The Tennessean (Nashville, Tennessee)
Senator Bill Frist should fully explain why he recently sold his stock in the family business, HCA Inc.
The senator’s spokeswoman says the sale was to avoid any appearance of a conflict of interest. But Frist has been a member of the U.S. Senate for more than 10 years. If he wanted to avoid the appearance of a conflict of interest over his HCA stock, he should have done so long ago.
Frist has indicated he will not seek re-election in 2006, although he is widely viewed as a potential presidential candidate in 2008. If his intent is to erase any appearance of a conflict while he’s a public servant, it’s too late.
If he does not run for national office, his concern about the appearance of a conflict comes only in the waning days of his service as a senator, including his current position as majority leader.
The public watchdog group Foundation for Taxpayer and Consumer Rights filed a complaint with the Senate Ethics Committee in April 2004 over Frist’s position on medical malpractice liability suits. The group said that Frist’s holdings gave an appearance of a conflict since HCA could financially benefit from the legislation. The Ethics Committee found no reason to act.
Frist has long maintained that his holdings in HCA did not present a conflict because they were held in a blind trust. The arrangement gives him the ability to direct the sale of the stock even though he could not know how much of the stock he held. Frist’s last personal financial disclosure statement reported a net worth of $15 million to $45 million, mostly in blind trusts.
Frist requested on June 13, 2005 that his blind trust sell his HCA shares, as well as the shares of his wife and children. On July 1, his shares were confirmed as sold. On July 8, his wife’s and children’s shares were confirmed sold. The price of HCA stock fell by 8.83% on July 13. HCA Inc. said yesterday that federal prosecutors have issued a subpoena for documents related to Frist’s sale. A Frist spokesman said the Securities and Exchange Commission has contacted Frist about the sale.
No one has presented any evidence linking the timing of Frist’s sale to the subsequent drop in price. Frist has served the better part of two terms while holding HCA stock and making decisions that could affect the value of the business. That connection shouldn’t have taken a decade to discover.