Is Bill Frist in a pickle?

“Frist Stock Sale Raises Questions on Timing

Senate Majority Leader Bill Frist (R-Tenn.) has maintained for years that his stock holdings in the nation's largest for-profit hospital chain posed no conflict of interest for a policymaker deeply involved in health care matters. He even received two rulings in the 1990s from the Senate ethics committee that blessed the holding of the stock in blind trusts.

So when Frist decided in June to dump all the stock, and later cited as the reason his desire to avoid the appearance of a conflict of interest, eyebrows went up among ethics experts and congressional watchdogs. Why did he do it at that time?

Precisely a month later, after the stock was sold, its price tumbled 9 percent when executives in the company -- HCA Inc., which was founded by Frist's father and on whose board Frist's brother serves -- disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.

The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company. "Frist has been in the Senate for many years now, and the conflict is not new," said Melanie Sloan, executive director of the watchdog group, Citizens for Responsibility and Ethics in Washington. "Why did he decide to sell it then? Why not years ago? What's changed? Did he know that the stock was about to take a fall?"

Frist spokeswoman Amy Call said yesterday that Frist "did not have any conversations with HCA executives about HCA stock when he was making the decision to divest." Asked more generally whether he had discussed the company's performance with its executives, she replied, "No."

She said Frist's decision was based "purely on wanting to avoid any future appearances of conflict" while pursuing new health initiatives, and said he had no way of knowing -- under the rules of the blind trusts -- how quickly the stock would be sold. Call promised to provide recent examples of criticism directed at Frist's stock holdings, but all those she eventually cited occurred before May 2004.

Until the sale, Frist's holdings in HCA formed a significant source of his wealth. His political career was launched in part by a loan secured by the stock; in 1994, he valued his holdings at $13 million, and the following year he placed them in a blind trust. In 2000, he transferred the HCA stock into a new blind trust, a transaction that could have given him insight into its value.

Frist's signed financial disclosure statements indicate that the overall value of his blind trusts did not substantially change from 2003 to 2004. As one of the Senate's multimillionaires, Frist has other non-HCA-stock holdings outside of the trusts.

Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, "The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn't make any sense. It means you have a seeing eye trust and not a blind trust. It's ridiculous."

Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement "seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose."

A sample agreement for blind trusts published by the Senate ethics committee staff on its Web site states that there should be no "direct or indirect communication" between senators and trustees unless the senator is directing the trustee "to sell all of an asset . . . [which] creates a conflict of interest or the appearance thereof due to the subsequent assumption of duties" by the senator.

Jan W. Baran, a Republican ethics expert at Wiley Rein & Fielding LLP, said, "That's the question, 'What changed?' " to compel Frist to sell his stock when he did.

According to Senate ethics rules, Baran said, Frist "can tell somebody to dispose of all of an asset that was initially placed into the blind trust. As a matter of Senate ethics rules, he is in compliance. The question that remains is, why did he sell the stock at that time? What conflicts arose in June that did not exist beforehand?"

"For the Securities and Exchange Commission," Baran added, "the answer is probably very important."

According to Thomson Financial, a reporting service, seven senior HCA executives sold 574,882 shares worth $19,942,610 between May 17 and June 10. A company spokesman, Jeff Prescott, said the executives are entitled "like other stockholders [to] make personal decisions . . . about when to sell." He said the executives complied with "blackout restrictions" imposed by the SEC to prevent dealing within a certain period prior to restatements of earnings.

An SEC spokesman said it is the commission's policy not to comment on investigations, and would neither confirm nor deny that it is probing insider trading at HCA.”

“What I wanna know is, is there a pickle in Bill Frist?”

“He made his fortune running a Medicare Mill.

Gotta love the taxpayer's money, it's a bottomless pit.”

“Of course it's legal. He's a Republican. It's only illegal if Democrats do it.”

“HCA insiders sold stock before dive, as Frist did

Senator's sale came as executives exercised longtime stock options

By KEITH RUSSELL
and RANDY McCLAIN
Staff Writers


Senate Majority Leader Bill Frist's move to sell his remaining shares of HCA Inc. stock in June came at the tail end of at least a three-month period in which many of the company's top executives were cashing in long-term stock options for millions of dollars in profits.

A review by The Tennessean of stock transactions by HCA insiders between April 1 and June 30 shows the group as a whole sold nearly 1.8 million shares of stock worth nearly $100 million over that period. The data come from Securities and Exchange Commission filings used by Wall Street analysts to track whether executives are accumulating or selling shares in their own companies.

Watchdog groups have criticized Frist's stock sale and have asked the Securities and Exchange Commission to investigate the timing of the transaction. Frist's order to a blind trust to sell his shares came on Monday, June 13, one month before the stock took a nearly 9% drop in a single trading day.

The New York Times reported today that the Securities and Exchange Commission had contacted Frist’s office about the sale in June of his shares in HCA. A spokesman for Frist said the majority leader will provide the SEC any information that it needs with respect to this matter.

Frist was not alone in selling shares in the Nashville-based health-care company.

For example, in the five trading days before Frist made his sell order, HCA's top executives and directors sold 228,800 shares of stock worth $12.4 million. Most of the transactions came as company executives exercised past stock options that HCA had given to them as performance incentives over a long period of time.

Stock analyst Mark LoPresti with Thomson Financial said the wave of stock sales by HCA executives was a bearish sign that could have been picked up by savvy investors.

"What you did have was HCA people selling in record numbers," LoPresti said. "It sends a signal that they think they're getting a good price, and they're taking the shares off the table."

"Why would (the average investor) want to increase holdings when other people are unloading theirs?"

It's impossible to say that the executives or Frist had advance knowledge of an earnings report issued by HCA in mid July warning of weaker second-quarter profits, the stock analyst said. That report led directly to the 9% dip in the company's stock on July 13.

LoPresti said the only other period in which HCA executives sold a comparable volume of stock was in the spring of 2002, and the company's shares fell 30% over the next 12 months.

LoPresti said he can't get inside the heads of individuals to determine exactly why they sold shares at a given time.

Still, Frist's stock sale and the fact that it came amid a wave of selling by current HCA insiders has caused political troubles for the potential 2008 presidential candidate.

Frist dodged the issue yesterday, with his staff cutting off questions from reporters as he left a rally at the Capitol in support of John Roberts's nomination to be chief justice of the Supreme Court. Aides again refused requests to interview Frist about the sale.

"He's not going to talk about it," spokeswoman Amy Call said.

If Frist sold his HCA stock in the midst of a massive insider sell-off, that could cause him more problems in Washington. "It definitely gives you pause," said Larry Noble, executive director of the nonpartisan Center for Responsive Politics, a government watchdog group. "It goes beyond just the question of whether or not he complied with ethics rules in terms of selling stock in the blind trust. Now he may be dealing with an even more serious allegation having to do with insider trading."

The Foundation for Taxpayer and Consumer Rights, a Santa Monica, Calif.-based group that complained to the Senate Ethics Committee about Frist's HCA holdings last year, has asked the SEC to investigate the sale.

"If there's a trend of insider trading just as Senator Frist dumped his stock, it's a clear indication that he may have known more than the rest of the public," said Carmen Balber, a consumer advocate with the group.

It isn't clear whether the SEC will look into the matter.

Nashville securities attorney Gary Brown said he wouldn't be surprised if security regulators look into Frist's sales. "Any time something like that happens, you've got to at least raise the question."

One potential explanation of the increased sales this year could be that HCA in December made 19.1 million shares tied to stock options immediately exercisable for executives and employees, even though the shares were accumulated over a period of years.

"To the extent that options were accelerated (meaning they could be sold) that means that this year there were a greater number of options available for exercise and sale of the shares," Brown said.

The decision by HCA came ahead of an expected change in accounting rules that would require companies to deduct the value of options from their profits. But at the time, company spokesman Jeff Prescott downplayed that connection, adding employees would have become vested in roughly half of the 19.1 million shares in early 2005 anyway, with the rest kicking in over the next three years.

Early vesting increased opportunities for HCA executives to sell shares, LoPresti said.

"You can't make the definitive statement that these guys knew there was trouble ahead. That would be irresponsible," LoPresti said. Still, LoPresti said that between Jan. 31 and April 7, 17 HCA insiders sold almost 1.5 million shares as the company's stock ran up above $50 a share. The stock peaked at $58.60 on June 22.

Frist ordered his stock sold to avoid the appearance of a conflict of interest, Call, the Frist spokeswoman, said earlier this week. The senator declined to comment further yesterday.”

“I am curious to know how this ia a blind trustif he knew what was in it and he could order the sale. IF this is so, then how is a blind trust different from any other investment account?”

“HCA was a family business. Frist knew what was in the trust when he set it up. The WP article says he sold to "avoid any future appearances of conflict". He knew what he was selling. Therefore, it was not a 'blind' trust as defined here: http://www.investopedia.com/terms/b/blindtrust.asp

It does appear that he did something slimey.”

“USA Today has this:

NASHVILLE (AP) — Hospital operator HCA (HCA) said Friday that federal prosecutors have issued a subpoena for documents the company believes may be related to the sale of its stock by Senate Majority Leader Bill Frist.
A release from the company said the subpoena came from the U.S. attorney for the Southern District of New York.

A spokesman for Frist couldn't immediately be reached for comment.

HCA, the nation's largest for-profit hospital company, was founded by Frist's father, and his brother was its CEO and chairman and remains on the board of directors.

Frist asked a trustee to sell all his HCA stock in June, near a 52-week stock price peak of $58.40 and at the same time HCA insiders were selling shares. Reports to the Securities and Exchange Commission showed insiders sold about 2.3 million shares, worth about $112 million, from January through June, said Mark LoPresti of Thomson Financial. (Related: Insider trades.)

The sale came about two weeks before the company issued a disappointing earnings forecast that drove its stock price down almost 16% by mid-July. The stock still has not recovered, trading Friday around at $45.90.

The value of Frist's stock at the time of the sale was not disclosed. Earlier this year, he reported holding blind trusts valued at $7 million to $35 million.

For years, Frist was criticized for holding HCA stock while directing legislation on Medicare reform and patient issues. His office has consistently deflected criticism by saying his assets were in a blind trust and not under his active control.
[...]
The Wall Street Journal reported Friday that the Securities and Exchange Commission is looking into whether Frist had any inside knowledge that prompted his sales.
[...]

http://www.usatoday.com/money/industries/health/2005-09-23-hca-frist_x.htm”

“Sounds more like a 'seeing eye' trust.


WASHINGTON - Senate Majority Leader Bill Frist, R-Tenn., was updated several times about his investments in blind trusts during 2002, the last time two weeks before he publicly denied any knowledge of what was in the accounts, documents show.

The updates included stock transactions involving HCA Inc., the hospital operating company founded by Frist's family.
[...]
Frist, asked in a television interview in January 2003 whether he should sell his HCA stock, responded: "Well, I think really for our viewers it should be understood that I put this into a blind trust. So as far as I know, I own no HCA stock"

Frist, referring to his trust and those of his family, also said in the interview, "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."

Documents filed with the Senate showed that just two weeks before those comments, the trustee of the senator's trust, M. Kirk Scobey Jr., wrote to Frist that HCA stock was contributed to the trust. It was valued at $15,000 and $50,000.

The documents filed by the trustees of Frist's blind trusts were obtained by The Associated Press on Friday.

On Nov. 20, 2002, Scobey wrote Frist that 14,781 shares of HCA were sold, along with three other investments. The same day, Scobey wrote that four other investments were sold, none of them HCA stock.

On May 16, 2002, Scobey advised Frist that four investments were contributed to a Frist blind trust, including HCA stock valued at $500,000 to $1 million. A second letter the same day mentions the same four investments going into a different trust, but with different valuations, including HCA stock valued at $250,000 to $500,000.
[...]

http://news.yahoo.com/s/ap/20050924/ap_on_go_co/frist_stock”

“I don't have anything to add in terms of the insider trading.

But I just wanted to remind everyone that HCA performs abortions in its facilities. Just type "HCA" and "abortion" into any search engine.

So pro-lifers be aware. When you vote for a Republican Senator, you are voting to keep a man who makes money off the death of unborn babies in the position of majority leader.”

“But I just wanted to remind everyone that HCA performs abortions in its facilities. Just type "HCA" and "abortion" into any search engine.

So pro-lifers be aware. When you vote for a Republican Senator, you are voting to keep a man who makes money off the death of unborn babies in the position of majority leader.”
reformed lurker
9:09:25 PM
9/24/05


so they perform LEGALabortions..now if it was illegal you might have something to #&%!$ about”

“And if Bill Frist were a Democrat would all the above be ranting.The Senate has 40 millinaires, 22 Republicans and 18 Democrats. Should everyone have condemned John Edwards for making $ off torts and other people suffering?? What about John Kerry latching onto Theresa Heinz and her tainted Republican $. (You do know she made her money the old fahioned way, she married it.) Where are the howls??

How many people make $ off the government mill. Many races, faiths, colors, sexual preferences. My brother in law is tonning it on the Medicare Mill, and he's a Democrat!

Abortion is not the problem, unwanted pregancy is. If our society would resolve the problem of unwanted pregnancy, abortion wouldn't be a "problem." Americans don't tackle problems head on, its too painful. We're great fixing problems, once they have large consequences.

"Anybody not a liberal at 20, has no heart. Anybody not conservative at 40 has no brain."”

“There is no doubt that abortion is legal.

And there is no doubt that the solution is contraceptions, abstinence and better education/support for young people.

But there are MANY, MANY people who vote only on the basis of abortion.

And Bill Frist calls himself pro-life. He has stated that life begins at conception.

So, either he has lied about being pro-life. Or he believes that it is perfectly fine to kill a human being for money.

Personally, I believe that he is lying about being pro-life.

And I also believe that it is useless to vote for a Republican on the basis of life issues.

Finally, this does not mean that Democrats aren't hypocritical. They are.”

“RL, This whole thread was about Frist selling off his stock whether and if he did it ethically. The thread wasn't about abortion until you brought it up. You are getting away from what was being discussed (typ on TT though)

BTW, I have never been a Frist fan because up until recently he has been a Bush puppet. I will give him props for being honest about only serving two complete terms as Senator. He ran for office that he would do that and he did. He tried for term limits in the Senate and got no where. I also believe he has his eyes on being President which is why he is stepping down from his position.”

“tangent alert...

I'm just recalling the provision for term limits in Newt's so-called "Contract with America" that was conveniently forgotten when he (and they) came to power.


The possibility of Frist 'eyeing the presidency' also sheds light on his flip-flop re: stem cell research.... but they're supposed to suck up to their base, first... aren't they?

*grin*”

“The more this kind of crap goes on the less I like the two big parties.”

“Wow! The two big parties are not selling their bull anymore.I guess we should give them more power and money.”

“ppcraft has no brain. Does that mean he/she/it is an over 40 liberal?

What is being investigated is did he break securities law, not that he made money.”

“I'm waiting to see what the Enquirer's take on this is before drawing a conclusion.”

“People have been after him for a long time to ditch that stock. It goes high and and ditches it. Now he's in trouble for selling it. I don't know if he had inside information or not (frankly none of you do either). But I can tell you one thing. If I had a lot of stock, that's when I'd like to sell it.”

“This July 2003 article has some interesting information on Frist's 'blind' trust.

http://www.metropulse.com/dir_zine/dir_2003/1328/t_cover.html”

“VioLin,

Honey lets not be hateful. You don't even know me. Is that b/c I shoot down all your conservative conspiracies? Bless your heart.

your friend,

ppcraft”

“WASHINGTON, Sept 28 (Reuters) - The U.S. Securities and Exchange Commission has given subpoena power to investigators looking into the stock sales by Senate Majority Leader Bill Frist, said sources familiar with the matter on Wednesday.
Moving to protect the Frist inquiry from any future criticism for not being thorough, the SEC changed its status to formal from informal and gave investigators subpoena power to force individuals to talk or to produce documents or e-mails.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh12268_2005-09-28_20-31-25_n28463798_newsml”

“Tom DeLay - Jail
Bill Frist - Jail
GW Bush - Jail
Cheney - Jail”

“Don't forget Rove!”

“Brings to mind the old David Frye schtick:

Sound of footsteps walking down hallway on stone floor, footsteps echoing

Sound of iron door opening

Voice: "In here, Nixon!"

Sound of iron door clanging shut

Frye as Nixon: "What are you in for kid?"

Voice: "Murder. What are you in for?"

Frye as Nixon: "I tried to rip off the Constitution."”

“Senate Majority Leader Bill Frist (R-Tenn.) was given considerable information about his stake in his family's hospital company, according to records that are at odds with his past statements that he did not know what was in his stock holdings.

Managers of the trusts that Frist once described as "totally blind," regularly informed him when they added new shares of HCA Inc. or other assets to his holdings, according to the documents.

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/23/AR2005102301201.html”

“Who cares? Frist is a unimportant lightweight.”

“Frist is the Senate Majority Leader. I don't think that is considered lightweight.”

“A Senate Majority Leader that isn't leading, therefore unimportant.”

“Is Tom Delay a lightweight too?”

“Geo, only when it suits SS needs”

“I think the response will be delayed, as it were.”

“I don't much care for Frist.
He's to much of an opportunist rather than a leader for my taste.
Ewker voted him in, not me. ;-)”

“Unlike you silly Dems, I don't blindly follow Party Leaders.”

“Ewker voted him in, not me. ;-)”
GreasyGrimyGopherGutsStomper
10:51:45 AM
10/24/05

again SS opens his mouth and spews out info he has no clue about. Seems SS like to stereotype people...SS must be a libbie since he thinks they are the only ones who do that.

You libbies sure do love to stereotype.
last edited: 10/20/05 11:14:24 AM”
GreasyGrimyGopherGutsStomper
11:12:25 AM
10/20/05”

“Ewker lives and voted (I assume) in TN.
If he doesn't vote, he has no biz #&%!$ing about his reps, or anything else in politics.
Frist is Ewker's man.
LOL”

“so because I live in Tenn means I voted for him..damn that makes a lot of sense.

By your way of thinking bacpac must have voted for Clinton both times because he lives in Arkansas...LOL”

“Frist is too libby for you huh Stovey?”

“Ewker, I'm teaseing you. man. Lighten up.”

“one good thing is that Frist isn't running for Senator again.

Tennessee (Frist-R) - With Sen. Majority Leader Bill Frist retiring in 2006 to possibly run for president, the Tennessee senate race is shaping up to be one of the hottest of 2006. Rep. Ed Bryant is the leading Republican contender; former Rep. Van Hilleary and Chattanooga Mayor Bob Corker. For the Democrats, Rep. Harold Ford and state Sen. Rosiland Kurita are running.


Only ones I am really familiar with are Bryant, Van Hilleary, and Ford.

Ford should be running for the Dems while either Bryant or Hilleary will be for the Reps.”

“Isn't Ford the one with two wives, or rather keeping one wife and one mistress in houses and support?”

“Frist doesn't stand a chance of getting the Rep nod.
I would hold my nose and vote for him if Hillary was the Dem.
Only way though.
He11, I would vote for Bill over Hill. ;-)”

“SS, different Ford..I think. They did a history of the Ford family in the newspaper..damn near couldn't figure out who was whom.. BTW Gerald Ford is not related..he would be the white sheep of the family”

“LOL, I think it is the brother of Harold, John Ford I'm thinking about. That one seems to be very sleezy and crooked as he11.”

“WASHINGTON —Senate Majority Leader Bill Frist acknowledged yesterday that he could have been "more precise" two years ago when he told the public in a televised interview that he wasn't sure if he still owned any HCA stock because his holdings had been placed in a blind trust.

Frist claimed in 2002 and on television in 2003 that he didn't know how much HCA stock he owned, and might not have owned any. But in fact, since 2001, Frist received notification 15 times of sales or deposits into his trust accounts of various stocks, including HCA shares.

http://www.tennessean.com/apps/pbcs.dll/article?AID=/20051026/BUSINESS01/510260439”