Bush Harken Deal Faces New Scrutiny (AP Workiing for the Dems)

WASHINGTON (AP) - George W. Bush signed a letter in 1990 saying he wouldn't sell any stock for at least six months in the struggling Texas oil company where he was a director. But 2 months later, with Harken Energy Corp. hit by a sudden financial crisis, Bush cashed out his shares for $848,560.

Bush's accountant, Robert McCleskey, said Monday that Harken's troubled finances were "not, in my opinion," a factor in the stock sale and that Bush sold his shares 12 years ago as part of a pre-existing plan in place for many months to "get liquid."

McCleskey said one goal was to pay off a bank loan that Bush had used to buy his stake in the Texas Rangers baseball team. The Harken stock sale became the focus of an insider trading probe of Bush in 1991 by the Securities and Exchange Commission ( news - web sites).

The SEC did not interview Bush and took no action against him. But Bush's sale is under renewed public scrutiny as he tries to restore investor confidence in the financial markets.

McCleskey said he wasn't aware of Harken's financial condition and that Bush "never said anything about it to me."

But two securities lawyers questioned Bush's motive in selling Harken stock amid financial turmoil just over two months after he had pledged not to sell.

The promise came in the form of Bush's signature on a "lockup" letter on April 3, 1990. It said he would hold onto his Harken stock for six months after the effective date of a proposed public stock offering.

Little more than a week later, the company was plunged into a financial crisis when one of its bank lenders withdrew its support.

Harken abandoned the proposed stock offering, began a desperate search for cash, and eventually split itself into three parts.

"Bush's signing of the April 2, 1990, lockup agreement undercuts his lawyers' explanation for the early sale of his Harken stock," said Houston securities lawyer Thomas R. Ajamie, whose firm advises companies that did business with the failed energy trader, Enron Corp.

"If his accountant told him that he needed to sell stock to pay a debt obligation for his interest in the Texas Rangers, it does not make sense that he would subsequently sign an agreement promising not to sell his shares of Harken stock for six months," Ajamie said in an interview Monday.

But McCleskey said the lockup letter was not a problem because there was no rush in selling Harken stock. A number of Bush's stock holdings from different companies were "on the table" and the sales would take place "when we get it done," said McCleskey.

McCleskey said Bush had pledged 130,000 shares of Harken stock on the bank loan for his piece of the baseball team, and when the bank note was renewed around March 1990, the shares were freed up, enabling Bush to sell them.

White House spokesman Dan Bartlett said that the lockout letter was "made irrelevant and obsolete" by the time Bush sold his shares because the public stock offering never went through.

In June and July 1990, Bush sold with a vengeance. He divested himself of more than $1.5 million in stocks in Harken and other companies to cover debts of about $931,000 — $600,000 for the Rangers loan and $331,000 for taxes, according to McCleskey. Bush put the rest in Treasury bills and certificates of deposit.

Christopher Bebel, a Houston attorney whose firm specializes in securities law, said that the extra cash left over after the Rangers debt and taxes were paid points to "the possibility that Bush's liabilities did not prompt him to sell the Harken stock.

Even if Bush had a pre-existing plan to pay off his debts, as his attorneys told the SEC in the insider trading probe, "Bush still could have met his obligations by selling only a small portion of his Harken Energy stock," said Bebel.

But McCleskey said that Bush's financial strategy was broader — that "we have Treasuries and CDs" left over after covering Bush's debts. We wipe out interest of the Rangers. Plus we have income.

"On the Rangers note, we were paying $45,000 to $50,000 a year in interest," said McCleskey.

One expert said even though Bush signed the lockup letter, it didn't represent a serious obstacle to selling.

It is fairly common for company insiders to sign such letters and then obtain permission to sell the stock anyway before the lockout period is up, said Carr Bettis, an associate research professor of finance at Arizona State University.

Bush sold his Harken stock on June 22, 1990, after he got a call from a California stock broker who said his institutional client wanted to buy a large block of Harken stock. Bush sold two weeks later. The buyer has never been identified.

Bush sold his stock for $4 a share, two months before Harken disclosed an unprecedented quarterly loss of $23 million. The stock's value declined to $3 two months after Bush sold and to $1.25 at year-end. The following year, the stock rose to a little over $8 a share at one point as Harken explored for oil in a potentially lucrative Middle East venture that never found any oil. It has ranged from $2.50 to 33 cents over the past 52 weeks and closed Monday at 42 cents.

Harken abandoned the proposed stock offering, began a desperate search for cash, and eventually split itself into three parts.

So where's the story.

So where's the story.

I guess he didn't use insider information after all, he just guessed it was time to dump his stock. This guy is dumb like a fox...

Let's see now, the stock broker involved in the transaction supports Bush's position. His accountant supports Bush's position and the SEC found no wrongdoing.
What am I missing here?

You're not missing a thing. The whole point of the article is to connect, in the minds of the ignorant masses who have seen their 401ks smashed to bits, Bush with the market crash. It's all his fault because he is a crooked Republican rich guy.

The story was this was investigated at least three times, and nothing illegal was found. The Democrats are trying the old adage that "if at first you don't succeed, keep on sucking till you do suck seed". They have no real issues or facts but that's never stopped them from going forward with a steaming pile of nothing. As long as they can get their people to feel that President Bush did something wrong, then they win.

Pete Yost_{TM DNC} is the AP 'reporter'who recieved an illegal leak from the Democrat judge on the panel overseeing Starr's investigation- and filled his article with condemnations of the Republicans as the source of the leak.

Pete Yost_{TM DNC} reported all the accusations that Starr was the source of leaks about his investigation- even though he knew then (being the reciever of those leaks), as we all know now, that the White House was the source of the leaks.

Lots of threads on these two of the many examples of Pete Yost_{TM DNC}'s Democrat subservience: FR search results

The SEC memo/report specifically stated that dropping the inquiry should not be viewed as 'exonerating' him, thereby leaving a huge question mark hanging over him. The guy was on the audit committee of Harken, and knew full well what was coming down the line, or else he was incompetent.
I think it's clear that although the rats are making hay with it, this one's a loser for him whichever way you cut it. All he can do is get some of the murky ties of the opposition put out there.

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