A Fristfull Of Trouble (UPDATED)
It’s bad enough that Senator Bill Frist has gotten the image of a not-always successful Majority Leader and as a master political panderer, but now the question is arising: is he insidious, simply careless or just plain dumb? YOU decide (and the voters eventually will).
Consider two stories that comprise a double whammy of rotten political imagery that will be pounced upon by the Senator’s many foes and will require must spin by his staunchest supporters (but even some GOPers aren’t thrilled about Frist).
First consider this Washington Post piece indicating raised eyebrows at the Securities and Exchange Commission over the Senator’s stock dealings:
Senate Majority Leader Bill Frist is facing questions from the Justice Department and the Securities and Exchange Commission about his sale of stock in his family’s hospital company one month before its price fell sharply.
The Tennessee lawmaker, who is the Senate’s top Republican and a likely candidate for president in 2008, ordered his portfolio managers in June to sell his family’s shares in HCA Inc., the nation’s largest hospital chain, which was founded by Frist’s father and brother.
A month later, the stock’s price dropped 9 percent in a single day because of a warning from the company about weakening earnings. Stockholders are not permitted to trade stock based on inside information; whether Frist possessed any appears to be at the heart of the probes.
A spokesman said Frist’s office has been contacted by both the SEC and the U.S. attorney’s office in Manhattan about his divestiture of the stock. HCA disclosed separately that it was subpoenaed by the same U.S. attorney’s office for documents that were related to Frist’s sale. Frist and HCA said they are cooperating.
Historians said they cannot recall any other congressional leaders who have faced federal inquiries into stock sales. Frist has denied any wrongdoing.
On Thursday, a Frist spokeswoman said the senator had not discussed the stock sale in advance with any HCA executives. On Friday, in a statement from Frist’s office, the issue was couched a little differently. It said the senator “had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock. His only objective in selling the stock was to eliminate the appearance of a conflict of interest.”
According to Frist’s office, the senator decided to sell all his HCA stock — held in blind trusts managed by two companies for him, his wife and his children — on June 13. Under the rules of the trusteeships, Frist had no control over the timing of the sale, Frist spokeswoman Amy Call said.
The SEC’s interest suggests this is not a case that is taken lightly. Still, some could dismiss that as “this is typical biased report on the part of a reporter — see the reporter works for the Washington Post!!”
Except there’s more: an AP report alleges that even thought he denied it, Frist was updated on his blind trust investments:
Senate Majority Leader Bill Frist, R-Tenn., was updated several times about his investments in blind trusts during 2002, the last time two weeks before he publicly denied any knowledge of what was in the accounts, documents show.
The updates included stock transactions involving HCA Inc., the hospital operating company founded by Frist’s family.
Frist’s sale of HCA stock is under scrutiny by the federal government. Nashville, Tenn.-based HCA said Friday it had received a subpoena from prosecutors for the Southern District of New York, asking for documents the company believes are related to Frist’s sale of company stock this past summer.
rosecutors also have contacted the senator’s office, Frist spokesman Bob Stevenson said Friday. He said neither the senator nor his office had received a subpoena.
Frist’s office confirmed the Securities and Exchange Commission was looking into the sale.
“Senator Frist had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock,” Stevenson said in a statement.
Frist sold his HCA stock from several blind trusts this summer, at a time when insiders in the company also were selling off shares worth $112 million from January through June. Frist aides say he sold his stock to avoid any appearance of a conflict of interest.
Frist, asked in a television interview in January 2003 whether he should sell his HCA stock, responded: “Well, I think really for our viewers it should be understood that I put this into a blind trust. So as far as I know, I own no HCA stock”
Frist, referring to his trust and those of his family, also said in the interview, “I have no control. It is illegal right now for me to know what the composition of those trusts are. So I have no idea.”
Documents filed with the Senate showed that just two weeks before those comments, the trustee of the senator’s trust, M. Kirk Scobey Jr., wrote to Frist that HCA stock was contributed to the trust. It was valued at $15,000 and $50,000.
So there are now several questions about Frist, a man who aspires to be President and often seems to not only have his finger in the political wind, but seems ready to construct a weathervane atop his office for immedidate political guidance:
- Is he simply dumb and made some mistakes on his blind trust stocks?
- Is he being intentionally creative with the actual facts?
- Was he honest to the reporters he talked with when he said he didn’t even know he had the stock? Or was he doing a Pinnochio imitation?
- How will this play with GOPers? Frist is not the kind of leader many in the Republicans idolize. If anything, he seems to be more akin to a 21st century Richard Nixon, a political technician who, if he wins the nomination, will get it via crafty, sometimes shifting political stances and quiet behind-the-scenes coalition-building rather than rank-and-file enthusiasm.
Will the sale of the stock in the blind trust mean Bill Frist’s political stock will go down?
UPDATE: There are other voices on this issue. Here’s a cross section. Note that these are EXCERPTS so we urge you to read the entire posts:
–Glenn Reynolds aka InstaPundit has a good roundup and writes:”Regardless of what happens with this case, it’s the second term of an Administration, so we’ll probably see a lot more of this sort of thing, real or bogus. That’s not all bad: I think that the coming years will be good ones for this book!” (And the book he links to is relevent!)
–Captain Ed Morrisey calls for Frist to step down:
If the documents prove to be authentic — and we all know how important it is to verify that — then Frist has landed himself into a world of trouble. ….
These charges seem rather specific, and if the AP did their homework properly (a big if, of course), the evidence gives at least some credence to the charges. It seems appropriate, with this kind of investigation going on, for Frist to step down as Senate Majority Leader and allow another Republican to take the reigns. We have too much at stake to have a distracted leadership in the upper chamber let the agenda go adrift. We need a strong Majority Leader who can keep the Democrats on the hot seat for their obstructionism and also keep a spotlight on Chuck Schumer’s own emerging scandal. I’d prefer to see George Allen step into the #1 slot.
In the meantime, Frist needs to do some explaining to his home state constituents. They sent him to Washington.
– The Florida Masochist (the title of that site must mean he reads TMV!) agrees with Captain Ed:
Senator Frist 2003 statement and the blind trust statements gotten by AP are absolutely contradictory. If true the Senator is lying, and recent sales of HCA stock by other corporation officials and him look awfully damning.
The Senator was a yet unannounced GOP candidate for President. This in no way can help him even if exonerated. I’ll reserve final judgement but this smells to me. You’d think Frist would be smarter, but powerful people make dumb decisions regularly. To me it don’t matter Democrat or Republican, I don’t like corruption or politicians flouting the laws…..The Republicans don’t need this albatros hanging over their heads with the mid-term elections approaching.
–Think Progress:”In other words, the only time Frist could contact his trustee and tell him to sell a specific stock is when he took on new â€œdutiesâ€? which created a new â€œconflict of interest.â€? The problem is that Frist is the Majority Leader, a position which heâ€™s held since 2002. What duties did Frist take on in June that he didnâ€™t have before? “
–Just One Minute offers an interesting hypothetical defense of Frist (a must read because it outlines an additional point of view), then writes that “my guess is that if Frist were gone today, he would be forgotten tomorrow (and with a fine defense like this, tomorrow may be here by yesterday…)”
–At the great GOP-oriented site Red State there is a flat call for Frist to vacate his position, in a post that details Frist’s failures. Here’s a small part of it 4 U:
An astute observer might have noticed some time ago that we’re not the biggest fans of Bill Frist, generally speaking, here at RedState.org. As a majority leader, I have long been of the opinion that he is ineffective, and he has certainly shown a willingness as an individual Senator to stab both social and fiscal conservatives. There are no other constituencies of the Republican party left to fail.
Unless, of course, you want to examine the fact that he is failing his own constituents in Tennessee by leaving the fight for the 118th Air Lift Wing entirely to Democrat governor Phil Bredesen. Oh yeah, he’s also mired in personal scandal that is likely to get much worse before it gets better.
The situation is clear. Bill Frist cannot at this current time act effectively as Senate Majority Leader for the Republican Party, and should step aside from his position immediately.
The former (insider trading), depending on what information he had prior to the sale, may be illegal; the latter (lying, or perhaps misleading) is not illegal, but it’s certainly unethical. I suspect both Republicans and Democrats are going to spend the upcoming months considering the fate of former Speaker of the House Jim Wright. And if it turns out Frist did engage in insider trading, I hope we’ll all consider the fate of Congressman James Traficant.
Frist may deserve such fates. In the meantime, I’m with Captain Ed, who suggests Frist “step down as Senate Majority Leader and allow another Republican to take the [reins].”
The news that federal prosecutors and the Securities and Exchange Commission are looking into Frist’s sale of stock in HCA Inc., the hospital operating company founded by his family, comes as a criminal investigation continues of Jack Abramoff, a high-powered Republican lobbyist, and his ties to DeLay of Texas.
Less than a week ago, a former White House official was arrested in the Abramoff investigation. For Republicans, the timing couldn’t be worse.”
–Steve Soto sees Frist’s woes offering a clear political gain for the Democrats on George Bush’s next choice for the Supreme Court. Here’s a small part of what he says:
With both Lincoln Chafee and Olympia Snowe signaling that they will not support anyone for the Oâ€™Connor seat who changes the existing ideological balance on the court, you can bet that there will be other GOP senators, possibly within the Gang of 14, who would not allow Frist to employ the nuclear option when Reid says â€œGo ahead, make my day.â€? Compromising Frist right now undercuts Bushâ€™s ability to ram through a far right pick, if it turns out that Frist is weeks away from an SEC insider trading indictment from a US attorney. Bush will get no help because of Fristâ€™s problems and there may now be a leadership challenge within the Senate GOP at a critical time. That means Bush is heading for a splintered caucus and a train wreck on that pick, because the American Taliban will go nuts if they canâ€™t ram through a winger jurist after having to swallow the Roberts pick.
–Professor Bainbridge looks into the legal issues and a possible Frist defense in great detail. We’d ruin this post if we take anything out of context so read it in its entirety.
–Kos’ manyoso:”I say, stick a fork in him. Fristy’s goose is cooked.
–Liberal Penpal writes “we knew he was an idiot, but a crook too? We’ll see if the SEC actually investigates this one (they should).”
What part of â€œblindâ€? does Frist not understand? Thatâ€™s the first question. It doesnâ€™t seem possible that the rules of the Senate would allow him to have so much contact with the people running the trust. At worst, that would be an ethical breach and he could be punished.
But the bigger implication of these investigations is whether Frist sold the HCA stock based on insider information. That could cost him much more.
Power corrupts and absolute power corrupts absolutely. When a guy is as high in the government as Bill Frist is, it’s easy to imagine the temptations of an easy buck, the Martha Stewart way, or an easy lay, the Monica Lewinsky way. We elect men, not saints. Our governments are run by regular guys who put their pants on one leg at a time. Only Jesus Christ was perfect.
That said, if there is wrongdoing, let’s go after it with the full force of the law. Crime is crime. Our elected officials must set an example for America and the rest of the world. If Frist is found guilty of wrongdoing, let him hang.
–Bull Moose:”The Moose wonders whether Martha Stewart is providing financial planning for the Senate Majority Leader.”