Special Analysis Follow-up: Senator Frist in Media Klieg Lights

In the article, "Questions Surround Frist Blind Trust Stock Sale," published here at the Big Brass Blog, details were provided concerning the disposition by a blind trust for the Senate Majority Leader of all stock holdings in a public corporation that had previously been controlled by the Senator's family. From that article comes the gist of the issue that has been a cause of concern.

Questions arise in the case of the WH Frist 2000 Qualified Blind Trust with respect to the liquidation of HCA common stock from the trust portfolio because the order to dispose of the stock was issued by Mr. Frist on June 13, and the execution was completed before the company issued a warning about up-coming, disappointing earnings: the trustee could have waited as long as six months, at his discretion, but chose instead to execute the directive in a timely manner, commencing the liquidation eight days subsequent to HCA common stock reaching a high of $58.22 on June 22.

Although the Senator has denied any wrongdoing in the matter, CNN is reporting that both the Securities and Exchange Commission and the U.S. attorney for the Southern District of New York are now actively looking into the sale, possibly indicating that parallel civil and criminal investigations are under way. Although this aspect of the looming difficulties facing the Senator has been reported previously by, among other media outlets, the Washington Post, CNN is now quoting Senator Frist from a January 2003 television interview in which he was asked, because of his known family ties to the company, if a prudent investor should sell HCA stock. CNN quotes Senator Frist as saying, "So as far as I know, I own no HCA stock."

This was almost exactly two-and-a-half years before Mr. Frist, on June 13, 2005, ordered the administrator of the WH Frist 2000 Qualified Blind Trust to sell all HCA stock in the portfolio of the blind trust, an order that was executed shortly before the company issued an adverse earnings report that sent the stock price down by more than 15 percent.

According to the Seattle Times, Senator Frist was recently named by the watchdog group Citizens for Responsibility and Ethics in Washington as one of the 13 most corrupt members of Congress, which included such other notable Republicans as House Majority Whip Roy Blunt and outspoken GOP Senator Rick Santorum, as well as California Democratic Representative Maxine Waters.


The Dark Wraith has provided this update for citizens concerned not only about ethics in Washington, but also about compliance with the rule of law by the nation's leaders.