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Archive for Saturday, September 24, 2005

Frist’s stock sale probed

September 24, 2005

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— Federal prosecutors and the Securities and Exchange Commission have opened investigations of Senate Majority Leader Bill Frist's sale of stock in a hospital operating company founded by his family. Documents show Frist was updated several times about his investments in HCA Inc. and other transactions even though they were held in blind trusts.

Despite the updates, Frist insisted in public statements afterward that he didn't know what was in the trusts, specifically denying knowledge of his HCA holdings.

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 stock sale.

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

Frist's office confirmed the SEC was looking into the sale.

The Tennessee Republican, a potential presidential candidate in 2008, sold the stock at a time when insiders in the company also were selling off shares worth $112 million from January through June of this year. Aides say he sold his stock to avoid any appearance of a conflict of interest.

"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, 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.

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