Senate Republican leader Bill Frist Monday defended his blind trust’s sale of stock he owned in the health care company founded by his family, saying that he and staff spent two months checking the legality and ethics of the deal before he directed the sale in June.
Addressing two federal investigations begun last week after public disclosure of the stock sale a month before its value dropped 10.5 percent, Frist, R-Tenn., predicted the reviews “will demonstrate that I acted properly.”
It was the first time that Frist spoke at length in public about the controversy since the Securities and Exchange Commission and the U.S. Attorney’s Office of southern New York started reviews of HCA Inc. and Frist’s sale through a qualified blind trust. Both Frist’s office and HCA, a national hospital and surgery center management company based in Nashville, confirmed the two probes Friday.
In new information Monday, Frist said he asked his staff in April to check on Senate rules and laws to determine if he could divest the HCA stock from his blind trust to end a series of criticisms since he joined the Senate in 1995 that his health care initiatives might be influenced by his HCA stock. He got “expert advice” that he could order the sale, he said
The blind trust has not reported how much HCA stock it divested. But Frist’s public financial statement for 2004 showed the trust’s total value of various stocks ranged from $7 million to $35 million.
Meanwhile, the chairman of the SEC, Chris Cox, announced that he will recuse himself from the Frist investigation because he recently served in the House’s Republican leadership.
Also, an advocacy group, Citizens for Responsibility and Ethics in Washington, said it filed a complaint with the Senate’s ethics committee alleging that Frist may have had insider information to time his stock sale.
Frist said Monday that he had decided to divest himself of the HCA stock after a decade of serving in the Senate because of “continuing concerns” that have arisen in the public.
“Looking ahead at my final years in the Senate and what might come next, I have for some time wanted to eliminate even the possibility of an appearance of a conflict by totally divesting of any HCA stock in my family’s trusts,” Frist said.
His wife and three sons also had blind trusts and also had trustees sell their HCA stock.
Frist has been touted by some GOP activists as a potential presidential candidate in 2008. He said earlier he is not seeking Senate re-election in 2006 after completing two six-year terms.
Frist’s directive in the June 13 letter to his trusts was confirmed by trust managers in a July 1 letter saying that all his HCA stock had been sold, and a July 8 letter said his wife and sons’ shares were divested. No date of sale or value or quantity was disclosed. The stock share value peaked at $58.22 on June 22 and dropped to $49.90 July 13 on news of the quarterly earnings report.