Bush Defends His Texas Oil Dealings: 'Sometimes Things Aren't Exactly Black and White'

AP via TBO ^ | Jul 8, 2002 | Scott Lindlaw

[Jean S]

WASHINGTON (AP) - President Bush heatedly defended his decade-old dealings as an oil company director Monday amid rising concern about the nation's business scandals. "Sometimes things aren't exactly black and white when it comes to accounting procedures," he said.

Bush rejected comparisons between his own actions and those of executives and accountants at such companies as Enron and WorldCom that have resulted in billions of dollars of losses.

"This was an honest disagreement about accounting procedures," Bush said.

One day before he was to propose stiff punishments for corporate wrongdoing, Bush faced a barrage of questions at a news conference about his own failure in 1990 to disclose stock sales as promptly as required by law.

Pressed to explain, Bush said: "I still haven't figured it out completely." Previously, Bush has said he thought regulators lost the documents. Last week the White House called it a mix-up by lawyers.

In his dealings involving the Harken Energy Corp. a decade ago, Bush said, the Securities and Exchange Commission "fully looked into the matter, they looked at all aspects of it, and they did so in a very thorough way, and the people that looked into it said there is no case."

He said there was "no attempt to hide anything."

The SEC forced the company to amend its books to reflect millions of dollars in losses that had been masked by the sale of a subsidiary to a group of insiders. And 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. An agency summary on the matter states that "it would be difficult to establish that, even assuming Bush possessed material nonpublic information, he acted with ... intent to defraud."

On Monday, Bush grew testy at times with questions about his actions as a corporate director on the eve of a speech he will give in New York on corporate responsibility.

"People love to play politics," Bush said. "You know, you said the Democrats are going to attack me based upon Harken. That's nothing new."

Bush will propose stricter regulation of businesses on Tuesday, including longer jail terms for executives who commit fraud.

The White House stood firmly behind Bush's chairman of the Securities and Exchange Commission, Harvey Pitt, as House members at a hearing on WorldCom called for Pitt's resignation. The Senate was considering legislation to tighten oversight of the accounting industry.

Bush will speak on Wall Street at a time of rising public outrage over accounting scandals in some of the nation's biggest firms.

"He thinks it's important for the economy that the American people have confidence in corporations and his speech is going to be aimed at restoring that confidence," White House press secretary Ari Fleischer said as the president returned from a 3 1/2-day birthday weekend with his parents in Maine.

The first president with a master of business administration degree faces a balancing act in the speech: boosting investor confidence while also distancing himself from executives who are among his most ardent and monied political supporters.

Several administration officials previously worked for Enron, the oil-trading company that collapsed last fall, and former Enron chairman Kenneth Lay was Bush's biggest campaign donor.

Bush's Army secretary, Thomas White, was head of Enron Energy Services, a subsidiary. Vice President Dick Cheney was CEO of Halliburton Co. when it adopted accounting methods now under SEC investigation.

AP-ES-07-08-02 1900EDT

[bloggerjohn]

Bad timing for this Harken stuff, right before Bush is going to take CEOs to the woodshed. But then, it's probably purposely timed.

Still, he'll be talking on Wall St. and a lot of them will be thinking "Harken." Frankly, I don't think that's good for the nation, since many will assume the speech is window dressing and the threats are not real. I'm not one for muzzling the truth but it would have been best for the nation if Harken had lay quiet a little longer, until corporations got their books in order.