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Post saves bush { July 12 2002 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A58469-2002Jul11.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A58469-2002Jul11.html
Bush Uncooperative At First in '90 Probe, SEC Memo Suggests
Insider Trading Suspected in Sale Of Stock; No Illegal Activity Found
By Mike Allen
Washington Post Staff Writer
Friday, July 12, 2002; Page A07
An internal Securities and Exchange Commission memo suggests President Bush was initially uncooperative a decade ago with investigators looking into suspected insider trading.
Back in 1990, Bush was a member of the board of Texas-based Harken Energy Corp. when he sold 212,140 shares of Harken stock shortly before the company announced huge losses and the stock price fell. The SEC looked into whether Bush, a member of Harken's audit committee, had profited from information that was not available to other investors.
Two SEC investigators said in a 1991 internal memo, released yesterday by the nonpartisan Center for Public Integrity, that they had asked Bush and Harken twice for relevant documents.
"Harken has asserted the attorney-client privilege and refused to produce documents concerning its policies covering the purchase, sale or ownership of Harken securities by officers or directors," the memo said. "Bush has produced a small amount of additional documents which provide little insight as to what Harken nonpublic information he knew and when he knew it."
Dan Bartlett, the White House communications director, said Bush "was fully cooperative, waived attorney-client privilege and made himself available for a telephone or in-person interview." Investigators did not interview Bush, he said.
SEC records show that Harken eventually produced substantial information, and a 1992 memo concluded: "Based upon our investigation, it appears that Bush did not engage in illegal insider trading because it did not appear that he possessed material nonpublic information."
Democrats have seized on a 1993 SEC letter to a lawyer for Bush, which says that "no enforcement action is contemplated" against Bush but goes on to add legal boilerplate, set off from the body of the letter as a quotation from securities law, saying that the end of the investigation "must in no way be construed as indicating that the party has been exonerated."
Bush referred to the corporate scandals while discussing the war on terrorism during a speech in Minneapolis yesterday. He said that "as a result of the evil done to America, there's going to be some incredible good here at home, too."
"I believe people have taken a step back and asked, What's important in life?" he said. "You know, the bottom line and this corporate America stuff, is that important? Or is serving your neighbor, loving your neighbor like you'd like to be loved yourself?"
Democratic leaders chided Bush after news reports said yesterday that he accepted two loans from Harken while he was on the board, a practice he condemns in his new anti-fraud agenda. Senate Majority Leader Thomas A. Daschle (D-S.D.) said that "puts him in a difficult position to criticize others." Daschle added that the White House should call for the release of the SEC's file on Bush but noted that he does not favor having an independent counsel because "oftentimes that position is abused."
House Minority Leader Richard A. Gephardt (D-Mo.) said it's "hard to lead when you haven't done the things that you're asking others to do."
Sen. John McCain (R-Ariz.), Bush's opponent in the 2000 GOP primaries, spoke on corporate governance at the National Press Club and called on Bush to replace SEC Chairman Harvey L. Pitt, saying the times require a new leader "whose background and record will leave no question."
© 2002 The Washington Post Company
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