Will Bill Frist be jailed ala Martha Stewart?

So what exactly do you think he did wrong here. By posting this with the title you chose, I assume you believe he has done something illegal, but since you chose not to comment on the article you posted, I am not sure what you really think.

But, just for kicks, I'll answer the question posed in your title. The answer: It depends on whether or not there is proof he violiated laws such as was proven Martha Stewart had. The article does not seem to say he did, so I will suppose he did not.

Coastal Rats


Did you read the paragraphs I placed in bold? Sounds to me to be identical to what Martha Stewart did with her stock sale. Martha lied about her actions. So far Frist hasn't been questioned about insider stock trading. Will he also lie or will he tell the truth?

BBB
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washingtonpost.com
Frist Stock Sale Raises Questions on Timing
By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Thursday, September 22, 2005; A10

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.
-------------------------------------

Researcher Richard Drezen, in New York, contributed to this report.

Yes, I read the bold print. And no, it does not yet sound like what Martha S. did. The fact that he sold stock then subsequently went down in price is not in any way evidence that what he did was illegal. In fact, your bold print seems to say that everything was in fact on the up and up.

Your statement, "Will he also lie or will he tell the truth?" says everything we need to know about your view. You are predisposed to believe that what he did was illegal, thus if he does not admit to insider trading (telling the truth in your view) then he is lying.

If he is investigated and there is evidence of insider trading, then I would hope he is charged and prosecuted. If found guilty, he should receive the sentence that the law allows for his crime. But until then, you are simply making this an issue because he is a republican and you happen to be very much opposed to this admin.

I understand completely. :wink:

While there isn't hard evidence presented yet, it certainly is suggestive that he knew something was up when the sold the stock. Quite suspicious. And pardon us if we don't consider Frist to be a paragon of virtue.

Insider trading is a serious crime...

Cycloptichorn

Agreed Cy. It is serious. But people trade stock every day and then see that stock go down shortly afterwards. The fact that it happened in this case is not indicative of any wrong-doing in and of itself.

Martha was actually convicted of obstruction of justice or evidence tampering, wasn't she? (Just being pedantic here, I don't really have a beef with anything said so far.....)

True, but the fact that his family ran/owned the company doesn't help matters much, does it?

I mean, it seems as if there was quite the possibility of insider trading info being passed around the family; much like the Stewart case, actually!

Cycloptichorn

Absolutely Cy, the possibility does exist. But BBB is ASSUMING guilt and ASSUMING that if he is questioned and he denies any illegality, then he is lying. And she is doing so for one reason. He is a republican and she does not agree with republican ideas and thus is more than willing to think the worst. Otherwise, why even bring up this piece of non-news? It is pointless unless and until there is some basis to the accuasation.

Which is fine if she likes going about thinking that way. Just don't try to get everyone else to buy that sack of goods until there is something in the sack worth buying. :wink:

I dunno. I think there are plenty of republicans who could claim they were innocent, and based upon their charcter and past experiences they've had, I wouldn't assume they are lying.

I think BBB probably does for the same reason that I am tempted to; not because it is a Republican, but because it is Bill Frist, a lying scumbag of a man no matter which party he is affiliated with.

Still, I will withold my judgement for now of his guilt or innocence on this issue. My personal beliefs about his charcter do not a guilty man make, for sure...

Cycloptichorn

Cycloptichorn


You are so smart.

BBB

Frist Knew About Blind Trust Investments
Frist Knew About Blind Trust Investments
By JONATHAN M. KATZ and LARRY MARGASAK
Associated Press Writers
9/24/05

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's sale of HCA stock is under scrutiny by the federal government. Nashville, Tenn.-based HCA said Friday it had received a subpoena from prosecutors for the Southern District of New York, asking for documents the company believes are related to Frist's sale of company stock this past summer.

Prosecutors also have contacted the senator's office, Frist spokesman Bob Stevenson said Friday. He said neither the senator nor his office had received a subpoena.

Frist's office confirmed the Securities and Exchange Commission was looking into the sale.

"Senator Frist had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock," Stevenson said in a statement.

Frist sold his HCA stock from several blind trusts this summer, at a time when insiders in the company also were selling off shares worth $112 million from January through June. Frist aides say he sold his stock to avoid any appearance of a conflict of interest.

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.

On Jan. 14, 2002, a trustee for Frist's children notified the secretary of the Senate that two investments were added to the blind trusts of Frist's sons Jonathan and Bryan ?- including HCA stock valued at $5,000 to $10,000. It was not clear whether Frist received a copy of the letter.

Stevenson, the Frist spokesman, said he could not comment on the updates received by the senator. He added that Frist properly notified the Senate Ethics Committee this summer that he was initiating the sale of all remaining HCA shares, a requirement under Senate rules. All the stock was sold by July 1, including shares owned by his wife and children.

"As with the SEC, the majority leader will provide the U.S. attorney's office with any information that it needs with respect to this matter," Stevenson said.

The SEC also contacted HCA on Friday to informally request copies of the subpoenaed documents, said company spokesman Jeff Prescott. "We of course will comply with that request," he said.

Herb Haddad, a spokesman for the U.S. attorney's office in Manhattan, said the office had no comment on the matter. SEC spokesman John Nester declined to say whether the agency had contacted Frist's office.

David Becker, who was general counsel at the SEC from 2000 to 2002, noted that both Frist and HCA were being put under scrutiny.

In insider trading cases, "you connect the dots not by simply going from one dot to another but by starting at both dots and working toward the middle," Becker said. "The facts that are public don't come close to demonstrating wrongdoing. It's way too premature to have any judgment."

HCA, the nation's largest for-profit hospital company, was founded by Frist's father, the late Thomas Frist Sr. His brother, Thomas Jr., was formerly its CEO and chairman and remains on the board of directors. Frist is a heart surgeon by training.

Frist asked a trustee to sell all his HCA stock in June, near a 52-week price peak of $58.40 a share. Reports to the SEC showed HCA insiders sold about 2.3 million shares.

Frist's sale came about two weeks before the company issued a disappointing earnings forecast that drove its stock price down almost 16 percent by mid-July and still have not recovered. HCA rose $1.70 Friday, closing at $47.60.

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

AP researcher Rachel Landau in Washington contributed to this report.

HCA subpoenaed over Sen. Frist's shares
HCA subpoenaed over Sen. Frist's shares
By Jeremy Pelofsky
Fri Sep 23,11:21 AM ET

A federal investigation into Senate Majority Leader Bill Frist's sale of HCA Inc. stock widened on Friday when the largest U.S. hospital chain said federal prosecutors had subpoenaed the company for related documents.

Frist, a Tennessee Republican and a potential 2008 presidential candidate, has come under fire for sale of his stock in the company shortly before HCA warned that earnings would miss expectations.

The sale has also drawn the attention of the Securities and Exchange Commission, which has sought information from Frist. His spokesman has denied Frist had any inside information when he initiated the sale.

The lawmaker on June 13 requested the sale of all of his remaining stock in HCA, which was held in blind trusts, his spokeswoman Amy Call said. By July 8 the shares held for himself, his wife, and children were sold by trustees, the spokeswoman added.

Frist had no control over the timing of the sale, the spokeswoman said.

On July 13, HCA warned that second-quarter operating earnings were likely to fall short of analysts estimates, sending its shares tumbling 8.85 percent.

HCA, which Frist's father and brother helped found, said in brief statement that it had received a subpoena from the U.S. Attorney for the Southern District of New York for the production of documents.

"The company believes the subpoena relates to the sale of HCA stock by Senator William H. Frist," HCA said, adding that it would fully cooperate with the matter.

A spokesman for the SEC, which routinely investigates potentially suspicious stock trades before major company news, declined comment.

"Senator Frist had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock," Frist spokesman Bob Stevenson said in a statement issued on Thursday.

"His only objective in selling the stock was to eliminate the appearance of a conflict of interest," Stevenson said. "The majority leader will provide the SEC any information that it needs with respect to this matter."

HCA and other hospital operators have been hurt by high levels of unpaid patient bills and lackluster admissions.

Shares of HCA were up 84 cents, or 1.8 percent, to $46.74 in morning trading on the New York Stock Exchange.
---------------------------------------------

(Additional reporting by Julie Steenhuysen in Chicago)

BBB
Any presidential candidate who thought he could get away with insider trading is either to stupid or to arrogant to be presidental material---unless he is a Republican. They think they are part of the entitlement class.

BBB

These two statements seem contradictory. If Frist told them to sell the shares, he certainly didn't expect them to hold onto them for any length of time. The interesting thing is that the request was one month before the news was scheduled to come out. Frist couldn't direct exact date to sell but I am guessing a month would be the reasonable time frame to execute the order.

Lots of reason for the SEC to investigate this. Why was it suddenly imperative for Frist to eliminate his holdings? He had been in the Senate since 1994 and Majority leader since 2002. That seems a LONG time to not worry about conflict of interest. Why was the conflict only a concern one month before the stock was to deliver bad earnings information. The reasoning sounds fishy.

I titled this thread about Frist and Martha Stewart, which probably isn't correct. Frist's insider trading is closer to Stewart's doctor friend, Samuel Waksol, who owned the company and is serving a long term for insider trading and other crimes.

http://www.cbsnews.com/stories/2003/10/02/60minutes/main576328.shtml

BBB

Will Frist Survive?
Will Frist Survive?
By Jason Leopold
09.26.2005

It's one thing to lie in politics. It's another to be caught in a lie. Bill Frist has been caught in a lie. His political future is over. The immediate question is, can he survive as Majority Leader?

The Tennessee Republican claims he wasn't privy to any inside information leading up to the sale of his stock in Hospital Corporation of America (HCA), the country's largest for-profit hospital chain founded by Frist's father, Thomas, and brother, Thomas Jr., weeks before the company reported lower than expected earnings July 13 that sent the stock south.

Now the Securities and Exchange Commission is investigating the matter, a spokesman for the senator said last week, to determine if Frist broke any laws.

Frist's press secretary told the Washington Post last week that Frist decided to sell his stock to eliminate any appearance of a conflict-of-interest due to his work in the senate in shaping the nation's healthcare policies. So, the senator's spokesman said, Frist drafted a letter to Northern Trust and Equitable Trust in Nashville June 13 advising them to sell all of his stock in HCA, as well as his wife and children's investments in the company.

Still, the improprieties have been in the making for quite some time. According to an Associated Press report Saturday, Frist "received regular updates of transfers of assets to his blind trusts and sales of assets. He also was able to initiate a stock sale of a hospital chain founded by his family with perfect timing. Shortly after the sale this summer, the stock price dived."

In fact, Frist had attempted to have it both ways since he created his so-called blind trust in the 1990s: being intimately involved with his investments that directly conflict with his political work as a senator and then claiming that he's totally unaware of his personal financial investments?-and stock sales?-because it's in a blind trust.

The mainstream media, quick to accept Frist's statements that he's been in the dark about his HCA holdings, was complicit in allowing the obvious conflict of having a senator who makes national decisions on healthcare that directly benefit the senator's fortunes and that of his family, fall off the radar screen.

Indeed, in Jan. 26, 2003, story titled "Frist's Health Care Votes Reflect Roots," Frist told the Post that he "no longer knows how much the (HCA) stock is worth."

But letters sent to Frist by Kirk Scobey Jr., his trustee, and documents filed with the senate contradict the Frist's statement.

Frist knew that Scobey transferred three additional blocks of HCA stock?-worth $750,000?-to his trust in 2001 and 2002, which came from Frist's parents' estate. More than $750,000 in HCA stock was transferred into the blind trust during that time period from the estate of his late parents. Public filings show that Scobey sold as much as $8 million of Frist's HCA stock between 1994 and 2000, a bulk of which was sold between 2001 and 2002.

"Interestingly, Frist knew of these sales, or at least had access to information that these sales took place," reported the Nashville Scene, in an investigative story in July 2003 into Frist's so-called blind trust." How? The income from these sales of HCA stock was reported on Frist's annual financial disclosure statements that he filed with the Secretary of the Senate."

"Given the annual reporting of capital gains, it's kind of a crock for Frist to say he doesn't know what he owns because it's in a blind trust," Charlie Gofen, a portfolio manager at Gofen and Glossberg, a Chicago-based investment-counseling firm, told the paper at the time.

Frist's office provided the Scene with supporting documents into the senator's blind trust. The paper hired an eight-member, bipartisan, unpaid panel of experts in trusts from around the country to analyze it and what the panel discovered was that Frist's blind trust "blind" trust isn't really blind at all."

"Frist's ownership of HCA stock isn't considered a conflict of interest according to Senate rules," the paper reported. "But then, according to those rules, almost nothing qualifies as a conflict of interest."

Frist created his blind trust in accordance with the rules of the Ethics in Government Act. That law states that a "qualified blind trust" must meet certain requirements:

* The trustee, who is the individual charged with managing the assets of the trust, must be independent.

* There can be no restrictions on disposing of the trust's assets.

* Communication between the trustee and the politician must be limited.

* And the trust must be approved by the Senate's Ethics Committee.

In 1995, with his holdings in HCA and the senator's increasing role in shaping the nation's healthcare policies coming under intense scrutiny, Frist first put his assets into a blind trust. Five years later, in December 2000, Frist put his assets into a newer blind trust, prompting the Nashville Scene to ask "Why the new trust?"

"At the time he created his first trust, Frist's portfolio included so-called "non-public securities," the paper reported. "More than likely, these were private partnerships and the like. Federal laws say such securities cannot be put into a so-called "qualified blind trust"?-the type of high-end trust that Frist now has. Once these securities were sold the "more stringent" form of trust was created "as soon as practical."

Experts interviewed by the paper said what was likely the key selling point for Frist when he created the new trust in December 2000 was that he given the opportunity to look at his specific financial holdings, including HCA.

"Whenever one blind trust is discarded in favor of a newer one, panelists say the blind trust ceases to be blind during the changeover period," the paper reported.

But what was virtually unknown, is that Frist was able to figure out the value of his financial holdings in the blind trust in a much simpler way that would give him a window into the value of his HCA stock, the main source of his wealth. Each year, the senator files his annual financial disclosure statement with the Office of the Secretary of the Senate Frist is required to disclose the amount of income generated from his blind trust. Considering that 89 percent of his assets are tied up in HCA stock, the senator would have a good indication of how well his stock has performed.

When Frist named Scobey as the administrator of his blind trust, he was choosing a well-connected family friend.

James C. Gooch, a trust and estates attorney who has worked at the prestigious Nashville law firm Bass Berry & Sims, the same firm where Frist's brother-in-law H. Lee Barfield is a partner, drafted Frist's trust, which, among other things, states that the trust is "concentrated in the stock of HCA"; and Scobey, president of Equitable Trust, an institution Frist has done business with for years, was chosen as the trustee.

"Scobey's boss at Equitable is William H. Cammack, the firm's chairman. In fact, Gooch, Cammack and Scobey are all solid members of genteel West Nashville culture, the same culture that produced and nurtured Bill Frist," the Nashville Scene reported.

Scobey, according to documents filed with the Secretary of the Senate, doesn't charge Frist a substantial fee to manage the trust. Furthermore, Equitable waived its $5,000 annual fee it usually charges individuals to manage similar assets, as well as cut its management fee for trusts as big as Frist's from .3 of 1 percent to .22 of 1 percent.

But wait, there's more. Back in September of 2002, a business partially owned and funded by Frist was embroiled in a lawsuit that claimed that the company's founder, along with Frist's business agent, sold a Laundromat to a Bellevue, Tenn., couple at an inflated price.

Jon and Lynn Hargis of Bellevue, Tenn., didn't accuse the senator of wrongdoing in their lawsuit against Campus Concepts Inc., a company that Frist holds a 49 percent stake in. But the couple said Frist's close friend and business partner, David E. Harvey, the president of Campus Concepts, had told them that the Laundromat had grossed $10,000 more a month than it was actually bringing in. The Hargises said Harvey provided them with tax returns to back up his claims and the couple then agreed to purchase the Laundromat for $460,000.

The Hargises discovered a few months later that the income figures Harvey provided were grossly inflated and that he lied in papers he filed with the Tennessee Department of Revenue. Frist has been an investor in Campus Concepts since 1991.

At the time the lawsuit was filed, a spokeswoman for Frist told The Tennessean Nashville newspaper that the senator wasn't involved in the "day-to-day operations" of Campus Concepts and that his share and investment in the business was placed into a blind trust.

"However, financial disclosure documents signed by Frist, a Tennessee Republican from Nashville, and filed with the Senate starting the year after he took office show he listed Campus Concepts as one of his assets, valued at $50,000-$100,000," the paper reported. "His most recent disclosure for [2001] lists as an asset an unsecured note from [the Laundromat] valued at $100,000-$250,000. Asked how Frist could provide such information if he had no knowledge of the assets in his blind trust, Frist's spokeswoman would not elaborate."

It remains to be seen whether someone inside Hospital Corporation of America (HCA) tipped off Frist earlier this year that the for-profit hospital chain founded by his father, Thomas, and brother, Thomas Jr., expected to forecast lower second quarter earnings July 13, just a couple of weeks after Frist sold his stock, due to, among other things, an increase in uninsured hospital admissions at HCA facilities. Or perhaps Frist is just a savvy investor and the timing of his stock sales is coincidental.

It does seem that happenstance has been good to Senator Frist and HCA. Not long after he was chosen as Majority Leader, the Department of Justice abruptly ended a 10-year probe into how HCA defrauded the federal government's Medicare and Medicaid programs. The Justice Department, which surely had been pursuing federal criminal charges against HCA executives, (including Frist's brother, Thomas Jr., HCA's former chief executive and current board member) agreed to a $631 million settlement. In total, HCA paid $1.7 billion in fines to keep at least one Frist out of jail, making it the largest fraud settlement in U.S. history.

In February, just a few months before Frist claims he instructed the administrator of his blind trust to unload his shares of HCA, company insiders were dumping shares by the truckload, prompting shareholders to raise questions on message boards and during HCA investor conference calls whether HCA executives?-and possibly Frist?-knew something that the public didn't know.

A number of HCA executives seemed to be were aware that the increase in treating uninsured patients would have a negative impact on the company's earnings. That would explain the massive sell off of HCA stock that started Feb. 2, when HCA chairman Jack Bovender sold 500,000 shares (despite the fact that HCA stock was near a 52-week high) earning roughly $9 million.

Bovender dumped his shares a day after a government official testified that the health care industry's biggest problem was an increasing number of bad debts from the uninsured that would no doubt worsen during the course of the year.

Mike Leavitt, secretary of the U.S. Department of Health and Human Services, said the Medicaid program was on shaky ground and there was a desperate need to control spending on the government's health care coverage for the poor, according to a May 6 story on HCA in TheStreet.com.

In April, Congress passed a budget that cut Medicaid by $10 billion over five years for the first time since 1997, which is incidentally the same year that "Congress passed the Balanced Budget Act that reduced hospital payments and sent the industry into a tailspin," TheStreet.com reported. That's a major financial blow to hospitals such as the ones controlled by HCA and is what likely prompted the huge selloff by HCA executives.

Shortly after Bovender sold his shares several other insiders, including Treasurer David Anderson and Chief Investment Officer Noel Williams and three vice presidents sold their stock too, clearing tens of millions of dollars. In fact, between January and June, HCA insiders sold shares worth $112 million, 879,000 shares between March and April alone, netting the execs $45 million.

Insider sales increased in the beginning of March when HCA said it planned to sell 10 of its hospitals that were located in poor states that were dealing with Medicaid troubles. On April 22, HCA President Richard Bracken sold $4.13 million of company stock followed by Milton Johnson, the company's chief financial officer, who sold twice that amount.

Speaking of the pending hospital sales, a footnote in HCA's past proxy statements researched for this story has revealed something few HCA investors seem to be aware of: the cozy and questionable business relationship between the hospital chain and a company operated by the son-in-law of HCA's former chairman, Thomas Frist, Senator Frist's father.

A company owned by the elder Frist's son-in-law, Charles Elcan, bought 116 medical office buildings from HCA back in December 2000 for $250 million, which the hospital chain disclosed in a 2001 SEC filing, the website footnoted.org said in April 22 posting. In a filing HCA made with the SEC last year when the company, known as MedCap was sold for $575 million, HCA disclosed for the first time that Elcan only put up a small fraction of the initial $250 million back in December 2000.

"This year, HCA has provided even more details, though it's a somewhat convoluted path involving a swap transaction that involves quite a bit of alphabet soup," said footnoted.org. "What it appears to boil down to is that HCA had to ante up even more money than it previously disclosed to essentially help the son-in-law out of a jam, even though it was unusually generous when it sold the office buildings to Elcan back in December 2000, since that investment more than doubled in less than three years. HCA has chosen to let details of the deal trickle out gradually over the past few years which certainly leave one with the impression that they're trying to hide something."

SEC chief recuses self from Frist stock probe
SEC chief recuses self from Frist stock probe
Yahoo news 9/26/05

Christopher Cox, chairman of the U.S. Securities and Exchange Commission, said on Monday he has recused himself from an SEC probe of sales of stock in hospital company HCA Inc. by Senate Majority Leader Bill Frist, a former congressional colleague of Cox.

"The staff of the Securities and Exchange Commission have commenced a review of sales of HCA stock by a blind trust established by the U.S. Senate Majority Leader," Cox said in a statement.

"Because of my service in the congressional leadership for the last 10 years, I have recused myself in this matter," he said.

Cox's campaign committee donated $1,000 to Frist's 2000 re-election campaign, according to Federal Election Commission records made available by PoliticalMoneyLine, a non-partisan group that tracks money in politics.

"The purpose of the recusal is to avoid any appearance of impropriety in the commission's consideration of this case," said Cox, whose statement did not mention the 2000 donation.

Cox was a long-time Republican congressman from Southern California before being named this summer by President George W. Bush as head of the investor protection agency. Frist is considered a potential 2008 presidential candidate.

Frist's office said last week the SEC had contacted the Tennessee Republican for information about his decision to sell his stock in HCA -- held in blind trust -- a month before the company issued a warning that its operating profits were likely to fall short of Wall Street expectations.

HCA said last week the U.S. Attorney for the Southern District of New York had issued a subpoena to the company seeking information it believed was related to the stock sales, and that the SEC had requested the same information.

Frist spokesman Bob Stevenson has said the Senate leader had no inside information when he initiated the stock sale and that his objective was to eliminate any appearance of a conflict of interest.

Stock sale may be costly for Frist
washingtonpost.com
Stock sale may be costly for Frist
By Thomas Ferraro
Reuters
Tuesday, September 27, 2005; 3:18 PM

WASHINGTON (Reuters) - Senate Majority Leader Bill Frist's recent stock sale threatens to cost him and fellow Republicans politically as he mulls a 2008 presidential bid and investigators examine whether he violated any trading laws, political analysts said.

"Frist's White House campaign hasn't really taken off, and this adds weight to an idling plane," said Larry Sabato, a political science professor at the University of Virginia.

"He may prove to be totally innocent, but this is a negative -- a big distraction -- for his presidential ambitions and management of the Senate," said Ethan Siegal of the Washington Exchange, a firm that tracks politics and legislation on Capitol Hill for institutional investors.

Frist has been put on the defensive by a disclosure last week that federal investigators are examining the senator's June 13 request for a trustee to sell all of his remaining stock in HCA Inc., a Nashville-based hospital company founded by members of his family.

On July 13, days after the Frist stock sales were completed, HCA warned that second-quarter operating earnings were likely to fall short of analysts estimates, sending its shares tumbling 9 percent. Frist has denied any wrongdoing.

But it has given Democrats fresh ammunition to bolster their claim, one they plan to make in next year's congressional elections, that Republican lawmakers are ethically challenged.

Such partisan fire has been previously aimed mostly at House of Representatives Majority Leader Tom DeLay, a Texas Republican admonished on three separate matters last year by the House Ethics Committee.

At a news conference on Monday, Frist, a wealthy surgeon and influential force in Congress on health care issues, said he had no inside information about the stock and sold the shares in the hospital company merely to avoid the appearance of a possible conflict of interest.

BEGAN SALE MONTHS AGO

Frist said he began moving to sell the stock held in a trust about three months before its value dropped. He said he acted with the approval of the Senate Ethics Committee, and will now cooperate with investigators from the Justice Department and Securities and Exchange Commission.

"And now I'm going back to work," Frist told reporters, declining to take any questions.

Senate Majority Whip Mitch McConnell, a Kentucky Republican, rose to Frist's defense on Tuesday, calling him in a Senate speech "one of the most gifted, hard-working and honest people I have ever met."

Afterward, McConnell told reporters: "He enjoys full support in our (55-member Senate Republican) caucus."

At the Senate Republicans' weekly closed-door meeting on Tuesday, Frist, who was first elected to the Senate in 1994 and rose to leader eight years later, again defended himself and took questions from colleagues, lawmakers said.

Sen. Judd Gregg, a New Hampshire Republican, said, "Bill Frist is an extraordinarily ethical individual and we're lucky to have him in the Senate."

A Senate Democrat, speaking on the condition of anonymity, said: "This doesn't help Bill Frist. It just looks bad. We'll see what happens."

Pollster John Zogby, who conducted a survey in June that found Frist far behind several possible Republican presidential contenders, including Sen. John McCain of Arizona and former New York Mayor Rudolph Giuliani, said, "For a fledgling presidential campaign, this isn't the best kickoff."

Frist is to go to Iowa, site of the initial 2008 party-nominating presidential contest, on October 22 to address a Republican dinner.

Stuart Rothenberg of the nonpartisan Rothenberg Political Report, which tracks presidential contests, said the stock sale may hurt Frist, but until the investigation is completed its premature to predict how much.

Rothenberg said: "Frist has bigger (political) problems -- lack of a Republican message, difficulty dealing with the House and weakness as a presidential contender. He isn't one of the party's better speakers, and has difficulty exciting people."

(Additional reporting by Richard Cowan)

Frist Made At Least $2 Million on Insider Trade
Frist Made At Least $2 Million on Insider Trade
By Jamie Court
09.28.2005

New details of Senate Majority Leader Bill Frist's dumping of HCA stock just before it plummeted should give the SEC even more to chew over as it begins a formal investigation, with subpoena power, into Frist's contact with insiders at his family-founded and -run company.

A new analysis by my Foundation for Taxpayer and Consumer Rights has found that Senator Frist made between between $2 and $6 million by selling his HCA holdings just before stocks plummeted in the face of a bad earnings report. In addition, overly rosy earnings projections made by HCA executives just as Frist and HCA insiders were disposing of the stock en masse, point to a coverup by insiders intent on keeping stock prices high until a disappointing earnings report surfaced.

Frist trust agreements made public today by Consumerwatchdog.org also show that since the founding of his trust, Senator Frist directed trustees not to sell his HCA stock. Each of the Senator's trust agreements acknowledged their high concentration in HCA stock, and specifically relieved trustees ?'from any obligation the Trustee might otherwise have to diversify the investments.' In other words, this was a seeing-eye trust, not a blind trust.

As subpoenas begin to fly, Senator Frist will have a lot of explaining to do. My consumer group filed ethics complaints with Frist dating back to 2003 over his HCA holdings -- and he ignored them. Frist's sudden shock of "conscience" either has to do with presidential amibitions or pure greed.