Files: Bush Knew Firm's Plight Before Stock Sale
Washington Post
By Mike Allen
Washington Post Staff Writer
Sunday, July 21, 2002; Page A07
As a businessman in 1990, George W. Bush was deluged with confidential information about the financial plight of a Texas oil company before he sold the majority of his holdings and triggered a federal investigation, according to Securities and Exchange Commission records.
President Bush has refused to authorize the SEC to open the full file on his investigation, but selected documents have been released under the Freedom of Information Act. The president's business dealings have come under more scrutiny as he tries to restore confidence in markets hurt by business scandals. Nearly half of 1,004 respondents in a Newsweek poll released yesterday said they thought Bush took advantage of the system for personal gain with the 1990 stock sale.
The documents show that four months before Bush sold most of his stake in Harken Energy Corp., he and other board members received a letter from management calling the previous year's profits disappointing and warning that the company would "continue to be severely limited in our activities due to cash constraints." The letter said that "as indicated at the December board meeting," the failure of a deal involving a subsidiary had "left the company with little cash flow flexibility."
[End of Partial Transcript]
Bush Was Warned of Harken Company Troubles - Report
Reuters
Staff
Sun, Jul. 21, 2002
WASHINGTON - Government records show that President Bush while in private business had confidential information in 1990 about financial problems facing a Texas oil company just months before he sold stock in the firm, The Washington Post reported on Sunday.
In recent weeks, Bush has been confronted with renewed questions from reporters about circumstances surrounding his sale of Harken Energy Corp. stock in 1990. Bush was an outside director of Harken at the time of the sale.
He has repeatedly responded that a Securities and Exchange Commission investigation of the transaction cleared him of any wrongdoing.
According to the Post report, documents released under the Freedom of Information Act show that four months before selling most of his Harken stock, Bush and other board members received information from management warning the company would "continue to be severely limited in our activities due to cash constraints."
The information was conveyed in a letter to Bush and his colleagues, which also said a failed deal involving a Harken subsidiary "left the company with little cash flow flexibility," the newspaper reported.
The documents were released on Friday by the Center for Public Integrity, which calls itself a nonpartisan organization that probes government and ethics issues.
Bush has brushed off recent suggestions that he ask the SEC to release all documents related to its 1991 investigation of the stock sale. "The key document said there is no case," Bush said.
The White House has also been fending off questions surrounding Vice President Dick Cheney's actions while serving as chief executive of Halliburton Co., a Texas-based oil services company.
The SEC is investigating Halliburton's procedures in accounting for cost overruns. Bush has told reporters he is confident the SEC would find Cheney did nothing wrong.
Interest in the business dealings of Bush and Cheney has grown as a wave of accounting scandals has enveloped U.S. companies in recent months, contributing to a declining U.S. stock market and stoking fears Wall Street's setbacks will hobble an economy struggling to grow.
Bush, in his weekly radio address on Saturday, called on Congress to enact legislation to increase penalties for corporate fraud and to strengthen oversight of the accounting industry. Doing so, he said, would "bring a new era of integrity to American business."
Q "Mr. President, you've said that you didn't know, when you sold your Harken stock, that the company was going to restate its earnings. As a member of its audit committee, how could you not know that its earnings had not been properly accounted for?
THE PRESIDENT: Because that fact, that fact came up "after" I sold the stock."
Source.
"It must in no way be construed as indicating that the party[George W. Bush] has been exonerated or that no action may ultimately result from the staff's investigation."
Bruce A. Hiler - associate director of the SEC's enforcement division.