Houston Cronicicle Story about Frist
Sept. 24, 2005, 10:29PM
Frist inquiries may raise the stakes
Democrats gain an opportunity to extend claims about GOP ethics into the Senate
By CHARLES BABINGTON and JEFFREY H. BIRNBAUM
Until now, such accusations have centered on the House and White House. House Majority Leader Tom DeLay,
With the revelation that federal prosecutors and the Securities and Exchange Commission are looking into Frist's sale of hospital stocks shortly before their value fell, Democrats are expanding their ethics accusations into the Senate's GOP leadership ranks.
Activists in both parties agree it is too early to say whether Frist, of
"It is a drip drip drip," said former House Majority Leader Tony Coelho, a California Democrat who resigned in 1989 following accusations about a loan deal. ''With (President) Bush's numbers down, this could be a very negative thing for the Republicans."
In carefully worded statements, Frist's office has said the senator instructed managers of his "qualified blind trust" in June to sell his family's shares in HCA Inc., the nation's largest hospital chain, founded by Frist's father and brother. A month later, the stock's price dropped 9 percent after the company predicted weakening earnings. It is illegal to trade stocks based on inside information. Frist "had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock," his office said.
The senator's spokesmen say he sold the stock to avoid conflicts of interest as Congress deals with health care legislation. But for years, Frist rejected arguments that his stock holdings could cause a conflict.
In January 2003, Frist said in a televised interview that his assets were in a blind trust and "as far as I know, I own no HCA stock."
Financial disclosure documents filed with the secretary of the Senate by the trustees show that two weeks before the interview, a trustee notified Frist that HCA stock had been contributed to his trust. Spokesman Bob Stevenson said Saturday that Frist was truthful in the TV interview because the trustee can sell assets at any time without notifying the senator, and therefore on any given day the trust's contents are unknown to him.
Some nonpartisan analysts said the Frist case could fizzle, in legal and political terms, if anything short of insider trading is proved. For one thing, they say, the story has broken at a time when hurricanes are dominating the national news. Moreover, they say, questions of blind trusts and stock transactions may prove too arcane to captivate the average voter.