By Joe Baker
The Washington Post reported recently that President Bush is making ready to announce tough new policies to punish crooked corporate execs and protect corporate stockholders.
It seems Bush and his cohorts are concerned that mounting business scandals and the steady erosion of the stock market may have adverse effects on Republican prospects in the upcoming election.
At a recent Oval Office meeting, the Post said, Bush expressed anger at the massive accounting monkey business revealed at MCI WorldCom Inc.
He just gets outragedand Ive seen it over and over againat what is intentional fraud, what is irresponsible behavior that is dismissive of investors and employees, a White House official said.
One of the big pillars in the new policy recommendations is to make it a crime for chief executives and their financial officers to deliberately furnish misleading financial statements to the Securities and Exchange Commission.
Oh, really! How hypocritical can this guy get? Lets back up to right before the holiday, July 3rd. Thats when Bush and his spokesman changed their story about Bushs 1990 failure to file timely reports of stock transactions with the SEC.
That was back in the days of Harken Energy Corp., where Bush was a director for and on the companys audit committee. It was only a little filing delay34 weeks, to be exact. A decade ago, Dubya blamed it all on the SEC, claiming they lost the disclosure documents.
Now he says, through Ari Fleischer and under the prospect of new inquiries, that it was all a mix-up by the companys lawyers. As Ari put it, that is the best available explanation.
The Associated Press quoted Bushs own words, Sometimes things arent black and white when it comes to accounting procedures.
The ink is black, and the papers white. The numbers come in on time and add up, or they dont! Does Bush sound like an executive at Arthur Andersen, which was Harkens accounting firm, or what? Will he testify on the Hill?
The AP story went on to say: When pressed to explain, Bush said, I havent figured it out completely.
In other words, were not going to tell you the truth, so here is the best available lie weve got.
According to an SEC memo, Bush was late filing four forms reporting transactions in Harken stock amounting to $1,028,935. On June 22, 1990, two months before Harken reported a big loss and a disastrous slide in stock values, Bush sold 212,140 shares of Harken for $848,560, according to SEC records.
That makes it difficult to find much credibility in Dubyas call for more corporate responsibility on the heels of scandals at Enron, MCI WorldCom, Dynegy and other companies.
The SECs general counsel during the probe of Dubyas Harken trades was James R. Doty, who had previously represented the younger Bush in his acquisition of the Texas Rangers team, carried out with the cash from his sale of Harken stock.
The SEC investigation happened while Papa Bush was president. Junior was represented by Robert Jordan, a law partner of Dotys at the law firm of Baker Botts. Dubya rewarded Jordan with an ambassadorship to Saudi Arabia last year.
While Bush was a Harken director, the company was up to the same kind of creative accounting that brought down Enron and has mired Xerox, WorldCom and others. In January 1991, the company said that after earnest talks with the SEC, it had decided to add more than $9 million to its net loss for the year, making it nearly four times what Harken originally reported.
The SEC said Harken had counted the sale of a subsidiary, Aloha Petroleum, as income gains, thus inflating its short-term earnings instead of deferring the amounts to future years.
The commissions memo of April 9, 1991 stated Bush had been a director of Harken Energy since November 1986, and its subsidiary, Tejas Power Corp. (TPC), since October 1990. Tejas registered an equity security with the commission in March 1991. To date, said the memo, no Form 3 appears to have been filed by any of the officers and directors of TPC.
The memo reports in addition to the 212,140 shares sold on June 22, 1990, on April 17, 1987, about 17 weeks late, Bush reported acquiring 212,152 shares in an exchange offer in November 1986. On April 22, 1987, about 15 weeks late, Bush reported exercising options in December 1986 in the amount of $96,000 and on October 23, 1989, again about 15 weeks late, Bush reported exercising options for $84,375 in June of 1989.
SEC officials at the time said Bush also was a director of two unrelated companies, Lucky Change Mining Co. (LCM), Inc. and Tom Brown Inc. He filed a form regarding LCM about three days late in January 1984 which indicated he owned 30,000 shares of common stock in that company. As of 1987, he was no longer a director of that company.
Commission spokesmen said they launched an investigation into Bushs June 1990 sale of Harken stock just before the company announced a $23.2 million loss for the quarter ended June 30, 1990. That reportedly sent the value of the stock down by 20 percent.
No action ever was taken against Dubya as a result of that probe. Papa was president, you know. Fleischer neatly explained it all away. The SEC has been well aware of this issue, he said, and the SEC has concluded this is not anything thats actionable.
In March, Bush announced a 10-point plan which would require companies to reveal significant sales or purchases of company stock by directors or officers within two days of the transaction.
Washington Democrats wasted no time in opening fire on Bushs stance. Democratic National Committee Chairman Terence McAuliffe said: President Bush, Vice President Cheney and SEC Commissioner Harvey Pitt like to preach CEO responsibility, but when it comes to their own records, their motto is: The buck stops over there.
Bush aides, referring to the proposed legislation to clamp down on corporate misbehavior, said: The bigger stick will go hand in hand with a call for responsible, ethical behavior.
It would be mighty nice to see Dubya set the example for a changerather than do as I say, not as I do kind of situation. Now, the righteous Bush wants jail time for corporate offenders. Does that include jail time for himself?