Byron York delves deeper into the Bush-Harken issue, and finds that SEC documents available to the public show that the Bush stock sale was perfectly legitimate:
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.
Because Bush was only involved in a very limited way in the company, he did not have "insider information" about most of Harken's losses, and if he didn't have that information, then there was no reason preventing him from selling the stock at will.
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.
That's important because Bush's knowledge and intent are important elements of any "insider trading" allegations. If he didn't know about the bulk of the losses, and cleared the stock sale through the lawyers first, then there's no way he could have had the evil intent his critics claim he had.
Even more itneresting, York tells us that Harken's stock price took a temporary dip, but within the next year, had rebounded to $8 - double the price Bush sold it for. If that's some kind of evil scheme, it's a pretty poor one, missing out on a 100% return in just over a year.
As I've said before and elsewhere, there's no scandal here, just a bunch of howling partisans eager to take a chunk out the President's popularity rating by lumping him in with a handful of bad corporate apples. I'm looking forward to the Dems trying to make an election year issue out of Harken, for two reasons - one, the SEC has already investigated and found actual proof of innocence, as distinguished from lack of proof of guilt; and second, unlike Enron and WorldCom, there are no victims here - because there's no crime. This will blow up in the Democrats' faces, because the percentage of the voting public that gets it will see that the accusers are essentially lying to them, and the portion of the public that doesn't get it simply won't care.
Posted by wasylik at July 11, 2002 02:41 PM