Harken is old news:
Twelve-years old to be precise. But back in 1990, corporate governance was hardly the stuff of daily headlines as it is today. Then, as now, Bush framed reports of his stock deal as opportunistic political attacks - and got away with it. But now, as the nation struggles with the biggest corporate upheaval since the Great Depression, questions about the President's behavior during his tenure at Harken are at the very heart of the issue. And, as such, they deserve a fresh look.
I filed with the SEC my intention to sell my Harken stock:
True, but that filing does not satisfy either the spirit or intent of the SEC's insider stock sales rules. All Bush told the SEC when he filed his SEC Form 144 was that at some point in time he intended to sell some of his Harken shares. Form 144 did not say when. The "when" part is the most important information since it allows SEC to determine if an insider might have sold on "non-public information." The when question is answered on SEC Form 4, which is supposed to be filed no later than the 10th day of month following the actual sale. That's the form Bush says now he can't figure out why he failed to file until eight months later.
The Harken deals were investigated already:
Back in 1990, during his father's Presidency, the SEC did open an investigation of the stock sale, a fact that the President is quick to mention. "The folks who investigated this did so thoroughly and found there was no case," Bush said again yesterday. What he neglected to mention is who those "folks" were.
Bush's former personal attorney was the SEC general counsel at the time the commission cleared him of wrongdoing in the stock sale. (The attorney, James Doty, says he recused himself.) Doty had been private citizen George W. Bush's personal attorney who had negotiated Bush's purchase of the Texas Rangers baseball team. As for his investigation being "thorough" as the President described it, Doty closed his probe without ever interviewing Bush or a single other Harken director.
Harken's Audit Committee findings were not issued until after his Harken stock sale:
Well, of course. That's the very point. An insider, acting on non-public information, is what insider trading is all about. There may be a germ of truth to this explanation. At the time Bush sold his Harken stock, the audit committee on which he sat had been working for weeks with outside consultants from Smith Barney on a restructuring plan for the troubled company. The committee's report may indeed not have been completed by June 22, 1990, when Bush sold out. But the only way Bush could not have known the committee's preliminary findings is through a failure to attend audit committee meetings. If that's the case, Bush should say so. Of course such an admission would raise new troublesome issues involving director Bush shirking his fiduciary duty to Harken and its shareholders. Which is it President Bush? Either you attended the meetings and knew Harken was in trouble before you sold, or you were AWOL from those audit committee meetings.
When he sold the stock he got $4 a share. If he'd held for eight more weeks he would have gotten nearly twice that:
Well, maybe. Of course hindsight is a valuable asset real-time investors lack. When Bush sold his Harken stock there was no way he could have foreseen that the patient would briefly rally a few weeks later. After Bush sold his Harken stock and the company announced its dismal condition, Harken shares dropped 50% a share. What caused the "dead cat bounce" in Harken stock to nearly $8 was the fortuitous appearance of the Texas Bass brothers who shored the company up by investing in Harken's struggling Bahrain drilling deal. Once the glow of that news wore off, the stock resumed its downward spiral. Today Harken is selling for under 50 cents a share.
- Continues:
http://www.thedailyenron.com/documents/20020709074849-26033.asp
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