The Democrats' Latest Hit Job

National Review ^ | July 3rd, 2002 | Byron York

[WarrenC]

In 1991 the Securities and Exchange Commission investigated the sale and took no action against Bush or anyone else. "I don't remember a lot about it, other than there wasn't a lot about it," says William McLucas, who was the SEC enforcement chief at the time. "The facts just didn't support any judgment that this was something that would result in a serious enforcement proceeding."

[backhoe]

Mayhap these should also be investigated?

The Holiday *Best* of Bill Clinton & his Friends!

FOB and FOFOB... the clinton friend files

Hodgepodge O' Hillary

-DOWNSIDE LEGACY AT TWO DEGREES OF PRESIDENT CLINTON --

[Nick Danger]

Bush has been remarkably restrained in his treatment of the Clintons.

[Wright is right!]

It should be noted that this flurry of articles flew in the face of a strong July 4 Holiday Weekend wind - the sort of trial-balloonism the WashPost and NYTimes engage in to see how many other outlets pick up the story.

If the story dies a quiet death, as this one's going to, then the Times and the WashPost will draw little fire for running it - burying it in a holiday weekend when no one's paying attention. In fact, it appears that only CNN has picked up the sordid DNC banner on this one - and on a holiday weekend, it's hard to imagine an outlet with lower viewership. Other outlets have simply rolled their "old-news" eyes and file-13'd the story.

This does, however, accomplish a couple of things. The WashPost and the NYTimes can tell the DNC, "Hey, we ran 'em, but no one saluted." The fact that both papers ran the stories when they did indicates that they knew ahead of time that no one was going to get too wound up about them.

The other thing publication of these stories across a holiday does for the Times and Post is send a message to the DNC and its various and sundry arms, tentacles, etc., that if they expect the Times and Post to carry their water this time around, it had better be a better story than this one. If the papers thought this story would really go anywhere, then they would have held it until after the holiday. Running it ON a holiday gives it the half-hearted imprimateur of a pitchman not really believing his own spiel.

Of course, the DNC must have been heartened by CNN's treatment. Aaron Brown's return from vacation (in which he alluded to the fact that many more viewers seemed to like his replacement, Mole host Anderson Cooper, than Brown himself) featured Brown laying it on thick as chopped liver at a Bar Mitzvah. Brown had Bush thoroughly tarred, discredited, and driven from office by the end of his first evening back. I hope Anderson Cooper wasn't watching.

This story and the way the two dailies played it is a perfect example of how they send signals to the DNC without saying it in so many words. There may be a couple of ripples left to play out, but as THIS article says, this is really really OLD meat, and no one bit on it before.

Michael

[elbucko]

I enjoyed your analysis as much as the article. One more indication that the media left is a propaganda and public relation arm of the DNC. It's almost unconstitutional. Almost.

[Intolerant in NJ]

Oddly, though the law requires prompt disclosure of insider sales, he neglected to inform the Securities and Exchange Commission about this transaction until 34 weeks had passed...more lies by half-truths - the law requires two notifications - once before the sale is made, which notification Bush did comply with personally, and once after the sale is completed - this is the notification which was delayed, because, Bush says, he thought the corporation lawyers had made it for him when in fact they had not - by then the sale was already on the record so it's imbecilic to insist this was some sort of coverup or attempt to dodge the law - just one more attempt at character assassination by the 'rats and their fellow travelers, but since when did the truth ever stand in their way?!......

[Torie]

It appears that the Harkin stock may have gone UP after the June 30, 1990 10Q was issued. I think 10Q's within 45 days of the end of each quarter. You can see the volume blip in late June that is probably the Bush sale. If so, that is a KEY fact, would explain why the SEC investigation went nowhere. What we need to know is the EXACT date the June 30, 1990 10Q was released to know whether it pushed the stock up or down.

[deport]

Click here and look at the daily highs/lows/volumes (click previous at the bottom for the next 200 days). The stock was volitable and didn't have large volumne trade days except like the Bush trade. They had highs during the trade days of Jan 91 above the $4 price that Bush got for his stock. It wasn't down that long....

[blake6900]

Since the president began his political career, there have been a number of meticulous examinations of the Harken sale, first in Texas newspapers, then in the Washington Post, the New York Times, and other national publications.

And, of course, no wrongdoing was found. But that's the whole point. No wrongdoing needs to be found...as long as some is implied, the regurgitation of non-stories like this will continue to sprout up in rags like the Post and the Times. It's the only thing they can find that they believe will have traction against this president. Nothing else seems to work. This won't either.

On Face The Nation today I heard Gloria Borger make the statement that small investors were unwilling to invest in the stock market because of the "constant corporate scandals". Oh really?! Well, I'm a small investor and I had no problem whatsoever doing my part to help the market go up 324 points last Friday especially in light of the pounding it had taken prior to that. But the more interesting point is that Ms. Borger's statement only went to prove why liberals are usually piss-poor when it comes to investing. They simply don't understand the concept of "Buy low, sell high"!

[Torie]

What happened to the stock price down the line based on subsequent developments simply isn't relevant. What is relevant is the period after Bush sold the stock until what he knew became public regarding the financial restructuring. Unfortunately, another event intervened, unless the restructuring came out before the 10Q. That event was the Gulf War.

Specfically, Bush did appear to have insider information. One can argue whether it was negative or positive. But it appears that the stock dropped due to the Iraq invasion of Kuwait on August 2, 1990, rather than the subsequent 10Q issuance that may have happened on Monday, August 13, 1990 as a guess, which didn't seem to impact the price much. Harken had a deal with Bahrain which made it sensitive to Gulf happenings. The Gulf War does muddy the waters here.

This is quite an interesting detective story, actually. I am sure we will hear more about it - much more.

cc: to the Bushbot lady. :)

[jwalsh07]

[mewzilla]

Gee, I wonder if Hilliary has returned any donations from World Com/Enron/ImClone, etc? And I womder if she or Bubba made any money from these stocks? And if so, when did they sell...?

[jwalsh07]

The slope of the trend line is negative, he sold at almost the middle of that trend line cycle. What do you see in that chart that is suspicious?

[deport]

From another article in the WP just a few ago... {excerpt}

The memo said Bush sold 212,140 shares of Harken stock on June 22, 1990, for $848,560, before Harken's announcement on Aug. 20, 1990, that it had lost $23.2 million in the quarter ending June 30. The SEC said the announcement caused Harken's stock to drop by more than 20 percent, and called Bush's stock sale a "matter under inquiry."

At the time, Bush was a member of Harken's audit committee. The stock sale was reported by Bush on March 4, 1991, about 34 weeks late, the memo said. Dan Bartlett, Bush's communications director, said that was the result of a miscommunication between Bush's lawyer and the Harken counsel's office.

"These types of late filings are not out of the ordinary," Bartlett said. "It would be like doing a 60 [mph] in a 55."

The White House provided the first four pages of an SEC memo from 1992 which said, "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." Bartlett said the information about the losses at issue was available only to Harken's executive committee, of which Bush was not a member.

Now from the Flocco article you linked.....

Bush's insider transaction yielding a profit of $848,560 -- some 250 percent profit on the stock's original value -- came a week prior to the end of a quarter in which the company lost $23 million.

I don't know where Flocco is getting his info, but the following differs greatly.....

Wall Street Journal

In fact, the loan was paid off through the sale of stock Mr. Bush had been awarded in his only successful venture in the oil business, as a director of Texas-based Harken Energy Corp. Barely afloat in the tough oil market in the early 1980s, Mr. Bush joined Harken as a director in 1986. He was given 212,000 shares of Harken stock, worth about $500,000, or $2.50 a share, at the end of the year--although he had no daily management responsibilities. He later acquired an additional 133,000 shares through special offerings to company directors, and he was paid between $42,000 and $120,000 a year for the next five years as a consultant. .....

In 1989, Harken's stock was trading at between $4 and $5 a share. That's when Mr. Bush put up his shares as collateral for the Rangers loan. In January 1990, with shares trading around $4.50, Harken announced that it had signed a potentially lucrative oil-exploration deal with the government of Bahrain. On June 20, 1990, Mr. Bush sold the bulk of his Harken stock for $848,000, at $4 a share, and paid off the Rangers loan. Eight days later, Harken finished the second quarter with losses of $23 million, and the stock went into a nosedive, losing nearly 75% of its value, finishing the year at a little over $1 a share.

That's hardly a [$848,560 -- some 250 percent profit on the stock's original value "] .... So I have my doubts of Flocco as he's been anti Bush if I remember correctly. I'll trust the Wall Street Journal to come closer to the facts here that Flocco. JMO.

[Torie]

John, you need to focus on the relevant period. That is the last week in June through mid August, 1990. Your time frame is too long, and muffles the relevant data. (No doubt, some Pubbies will be posting your kind of chart a lot, but it is a red herring.) By mid August, whatever Bush knew would have become public. What we need to know is precisely WHEN it became public.

[jwalsh07]

Only if you assume wrongdoing. If he simply sold because he needed cash to pay off his loan, then it makes sense.

Having said that, I don't like cheats, period. But you'll have to do better than Krugmans klaptrap to convince me of that.

[Torie]

If the 10Q came out on August 20th, reporting the loss, than the 10Q was late. It should have come out on August 14th at the latest. In any event, it appear that on August 20th, the stock took a hit, but bounced right back up the next day. Maybe that influenced the SEC, I don't know. The article you posted has nothing relevant as to details that I can see, other than the SEC conclusion (which of course IS relevant, but we presumably want to know the basis of it) and disclosing the error in the article I linked as to the amount of Bush's profit, which also isn't relevant.

[Bob J]

They're flailing. It's a good thing.

[Torie]

I don't think Bush's motive is legally relevant IF he had negative inside information that was publically available and subsequently ended up profiting from that information. What we don't know is whether the inside information was negative, and whether it in fact pushed the price down below what Bush sold at when it became public. We may never know that, given the pace of other events. The most exculpatory fact I think might be that the 10Q only depressed the stock price for one day, suggesting that it really didn't have an impact on the price after the information was absorbed.

What's Krugman got to do with this? I didn't reference him. If I want polemics I go to Krugman. But this isn't about polemics. It is about the evidentiary trail.