smCOLUMN SEVENTY-FIVE, SEPTEMBER 1, 2002
(Copyright © 2002 The Blacklisted Journalist)
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COLUMN
SEVENTY-FIVE, SEPTEMBER 1, 2002
(Copyright © 2002 The Blacklisted Journalist)
FROM PORTSIDE
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ARE BUSH, CHENEY CORPORATE CROOKS WHO WOULD GO TO JAIL UNDER NEW LAW?
Subject:
Bush Played Active Role at Harken
Date: Fri, 26 Jul 2002 05:01:47 -0700 (PDT)
From: portsideMod <portsidemod@yahoo.com>
Reply-To: portside@yahoogroups.com
To: ps <portside@yahoogroups.com>
Papers
Show Bush Played Active Role at Harken
By
Adam Entous
July
25,2002 ET
http://story.news.yahoo.com/news'tmpl=story2&u=/nm/20020725/pl_nm/
WASHINGTON
(Reuters)---President Bush played an active role in Harken Energy Corp's
business decisions and consulted with the head of the company shortly before a
controversial 1989 transaction which drew scrutiny from the Securities and
Exchange Commission, documents released on Thursday show.
The
information raised fresh questions about the extent of Bush's role as a director
at Harken more than a decade ago. Democrats have seized on the Harken
transactions and Vice President Dick Cheney's tenure at Halliburton Co. to paint
the Republican administration as compromised by insider deals and close business
connections.
Given
public outrage over stock market losses triggered by a wave of corporate
scandals, the scrutiny could undercut Bush's public standing and hurt
Republicans in the November congressional election, polls show.
White
House officials said Democratic attacks were politically motivated and without
merit. "The career staff of the SEC reviewed all of the documents in this
matter and concluded that there was no case, that the president had acted
appropriately," White House spokeswoman Claire Buchan said.
According
to a June 15, 1989 letter from Harken President Mikel Faulkner, obtained by the
nonpartisan Center for Public Integrity, Bush frequently advised Harken
management on "organizational and strategic matters."
In
the letter, Faulkner praised Bush for "the positive image you have helped
create regarding Harken Energy Corporation, the intuitive analysis you have
provided on our various acquisitions, operating decisions at the board level and
the personal suggestions and ideas you have shared with me over the past two
years on a CEO to CEO basis."
"I
consider the role which you play at Harken Energy Corporation to be a very
meaningful and significant role and look forward to a continuing
relationship," Faulkner said in his letter to Bush.
Documents
show the two met just two weeks before Harken's controversial sale in 1989 of
its Aloha Petroleum subsidiary, a transaction which critics have compared to the
accounting
The
company's initial treatment of the Aloha sale significantly understated the
losses Harken first reported for 1989. Under a subsequent agreement with the
SEC, Harken restated its financial statements for 1989 and for the first nine
months of 1990. As a result of accounting changes, Harken's 1989 loss widened to
Bush
has denied wrongdoing, saying the Aloha matter reflected an honest disagreement
over accounting. "All I can tell you is, that in the corporate world,
sometimes things aren't exactly black and white when it comes to accounting
procedures," he said earlier this month.
In
addition to the Aloha deal, Bush is under pressure to explain his sale of
212,140 shares of Harken stock at $4 per share, or $848,560, on June 22, 1990.
Two months later, the company announced bigger-than-expected losses for the
quarter ending June 30, and its stock price plunged.
Democrats
point to documents showing Bush was told that Harken faced serious cash flow
problems in the weeks and months before he sold his stock holdings.
Two
weeks before selling his shares, Bush was sent a company report giving
"information provided by subsidiaries regarding estimated historical and
projected earnings." Earlier in the year, Bush received a letter from
Harken's president warning that the company would "continue to be severely
limited in our activities due to cash constraints."
An
internal memo dated May 20, 1990 also warned of the possibility that Harken
would "deplete all available cash to pay payroll and other basic
needs."
The
SEC investigated and concluded in a March 18, 1992 memorandum: "It appears
that Bush did not engage in illegal insider trading because it does not appear
that he possessed material nonpublic information."
A
week earlier, Rep. John Dingell, a Michigan Democrat who at the time chaired the
House subcommittee on oversight and investigations, asked the SEC to provide his
staff with a confidential briefing on its investigation of Bush's stock trades,
newly-released documents show.
"We
are looking into the administration and enforcement of the federal securities
law by the commission with respect to the prohibitions concerning insider
trading," Dingell wrote.
Cheney
has refused to comment on the SEC's investigation of how Halliburton accounted
for cost overruns. But Bush said earlier this month that he was confident the
federal probe would show his vice president did nothing wrong.
##
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