those massive companies. Remember, private equity isn’t quite as private as it used to be. The largest deals typically involve the acquisition of public companies, while an entire trade press industry has arisen to cover smaller transactions.

To be clear, I’m not suggesting that Romney did anything unethical either as governor or as a candidate for president. Instead, I’m simply pointing out that Romney’s use of blind trusts did not remove the conditions for such impropriety to occur. As he himself said, it’s “a ruse.”

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