The republican "culture of corruption" continues to unravel before our eyes.
Excerpts from a new WaPo article:
Senate Majority Leader Bill Frist (R-Tenn.) has been subpoenaed to turn over personal records and documents as federa authorities step up a probe of his July sales of HCA Inc. stock, according to sources familiar with the investigation.
The Securities and Exchange Commission issued the subpoena within the past two weeks, after initial reports that Frist, the Senate's top Republican official, was under scrutiny by the agency and the Justice Department for possible violations of insider trading laws.
More below the fold...
Frist aides previously said he had been contacted by regulators but did not mention that the lawmaker had received a formal request for documents. The sources, who spoke on condition of anonymity because of the investigation, said Frist is expected to testify under oath about what he knew about the company's health in the weeks before he sold stock. Frist has told reporters that he did nothing wrong and that he directed the sale to eliminate potential conflicts as he considered a 2008 presidential bid.
The formal request for documents usually presages an acceleration of a federal probe. In Frist's case, regulators had to proceed with caution due to his status in Congress and their mutual desire to avoid triggering constitutional objections to the release of documents. The disclosure of the subpoena comes as Democrats blasted Frist anew for his financial and personal ties to Hospital Corporation of America, a Nashville chain founded in 1968 by his father and his brother, Thomas Frist Jr. Critics yesterday seized on a report that Frist held a substantial amount of his family's hospital stock outside of blind trusts between 1998 and 2002 -- a time when he asserted he did not know how much of the stock he owned.
The article goes on to say:
The subpoena for documents related to the July stock sales was written carefully to avoid asking for documents related directly to Frist's legislative actions, according to sources. By keeping the request focused on his personal activities, experts said, the SEC avoided raising objections from Senate lawyers who might otherwise have fought the request on the grounds of constitutional separation of powers.
The wording in the subpoena also ensured that Frist did not have to tell colleagues about the document request or to otherwise involve them in the investigation, congressional aides said.
The executive branch is prohibited from seeking documents or testimony that relate to "legislative acts and the motivation for the performance of legislative acts," said Kenneth Gross of Skadden Arps, an ethics law expert. The ban is part of what is called the Constitution's "speech and debate" clause, which insulates Congress from unwarranted intrusions by the executive branch of government. Writing a subpoena that does not run afoul of the clause -- and also possibly trigger a public disclosure of the subpoena -- required careful work.
"There are some gray areas, clearly, and it could be tricky," said Baran, of Wiley Rein & Fielding. Members of the House of Representatives must disclose to the full House when they are subpoenaed. The Senate has its own rules that sometimes require the body to deal with subpoenas, experts say, but the Frist subpoena apparently has not triggered any of them.
A spokesman for Frist said yesterday: "As we have indicated, Senator Frist has been fully cooperating with the authorities conducting the inquiries and will continue to do so, including keeping our public comments to a minimum. The issuance of a subpoena would be an expected and normal part of that process."
And now for some clarification of the matters at hand... in case you haven't been paying attention. The following is from
an AP story on this whole sordid mess:
Over a period of four years, Senate Majority Leader Bill Frist accumulated stock in a family founded hospital chain that produced tens of thousands of dollars in income -- all outside the blind trusts he created to avoid a conflict of interest, documents show.
The stock was held in a family partnership largely controlled by Frist's brother, Thomas, who founded HCA Inc. along with the senator's late father.
Frist, R-Tennessee, has long maintained that he could vote on health care legislation and still own HCA stock because he placed his shares in Senate-approved blind trusts.
However, ethics experts say a partnership arrangement shown in documents obtained by The Associated Press raises serious doubts about whether the senator truly avoided a conflict.
While there have been no allegations of impropriety in Frist's having shares outside the voluntary blind trusts, federal prosecutors and the Securities and Exchange Commission are investigating Frist's sale of HCA stock from his blind trusts.
Frist ordered the stock sold June 13, and all sales were completed by July 1. The value of HCA stock peaked on June 22 and then gradually declined. On July 13, it dropped 9 percent.
Reports to the SEC showed insiders sold about 2.3 million shares of HCA stock worth at least $112 million from January through June 2005.
Frist has denied that he had any insider information before the stock sale and pointed out that he has not held any position in the company.
And a little unbiased analysis:
Kathleen Clark, a government ethics expert at the Washington University in St. Louis School of Law, said she doesn't believe the Senate trusts or the Tennessee trust insulated Frist from a conflict because the senator or his brother was advised of transactions and could influence decisions.
"What I find most appalling is the Senate calls it a qualified blind trust when it's not blind," Clark said. "Since the Senate says it's OK, the Senate has made it a political question. It's up to the voter. But there's no doubt it's a conflict of interest."
Is this all for real? I must be in some parallel universe where bad things actually do happen to bad people.