Stock sale may be costly for Frist
By Thomas Ferraro
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)