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Banned
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Note to readers: I did not intend to respond to SteelyLoins last post, because it was a poorly documented "hit piece" from conservative contributor Byron York, posted July 10, 2002, on the partisan websire, "NRO". But, since I'm posting anyway...I will say that it comes down to my conclusion that, if you unquestioningly support Mr. Bush's answers as to what he did regarding the sale of his Harken stock, Byron York's article will satisfy you that Bush did nothing wrong. Consider though, that Byron York's version must compete with the contradictory reporting of investigative journalists who worked for the most prominent newspapers in the U.S., who investigated and reported independently, and, it must be mentioned, in fairness to Byron York, that he posted his "report" four months before this disclosure: (full article in my post #4, and partial display, later in this post):
Now....on to mu response to Marv's post:
Quote:
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Originally Posted by Marvelous Marv
Then is the OP's position that President Bush relied on insider information to sell his stock at $4/share, so he wouldn't have to sell it a year later at twice that?
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Marv, IMO, this news article supports my conclusion that you have unintentionally reinforced the whole point of the thread. Dana Milbank, on Oct. 11, 2002, makes the case of why the comparison between what Enron's convicted officers did, and what Mr. Bush participated in at Harken, amounted to the same kind of stock price "elevating" machinations. The answer response to your posted comment, is in this article, in bold, and it does not flatter Mr. Bush's ethics:
Quote:
http://www.washingtonpost.com/ac2/wp...nguage=printer
Bush Linked to Harken Off-the-Books Deal
President Did Not Profit; White House Says Venture Can't Be Compared to Enron
By Dana Milbank
Washington Post Staff Writer
Thursday, October 10, 2002; Page A06
When President Bush served as a director of an energy company 12 years ago, he approved the creation of an off-balance-sheet partnership that reduced the company's debts and improved earnings in a transaction similar to those that led to the collapse of Enron Corp.
As a director of Harken Energy Corp. in 1990, Bush, who had sold his own oil business to Harken and was retained as a consultant, made the motion at a board meeting to negotiate the transfer of struggling Harken assets into a partnership with Harvard University's investment arm, Harvard Management Co. Inc., documents indicate.
Unlike Enron, which used partnerships to conceal debts and loss-making operations, Harken's partnership followed accounting rules and was disclosed to investors and regulators. Bush did not profit personally from the transaction because he had sold most of his shares earlier. "There is simply no comparison" to Enron, said White House spokesman Scott McClellan. "It was disclosed to investors and it conformed to accounting rules."
But news of the partnership, first reported yesterday in the Wall Street Journal and the Boston Globe after documents were gathered by a group called HarvardWatch that monitors Harvard investments, <b>provides an unwelcome link between Bush and the accounting scandals that have spooked investor confidence this year. After creation of the partnership, depressed Harken shares enjoyed a brief renaissance as the company's financial situation appeared to improve, in part because of the removal of $20 million in debt.
According to board minutes of Aug. 29, 1990, obtained by HarvardWatch, Bush made the motion, which was approved, to "proceed in negotiations . . . toward formulating a letter of intent" creating "a new entity." The entity, which became the Harken Anadarko Partnership, included oil and gas properties to be managed by Harken.</b>
Harvard Management, which invests the university's endowment, was a major investor in Harken, at one point owning 30 percent of its shares. Its investments began at about the time that Bush, the son of the then vice president, became a director of the company in 1986.
According to the Journal, Harvard's support of Harken influenced A. Robert Abboud, then head of First City Bancorp, to take over another bank's loans to Harken in 1990 and rescue Harken from default. Abboud had been a prominent supporter of Saddam Hussein's government in Iraq before the Persian Gulf War. Abboud also had ties to President George H.W. Bush, the current president's father.
McClellan, the White House spokesman, said the ties between Harvard Management and Harken had nothing to do with the Bush connections because talks about a possible Harvard investment in Harken began before Bush became a director. McClellan said the off-balance-sheet partnership was proposed by Harvard, and the university investors "set the terms of the partnership."
Harvard said in a statement yesterday that its investments in Harken "were not inappropriate" and had nothing to do with Bush connections. "The role of the Harvard Management Company is not to curry political favor but to invest well on Harvard's behalf," the statement said.
A phone call to Harken officials seeking comment was not returned.
<b>The partnership significantly improved Harken's fortunes. Its shares, which had fallen to $1.25 in late 1990 from an earlier high of $6, climbed to $8 in 1991. The stock improvement came as Harken's debt and interest expenses fell because of the partnership. Harvard benefited from the higher stock price by selling 1.6 million shares between September 1991 and October 1992, HarvardWatch said.</b>
By December 1992, Harvard Management had bought all of Harken's interest in the partnership. Harvard sold the venture in 1993 to Cabot Oil and Gas Corp. for stock valued at $34.6 million, HarvardWatch said.
The partnership "bears striking resemblance to the partnerships Bush has condemned at Enron," HarvardWatch argued. "It was controlled by and transparent only to Harken insiders, and likely was used to artificially brighten the company's business prospects."
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....Marv, the entire Spectrum 7/Harken era in Bush's life, the profits from which "transitioned"
Bush into his next "windfall", a $14.7 million "pay day", resulting from his $800K investment in the Texas Rangers partnership, "sweetened" by a politically influenced taxpayer financed construction of a new Texas Ranger's stadium, seems to fly in the face of the core beliefs of you and other Bush supporters who post on these threads. Does a man who made a career out of using his family legacy to gain admission to Yale and to Harvard, selection into the most prestigious Yale "secret society, then, in his Texas business "career", his daddy's name, rolodex full of influential contacts, bankers, and implied personal access to his daddy in political decisions, right up to and through his 2000 campaign, post Florida election recount (ala James Baker, et al) a sympathetic SCOTUS Dec, 12, 2000 decision that included votes by justices appointed via his daddy's influence in his 12 combined years as VP and POTUS, then in
his intital cabinet appointments, and finally, in his display of his own integrity and ethics,
really warrant or earn your seemingly "knee jerk" support?
Ironically, don't the backgrounds of men like Clinton or Kerry, both emerging from next to nothingness, striving to earn their places in Ivy league universities with no family legacy or fortune backing either of them, seem more in the spirit of what you say that you stand for?
Bush is still the same to this day. Deflecting, sketchy, seemingly oblivious to how disingenuous he looks to the rest of us who do not buy the idea that he is qualified, on his own merit, to head a financially busted oil wildcat venture, much less the presidency of the U.S. Check out his comments last week, to Larry King, below:
Quote:
http://en.wikipedia.org/wiki/Harken_Energy_Scandal
Debt Swap Transaction
In 1990, the US energy company Harken Energy entered into a business partnership called Harken Anadarko Partnership (HAP) with Harvard University which ultimately became the vehicle by which Harken Energy could transfer $20 million in debt to Harvard.
Harvard contributed $64.5 million worth of property. Harken contributed drilling operations valued at $26.1 million, which also carried $20 million of bank debt and liabilities. Harken held a 16% interest in the Harken Anadarko Partnership (HAP); Harvard owned the remaining 84%. The actual operation remained under Harken’s control, however. From 1990 until 1993 the Harvard-run HAP paid Harken about $1 million per year to operate the partnership's oil and gas.
Though made public, investors did not directly equate the transferred debt as a decrease in equity, allowing the share value of Harken stock to rise, and senior Harken managers liquidated their shares. See market liquidity.
Harvard Management, an independent fund that manages the university's endowment, invested heavily (almost $30 million) in Harken beginning in 1986 around the same time Bush was made director, at one point giving the fund one-third control of Harken. Bush, a graduate of Harvard Business School, could well have been what made Harken (a relatively little oil company in Texas) so attractive to Harvard Management.
Bush's Stock Sale
During the early 1990s Harken continued to suffer cash flow problems. On May 20, 1990 an internal Harken memo warned that its financial position was such that it may not be able to meet the June 15 payroll.
On June 8, 1990, Ralph Smith, a trader for Sutro & Co., called Bush on behalf of an institutional client interested in buying a large block of Harken stock. Smith asked Bush if he was interested in selling. Bush said no, but added that he might be interested in about two weeks.
On June 15, 1990, lawyers from the firm of Haynes & Boone, which worked for Harken, sent a warning about selling on insider information. The memo to Harken staffers had the subject line Liability for insider trading and short swing profits.
Quote:
http://www.washingtonpost.com/ac2/wp...¬Found=true
Bush Sold Stock After Lawyers' Warning
SEC Closed Probe Before Receiving Letter From Harken's Outside Attorneys
By Peter Behr
Washington Post Staff Writer
Friday, November 1, 2002; Page A04
A week before George W. Bush's 1990 sale of stock in Harken Energy Co., the firm's outside lawyers cautioned Bush and other directors against selling shares if they had significant negative information about the company's prospects.
The sale came a few months before Harken reported significant losses, leading to an investigation by the Securities and Exchange Commission.....
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A week later, Bush contacted Smith, and sold 212,140 Harken shares for $4 per share, netting $848,560. Despite having been put on notice by the company lawyer of the importance of filing timely insider reports only a few months before, Bush waited eight months before filing the required forms on the sale with the SEC. Bush used the money to repay a loan used to acquire his interest in the Texas Rangers, a baseball franchise.
Bush says he was unaware of the company's financial condition, despite sitting on Harken's audit board. Bush was investigated for insider trading by the SEC, but no charges were brought against him.
Things got even worse when the company announced on August 20, 1990 that it had a huge, unexpected loss of $23.2 million for the second quarter and it's stock tanked 20% that day.
[edit]
SEC Investigation
According to SEC documents, investigators concluded that neither Bush nor the rest of the company's hierarchy were aware of the magnitude of the loss at the time Bush sold his stock. The investigation was criticized on several grounds, including the fact that the subject of the inquiry, Bush, was never interviewed by the SEC.
A pertinent point here is that the SEC Commissioner had been appointed by President George Bush Sr., and its counsel had worked for Bush Jr. negotiating the purchase of the Texas Rangers.
On Oct. 18, 1993, an SEC memo declared the investigation has been terminated as to the conduct of Mr. Bush, and that, at this time, no enforcement action is contemplated with respect to him. The letter also stated that the investigation's termination must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the investigation. [citation needed]<b>comment by host: Here is the "citation":
Quote:
http://www.washingtonpost.com/wp-srv...bush073099.htm
....Dated Oct. 18, 1993, three weeks before Bush announced his candidacy for governor, the carefully worded letter was addressed to Jordan and said that "the investigation has been terminated as to the conduct of Mr. Bush, and that, at this time, no enforcement action is contemplated with respect to him."
<b>Bush took that as vindication. "The SEC fully investigated the stock deal," he said in October 1994. "I was exonerated." Supporting Bush, the head of the SEC's enforcement division, William McLucas, went beyond the letter and stated publicly that "there was no case there."
Hiler, however, was more cautious. His statement said it "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>
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<b>"Kenny Boy", I barely knew ye !! (wink....)</b>
Quote:
http://www.cnn.com/2006/POLITICS/07/06/transcript.bush/
Thursday, July 6, 2006; Posted: 10:53 p.m. EDT (02:53 GMT)
.....KING: Was that whole thing, the whole Enron story shocking to you?
G. BUSH: Yes, yes.
KING: Because, I mean, you knew him pretty well from Texas, right?
<b>G. BUSH: Pretty well, pretty well, I knew him. I got to know him. People don't believe this, but he actually supported Ann Richards in the '94 campaign.</b>
KING: She told me that.
G. BUSH: She did?
KING: She liked him a lot.
G. BUSH: Yes, he's a good guy. And so what I then did was we had a business council and I kept him on as the chairman of the business council and, you know, got to know him and got to see him in action. One of the things I respected him for was he was such a contributor to Houston's civil society. He was a generous person. I'm disappointed that he betrayed the trust of shareholders, but...
KING: Do you know him well, Mrs. Bush?
L. BUSH: Not really. Not really well.
KING: Did you know his wife?
L. BUSH: But I did know him. And I know Linda and I'm sorry for her.
KING: Do you have contact with her?
L. BUSH: I haven't.
G. BUSH: I haven't yet. I'm going to write her a letter at some point in time.........
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The "record" reinforces reports that Bush and Ken Lay were good friends:
<img src="http://www.thesmokinggun.com/graphics/art3/0708042lay1.gif"> |