Recently,
Common Cause called on the Senate Ethics Committee to investigate whether Senator Bill Frist violated Senate ethics rules by directing trustees to sell his HCA Inc. stock held in a blind trust. Federal investigators and the Securities and Exchange Commission are investigating Senator Frist, whose family founded and whose brother sits on the board of HCA, because the stock sale occurred shortly before a poor earnings report. Additionally, we asked the Committee to clarify how the numerous communications between the senator and trustees of his blind trust - during a period when the senator was working on legislation of interest to HCA - did not qualify as a conflict of interest at the time.
Then, two days ago, the Associated Press reported that Senator Frist has held HCA stock in an investment partnership in addition to the HCA stock held in his blind trusts covered by Senate ethics rules:
...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.
In that case, the HCA stock was accumulated by a family investment partnership started by the senator's late parents and later overseen by his brother, Thomas Frist. The brother served as president of the partnership's management company and as a top officer of HCA. Sen. Frist holds no position with the company.
The senator's share of the partnership was placed in a Tennessee blind trust between 1998 and 2002 that was separate from those governed by Senate ethics rules. Frist reported Bowling Avenue Partners, made up mostly of non-public HCA stock, earned him $265,495 in dividends and other income over the four years.
A variety of ethics experts have argued that Senator Frist's additional trusts did not insulate him from a conflict of interest because "the senator or his brother were advised of transactions and could influence decisions." It seems apparent from the facts reported about Senator Frist's investments that a genuine conflict of interest existed for the senator long before his recent sale of HCA stock. Yet, the
Committee's approval of that sale was premised on the notion that a
future conflict of interest might exist for the senator.
At a minimum, it seems clear that the Committee's oversight of Senator Frist's handling of HCA stock and the possible conflicts of interest it might have created has been inconsistent, if not negligent.
Am I missing something here?
