Avoiding Conflict for Fun and Profit
For over a decade, Bill Frist has steadfastly rejected all suggestions that his ownership of up to $25 million worth of stock in HCA -- the nation's largest for-profit hospital chain, founded by his father -- created a conflict of interest for a Senator deeply involved in shaping health care policy.
Then, this past June, Frist suddenly changed course and, in what he claims was an effort to avoid any conflict of interest, decided to sell off the stock. Nine days before the share price hit an all time high. And just one month before a company warning of weakening earnings sent the stock price tumbling.
As the Church Lady would say: "How convenient!"
After all, the Good Doctor has had ample opportunity to examine the conflict question. He insisted owning HCA stock wasn't a conflict back in 1994 when he first ran for the Senate -- and the stock was trading at $27 a share. He was just as adamant in 1999 when the issue was raised during his efforts to block President Clinton's patients' bill of rights -- and the stock was at $24. And again in 2003, when he championed the Medicare prescription drug bill that directly benefited HCA -- and the stock was at $41. And again in 2004, when consumer groups cried foul about his involvement in the debate over malpractice reform (another potential financial boon to HCA) -- and the stock was at $40.
So, if owning HCA stock wasn't a conflict of interest when it was trading at $24, $27, $40, and $41 a share, why did it suddenly become a problem at $58 a share? Was the Majority Leader's sudden burst of ethical sensitivity due to the latest round of complaints raised by... oh, sorry, there weren't any complaints. Then maybe it was the brewing firestorm over... hmm, there wasn't a firestorm either.
Or could it, just maybe, I don't know... have been part and parcel of a massive stock sell-off by HCA insiders? Now, I'm not saying that Frist was pulling a Martha Stewart. But, if he wasn't, then he sure is one lucky SOB.
Forget running for president. Frist's next gig should be doling out stock tips on CNBC (although he clearly hasn't always been so blessed when it comes to playing the market).
Which bring us to the other big question facing Frist: why has he spent so much time and energy lying about how blind his not-at-all-blind trust actually is?
According to Senate rules, Frist is allowed to receive information about the trust, and has the power to order the sale of a stock. Then why has he long been painting such a dramatically different picture?
"I have absolutely no input," he said of the trust in 2000. "[The trustees] have 100 percent control." An out and out lie -- unless determining when to sell the stock doesn't qualify as "input".
And that's far from the only time Frist has been deceptive about his level of awareness and input regarding his stock holdings.
In January 2003, Frist told a television interviewer, "It should be understood that I put this into a blind trust. So as far as I know, I own no HCA stock" Sounds very reasonable and very convincing. I mean, it's called a "blind trust," right? Only problem is, we now have the documents that show that just two weeks before making that claim, Frist had been informed that more HCA stock had been added to his trust. And eight months earlier he had been advised that the trust had purchased $750,000 to $1.5 million in HCA stock.
In that same interview, Frist said of the trust, "I have no control. It is illegal right now for me to know what the composition of those trusts are. So I have no idea." But it isn't illegal -- and Frist had a damn good idea about the makeup of the trust, having received nearly two dozen updates from the trustees between 2001 and July 2005.
Even after the story broke last week, Frist's staff steadfastly stuck to playing the clueless card. "Frist had no control over when the stocks were sold," said his spokesperson, Amy Call. Other than knowing the perfect moment to dump it, that is.
Politicians clearly want to have it both ways, and not-really-blind trusts let them do just that -- able to control their assets while giving voters the illusion of absolutely no control. But Frist went that extra mile, repeatedly lying through his teeth not to cover up a crime -- but to make himself look better.
In doing so, he has transformed himself from ready-made 2008 frontrunner into instant political punchline: "Bill Frist has this all upside down," said Rahm Emanuel. "He thought Terri Schiavo could see and his trust was blind."
A Majority Leader who is a proven serial liar -- and probably an insider trader -- is the last thing the GOP needs right now. Frist should remember what happened to Trent Lott (after all, he helped shove him aside) and resign while he can.