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Originally Posted by host
I am offended by your tone, SteelyLoins....all the more because you brought nothing to the table to back your claim that "Bush was cleared". The "record" indicates that this is a legitimate and timely topic to discuss. Enron's Mr. Skilling has been convicted, by a jury of a crime that mulitple news reports, appearing in the nations newspaper "of record", over a pan of time from at least 1999 to 2002, indicate is very similar to allegations that Mr. Bush has....contrary to your claims....never been officially cleared of doing.
Bush has never been "cleared" after any official investigation into whether or not he made illegal "insider trades" of his Harken stock when he served on that company's BOD and audit committee.......
The record indicates, that....at the least, Mr. Bush is ethically challenged. Is it better...on a political forum, to simply "let it pass", when a senior executive of a prominent company that had close political ties to Mr. Bush, is convicted of a crime that seems remarkably similar to something that Mr. Bush himself was reported to have been investigated for doing, and, according to the SEC official who investigated, made a determination that, <b>"must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff's investigation."</b>
This thread sits on much more solid ground than much of what you watch on foxnews....if the reported record in my posts, is any indication!
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Au contraire.
http://www.nationalreview.com/york/york071002.asp
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The Facts About Bush and Harken
The presidents story holds up under scrutiny.
Recently Senate Majority Leader Tom Daschle was asked whether President Bush's 1990 sale of stock in the Harken Energy Corporation undermined his credibility in dealing with today's corporate scandals. Daschle did not answer directly but said, "I think the president would do well to ask the Securities and Exchange Commission to release the file release it all. Let everybody see just what is there. There have been some real questions, I think, about what happened."
On Monday, after the president's news conference in which he faced a long series of questions about Harken, Democratic National Committee chairman Terry McAuliffe joined Daschle's call. "Every day, more questions arise," McAuliffe said in an e-mail to reporters and activists. "President Bush should stop refusing to release his SEC files and let the American people, and not his lawyers, decide what is relevant."
The calls for SEC disclosure are the latest tactic in the Democrats' attempt to tie Bush to the issue of "corporate greed." While such statements are intended to suggest that Bush is covering up his role in the Harken matter, they ignore one important fact: There are already many SEC documents about Harken available to the public. The documents deal with the critical issues raised by Bush's stock sale, and they reveal the reasoning behind the SEC investigators' decision not to take any action against Bush or Harken. A close review of the documents supports statements made by the president and answers most, if not all, of the questions raised by his Democratic critics. Together with other publicly available information on Bush's business career, they suggest that Bush was correct when he told the press that as far as Harken is concerned, "there's no there there."
THREE QUESTIONS
In the 1980s, Bush ran an energy company called Spectrum 7. By 1986, with the oil market in a deep slump, the firm was in serious financial trouble. That year, another company, Harken Energy, which specialized in buying distressed oil properties, purchased Spectrum 7. Harken's management wanted Bush on its team his father was then vice-president, and he had extensive connections, as well as knowledge of the oil and gas business. But Harken's officers did not offer Bush an executive role, instead giving him a seat on the board, a chunk of stock worth at least $500,000 at the time, and a consulting contract.
It was not a full-time job, and in 1987 and 1988 Bush devoted much of his energy to his father's presidential campaign. The next year, Bush got involved with a group of investors who were trying to buy the Texas Rangers baseball team. When the sale went through in March 1989, Bush borrowed $600,000 to purchase his stake in the team. At that time, his biggest single asset was his Harken stock, and he decided to sell the stock to pay off the baseball loan.
On June 22, 1990, Bush sold 212,140 shares of Harken at $4 a share, for a total sale of $848,560. Nearly two months later, on August 20, Harken announced a much larger than expected loss for the quarter that ended on June 30. In the months that followed, Harken's stock price drifted downward, hitting $1.25 per share by the end of 1990. When word of Bush's sale became public, Democrats charged that he had used inside information he also served on the Harken board's audit committee to sell the stock while he could still make a lot of money.
Bush denied any wrongdoing, but the allegations led to an SEC investigation. Commission experts looked into three questions: One, did Bush know in advance that Harken was going to post an abnormally large loss in August, 1990? Two, did Bush sell the stock with the intent of getting out while the getting was good? And three, did Harken's loss announcement lead to a stock downturn that hurt ordinary investors who had no inside knowledge of the company's workings?
According to several internal SEC memos written in 1991 and 1992 they are available on the website of the public-interest group the Center for Public Integrity investigators examined thousands of pages of documents given to them by Bush and Harken, interviewed several witnesses, and met with lawyers for Bush and the company (Bush waived attorney-client privilege to allow the SEC to interview the lawyers). [When is the last time a Democrat did that?] On the first question, whether Bush knew in advance about the losses, the SEC investigators found that "the evidence establishes that Bush was not aware of the majority of the items that comprised the loss Harken announced on August 20." Most of that loss, according to the SEC, resulted from write-downs and expenses that occurred after Bush sold his stock events that he did not know were coming. In addition, the investigators found that Bush played a "relatively limited role in Harken management." In that role, he usually did not receive what were called the Weekly Flash Reports on the company's financial condition; those reports were given only to the board of directors' executive committee. The result, according to an SEC investigative memo, was that Bush was not particularly up to date on the company's finances:
The staff's investigation indicates that, at most, Bush was aware that Harken was forecasted to lose approximately $4.2 million in the second quarter. [The actual loss eventually turned out to be more than five times that] Harken's financial reporting was on about a 45-day delay, so that in mid-June the numbers reflecting Harken's actual results in April would be available. Consequently, by June 22 (the date when Bush sold) no actual revenue or loss information was available for the second two months of the quarter ended June 30. Bush, however, did see the Weekly Flash Report for the week ended May 31, 1990, which reflected a projected net loss for April of $1,875,00, a loss for May of $2,029,000, and a loss for June of $327,000 (for a total of $4,231,000)....Flash reports for the first two weeks of June, which would have been in existence prior to June 22, were only circulated to the members of the Harken executive committee (of which Bush was not a member).
On the second question, whether Bush sold the stock deliberately to avoid losing money before bad news was made public, the SEC found that Bush made the sale after being contacted by a stockbroker who had an institutional client who wanted to buy a large block of Harken stock. When Bush decided to sell, he checked with Harken's in-house counsel, as well as the company's chairman, plus another director, and, finally, the company's outside counsel, to see whether there were any reasons the sale could not go through. No one raised any objections. "In light of the facts uncovered, it would be difficult to establish that, even assuming Bush possessed material nonpublic information, he acted with scienter or intent to defraud," the SEC concluded.On the third question, whether the news of Harken's unexpectedly large loss hurt the company's investors, the SEC examined Harken's share price just before and just after news of the loss was made public. The announcement came at 9:34 A.M. on August 20, 1990. When the market opened that morning, according to the SEC, Harken's stock was selling at $3 per share. It stayed at that level until after noon, when it began a slow slide to $2.375 per share. The next day, however, it rebounded to $3 per share. If the loss announcement had been a bombshell, SEC investigators reasoned, the stock would most likely have fallen immediately and stayed down. "The conclusion of the Office of Economic Analysis is that, because the price of Harken did not immediately react to the earnings announcement and there is no news that explains Harken's return to its pre-announcement price of $3 on August 21, 1990, the earnings announcement did not provide investors with new material information," the SEC said. Furthermore, even though Harken stock moved down for the rest of 1990, it recovered its value and more the next year, when it hit $8 a share.
FORM 144 VS. FORM 4
In addition to the questions that have been raised about Bush's decision to sell his stock, there are also questions about when he informed federal regulators of the sale. Last week, New York Times columnist Paul Krugman wrote, "Oddly, though the law requires prompt disclosure of insider sales, [Bush] neglected to inform the SEC about this transaction until 34 weeks had passed. An internal SEC memorandum concluded that he had broken the law, but no charges were filed. This, everyone insists, had nothing to do with the fact that his father was president."
The documents tell a somewhat different story. Although Krugman did not mention it, Bush was required to file two disclosure forms with the SEC. One, which was known as a Form 4, was due the month after Bush made the sale. The other, known as a Form 144, was due at the time of the sale. Bush filed the Form 4 several months late, but he filed the Form 144 on time. In the view of some experts, the Form 144 was the more important of the two.
Bush filed the Form 144, officially known as a "Notice of Proposed Sale of Securities," on June 22, 1990, the day of the sale. In the form, he listed, among other things, how many shares he intended to sell, when he had originally acquired them, how much they were worth, and which broker would handle the transaction. "The 144 is probably the more market-informative form," says Edward Fleischman, who was an SEC commissioner between 1986 and 1992. "It gives market-watchers an indication of what is coming." In contrast, Fleischman says, "The Form 4 is totally retrospective and was originated for a very different purpose, to keep track of dates and prices." If the purpose of disclosure was to make regulators and investors aware of Bush's insider sale, then the Form 144 was the more important document.Still, the law required that the Form 4 also be filed, and even though he had apparently done everything by the book up to that point, Bush did not file the form until March 1991, nearly 34 weeks late. Why did he wait so long to file? At various times through the years, Bush's advisers have suggested that he thought he filled out the form and believed it might have been lost, either inside Harken or the SEC. After Krugman raised the issue last week, White House spokesman Ari Fleischer attributed the late filing to "a mix-up with the attorneys." Then, at his news conference on Monday, the president admitted, "As to why the Form 4 was late, I still haven't figured it out completely."
Whatever the reason, the fact that the report was filed late, while a violation of SEC rules, does not seem particularly damning in the absence of any underlying wrongdoing that a late filing might have been intended to conceal and especially in light of the fact that the Form 144 was filed on time. In addition, it appears that at the time Bush sent his form to the SEC, late filing was not seen as a very serious offense. "If it had come to the SEC's attention back then, somebody would have said, 'Get the bloody form filed,' and that would have been it," says Fleischman. "There was precious little attention paid to a timely or tardy filing of Form 4."
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Please note that I have accented the most relevant parts. I believe that many here would appreciate it if you would do likewise, as opposed to posting a great deal of text that has little to nothing to do with the subject matter.
Also, if you had mentioned Aloha, you would be on firmer footing, but since you have focused on Harken, I did likewise.
Originally posted in YOUR article:
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The SEC cleared Bush after looking into whether he had insider knowledge of an upcoming quarterly loss at Harken.
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Cheers. (Unless you now intend to split hairs on the meaning of "cleared.")
Last edited by SteelyLoins; 06-14-2006 at 09:14 PM..
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