GOP says Frist stock sale OK, but others disagree

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Chattanooga Times Free Press (Tennessee)

WASHINGTON, D.C. — Senate Republicans and a Washington lawyer said Senate Majority Leader Bill Frist, R-Tenn., followed ethics laws when he sold stock shares in his family’s company this summer.

Jan Baran, a Washington lawyer specializing in government ethics requirements, said Sen. Frist acted within the letter of the law.

“No one has reported an impermissible or illegal communication occurred between the senator and his trustee,” said Mr. Baran, a former counsel for the Republican National Committee. “It is a lot of noise signifying nothing as a matter of law and ethics.”

However, liberal-oriented political advocacy groups said the stock sale highlights the need for reform.

Melanie Sloan, executive director of the liberal Citizens for Responsibility and Ethics in Government, said the stock sale highlighted a problem in ethics rules.

“Senate conflict of interest rues are troubling,” said Ms. Sloan, who has worked for Democratic members of Congress. “The rules need to be changed on conflict of interest.”

Sen. Frist said that he directed the trustee of his blind trust to sell his and family members’ shares in HCA Inc., the Nashville-based hospital management company founded by his father. The sale occurred weeks before the stock dropped about 9 percent in value and has led to investigations by two federal agencies.

The sale was governed by the Ethics in Government Act of 1978 that is enforced for senators by the Senate Ethics Committee, Mr. Baran said.

He said a qualified blind trust for elected officials is not like a blind trust for private citizens.

The law allows communication between a senator and his trustee under certain conditions, he said. Those include when the trustee disposes of all of a particular asset, the asset’s value drops below $1,000 and whenever a senator wishes to sell all holdings in a particular stock, he said.

Mr. Baran said those exceptions exist so government officials may confirm they no longer own a particular asset and can affirm they no longer have a conflict of interest.

In defending his stock sale during a brief public statement this week, Sen. Frist said he sought review and preapproval from the Senate Ethics Committee. He said his staff worked with the panel to ensure compliance with Senate rules and relevant laws.

Sen. Frist said his staff received help from the Senate Ethics Committee in drafting a letter to the trustees.

Mr. Baran said Sen. Frist was not required to get preapproval of the sale form the Senate Ethics Committee but was required to inform its members of the sale. He said calls for revisions to the existing ethics laws are not new.

Senate Republicans said the explanation is sufficient.

“It looks to me like the system worked as it is supposed to work,” said Sen. Mitch McConnell, R-Ky, the chamber’s majority whip.

Sen. Johnny Isakson, R-Ga., said Senate Democrats have not attacked Sen. Frist over the sale.

Carmen Balber, with the liberal-oriented Foundation for Taxpayer and Consumer Rights, said the regulations are too lax and should not be policed by fellow senators.

“Blind trusts need stricter rules,” Ms. Balber said. “They have a lot of loopholes. Partisanship could overshadow a significant investigation.”

Dr. Bruce Oppenheimer, a Vanderbilt University political scientist, said the confusion with Senate rules extends to the voting public.

“It clearly allows some things we don’t allow in regular blind trusts,” Dr. Oppenheimer said.

Mr. Baran said he doubts the Senate Ethics Committee would rule against Sen.
Frist’s sale because it gave preapproval. He said the ongoing federal
investigations probably would exonerate Sen. Frist.

However, he said it adds one more week of bad press for Sen. Frist. He was criticized by some earlier this year for threatening to circumvent a Democrat filibuster on judicial nominations and for his reversal on stem cell research funding.

“This has been a year of bad timing and bad luck for Senator Frist,” Mr. Baran said. “If the stock had gone up 10 points after the sale, there wouldn’t have been a story.”
E-mail Lee Pitts at [email protected]

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