AP has a very detailed article on the Senate Majority Leader's handling of his so called blind trust and the HCA stock in it. I blogged earlier about this here. If what AP is reporting is true, then I feel Bill Frist has a great deal of explaining to do. Right now the Senator's sale is under investigation by the SEC.
WASHINGTON - 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.
Prosecutors 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.
But the interesting part comes here.
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.
The documents filed by the trustees of Frist's blind trusts were obtained by The Associated Press on Friday.
On Nov. 20, 2002, Scobey wrote Frist that 14,781 shares of HCA were sold, along with three other investments. The same day, Scobey wrote that four other investments were sold, none of them HCA stock.
On May 16, 2002, Scobey advised Frist that four investments were contributed to a Frist
blind trust, including HCA stock valued at $500,000 to $1 million. A second letter the same day mentions the same four investments going into a different trust, but with different valuations, including HCA stock valued at $250,000 to $500,000.
On Jan. 14, 2002, a trustee for Frist's children notified the secretary of the Senate that two investments were added to the blind trusts of Frist's sons Jonathan and Bryan — including HCA stock valued at $5,000 to $10,000. It was not clear whether Frist received a copy of the letter.
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.
Again the laws of insider trading are murky to me, but this is a matter for prosecutors to look into. I have to agree with Captain Ed, Bill Frist should step down as Senate Majority Leader while this investigation plays out. The Republicans don't need this albatros hanging over their heads with the mid-term elections approaching.
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