July 4, 2002

Caught in a tangled web

As reported in The Washington Post George and Ari are having some trouble keeping their stories straight.

All the corporate scandals are getting so close to Bush's heals that White House spokesman Ari Fleisher was forced to deal with questions about an insider trading investigation by the SEC of Bush back when his daddy was president in 1990. (See The Center for Public Integrity "Bush’s Insider Connections Preceded Huge Profit On Stock Deal" and "Bush Violated Security Laws Four Times, SEC Report Says" for detailed reports on Bush's Harken dealings.)

Briefly this is the story: on June 22, 1990, sold his stock in Harken Oil, for which he was a member of the board of directors, for $848,560 or $4 a share. Two months later, on August 22, the company's quarterly report was released showing for the first time massive losses that had been masked before through accounting tricks. By the end of the year the stock was trading at $1 a share, one quarter of its value when board member Bush dumped his shares.

He also neglected to file the legally required form with the Securities & Exchange Commission until eight months after the deadline. Fleischer said that the delay was due to an error by Harken's lawyers. But in 1994 when Bush was running for governor, he claimed he did file the report but the SEC lost it.

Bush had acquired the stock and become a board member of Harken as part of a deal in which Harken had bought Bush's failing Spectrum 7 oil company for $2 million in stock even though the company had posted losses of $400,000 six months before the purchase and carried a debt of $3 million.

Asked what he bought the failing company for, Harken founder Phil Kendrick said “His name was George Bush. That was worth the money they paid him." (See Knut Royce at The Public i.)

For more on Bush's shady stock dealings, see:

  • The Washington Post,
  • Media Whores Online
  • The Wall Street Journal
  • Scoop
  • The New York Times
  • The Public i -- By David Cogswell
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