Bush Is No Good Trade

According to U.S. Securities and Exchange Commission records, on four separate occasions Gov. George W. Bush disregarded federal statutes by failing to file insider stock trade reports on a timely basis, back-dating one trade by some four months. Moreover, one key trade just a few weeks before Iraq invaded Kuwait -- but reported some eight months late after the Gulf War was over -- netted Bush close to $1 million in profit as he sold stock in Harken Energy, an oil company doing business in the Middle East wherein some of his father's largest contributors also maintained substantial positions.

The SEC under President Bush carried out an incomplete investigation of the younger Bush's pre-Gulf War trade in 1991 after key presidential advisor George Jr. claimed that he filed a report, but that the SEC had most likely lost it. (No one has really asked whether the governor bothered to use registered mail to verify receipt of the documents.)

According to an Oct. 28, 1991, Time Magazine report, SEC spokesman John Heine said, "as far as I know, nobody ever found the 'lost' filing." And, strangely, Bush refused comment to Time regarding either the incident or his involvement with Harken.

The governor also did not reveal the blatant conflicts of interest involved, since the chairman of the SEC was Richard Breedon, former lawyer with Houston firm Baker and Botts and deputy counsel to Bush's father when he was vice president. Breedon received his SEC appointment after the elder Bush became president.

The SEC investigation of George W. was led by general counsel James R. Doty who, according to a UPI report, mysteriously neglected to interview any of the Harken directors. Moreover, Doty had previously served as George W. Bush's personal lawyer in the deal involving his Texas Rangers purchase. So, in the end, the younger Bush was cleared of insider trade wrongdoing by his personal attorney and by his father's vice-presidential counsel, a virtual impossibility for the average U.S. citizen.

That the mainstream media has refused to question Bush regarding what voters might consider a mockery of the criminal investigative process is a story in and of itself -- especially considering it concerns how a possible future president might enforce U.S. laws if he had also broken those statutes.

Consider that Americans who currently hold stocks or mutual funds would never -- by virtually no stretch of the imagination -- be able to obtain access to corporate insider information that could turn a million dollars profit. But reporters following Bush have not broached the subject during the campaign.

Most reports involving Bush's insider oil stock trades refer only to his highly controversial June 22, 1990, million dollar trade made six weeks before Gulf War hostilities broke out in Kuwait -- a trade which was reported eight months later. However, SEC documents between 1986 and 1993 show that Bush acquired 212,152 shares of Harken stock on Nov. 1, 1986, at the time he merged his Spectrum 7 company with Harken. But the future governor did not report the transaction until April 7, 1987 -- more than five months later.

When Bush filed late on April 7,1987, SEC filings show he had purchased another 80,000 shares on March 10, 1987. But strangely, two weeks later, an April 22 filing noted that the 80,000-share purchase was backdated to Dec. 10, 1986. When questioned by the media, Bush's attorney said it was the same 80,000 shares but he could not explain the discrepancy regarding the purchase dates or why Bush even reported the trade two times.

Another SEC filing, this from June 6, 1989, showed that Bush purchased another 25,000 shares of Harken but again waited more than four months to report the transaction.

The Houston Post, recognizing Bush's late SEC filings, noted that he "took eight months to notify the government of his sale of stock in a company on whose board he served" and "also missed the filing deadline for reporting other insider trades involving Harken Energy."

Documents obtained by the Post showed "additional instances in which Bush ... ran afoul of the SEC rule requiring notification." And George W. described himself as a "small, insignificant" Harken stockholder; but news reports examining SEC documents identified Bush as the third largest non-institutional investor.

In October 1991, Time Magazine questioned why the tiny country of Bahrain would stake so much of its financial future on Harken Energy, which it labeled an "obscure, money-losing company with no refineries and no experience in offshore oil exploration." But the magazine also noted that oil-insiders speculated that Bahrain's rulers saw the arrangement as a way to gain influence with the Bush administration.

Mysteriously, primary reporters have also ignored what could point to a nexus regarding foreign policy and personal financial interests. Interestingly, the Village Voice in January 1991 reported that in 1990 the Bush administration signed an agreement with Bahrain that chose the small country as the permanent principal allied base in the Middle East, although it was some 200 miles away from the hostilities in Iraq and Kuwait.

The military-base deal came after Harken announced its Jan. 30, 1990, joint oil-drilling venture with Bahrain. So President Bush's key contributors and his son George W. were carrying on personal financial business with Bahrain at the same time decisions were being made regarding the possibility of a war in the Gulf.

And neither the president nor his adviser, George Jr., let the press know that Bahrain had been permitted to infuse $7.7 million in foreign cash to hire U.S. public relations firm Hill & Knowlton to lobby Congress and the American people; a stunning variety of opinion-forming devices and techniques were employed to inflame U.S. patriotic passions of war while personal financial interests were on the line.

On May 21, 1990, less than ten weeks before Saddam Hussein's troops invaded Kuwait to initiate the Middle East hostilities -- but just four weeks before Bush unloaded the bulk of his Harken stock -- a renegotiated corporate loan agreement featured an unusually high interest rate of 12 percent, less credit for acquisitions, a $750,000 debt fee and even requirements by some of Harken's major stockholders to guarantee $22.5 million in debt, according to Associated Press.

Did Bush know of impending losses when he sold his stock on June 22, 1990, since Federal securities law prohibits corporate insiders from trading "on the basis of" material information that is not publicly known? Bush denied the charge in spite of his positions on the Harken Energy board of directors, audit committee and stock restructuring panel. He added that he had no idea Harken was going to get an audit report full of red ink until weeks after he had made his stock sale.

But U.S. News & World Report said, "there is substantial evidence to suggest that Bush knew Harken was in dire straits. ... Harken's SEC filings make it clear that the company's directors knew radical steps were necessary." The magazine added that "one informed source says Harken's creditors had threatened to foreclose on the company if substantial debt payments were not made." Shortly thereafter, Bush cashed out of Harken.

The April 4, 1991,Wall Street Journal added that "Mr. Bush didn't return their phone calls seeking comment, and the Bush White House said 'it doesn't comment on the activities of the president's children.'"

According to the Washington Post, Harken's audit committee, of which Bush was a member, met with Mikel Faulkner and

auditors from Arthur Andersen & Co.

, Harken's accountants, on June 11, 1990 -- just 11 days before Bush sold his stock on June 22. When asked for a copy of the June 11 minutes or permission to inspect them, the company declined to make the records available.

Bush's insider transaction yielding a profit of $848,560 -- some 250 percent profit on the stock's original value -- came a week prior to the end of a quarter in which the company lost $23 million. The quarterly report was released just a few days after Iraq invaded Kuwait and the Harken stock plummeted. However, as reported in a 1992 Mother Jones report, Bush attended a meeting regarding a revised stock offering in May 1990 working with Smith Barney's financial consultants concerning corporate restructuring.

In an Oct. 11, 1994, UPI report, Bush also claimed that he was not aware of Harken's poor financial condition when he sold the stock, but UPI said that the Dallas Morning News reported on the same day that a corporate official who served with Bush on the audit committee at Harken felt otherwise; Stuart Watson told the Dallas paper that he and Bush were constantly made aware of the company's finances. "You bet we were," said Watson. "We were both trying to keep that company on the straight and narrow."

On March 16, 1992, U.S. News echoed Watson's statement, reporting that "according to documents on file with the Securities and Exchange Commission, his position on the Harken (restructuring) committee gave Bush detailed knowledge of the company's deteriorating financial condition."

Chuck McDonald, spokesman for Texas Gov. Ann Richards' campaign, said that SEC chief counsel in the Bush investigation -- James Doty, George W.'s former attorney -- never talked to George W., Watson or other Harken officials in its 1991 probe. He said, "Was this a real investigation, or was it a whitewash of an insider stock sale by the son of the sitting president?" UPI, which reported McDonald's statement, went on to note that "while Bush claims the SEC investigation absolved him of illegal insider trading, he has refused to release the investigation files."

Harken founder, Phil Kendrick, noted that the company's "annual reports and press releases get me totally befuddled. There's been so much promotion, manipulation and inside deal making." And even Harken chief executive Mikel Faulkner, an accountant, offered advice for those trying to decipher the financial statements: "Good luck. They're a mess."

Press accounts note that Bush requested a letter from the SEC, issued in October 1993, The letter, signed by SEC Associate Director Bruce A. Hiler, said that "the investigation has been terminated as to the conduct of Mr. Bush and that, at this time, no enforcement is contemplated with respect to him." But the letter also stated that "it must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result."

On Oct. 18, 1993, the Bush administration SEC said it would not bring a case against George W. Bush.

Gov. Bush speaks about his outstanding business record on the campaign stump; however, in 1989, U.S. News & World Report said, "Harken Energy lost over $12 million against revenues of $1 billion." Harken President Mikel Faulkner said that in addition to Bush's position as a director at $2,000 per meeting, stock options worth $131,250, 5 percent loans and 40 percent discounts on stock purchases, he was also a consultant to Harken for "investor relations and equity placement" at a salary of $80,000 per year from 1986 until 1989, when his salary jumped to $120,000.

The board was equally generous to Bush in 1990 as "the company lost another $40 million and shareholder equity plunged to $3 million -- down from more than $70 million in 1988." Faulkner declined to say what services George W. has performed as a consultant.

In March 1992, U.S. News said that "Despite repeated requests for interviews, George W. declined to discuss Harken or the reason for his stock sale, saying through an assistant that he 'does not want to read about himself.'" But some might ask whether American voters have a right to know whether a possible president would strictly enforce federal statutes or appoint lenient attorneys with suspect ethical standards leading to fixed politically sensitive investigations.

Moreover, should Bush -- a director of the corporation -- be accountable when huge losses are reported over a period of time, especially as a presidential candidate purporting to have an outstanding entrepreneurial business record at every presidential campaign stop? The answers have real implications regarding presidential character, morality and personal ethics.

Author and commentator Kevin Phillips offered a perceptive look at the Texas governor in the February 2000 issue of Harpers magazine when he said, "We can fairly ask whether George W. Bush is anything more than another scion who has made a decent governor during a period of prosperity and easy growth, and whether the United States can afford nominees who are to presidential politics what legacies are to college fraternities."

Another bureaucratic snafu.

Bush Seeks to Deflect Blame for Tardy SEC Filings

Reuters
Staff
July 03, 2002 12:37 PM ET
Source

WASHINGTON (Reuters) - The White House said on Wednesday that a "mix-up" by lawyers at a Texas-based oil and gas exploration firm was to blame for President Bush's delay in filing reports on stock transactions worth more than $1 million before his election as the governor of Texas.

White House spokesman Ari Fleischer said Bush personally did nothing wrong while serving as a director of Harken Energy Corp. in the late 1980s and early 1990s, brushing aside suggestions of a conflict between his actions more than 10 years ago at Harken and the rules he recently proposed as president requiring top executives to promptly disclose when they buy or sell company stock.

Eager to distance his administration from scandals at Enron Corp. and WorldCom Inc., Bush will issue a fresh call for corporate responsibility and a crackdown on misconduct in an address on Wall Street on July 9.

"If there are any bad players in our free enterprise system, they will be held accountable by this administration and by the government," said Fleischer, offering a preview of Bush's address to business leaders.

A 1991 Securities and Exchange Commission memorandum found that Bush was late on at least four occasions in filing reports about transactions involving Harken stock.

One report -- filed 34 weeks late -- disclosed that Bush had sold $848,560 of Harken stock on June 22, 1990, just weeks before the company filed a quarterly report revealing that it had hemorrhaged $23 million during that period.

Bush sold his stock for $4 a share. By the end of the year it was trading not much above $1, according to the Center for Public Integrity, which provided Reuters with a copy of the April 9, 1991, SEC memo.

Fleischer dismissed suggestions of wrongdoing by Bush, saying certain filings were late due to "a mix-up, a clerical mistake involving the lawyers at Harken."

A Harken Energy spokesperson was not immediately available to comment.

Fleischer said Bush properly disclosed the sales of stock in a separate June 1990 filing. "The president, in his own personal action, disclosed promptly the intent to sell," he said.

The SEC did not take action against Bush, whose father was president at the time.

Bush's political fortunes could depend on his stewardship of the U.S. economy and his response to a flood of corporate accounting scandals that have contributed to a sell-off in stocks.

In the run-up to November congressional elections, Democrats would like to blame Bush and his fellow Republicans for creating a lax regulatory atmosphere conducive to corporate greed.

In addition to Bush, Vice President Dick Cheney's conduct while at the helm of Halliburton Co. is under scrutiny. The company said in May that the SEC had begun a preliminary investigation of its accounting treatment of cost overruns on construction jobs. Cheney served as chief executive of Halliburton from 1995 to 2000, but a spokeswoman for the vice president said he has not been contacted by SEC investigators.

In March, Bush called for a crackdown on corporate and accounting misconduct. But he stopped short of tougher reforms advocated by lawmakers and his own treasury secretary after the collapse of Enron, one of the president's biggest financial backers in the 2000 campaign.

In the wake of the scandal at WorldCom and renewed attacks by Democrats, officials say Bush is considering new measures to crack down on corporate abuse.

Treasury Secretary Paul O'Neill wants to give the Securities and Exchange Commission the right to freeze the assets of officials implicated in scandals like that at WorldCom. O'Neill had also proposed changing legal standards -- from recklessness to negligence -- to make it easier to punish executives accused of misleading shareholders.

Other Bush advisers want to provide additional resources to the SEC to police the industry and punish misconduct by chief executives.

"The president's message next week is going to be the faith he has in our free enterprise system," Fleischer said. But he added: "We are all in this together, and the president calls on corporate America to live up to high ethics and high standards, and they will be held accountable by the federal government."

"and they will be held accountable by the federal government."

Government Fails Fiscal-Fitness Test

U.S. Federal Government Accounting Methods

$3,400,000,000,000(Trillion) of Taxpayers' Money Is Missing

The War on Waste - Rumsfeld Says 2.3 Trillion Dollars Missing

1.1 Trillion Dollars Missing At Defense Department

HUD Missing 59 Billion

Billions Lost By Feds

Cooking The Books At The Department Of Education

Bush Administration Has Tight Ties to Arthur Andersen

Harvey Pitt, the Bush administration's chief at the S.E.C., was actually an Arthur Andersen lawyer.
Harken Energy Accountants: Arthur Andersen. George W. Bush - Seated on Harken's Board of Directors and audit committee, and large shareholder while Arthur Andersen applied their talents to the books. Bush Violated Security Laws Four Times, SEC Report Says Harken's audit committee, of which Bush was a member, met with Mikel Faulkner and auditors from Arthur Andersen and Co. Harken's accountants, on June 11, 1990, just 11 days before Bush sold his stock on June 22. When asked for a copy of the June 11 minutes or permission to inspect them, the company declined to make the records available.
The S.E.C. Says: "Insider trading is illegal when a person trades a security while in possession of material nonpublic information in violation of a duty to withhold the information or refrain from trading."
Insider Trading and George W. Bush
A U S T I N, July 1-- The Securities and Exchange Commission defines insider trading as "Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments". Bush sold $848,560 worth of Harken Energy stock on June 22, 1990, just one week before the company posted spectacular losses and the stock plunged sharply. When the losses were reported to the public on August 20, 1990, the stock plummeted.
According to documents from a two year investigation by the SEC, Bush served on the board of directors of Harken Energy Corporation and his position on a special Harken committee gave him detailed knowledge of the company's deteriorating financial condition. The SEC received word of Bush's trade ten months late.
The SEC states, "Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the Commission has treated the detection and prosecution of insider trading violations as one of its enforcement priorities".
Bush supporters point out that the stock's value went back up, eventually, and if Bush had held the stock, it would have made him more money. But, knowing when to sell is the golden goose of stock trading and using inside information is insider trading. The SEC investigated but decided not to punish Bush. After all, his dad was President and all five SEC Commissioners are appointed by the President. Furthermore, the SEC's general counsel had actually represented George W. in the Texas Rangers negotiation. Any doubts?

George W. Bush and Ashcroft think Arthur Andersen is the firm to review and clean up the FBI.
Neil Bush - Silverado Savings and Loan Executive on Board of Directors. Signs point to mob involvement in savings and loan mess. Bush paid a $50,000 fine and was banned from banking activities for his role in taking down Silverado, which actually cost taxpayers $1.3 billion. A Resolution Trust Corporation Suit against Bush and other officers of Silverado was settled in 1991 for $26.5 million. Ernst & Young Pays $400 Million To Settle Thrift Regulators including Silverado Banking Savings and Loan.
BUSH AND CO. - JONATHAN BUSH , President & Chief Executive Officer. Massachusetts securities regulators have fined the stock brokerage firm owned by President Bush's brother Jonathan $30,000 and barred it from trading with the general public for one year because the company and Bush violated state registration laws.
Ideon Corporation - Jeb Bush - Board of Directors - Bush sat on Ideon's audit committee, the watchdog of financial and management integrity. Jeb Bush joined board of company mired in trouble. Ideon was sold to CUC International. Ideon's directors faced lawsuits claiming stock manipulation. Now, more than two years later, Cendant -- the successor company to CUC -- is struggling to recover after discovering years of accounting fraud attributed, in part, to CUC's purchase of Ideon. Consultants like convicted Wall Street felon Martin Siegel were used. Jeb Bush and his Republican fund-raiser friend Thomas Petway sat on Ideon's audit committee, the watchdog of financial and management integrity. Many of Bush's fellow outside directors -- who were supposed to represent shareholder interests -- had cut cozy business deals with Ideon. In some cases, they got six-figure consulting fees on top of their directors pay. By August 1996, Ideon was sold for $375-million to CUC. The sale included indemnification for directors against lawsuits. Good news, considering the lawsuits charge Ideon and its directors with stock manipulation. The cases were settled early this year for $15-million. Bush and the other directors paid nothing. On August 28, 1998, Arthur Andersen & Co. rendered its Report to the Audit Committee of the Board of Directors of Cendant Corporation reporting on its forensic audit of CUC International, Inc., in the wake of disclosures in mid-April that accounting irregularities had been discovered at CUC.
Zapata PetroleumFormer President George H. W. Bush(poppa) - George Bush: The Unauthorized Biography The Zapata Offshore filings with the SEC between 1955 and 1959 are cryptic, and the SEC files on Zapata Offshore between 1960 and 1966, when Bush had exclusive control of the company, were destroyed by the SEC either in 1981, when Bush had just become vice president, or somewhat later, in October, 1983, according to various SEC officials. Bush nevertheless created a network of subsidiaries which was suspiciously complex. This topic is difficult to research because of the very convenient disappearance of the Zapata Offshore filings with the Securities and Exchange Commission in Washington for the year 1960-1966 which were "inadvertently" destroyed by a federal warehouse. This is the kind of convenient tampering with official records from which Bush has benefitted again and again over his career. Auditors for Zapata Petroleum were Arthur Andersen. Counsel were listed as Baker, Botts, Andrews & Shepherd of Houston, Texas. Transfer agents were J.P. Morgan & Co., Inc., of New York City.

Bush Issues Warning On Hiring Andersen

SEC Launches Probe Into Halliburton's Accounting

Dallas Business Journal
Staff
May 29, 2002

Source

The Securities and Exchange Commission has launched a preliminary investigation of Halliburton Co.'s accounting treatment of cost overruns on construction jobs.

The Dallas-based oil services giant, which was headed by Vice President Dick Cheney from 1995 to August 2000, said in a press release late Tuesday that it expects to receive a formal request for documents or a subpoena in the next few days. It also said it will cooperate fully with the SEC's investigation.

Halliburton (NYSE: HAL) said it believes the investigation resulted from a May 22 New York Times story, which alleged the company was counting cost overruns on construction projects as additional revenue, even before the customer agreed to pay for the overruns.

The company said it believes it has accounted for construction claims and change orders in accordance with generally accepted accounting principles applicable to the construction industry.

Halliburton said before 1998 and its acquisition of Dresser Industries Inc., it did not record such items in revenue or accounts receivable before they were resolved with the customer. The company said it disclosed in its 1998 financial statement that it had recorded losses on certain engineering and construction projects related to claims and change orders, which it did not feel would be accepted by customers.

"Furthermore, in instances where unapproved claims and change orders were recognized in revenue and accounts receivable, no profits at all were recognized on the related projects," Halliburton said.

During 1998, the company said it began to record such items in revenue and accounts receivable when it expected the items to be collectible from the customer. The company said it has continued this accounting treatment of similar items since 1998 and has never recorded a profit on a job where an unapproved claim or change order has been recorded in revenue.

The company's former independent auditor was Arthur Andersen, which is currently under fire for its role in an accounting scandal that sent former client Enron Corp. into bankruptcy. Halliburton in April dismissed Andersen, ending a 50-year relationship, and hired KPMG.

Halliburton stock in recent months has been battered over concerns about the company's mounting asbestos liabilities. The company on Tuesday said it settled 30 lawsuits brought by workers who claimed they developed cancer after being exposed to asbestos.

The company's shares fell 63 cents, or 3.26 percent, to close at $18.72 Wednesday. The stock was worth a high of $48.20 a share about a year ago.

Under Cheney, Halliburton Altered Policy on Accounting

Cheney Led Halliburton To Feast at Federal Trough - State Department Questioned Deal With Firm Linked to Russian Mob

And the winner is: "Former Secretary of Defense Dick Cheney's Brown and Root and other megaconstruction outfits that will be cashing in for years rebuilding what NATO bombs and Serbian ethnic cleansing blew down."

When The Cannons Shoot, There's Brown & Root Services

"We will not abandon Bosnia. ... There are ways to try to address this and to honor our security commitments to Bosnia," - July 3, 2002

The Democrats’ Latest Hit Job - Byron York
Note: GEORGE'S ROAD TO RICHES - Byron York

Democrats Dredge Up Old News to Win Points on Corporate Responsibility

Bush's Business Practices Examined

Bush and Cheney face scrutiny in financial scandals

Bush s Insider Connections Preceded Huge Profit On Stock Deal

Bush Filing Given a New Explanation

Bush Name Helps Fuel Oil Dealings
Eight days after Bush's stock sale, Harken wound up its second quarter with operating losses from day-to-day activities of $6.7 million, almost three times the losses it reported for the second quarter of 1989.

The public didn't learn of this until Aug. 20, when the company, now known as Harken Energy, announced in a press release that its overall losses for the quarter, including non-recurring expenses as well as operating losses, totaled $23.2 million. Harken's stock had slipped to $3 a share earlier that month when Iraq's invasion of Kuwait stirred fears that it would endanger a potentially lucrative offshore drilling contract with Bahrain. On Aug. 20, the stock dropped to $2.37.

Did Bush know of the impending losses when he sold his stock in June? Federal securities law prohibits corporate "insiders" from trading "on the basis of" material information that is not publicly known.

Bush says he did not know, even though he had a seat on Harken's three-member audit committee as well as its eight-member board of directors. He said he had no idea Harken was going to get an audit report full of red ink until weeks after he had made the sale.

"I wouldn't have sold if I had," Bush said. "I got clearance by the lawyer [Harken general counsel Larry E. Cummings] to sell this stock. I was mindful that this transaction would be completely scrutinized. I knew the law and I sold at a time that I was cleared to sell."

Bush said he didn't seek a buyer, but was approached by a Los Angeles broker, Ralph D. Smith. Now retired, Smith said he had an institutional client who wanted a large bloc of Harken stock. Smith said he called other Harken officials before calling Bush on June 9, 1990.

"I had no takers until I got to him," Smith said. "It was just like a shot out of the blue."

Bush's lawyer, Robert Jordan, who also represented Harken in the SEC inquiry, said Bush and other board members were not informed until July 13, 1990, in a communication from Harken president Mikel Faulkner that "operating losses were incurred in the second quarter, which will be further quantified and explained." Even then, Jordan said, Faulkner did not provide details. Many companies project and announce expected profits and losses before the end of a quarter, but Jordan said this was not done at Harken.

Asked for a copy of the July 13 communique, or permission to inspect it, Jordan checked with company officials and said they would not allow it. He said Harken has "a policy of keeping internal documents private."

Before Bush's stock sale, Harken's audit committee – Bush, Watson(Stuart Watson) and another Harken director, Talat Othman – met on June 11 with Faulkner and auditors from Arthur Andersen & Co., Harken's accountants. Jordan, however, said the committee "did not discuss operating losses that might be coming up, because that would be in the realm of conjecture and speculation." The minutes of the meeting, Jordan said, "show that."

Asked for a copy of the June 11 minutes or permission to inspect them, the company, through Jordan, again declined to make the records available. Jordan said company officials felt that granting the requests would put them on "a slippery slope."

Before giving Bush clearance to sell his stock, Jordan said that company counsel Cummings "checked with Mr. Faulkner at least and maybe others" to see if there was "any material, undisclosed information out there that would prevent the sale." The answer was no, Jordan said.

Faulkner, a certified public accountant who used to work at Arthur Andersen and who has spoken frequently with reporters over the years, declined through Jordan to be interviewed. So did Cummings.

The SEC investigation was launched in April 1991 when it found that Bush apparently failed to submit notice of actual sale of the stock (as distinct from the separate "notice of proposed sale") until eight months after the deadline. Bush said he is sure he did, but the filing couldn't be found.

The inquiry became an issue in the 1994 governor's race when Richards, the incumbent Democrat, challenged its thoroughness, calling it "at best, incomplete, and at worst, a coverup."

Bush was prepared, having obtained a letter from a top SEC official, associate director for enforcement Bruce A. Hiler, a year earlier.
[NOTE: Bruce A. Hiler is the lawyer for Jeffrey Skilling of Enron]

Dated Oct. 18, 1993, three weeks before Bush announced his candidacy for governor, the carefully worded letter was addressed to Jordan and said that "the investigation has been terminated as to the conduct of Mr. Bush, and that, at this time, no enforcement action is contemplated with respect to him."

Bush took that as vindication. "The SEC fully investigated the stock deal," he said in October 1994. "I was exonerated." Supporting Bush, the head of the SEC's enforcement division, William McLucas, went beyond the letter and stated publicly that "there was no case there."

Hiler, however, was more cautious. His statement said it "must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff's investigation."

How thorough the SEC inquiry was remains unclear. Jordan said Harken provided investigators with "thousands of pages" of documents, including the June 11 minutes and Faulkner's July 13 communique. Investigators interviewed Cummings, stockbroker Smith and a member of the Arthur Andersen auditing team, but they did not talk to Faulkner or any other officers or directors of Harken.

In an interview, McLucas said the investigation was handled "the same way we would handle any inquiry as to [insider] trading or delinquency in reports," but such matters are usually not accorded high priority.

Dallas Attorney Named Ambassador To Saudi Arabia

He represented Bush in SEC case over sale of Harken Energy stock

The Dallas Morning News
By G. Robert Hillman
Article Source
July 21, 2001

WASHINGTON – President Bush has chosen as ambassador to Saudi Arabia a Dallas attorney who represented him against insider trading allegations arising from his sale of stock in Harken Energy Co. 11 years ago.

Robert Jordan, a founding partner of the Dallas law office of Baker Botts, represented Mr. Bush during a Securities and Exchange Commission inquiry into the allegations involving Mr. Bush's lucrative sale of stock in Harken, where he had been a director.

The SEC found no merit in the charges. Critics have noted that Mr. Bush's father was president during the investigation and a longtime supporter, Richard Breeden, was the commission's chairman.

Mr. Bush has said he needed to sell his 212,000 shares of Harken stock for nearly $850,000, which later plummeted in value, in order to finance his purchase of an interest in the Texas Rangers baseball club.

He invested about $600,000 in the team and earned nearly $15 million when it was sold in 1998.

If confirmed by the Senate, Mr. Jordan would represent the United States in the capital of one of its key allies in the Middle East.

"He understands the important relationship that exists between the United States and Saudi Arabia, and I am confident he will be an outstanding ambassador," Mr. Bush said in announcing his selection.

In a brief telephone interview Friday, Mr. Jordan said he was honored by the appointment, but could not discuss it in any detail until he is confirmed.

In the Senate, Allison Dobson, a spokeswoman for Sen. Paul Wellstone, D-Minn., whose foreign relations subcommittee will screen Mr. Jordan's nomination, said a staff review had just begun and any hearing was weeks off.

At the White House, deputy press secretary Scott McClellan said Mr. Bush has confidence in Mr. Jordan and foresaw no problems with his Senate confirmation.

"The president believes Mr. Jordan will do an outstanding job representing the United States," Mr. McClellan said.

Early in the new Bush administration, there have been reports of strained relations between the United States and Saudi Arabia over the continued violence between Israel and the Palestinians.

Just last week, it was reported that former President George Bush had called Saudi Crown Prince Abdullah to reassure him that his son was determined to "do the right thing" in the region.

Mr. Jordan, 55, is a director of the State Bar of Texas and a past president of the Dallas Bar Association.

He is a Navy veteran and a graduate of Duke University. He also has a master's degree in government and international relations from the University of Maryland and a law degree from the University of Oklahoma.

A corporate lawyer familiar with the courtroom, Mr. Jordan has handled a wide range of domestic and international cases. His Houston-based firm, Baker Botts, deals heavily with energy and technology issues and has a branch office in the Saudi capital of Riyadh.

James Baker, who was secretary of state in the administration of Mr. Bush's father and treasury secretary under President Ronald Reagan, also is a partner in the firm.

Although the White House has announced Mr. Jordan's selection, his nomination has not been formally submitted to the Senate. Mr. Jordan said he is still working on the voluminous personal and financial disclosures that are required for such appointments.

Decades In The Life of George W. Bush, George H.W. Bush and Saudi Arabia

The White House connection: Saudi `agents' close Bush friends

Bush advisers cashed in on Saudi gravy train

Our Friends the Saudis - Two Saudi princes had been paying, on behalf of the kingdom, what amounts to protection money to Osama bin Laden since 1995

Saudi Money Aiding Terrorist Bin Laden

Princely payments: Saudi royalty, it is claimed, make out like bandits on U.S. deals

Records Show What Bush Knew Before Stock Sale

Regulators Concluded in 1992 That He Did Nothing Improper

The Dallas Morning News
By Mark Curriden
September 7, 2000

Days before selling 212,000 shares of stock in a Texas oil company in 1990, George W. Bush received a memo as a company director estimating it might lose $4 million that quarter and faced serious problems refinancing its debt, according to documents made public Wednesday.

The records released by the Securities and Exchange Commission and Mr. Bush's lawyer show Mr. Bush didn't have any information that wasn't publicly available elsewhere. And, his lawyer said, the records were available to federal regulators who investigated Mr. Bush's stock sale and did not alter their 1992 conclusion that the he did nothing improper.

The internal corporate documents, provided by the SEC after Freedom of Information requests from The Dallas Morning News and The Associated Press, offer the most extensive details yet of Mr. Bush's knowledge of Harken Energy Corp.'s financial troubles when he sold his shares for $848,560 in June 1990.

Insider trading allegations have been raised during both Mr. Bush's run for governor and his presidential race. Mr. Bush has said he did not know that Harken was going to report a $22 million loss two months after he sold his stock.

"I absolutely had no idea and would not have sold it had I known," he told The News during his 1994 campaign for governor.

The records released Wednesday show Mr. Bush, a Harken board director and member of its audit committee, received a so-called "flash sheet" in early June 1990 estimating quarterly losses for the company would reach $4 million.

Other reports available to Mr. Bush disclosed that Harken faced a "liquidity crisis" regarding the refinancing of it's $43 million debt. Another told Mr. Bush the company was "in a state of noncompliance" with its lenders.

Those same documents also say the company expected to make a profit in subsequent quarters and that two of its largest stockholders had agreed to refinance its debt.

Federal law prohibits company insiders, such as corporate directors and consultants, from buying and selling stock based on private information they received as an officer of the company.

In separate internal SEC records obtained by the AP, federal investigators concluded in March 1992 that "Bush did not engage in illegal insider trading because it does not appear that he possessed nonpublic information or that he acted with wrongful intent when he sold the Harken stock."

Bush critics have noted that Mr. Bush's father was president at the time of the investigation and that a longtime Bush supporter, Richard Breeden, was then the SEC's general counsel.

Mr. Bush has said he received no special treatment and cited a letter from SEC associate director Bruce Hiler, stating that "the investigation has been terminated as to the conduct of Mr. Bush and that, at this time, no enforcement action is contemplated with respect to him."

Mr. Bush received the 212,156 shares of Harken stock in 1986 when he helped merge Spectrum 7, an oil company of which Mr. Bush was chairman and 15 percent owner. Mr. Bush has said he needed to sell his Harken stock to pay off a loan he got to invest in the Texas Rangers baseball club.

Mr. Bush's lawyer said Wednesday that the information, while new to the presidential campaign, is "old news.''

"The SEC did their job by the book, and this is old news," attorney Robert Jordan said. He said that "the company's financial situation was well-disclosed to the public" through filings at the time with the SEC.

"By the time Bush sold his stock, the cash crisis had been largely resolved," Mr. Jordan said. "By May 21, 1990, the major shareholders had agreed to a credit agreement which put $26 million into the company immediately. ...This stock sale was completely legal and proper."

The SEC investigators never interviewed Mr. Bush about what else he might have known about the company's financial situation before selling the stock.

The investigators said that Mr. Bush did not initiate the sale of his stock, that he was approached by a broker and checked with the company's general counsel about the propriety of the sale before carrying it out.

"We've had too many cases of people abusing their responsibilities, and people just need to know that the SEC [Securities and Exchange Commission] is on it, our government is on it,"
George W. Bush - Source - Insight Magazine.

"I am deeply concerned about some of the accounting practices that take place in America,"
George W. Bush - June 26, 2002 Source.

"There are some concerns about the validity of the balance sheets of corporate America, and I can understand why,"
George W. Bush - June 26, 2002. Source.

"There is a need for renewed corporate responsibility in America. Those entrusted with shareholders' money must -- must -- strive for the highest of high standards."
George W. Bush - June 26, 2002. Source.

"We will fully investigate and hold people accountable for misleading not only shareholders, but employees as well."
George W. Bush - June 26, 2002. Source.

"Off and on over the years, a few capitalists have done more to delegitimize capitalism than America's impotent socialist critics ever did or today's moribund left could hope to. It is the Republicans' special responsibility to punish such capitalists."
George Will - January 14, 2002 - Washington Post.

One time in America, the following was an outright lie, and with a little effort they threw your butt in prison. Now they elect you president.

Bush has said he did not know that Harken was going to report a $22 million loss two months after he sold his stock.

"I absolutely had no idea and would not have sold it had I known," he told The News during his 1994 campaign for governor.

"We will fully investigate and hold people accountable for misleading not only shareholders, but employees as well." George W. Bush - June 26, 2002.

Richard B. Cheney

Qwest Communications; Denver, Colorado (Oct-95)

Qwest Communications will continue to pay Mr. Cheney's deferred director's fees balance over a period of 5 years ending in Oct-04.

These director's fees were earned and deferred during the years in which Mr. Cheney served on the US West board of directors. Mr.Cheney resigned from the US West board of directors effective Oct-1-95.

Source:

Arthur Anderson letter to:

Federal Election Commission
Sept. 1,2000
To:
Jack McDonald esq.
Federal Election Commission
Office of the General Counsel
999 E. Street, N.W.
Washington D.C. 20463

Note: Ethics Act Report

Dear Mr. MacDonald,

Enclosed please find for filing the Financial Disclosure Report (SF 278) Richard B. Cheney.

Very truly yours,

ARTHUR ANDERSEN LLP
by William M. Jackson

JULY 05, 17:52 ET

Qwest Denies Federal Probe

By ROBERT WELLER

Associated Press Writer

DENVER (AP) — Qwest Communications International is hotly denying that it is under investigation by the Justice Department, a report that an analyst says is further evidence investors should steer clear of the telecommunications company.

``We have no reason to believe that we are the subject of any investigation by the U.S. Department of Justice,'' said Drake S. Tempest, Qwest executive vice president and general counsel.

``It's outrageous that we would learn about such an investigation through the media. We have disclosed everything asked of us and have cooperated fully with the Securities Exchange Commission and Congress,'' he said in a statement faxed to news media outlets.

Qwest spokesman Chris Hardman declined to answer questions about the report, including whether the company had contacted the Justice Department about the news reports. He said the company would have no comment beyond the statement from Tempest.

Jeff Dorschner, a spokesman for the U.S. attorney's office in Denver, declined to comment.

Analyst Drake Johnstone of Davenport & Co., said, ``It doesn't surprise me. I have had an issue for the past year about the behavior of Qwest management.''

Johnstone added, ``I think there is a potential risk of bankruptcy.''

He said top executives and shareholders of Qwest, including departed chief executive Joe Nacchio, had sold hundreds of millions of dollars of company stock while touting the company as the fastest-growing telecom.

``Qwest has this wide-range of issues with the Securities and Exchange Commission. We have seen what can happen with a wide-ranging investigation in the case of WorldCom,'' Johnstone said.

Analyst Vic Grover of Kaufman Bros. said he believes Qwest stock is undervalued and should be selling at $6 to $7 instead of the $1.82 it was selling at Friday when the market closed.

``I have been very negative on Qwest in the past, but lately we upgraded the stock to buy because I think the selling pressure has been overdone,'' he said.

In the past year, Qwest has faced a Securities and Exchange Commission inquiry into its accounting practices, a downgrade of its credit rating to junk status and a sinking stock price.

The main accounting issue is where Qwest overstated its revenue and profits through including in its income statements one-time revenue associated with capacity sales. Critics say the sales should have been recorded over a multi-year period.

Qwest is the local phone company for 14 states extending from Minnesota west to Washington and southwest to Arizona and New Mexico.

Shares of Qwest gained 12 cents, or 7 percent, to close at $1.82 Friday on the New York Stock Exchange.

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