FINANCIAL TIMES - Bush Under Pressure On Corporate Fraudsters
Bush to Crack Down on Wall Street Scandals
"The SEC fully looked into the matter, they looked at every aspect of it ... and the people who looked into it said they have no case,"
George W. Bush - July 8, 2002 - Source
"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."
The Washington Post - Bush Name Helps Fuel Oil Dealings - By George Lardner Jr. and Lois Romano - Friday, July 30, 1999; Page A1.
"I absolutely had no idea and would not have sold it had I known,"
George W. Bush - The News during his 1994 campaign for governor. - Source: The Dallas Morning News - By Mark Curriden - September 7, 2000 - Article: Records Show What Bush Knew Before Stock Sale.
Excerpt:
"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."
Source: The Dallas Morning News - By Mark Curriden - September 7, 2000 - Article: Records Show What Bush Knew Before Stock Sale.
"All I can tell you is that in the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures," Bush said in defending Harken. The company announced larger losses after the SEC determined that it had counted future income prematurely; Harken had sold a subsidiary, Aloha Petroleum, in 1989 through a seller-financed loan that it declared as a cash gain, masking huge losses.
Bush, who appeared irritated by the questioning, glared at reporters in the White House briefing room when he heard titters after that answer. "There was an honest difference of opinion as to how to account for a complicated transaction," he said. "And you're going to find that in different corporations. Sometimes the rules aren't as specific as -- as one would expect, and therefore the accountants and the auditors make a decision."
Bush said that some of the corporations suspected of wrongdoing could merely be victims of honest disagreements. "It could be," he said. "It's not my role to judge or the Congress's role to judge. It is the SEC's role to judge." Bush said prosecutors and a "strong SEC" would be able to draw the distinction between fraud and "just a difference of opinion."
Bush Defends His Texas Oil Dealings
"Asked if he, as a member of Harken's board at the time, approved of the questionable transaction, Bush shrugged. "You need to look back on the director's minutes," he said.
Bush, who was on the company's audit committee, was the subject of a separate insider-stock trade investigation. The SEC took no action against Bush in that inquiry, which also found he had disclosed his sales of Harken stock later than the law requires on four occasions.
The president is calling for swift disclosure of such insider stock sales as part of his corporate reform package.
Pressed to explain his eight-month delay in reporting such a sale on one occasion, Bush said, "I still haven't figured it out completely." Previously, he had said he thought regulators lost the documents. Last week, the White House called it a mix-up by lawyers."