FRIST INVESTIGATION A PUZZLER

A review of George W. Bush's history with the SEC leads one to wonder what the SEC could possibly find wrong with Bill Frist's selling of HCA stock from his blind trust.

Despite legal advice not to sell, George W. Bush unloaded his Harken stock soon after he learned the company was in deep trouble, and before the stock tanked. He had previously failed to meet SEC filing deadlines in othr matters. Nevertheless, the SEC did not even bother to interview him.

It is almost impossible to believe Bush was not using nonpublic information unless one assumed that he did not read reports or listen to what was occurring at meetings. In Frist's case, there is less reason for suspicion. He was told in 2002 what stock the trust held, but in 2003, he told interviewers that he did not know if HCA was in the portfolio. Under his unusual trust rules, he had a right to know what was there and to order a stock sold.

HCA was founded by his father Thomas Frist, and once run by Thomas Jr. Company officials sold off over $100 million in stocks before the firm announced that second quarter earnings would not live up to expectations. The senator ordered his sale in June and the stock was sold when it was near its peak.

Unlike the Bush case, there is room to doubt that the Tennessee senator held nonpublic knowledge and acted on it. Perhaps he had not discussed the hospital chain with his family.
How can it be proven that he did??? His investment in the firm was between $7 and $35 million. Maybe he weas not interested in the family business.

Frist's friend, SEC chair Christopher Shays has recused himself from this case, but it is a stretch to believe that his subordinates wopuld move against Frist. In the Bush case, the SEC chair was a Bush family friend who did not even bother to recuse himself.

The investigation is more likely an effort to remove this matter from the table before Frist runs for the GOP presidential nomination in 2004. A favorble SEC report and the blessing of his evangelical allies will be sufficient to make the matter disappear. To this day, the mainstream press has shown little interest in George W. Bush's SEC problems. It can be assumed that self-censorship will continue after the SEC clears Bill Frist.