Press Briefing by Ari Fleischer
For Immediate Release
Office of the Press Secretary
July 16, 2002
Source
The James S. Brady Briefing Room
12:23 P.M. EDT
Partial Transcript:
Q Just to answer a lot of the questions that have been out there and to show, back-up your claims in the past that this is an open administration. Why not just ask the SEC to release all the documents behind the Harken investigation -- just to get it out there.
MR. FLEISCHER: Ron, you know, the SEC took a look at all the questions that were raised in the context of Harken and they have come to their conclusions. They have made their determinations and they made their judgments and they made their call. It's all been shared with you. And you have what they determined.
Q Why don't you want to have shared with us the basis that they used to come to that conclusion?
MR. FLEISCHER: Well, Ron, you know, the lesson in Washington, there's no end to that type of question. It doesn't matter that the SEC has already looked into this in its entirety, shared its finding, shared its results with you and come to the conclusion that there's no "there" there.
Q Let me follow-up --
MR. FLEISCHER: The premise that you're asking is any time we ask for anything, we want to have full access to everything in a file. And that's just the precedent that is lacking in sense or merit, and especially in a case here where you know the conclusions, you know the reasons, you have everything you need, and it's all at your disposal.
Q Can I ask one more question? The President's accountant said yesterday that a Texas bank freed up $130,000 -- 130,000 shares of Harken stock that were being pledged for the loan the President took out for the Texas Rangers. Do you happen to know what the President did to get the collateral free?
MR. FLEISCHER: No, Ron, I'm not the President's accountant.
Q On Halliburton, Ari, you said from the podium that the Vice President believes that the lawsuit against him is without merit. I realize you're not going to comment on an ongoing SEC investigation. But isn't it also true that because of these things that one of the most experienced former CEOs in this administration has become something of a political liability, in that at the time when you're cracking down on corporate responsibility, the Vice President is not heard from, he's not talking about these issues. He can't be used as a vital spokesman of the administration.
MR. FLEISCHER: I thought I saw him on TV just yesterday or the day before giving a speech about corporate governance. So I just differ with your findings and with your premise.
Q That was a fundraiser, right, and we'd all stipulate that those don't get a lot of coverage, right?
MR. FLEISCHER: I saw him on TV, so obviously he got covered.
Q Wait a second, is that your only answer?
MR. FLEISCHER: I'm sorry, what was your next question?
...Q Thank you. Is the -- was he aware of circumstances or problems within Halliburton that could ultimately affect the financial position of the company prior to his selling of stock?
MR. FLEISCHER: As you know, these are issues that if the Securities and Exchange commission deems them appropriate to look into, they will look into.
...Q It was not on the wires, but it's all right. Next question. Does the President feel -- I know the President has been backing Harvey Pitt as president of the SEC -- does the President feel, though, that some of the criticism, some of the questions the Democrats have and John McCain have, does he feel some of those arguments are valid?
MR. FLEISCHER: No. The President listens to Arthur Levitt, for example. Arthur Levitt, the former Chairman of the Securities and Exchange Commission appointed by President Clinton has commended Harvey Pitt for the superb job he is doing at the SEC; for the enhanced number of corporate wrongdoers who Harvey Pitt has now banned from serving as members of board of directors of corporate companies or in corporate positions anymore; for the amount of money that Harvey Pitt has taken back from business executives who took that money as a result of filing phoney books.
He is receiving bipartisan acclaim from some of the best experts in the business, such as Arthur Levitt. And the President knows that Harvey Pitt is doing an excellent job, a superb job. And the President looks forward to him continuing in that good job.
And now folks, for the laugh of the day:
SEC Lawyer Who Probed Bush Denies He Was Pressured
Reuters
BY ADAM ENTOUS
July 16, 2002
WASHINGTON - The Securities and Exchange Commission lawyer who investigated President Bush for insider trading more than a decade ago said on Tuesday that no pressure was put on him to drop the investigation even though Bush's father was president at the time.
Bruce Hiler -- who currently represents Jeffrey Skilling, bankrupt Enron Corp.'s former chief executive -- was associate director of the SEC's enforcement division when it investigated Bush's sale in 1990 of Harken Energy Corp. stock before the company reported large losses. At the time, Bush was an outside director of the Texas-based oil company.
In the run-up to the November congressional elections, Democrats have seized on the Harken transaction in assailing Bush's record as a businessman, and have questioned whether the SEC cut short the insider-trading investigation because Bush was the president's son.
Hiler, who left the SEC to join the law firm of O'Melveny & Myers in 1994, rejected suggestions the probe was in any way influenced by then President George Bush, telling Reuters: "There was no political pressure. There was no case, period."
"Of course we were aware we were dealing with the president's son. But it wasn't intimidating at all. I reported directly to the director of enforcement, who was a public official and a public servant. We cut our teeth in dealing with high profile individuals and organizations," he added.
But Hiler said he has not been contacted by Bush aides, who so far have been unsuccessful in deflecting attention from the president's business dealings at Harken.
Documents released last week showed that Bush had also received low-interest loans from Harken in 1986 and 1988, benefiting from boardroom deals he now wants banned as part of a crackdown on corporate misconduct.
Democrats said both transactions cast doubt on Bush's credibility in addressing a wave of accounting scandals at Enron, WorldCom Inc. and other major U.S. corporations that have sent the stock market tumbling to five-year lows.
WHITE HOUSE DIGS IN
The White House said Bush did nothing wrong and that the SEC settled the matter when Hiler sent an Oct. 1993 letter to Bush's attorney saying "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."
Still, the White House has rejected requests by news organizations and Democrats in Congress for the release of the SEC's complete files on Bush's financial dealings at Harken.
"The SEC has already looked into this in its entirety," White House spokesman Ari Fleischer told reporters on Tuesday. "You know the conclusions, you know the reasons, and you have everything you need."
At issue is Bush's sale of 212,140 shares of Harken common stock at $4 per share, or $848,560, on June 22, 1990. Two months later, the company announced bigger-than-expected losses for the quarter ending June 30, and its stock price plunged.
The SEC was alerted to the transaction in March 1991 when Bush disclosed the completed sale to the SEC 34 weeks late. It opened an investigation on April 5 of that same year.
Bush has asserted for years that he did not know the extent of Harken's losses when he sold the stock.
In a March 1992 memorandum prepared by Hiler and other investigators, the SEC backed up this assertion, saying the "evidence establishes that Bush was not aware of the majority of the items that comprised the loss Harken announced."
"Based upon our investigation, it appears that Bush did not engage in illegal insider trading because it does not appear that he possessed material nonpublic information," the memo concluded.
However, an internal Harken chronology, obtained by the nonpartisan Center for Public Integrity, said that just over two weeks before Bush sold the stock, he was sent the company's "weekly flash report" giving "information provided by subsidiaries regarding estimated historical and projected earnings."
In a telephone interview, Hiler said the SEC's enforcement division conducted a thorough investigation, and that the president and his staff never weighed in.
"I absolutely feel we did a good job looking at this," Hiler added. "There was no case that I would have felt comfortable bringing. There was no indication of wrongdoing."
Hiler's current client, Skilling, is under investigation for his role in Enron's financial meltdown, and sources close to the case have said a federal indictment may be in the works. Enron, whose collapse last year wiped out thousands of jobs and billions of dollars in equity, was one of Bush's biggest campaign contributors.
"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.